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TMI Blog2013 (8) TMI 715X X X X Extracts X X X X X X X X Extracts X X X X ..... idence relating to other concerns namely M/s Malani Ram Jeevan Jagannatah, Jodhpur and M/s D.C. Trading Company, Mumbai were also found and sized. The assessments were completed after due compliance of notice issued u/s 153A of the Act . Against various additions made, the assessee preferred appeals before learned CIT(A) who has granted part relief to the assessee before us namely M/s Dinesh Tobacco Industries, which is one of the Group concern and is the assessee in all these appeals. The learned CIT(A) has passed a common order for both assessment years against which the assessee as well as the Revenue have filed their respective appeals: - ITA No. 184/JU/2011 - assessment year 2005-06 3. This is an appeal of the assessee pertaining to assessment year 2005- 06. In this appeal in as much as four grounds have been raised by the assessee / appellant. The ground Nos. 1 & 2 were not pressed at the time of hearing by the authorised representatives of the appellant namely Shri Rajendra Jain, C.A. , therefore, ground Nos. 1 & 2 of this appeal stands dismissed as "not pressed". 4. The ground No.3 is the only material ground which remains to be adjudicated by us because the other ground ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n cases of completed assessment . To support the above submissions, learned AR has relied on the various decisions, which are as under: - (i) Anil Kumar Bhatia & Bros Vs. ACIT (2010) 1 ITR (Trib) 484(Del ) (ii) LMJ International LmD Vs. DCIT (2008) 119 TTJ (Kol ) 214 (iii) DCIT Vs. Royal Marwar Tobacco Product Private Ltd. (2009) 120 TTJ (Ahd) 387 (iv) Sun city Alloys Private Ltd. Vs. ACIT (2009) 124 TTJ (JD) 674 6. On the other hand, the learned DR has reiterated the reasoning given by Assessing Officer and learned CIT(A) that both the above incomes are not derived from the business activities of the assessee although they may be attributable to assessee's business activities. Reliance made by Assessing Officer and CIT(A) on the decision of Hon'ble Supreme Court in the case of Pandian Chemicals 183 CTR 99 (SC) and CIT Vs. Sterling Foods 237 ITR 579 (SC) have been reiterated before us as well. 7. We have carefully circumspected the entire record in the light of the oral submissions and the related provisions and precedents on the issue. We are in agreement with the Department to the extent that both the above incomes viz. DEPB premiums and rebate / discount and interest are n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... well as dates on which the respective payments were made. In respect of these pages Shri Nand Kishore Malani stated that these related to unaccounted payments made towards import of supari on the dates mentioned thereon. He also stated that wherever payment of Rs. 25 lakhs has been shown i t is, in fact, a payment of Rs. 50 lakhs. He thus admitted that actual payments made on 30.11.2006 and 8.11.2006 shown as Rs. 25 lakhs which are Rs. 50 lakhs each. As per these pages, the total payments came to Rs. 3,25,00,000/ - but in view of the above admission the total payment came to Rs. 3,75,00,000/ -. Shri Nand Kishore Malani admitted these payments to be out of books and the same were offered for taxation. The seized documents were vet ted by the Director of Revenue Intelligence and it was found that these bills related to purchase of beet le nuts pertaining to assessment years 2005-06 and 2007-08. The Director General of Revenue Intelligence levied and collected differential duty from the assessee and an order by the Settlement Commission was also passed in the case of this assessee. Thus, Assessing Officer has finally concluded that the said transactions relate to purchase of beetle n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5- 06 and also made protective assessment of Rs. 3,75,00,000/ - in the hands of Shri Nand Kishore Malani who had made this surrender on the basis of the actual payments in assessment years 2007-08 and 2008-09. The Assessing Officer further made one more protective assessment of this amount in the hands of Dinesh Pouches Limited whose name was found written on the fax message found and seized during the course of search proceedings. He also noticed that this income was surrendered by Shri Nand Kishore Malani as business income but as per Assessing Officer it has to be assessed as income from other sources and accordingly he made a substantial assessment of these income in the hands of the assessee by assessing it as a income from other sources. 