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TMI Blog2014 (1) TMI 284X X X X Extracts X X X X X X X X Extracts X X X X ..... under consideration, we heard all the appeals together and dispose of the same by this common order. 2. Shri T.M. Sreedharan, the ld.senior counsel for the assessee submitted that there was a survey in the premises of the assessee on 02- 08-2006. According to the ld.senior counsel, the assessee was doing business in vegetables in the name and style 'Koncheril Vegetables' at Palayathode, Kollam. The ld.senior counsel, submitted that the assessee filed regular returns for all the assessment years under consideration. However, after the survey operation, the assessments were reopened u/s 147 of the Act. 3. There was a search in the premises of one, Shri E Shamsuddin u/s 132 of the Act on 02-08-2006. On the basis of the material found during ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the CIT(A) restricted the turnover at Rs.1 crore and fixed the gross profit at 13.52%; however, for the assessment year 2006-07 the CIT(A) confirmed the estimation made by the assessing officer. 4. The ld. Senior counsel submitted that certain materials were also found and impounded during the course of survey operation in the premises of the assessee. On the basis of the material found relating to cash remittances by the assessee to Shri E Shamsunddin, the assessing officer estimated the total turnover. According to the ld.representative, the material found at the time of survey was not corroborated by any other material. The assessee was also not provided with any opportunity to examine those materials and rebut the same. According to th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ring the course of assessment proceedings. Therefore, according to the ld.senior counsel, there is no justification in making any addition. The ld.senior counsel has placed his reliance on the judgment of the Andhra Pradesh High Court in Rajnik & Co vs ACIT 251 ITR 561 (AP). 5. On the contrary, Smt. Susan George Varghese, the ld.DR submitted that a search was conducted in the premises of Shri E Shamsuddin who is none than the father of the assessee. On the basis of the material found in the premises of Shri E Shamsuddin with regard to the remittances made by the present assessee, a survey was also conducted in the premises of the assessee on the very same day. According to the ld.DR, Shri E Shamsuddin was carrying on business in the name a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... total remittances upto 31-03-2004 is Rs.6,05,88,354 as per the seized document. However, the assessee declared the sales only at Rs.48,17,244. In view of the material found during the course of search operation, according to the ld.DR, the assessing officer has rightly made the addition. The CIT(A) is not justified in restricting the addition ignoring the seized material. According to the ld.DR, the seized material cannot be ignored since it discloses the remittances made by the assessee to his father, Shri E Shamsuddin. 8. We have considered the rival submissions on either side and also perused the material available on record. There was a search in the premises of assessee's father, Shri E Shamsuddin, who is carrying on business in veget ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t Edappallykotta. If the entire net turnover was remitted to Shri E Shamsuddin after deducting the expenses, then what is the profit element left in the hands of the assessee. Whether the assessee is transferring the profit to his father as application of funds or he is conducting the business as an agent of his father. If the assessee is conducting the business as a proprietory concern independent of his father, then the profit element embedded in the business transaction has to be assessed in his hands. But the case of the revenue is that the entire net turnover was remitted to his father at Edappallykotta. In those circumstances, it has to be ascertained whether Shri E Shamsuddin was doing business at different places through his sons an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s doing the business in his proprietory capacity or not? If the business was carried on as a proprietory concern, then why the entire net turnover was remitted to his father, Shri E Shamsuddin? What is the business arrangement between Shri E Shamsuddin and the assessee. This Tribunal is of the considered opinion that the assessing officer shall examine the issue in the light of the above observation. 11. Accordingly, the orders of lower authorities are set aside for all the years under consideration and the entire issue is remitted back to the file of the assessing officer. The assessing officer shall re-examine the issue in the light of the material found in the course of search and survey and the statements recorded and thereafter decide ..... X X X X Extracts X X X X X X X X Extracts X X X X
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