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TMI Blog2017 (11) TMI 897X X X X Extracts X X X X X X X X Extracts X X X X ..... view that the addition made on protective basis in the hands of assesses deserves to be deleted. We accordingly find no infirmity in the order of the CIT(Appeals), who has rightly deleted the additions. Accordingly, we confirm the order of CIT(Appeals). - Decided against revenue. - 56/Bang/2013, 57/Bang/2013, 58/Bang/2013, 59/Bang/2013, 60/Bang/2013, 61/Bang/2013, 62/Bang/2013, 74/Bang/2013, ITA No. 56/B/2013 And ITA No. 57/Bang/2013 - - - Dated:- 31-3-2017 - SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI S. JAYARAMAN, ACCOUNTANT MEMBER For The Appellant : Shri Sanjay Kumar, CIT(DR)(ITAT)-3 Bengaluru For The Respondents : Shri Prassan Chand Ostwal, CA ORDER Per Sunil Kumar Yadav, Judicial Member These appeals are preferred by the Revenue against the respective order of the CIT(Appeals). The assesses have also filed Cross Objections. Since the appeal of Revenue and Cross Objections were heard together, these are being disposed of through this consolidated order. 2. The facts in brief leading to the additions in the hands of the assesses on protective basis borne out from the record are that a search and seizure operation was conducted in the grou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... addition of the aforesaid amount reflected in the seized documents. 5. Both the assesses preferred their appeal before the CIT(Appeals) with the submission that they have not received any amount from Mr. Sohanraj Mehta. More over it was also stated that this money rather belongs to M/s. Dhariwal Industries Ltd. and not to the assesses. Therefore, no addition in the hands of assesses were called for. 6. Finding force in the contentions of the assesses, the CIT(Appeals) has deleted the addition made on protective basis in the hands of assesses. While doing so, the CIT(Appeals) has observed that mere recording of name of assesses on a piece of paper found in the premises of one, Mr. Mitulal suggesting that some payments of Dhariwal group have been effected through the assesses who are employees does not merit assessment in the hands of the assesses. 7. Aggrieved, the revenue has preferred appeals before the Tribunal with the submission that the seized material clearly speaks that substantial amount stated in the slip was paid to the assesses and now it is for the assesses to explain where the amount goes if he has not retained it. 8. The ld. counsel for the assessee, on t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ctor, VP Road, Girgaon, Bombay on 09-10-1996 regarding supply of counterfeit Manikchand Gutkha. A Newspaper report published in Malai Mallar (Tamil Daily) dated 11-10-1997 shows the manufacturing of duplicate Pan Masala and Tea dust for which 3 persons were arrested. Similarly, another news article published on 11-10-1997 in Vikatan newspaper (Tamil) shows seizure of 20 boxes of spurious Pan Masala and Gutkha by the Police. The various FIR copies filed show sale of spurious Pan Masala and Gutkha of the assessee s brand at Hyderabad, Jaisinghpur, Tiruchy, Kanpur, Mahabubnagar etc. Although no FIR copy has been filed at Bangalore or in the State of Karnataka, the submission of the Ld. Counsel that spurious Pan Masala and Gutkha under the brand name of the assessee company was being produced and sold in the market cannot be simply brushed aside. 130. So far as the finding of the Revenue authorities that the profit generated from suppressed production and sale was diverted to various persons whose names appear in the seized documents is concerned, we find the different Benches of the Tribunal have deleted such addition made in their hands. We find the Bangalore Bench of the Tribu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... accounted purchase, unaccounted sale, unaccounted transport receipt was found either during the course of search at the place of Shri Sohanraj Mehta/Shri Mithulal or at the premises of the assessee. If the extent of unaccounted production and unaccounted turnover as computed by the AO is believed, then atleast 700 to 800 trucks are required, a finding given by the Commissioner, Central Excise. Therefore, we find force in the submission of the Ld. Counsel for the assessee that if the assessee was indulging in the clandestine manufacturing of Gutkha, then atleast some evidence could have been found which is not in the instant case. Even the Commissioner, Central Excise has also given his findings that there was no unaccounted production. In our opinion, the question of unaccounted turnover will arise only when there is unaccounted production. Since one Government authority, after thorough investigation, has given a finding that there is no unaccounted production and clearance of such unaccounted Gutkha to the C F Agent, therefore, estimation of huge unaccounted producuction and sale thereof as determined by the AO in the body of the assessment order and upheld by the CIT(A), in our o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce to such estimated income. However, the same is not there in the instant case. 136. We also find force in the submission of the Ld. Counsel for the assessee that papers found from Shri Sohanraj Mehta is for the period from January 2003 to February, 2008. The search took place on 09-10-2009 at Shri Mehta s place. However, for the period from March 2008 till the date of search, no loose papers were found. Therefore, if the assessee was having such roaring unaccounted business, there was no reason to stop such lucrative business from March 2008 onwards. Secondly, if the inference is that Shri Sohanraj Mehta has already given the account for this period to the assessee and therefore he has destroyed the papers, there is no reason as to why he should have maintained the papers for the old period. This defies logic. 137. Another aspect which the Ld. Counsel for the assessee has argued and which in our opinion finds force is that there is no signature of confirmation by the assessee in the statements. For example Page No.204 of the paper book is the statement for the period 02-04-2003 to 31-08-2006. There is no signature of confirmation by the assessee on this paper. If the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... protective addition in his hands the same in our opinion cannot be the basis to compute huge suppressed turnover to the tune of about ₹ 340 crores as assessee s unaccounted turnover especially when not a single piece of unaccounted purchase or sales voucher or transport receipt or unaccounted purchase receipt was found. This in our opinion is also an indicator that no such unaccounted business was carried out by the assessee as alleged by the AO and upheld by the CIT(A). Even under the theory of probability also no such unaccounted business is possible under the facts and circumstances discussed above. 140. In view of the above, it has to be held that the huge suppressed production and suppressed turnover and thereby generation of huge unaccounted income as determined by the AO, in our opinion, is incorrect. Therefore, the addition made by the AO and partly sustained by the CIT(A) on account of unaccounted profit on suppressed production and sale thereof is directed to be deleted. 140.1 At the same time, it is also an admitted fact that certain chits duly signed by the assessee were found from the possession of Shri Sohranraj Mehta during the course of search on 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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