9911796707
Advanced Search 
TMI Blog2007 (9) TMI 533X X X X Extracts X X X X X X X X Extracts X X X X ..... ere Directors. There was a search and seizure operation carried out by the Income tax department u/s 132 of the Act in the case of Goyal Group. The assessee being the second wife of Shri S.P. Goyal was also subjected to a search. The residential premises of the assessee were searched. Based on the various documents that were seized in the course of search notice u/s 148 of the Act was issued on 21.2.1993 for A.Ys 1992-93 to 1995-96. Based on the documents found in the course of search the assessments were completed. Even before the AO the stand of the assessee was that Shri SP Goyal and the various companies run by his family members had been blacklisted by Financial Institutions, and, therefore, could not borrow monies in their names. It was under this circumstance that Shri SP Goyal started the business of M/s S.I in the name of the assessee. According to the assessee she was only a puppet in the hands of Mr.S.P. Goyal and his family members and was not aware of the business transactions. At the time of assessment proceedings Mr. S.P. Goyal had died. The assessee had pointed out several circumstances which go to show that Sri SP Goyal started the business of M/s S.I as Proprietri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ltd, while auditing the account of the F.Y. ending on 31.3.1992 has given a note that the "opening stock of Rs. 1,27,95,797/= represents the value of goods directly lifted by TMC of India from Customs Department in the Preceding Year and the value of such goods transferred to TMC of India has been included in the amount of sale shown above" but the A.O. assessing the appellant for reasons best known to him has turned a blind eye to all these vital facts while assessing the appellant and thereby he has allowed the main culprit Shri S.P. Goyal and his family members to escape dragnet of the tax which could have been easily fastened, rightly and legally fixed in their hands and not in the hands of the appellant who was merely a puppet dancing to the tune of her master, namely Shri S.P. Goyal, her late husband. ................................ Being the second wife of late husband Shri SP Goyal she has not been given any asset by husband's descendants. It will be, therefore, in the fitness of things that all these high pitched assessments for all these five years excepting for the year 1986-87 be set aside before the AO to pass fresh orders after considering the facts and after giving ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CIT(A) deleted these additions made by the AO because of his finding that Shri S.P. Goyal was the man behind the business and he alone was accountable for the expenses incurred in running the business. As already observed by us this finding of the CIT(A) that Shri SP Goyal was the person to be assesseed in respect of the income of the assessee has become final and therefore this ground of appeal of the Revenue is dismissed" 7. The second ground of appeal of the Revenue reads as follows. That the ld CIT(A) has erred in law and facts of the case in deleting an addition of Rs. 1,00,000/= on account of capital introduced in the business after violating Rule 46 A of IT. Rules. The AO has made an addition of Rs. 1 lakh towards unexplained investment of share capital in the business of M/s S.I. This addition was made by the AO on the basis of the statement of the assessee recorded in the course of search wherein she had stated that she had started the business of M/s S.I. with a capital of Rs. 1 lakh. In the course of assessment proceedings since the assessee could not explain the source of funds for making the aforesaid investment, the AO made an addition of Rs. 1 lakh as unexplained ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The 4th ground of appeal of the assessee reads as follows. That the ld CIT(A) has erred in law and facts of the case in deleting an addition of Rs. 39,21,422/= on account of unexplained investment in purchases. Hence the order of CIT(A) be quashed and that of AO upheld." In the course of search document marked Annexure A-10 was found and seized. This was Profit and Loss account in which purchases were shown at Rs. 1,25,00,000/ = . In the Profit and Loss account as on 31.3.1992 the assessee has shown purchases of only and Rs. 85,78,578/-. The AO therefore presumed that the assessee had made purchases outside the books of accounts by using her undisclosed income- The plea of the assessee was that this must have been prepared for the purpose of raising loan from the bank by Mr.S.P. Goyal. The AO held that no documentary evidence was produced by assessee to substantiate her claim. Therefore the AO made an addition of Rs. 39,21,422/- to the total income of the assessee. On appeal by the assessee the CIT(A) deleted this addition. The CIT(A) found that the Profit and Loss account as on 31.3.1992 in which figure of purchases was shown at Rs. 85,78,578/= was without considering the custo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... umstances there could not be any presumption of sale outside the books of accounts and consequently there cannot be any estimation of profit on such sale. Consequently the ground no.2 is dismissed. 14. In the result, ITA 2901/Del/OO is dismissed. 15. ITA 2902/Del/2000 ( A.Y. 1994-95) Ground no. 1 raised by Revenue reads as follows. "1. That the ld CIT(A) has erred in law and on facts of the case in deleting addition for Rs. 3343/=, Rs. 50,871/- and Rs. 58,686/= on ground, that these expenses should be considered in the hands of Mrs. S.P. Goyal" This ground of appeal arises under the same facts and circumstances under which ground no. 1 for A.Y. 1992-93 was adjudicated by us. For the reasons stated therein this ground of appeal of the Revenue is dismissed. 16. Ground no.2 reads as follows. "That the ld CIT(A) has erred in law and facts of the case in deleting an addition of Rs. 27,79,858/= on the grounds that the same has not come out of the appellant documents of Annexure C-19, page 154 and 155." In the course of search document was found which was marked as Annexure C-19 pages 154-159. This showed purchase of raw material worth Rs. 39,29,175/ = . In the audited books of acc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l income of the assessee which he had originally made in the hands of the assessee. The AO however made the assessment on a protective basis. While deciding ITA 2902/Del/00, ground no.2, we have already noticed that one of the items of addition in that year was an addition of Rs. 27,79,858/= on account of purchases made outside the books of accounts. This addition was deleted by the CIT(A) and we have already confirmed such action of the CIT(A). The AO however made assessment of this income also on a protective basis. The CIT(A) on appeal by assessee deleted the addition made by the AO by following the earlier order of CIT(A) which was subject, matter of appeal in ITA 2902/Del/00. The Revenue has raised the present ground of appeal against the order of the CIT(A). As already observed by us, this addition could not be the subject matter of scrutiny in the set aside proceedings before the CIT(A) for the reason that this addition had already been deleted by the CIT(A) and was never remanded to the AO for fresh consideration. In the circumstances the action of the CIT(A) in deleting this addition is found to be proper. Consequently ITA 2718/Del/00 is also dismissed. 22. In the result ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