10. The Assessing Officer further found that during the year under consideration, the assessee had declared a turnover of Rs. 5276.96 lakhs and gross profit of Rs. 2672.17 lakhs, giving a gross profit rate of 50.64% as compared to gross profit of Rs. 2012.13 lakhs giving the GP rate of 49.34% but at a total turnover of Rs. 4078.49 lakhs in the immediate preceding year. On this basis, the Assessing Officer found that in the event the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ial on record, we are of the considered opinion that during the course of search from the residence of Shri Nand Kishore Malani , the impugned incriminating documents were found and seized. On the basis of these papers, Shri Nand Kishore Malani had made a surrender of total amount of Rs. 3,75,00,000/- to be taxed in two assessment years i.e. assessment year 2005-06 and 2007-08. Shri Nand Kishore Malani also paid taxes thereon. In our considered opinion, there is no question of taxing this amount in the hands of the assessee firm would arise in the given facts and circumstances of the case. The action of the Assessing Officer is not justified because he has made substantial addition in the hands of the firm by taking into account the computation done by DRI and ignoring the surrender made by Shri Nand Kishore Malaini . In our opinion, the protective addition made in the hands of Shri Nand Kishore Malani and Dinesh Pouches Ltd. is also not justified. To that extent , the action of the learned CIT(A) is approved. But , in our considered opinion there is no scope for making the addition of Rs. 3,75,00,000/- , in the same manner as it was surrendered by Shri Nand Kishore Malani , in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... grounds raised by the Revenue in this appeal also stands covered under the reasoning given in respect of decision of appeal pertaining to assessment year 2005-06 and, therefore, with similar reasoning, we cannot al low the grounds raised in this year. Accordingly, the appeal is dismissed. ITA No. 297/Ju/2011 - assessment year 2006-07 16. This is an appeal of the assessee for assessment year 2006-07 which has been fi led against the order of learned CIT(A) dated 6.5.2011. In this appeal following grounds has been raised: - (i) That on the facts and in the circumstances, the Assessing Officer erred in applying the provisions of sect ion 145(3) of the Income Tax Act , 1961 which otherwise is not applicable for the assessment year 2006-07. (ii) That the learned CIT(A) (Central ), Jaipur on the facts and in the circumstances of the case, although reducing the trading addition made by the Assessing Officer resulting in no addition because of allowance of telescopy in respect of other addition but he erred in estimating the GP at higher rate even if the same was not at all desirable. The exercise of estimation of GP at higher rate deserves to be quashed. 17. Both the grounds stand c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed AR is that these expenses were allowed to a greatest extent and only the disallowance of Rs. 50,000/ - needs to be sustained. In support, reliance has been placed on various decisions including that of DCIT Vs. Royal Marwar Tobacco Product Private Ltd. (2009) 120 TTJ (Ahd) 387 and that of Jodhpur Bench of the Tribunal in the case of Suncity Alloys Private Ltd. Vs. ACIT (2009) 124 TTJ (JD) 674. It was pleaded in the light of the above submissions that in the original assessment order only Rs. 50,000/ - was disallowed out of total expenses claimed in respect of these accounts and as per law this amount can be sustained as addition. Per contra, learned DR has relied on the orders of the authorities below. 22. After considering the rival stands, in continuation of our finding given in respect of assessment order completed prior to the date of search in the earlier orders, we agree with the submissions of the learned AR and feel that just ice will be done if total amount of Rs. 50,000/ - out of these expenses is sustained as addition. With the above observation, which is based on the direct decision of this very Bench in the case of Suncity (supra), we order to delete all expenses s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e the fact that during the course of search proceedings a fax message was found where in the name of M/s Dinesh Pouches Ltd. was mentioned against the under invoiced payments made. ITA No. 303/JU/2011: - On the facts and circumstances of the case Ld. C.I.T. (A) has erred in: 1. Whether on the facts and circumstances of the case the CIT(A)(Central), Jaipur has ered in law and on facts in deleting addition of Rs. 3,12,57,509/- made by the AO on protective basis on account of unaccounted payments made for import of beetle nuts as on the Fax message found during the course of search operation it is clearly mentioned that on-money was paid by M/s Dinesh Pouches Ltd and also the issue of substantive addition in the case of M/s Dinesh Tobacco Industries has not got finality. 2. Whether on the facts and circumstances of the case the CIT(A)(Central), Jaipur has erred in law and on facts in holding that there is no involvement of M/s Dinesh Pouches Ltd. in purchase of beetle nuts and also payment of under invoiced amount against the purchase and also holding that no addition can be made in the hands of M/s Dinesh Pouches Ltd. despite the fact that during the course of search proceedings a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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