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TMI Blog2016 (6) TMI 1193X X X X Extracts X X X X X X X X Extracts X X X X ..... anation offered by the appellant that on the basis of documents found in the personal locker of Shri Arun Kumar Lila, no addition is called for either in this year or in earlier years. Thus, the findings of the learned CIT(A) is unjust, unfair and not tenable in the eyes of law. 2. That on the facts and in the circumstances of the case, the learned CIT(A) erred in not giving any finding on the ground raised by the appellant regarding the presumption of the AO that since the company has made payment of Rs. 1,76,40,000/- to Arun Lila and his family and his family members for 8.14% of holdings, the total payment which has been to the Lila family comes to Rs. 17,77,64,300/- for the entire 82.03% of shareholding by the Lila family. Thus, the order passed by the learned CIT(A) by not giving the findings on the ground raised by the appellant is unjust, unfair and bad in law. 3. That on the facts and in the circumstances of the case, the learned CIT(A) erred in giving the finding that the AO is free to take remedial action as per law for relevant A.Y. 2009-10 and A.Y. 2010-11 though on the basis of seized document BS 3 page 1 to 28 determination of exact assessment year is not possible ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he assesseecompanies are a part of Lilasons group of Bhopal. The Lilasons group is engaged in the business of manufacture and sale of Beer. The group is well-known for its famous Khajurao Brand of beer. It has set up two breweries so far, under the following companies:- (i) Lilasons Breweries Ltd. (LBL), Bhopal (ii) Lilasons Industries Ltd. (LIL), Aurangabad (Maharastra) The main persons of the group are Shri Arun Lila, Shri Mahesh Lila, Shri Mohan Lila, Shri Anil Lila, Shri Ratan Lila and others. A search u/s. 132 was conducted on the aforesaid group in October to December 2010. The search covered the premises of the aforesaid two companies LBL and LIL, and also the residences of the Directors and related persons. Further, the bank lockers of the Directors were also covered by search. The assessee-company LIL filed its return for A.Y. 2011-12 on 27.09.2011 declaring income of Rs. 1,98,08,350/- after including surrendered income at Rs. 1,50,00,000/-. Also, LBL filed its return for A.Y. 2011-12 on 22.09.2011 declaring income of Rs. 1,21,33,250/- after including surrendered income at Rs. 1,00,00,000/-. 4. During search, inter-alia, a bank locker, No. 2-114, Indian Overseas Bank, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ares of the company. The AO observed that since the appellant company had made payment of Rs. 1,53,62,000/- to Shri Arun Lila and his family for 21% of shareholding, the total payment which must have been paid to other members of the Lila Group works out to Rs. 6,93,84,000/- for the entire holding of 94.85% of shares by the Lila Group. The AO ,therefore, held that the assessee company had made payments to the family members of Lila group of Rs. 6,93,84,000/- outside the books of account as undisclosed payments. Accordingly, the AO made addition of Rs. 6,93,84,000/- into the total income of the appellant for A.Y. 2011-12. However, it was noticed by the AO that the appellant had disclosed unaccounted income of Rs. 1,00,00,000 and after giving credit of same, the net addition in the returned income was made at Rs. 5,93,84,000 [Rs. 6,93,84,000 - 1,00,00,000]. 7. The matter carried to the ld. CIT(A) and the ld. CIT(A) has deleted the addition vide his order dated 18.02.2014 holding that the loose paper set BS-3 does not pertain to A.Y. 2011-12, by observing, at page 33 in the case of LIL, as under :- "The next question is regarding the period for which these transactions relate. As me ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ustainable on two counts: - 1. Ld. CIT(A) has no jurisdiction legally to give such directions 2. Moreover, such findings/ directions could not be given in the facts of the case. 11. So far as the first count i.e. ld. CIT(A) has no jurisdiction legally to give such directions, it was submitted that under Section 251, the powers of ld. CIT(A) are worded. It is a settled law that the ld. CIT(A) has coterminus powers with that of the ld. AO. Ld. CIT(A) could conduct any enquiry as he thinks fit, and do enhancement of assessment. The jurisdiction of ld. CIT(A) is not limited to the subject matter of appeal, but to the subject matter of assessment. He can do what the ld. AO has failed to do. 12. For this contention, the ld. Authorized Representative for the assessee placed reliance on the following case laws :- (i) CIT vs Kanpur Coal Syndicate 53 ITR 225, 229 (SC). (ii) Kapurchand Shrimal 131 ITR 451, 460 (SC). (iii) CIT vs Ahmedabad Crucible Co. 206 ITR 574 (Guj.) 13. The ld. Authorized Representative for the assessee further submitted that it would not mean that ld. CIT(A) has unlimited powers. There are fetters on the powers of ld. CIT(A). Proceedings before ld. CIT(A) are con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (apparently Tour & Country Planning Expenses): Annexure BS-1 contain the following entries under the head TnCP. Page No. Amount 12 10 12 25 13(back side) 8.3 13(back side) 100 143.3 The amount expended under the head TnCP correlates with the expenditure recorded under the head TnCP contained in loose paper in Annexure A-10 seized from the business premises of M/s Lilasons infrastructure Pvt. Ltd at E-4/131, Arera colony(copy enclosed as Annex-2) Page 1,2 and 3 show an amount of 2143 recorded under the head TnCP which is actually in thousand as evident from page 3 which says amount (000). Page 11 of the same Annexure clearly states that Rs. 21,43,000/- is the expected outflow updated on 12.10.2010 meaning thereby that Rs. 21,43,000/- Was proposed to be spent up to 12.10.2010 However, the amount actually expended is Rs. 14,33,000/- (the expenditure recorded in Annexure BS-1 is in thousands). This expenditure is actually incurred in FY 2009-10 and Shri Arun Lila has admitted various expenses recorded in these loose papers in his statement recorded on 28.10.2010 (copy of this statement is enclosed as Annexure-3 ) Hence, It is evident that these ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he details of expenses of Rs. 32,90,000/- incurred in the month of July are recorded in the pages 9 and 10. The entries of expenses recorded in the aforesaid pages are in the thousands as rightly claimed by the assessee. But the entries of opening balance, receipts, expenses and closing balances recorded in 20,28,27,24,8,8,6,5,1,2,3 & 17 are in lakhs. The entries recorded in pages 1 to 28 pertain to period of 21 months as rightly observed by the Ld. CIT(A). The locker was operated in May 2010 and the entries are recorded from July to April from a period of 21 months. Hence, in all probability, the entries were written till April 2010 and the period of 21 months should be reckoned from July 2008 till April 2010, involving F.Ys. 2008-09, 2009- 10 and 2010-11. In the case of assessee company, the entries have been written up to march 2010 involving A.Ys 2009-10 and 2010-11. Regarding the justification of extrapolation of the entries recorded in the said loose papers and addition made in the assessment order, the undersigned wants to submit that during appellate proceedings, the assessee, to controvert the findings of assessing officer has furnished no new fact or document. The detail ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd A.Y. 2010- 11 in the case of appellant company" The ld. CIT(A) exceeded jurisdiction in giving such findings. In any case, there was no material to co-relate the papers to the A.Y. 2009-10 and A.Y. 2010-11. Such findings were baseless and without any material on record. 18. The ld. Departmental Representative relied upon the order of the AO and submitted that the order of the ld. CIT(A) is justified. In fact, he has deleted the addition. The direction of the ld CIT(A) that remedial action may be taken in other year, is not appealable at all, as assessee cannot be aggrieved out of such order. 19. The ld. Departmental Representative relied upon the orders of the authorities below. 20. We have heard the rival contentions of both the parties. We have also gone through the case laws relied upon by the ld. Authorized Representative for the assessee. We find that the gist of the plethora of judgments quoted above is that where any assessment year was not before the ld. CIT(A), no findings can be given in respect of such cases. We find that in the case of Pt. Hazari Lal, 39 ITR 265 (All.), it was made clear that the AAC was only competent to record the finding that the sum, which w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ember 1955. On appeal, the AAC deleted the addition of said sum on the ground that the said sum was outside the financial year 1956-57, relevant to the assessment year in question. The Court further observed that in the instant case the AAC was dealing with the propriety of the assessment for assessment year 1957-58. He found that the said sum did not relate to that year. That finding was sufficient to dispose of the item. He would not record a definite finding that this very item represented income of the assessee from an undisclosed source for assessment year 1956-57. We find that in the instant case the assessment year involved before the ld. CIT(A) was A.Y. 2011-12. The observations made for assessment years 2010-11 and 2009-10 would be out of the jurisdiction of the ld. CIT(A), as before him no such assessment year was pending. As the issue is squarely covered by Hon'ble Supreme Court and the Hon'ble High Court judgments, we hold that the directions of the ld. CIT(A) to take remedial action in the A.Y. 2010-11 and 2009-10 is uncalled for and liable to be expunged. We direct accordingly. 21. In the result, the appeals in I.T.A.No. 308/Ind/2015 in the case of M/s. Lilas ..... X X X X Extracts X X X X X X X X Extracts X X X X
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