TMI Blog2016 (6) TMI 1193X X X X Extracts X X X X X X X X Extracts X X X X ..... nt 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. Thus 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. - I.T.A.No.308/Ind/2015, I.T.A.No.314/Ind/2015 - - - Dated:- 30-6-2016 - SHRI D.T. GARASIA, JUDICIAL MEMBER AND SHRI B.C.MEENA, ACCOUNTANT MEMBER Appellant by : Shri Ashish Goyal and Shri N. D. Patwa, Advocates Respondent by : Shri Rajeev Varshaney, CIT DR O R D E R PER D.T.GARASIA, J.M. 1. This appeal by the assessee is directed against the order of CIT(A)-I, Bhopal, dated 05.12.2014 for the assessment year 2008-09. 2. Basic facts in both the cases are identical, except the amount of addition. In Lilasons Breweries Ltd. (LBL), the addition was ₹ 17,77,64,300/- and in Lilasons Industries Ltd. (LIL), the addition was ₹ 6,93,84,000/-. The addition has been deleted by ld CIT(A). However, the appellantassessee is challenging the directions of ld CIT( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (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 ₹ 1,53,62,000/- to Arun Lila and his family and his family members for 21% of holdings, the total payment which has been to the Lila family comes to ₹ 6,93,84,000/- for the entire 94.85% 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. Thus, the findings given by the learned CIT(A) is unjust, unfair and not based on correct footings. 4. That on the facts and in the circumstances of the case, the learned CIT(A) must ought to consider tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e nature of medicine, grass etc. were also entered on some of the loose papers. The AO further noticed that the family of Arun Lila holds 8.14% of the shares in the appellant company and the Lila family group holds 82.03% of the total shares of the company. The AO observed that since the appellant company had made payment of ₹ 1,76,40,000/- to Shri Arun Lila and his family for 8.14% of shareholding, the total payment which must have been paid to other members of the Lila Group works out to ₹ 17,77,64,300/- for the entire holding of 82.03% of shares by the Lila Group. The AO therefore held that the appellant company had made payments to the family members of Lila group of ₹ 17,77,64,300/- outside the books of account as undisclosed payments. Accordingly, AO made addition of ₹ 17,77,64,300/- into the total income of the appellant for A.Y. 2011-12. However, it was noticed by the AO that the assessee had disclosed unaccounted income of ₹ 1,50,00,000/- and after giving credit of same, the net addition in the returned income was made at ₹ 16,27,64,300/- [Rs. 17,77,64,300/- 1,50,00,000/-]. 6. In relation to LBL, the AO noted that there are 29 entri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hese papers contain the transactions in the case of the appellant company from July 2009 to March, 2010 i.e. for A.Y. 2009- 10 and A.Y. 2010-11. The Ld. AO also stated in remand report that In the case of assessee company, the entries have been written upto March 2010 involving A.Ys. 2009-10 and 2010-11 . Thus, it is evidently clear that no transaction recorded on these loose papers seized pertain the previous year relevant to A.Y. 2011-12 under consideration. Since, there was no transactions pertaining to A.Y. 2011-12 recorded in these loose papers, no addition could be made in A.Y. 2011-12 under consideration. In the light of the above mentioned facts, since no transaction pertaining to A.Y. 2011-12 was recorded in these seized documents, the addition made by the AO in A.Y. 2011-12 cannot be sustained. Hence, the net addition of ₹ 16,27,64,300/- (Rs. 17,77,64,300 - ₹ 1,50,00,000) made by the AO in the returned income for A.Y. 2011-12 is hereby deleted. However, the AO is free to take remedial action as per law for the relevant A.Y. 2009-10 and A.Y. 2010-11 in the case of the appellant company. 8. Similar findings have been recorded in the case of LBL. 9. Ag ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an Das 52 ITR 335 (SC) (k) Onkar Nath 64 ITR 347 (All.) (l) CIT vs Hirdey Narain Yogendra Prakash, 82 ITR 136 (All.). (m) CIT vs Rajgarhia (C.M.) 121 ITR 778 (Pat.) (n) Shri Ram Nutrient 14 ITJ 219 (ITAT Indore). (o) Sun Metal Factory (I) (P) Ltd. 124 ITD 14 (Chennai). 14. In respect to the second count, i.e. such findings/ directions could not be given in the facts of the case, it was submitted by the ld. Authorized Representative for the assessee that in the present case, the loose papers BS-3 having 28 pages was found in the locker of Shri Arun Lila. The entries in these papers were containing details of only months like JAN , FEB , MARCH and year was not written. Since the year was not written, it was not clear as to which year the entries pertained. The assessee submitted that these entries are very old and might by as old as 10 years. It was submitted that the ink used and the quality of papers proves that these documents were written perhaps more than ten years back. A reference was made to PB 16, which was the remand report of the AO to ld. CIT(A). In fact, the locker of Arun Lila was last operated in May 2010. In the remand report at PB 20 (para 4) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as discussed above. The assessee s argument that these documents are written more than 10 years back is clearly false in view of the fact that birthday expenses of ₹ 10,000/- are recorded in the name of Nudu who was born on 30.07.2004. Even assuming that these birthday expenses relate to her first Birthday i.e. on 30.07.2005, yet it very clearly falls the period of 6 years prior to the previous year in which search was conducted. 4.3 In the light of above, it is clear that the said loose papers pertains to the period immediately before the search action at locker. AS the locker No 2-114 in Indian Overseas Bank, Hamidia Road, Bhopal in the name of Shri Arun Lila was last operated in May, 2010 from which Annexure BS-3 was seized, this Annexure contains details of expenditure recorded up to May, 2010 only. As rightly Observed by the Ld CIT(A), there is a clear cut flow of funds appearing wherein the opening balance, cash receipts, expenses incurred and balance carried forward month wise has been mentioned. The details are summarized as under:- Page No. Month Opening Balance Additional T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 010 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 detailed discussion has been made by the assessing officer in the assessment order and the undersigned rely upon the findings of my predecessor in this regard. 15. The ld. Authorized Representative for the assessee submitted that in para 4.1 above, the ld. AO has made a reference to TNCP expenses which is placed at PB 115. It was submitted that going by the findings of the ld. AO himself, the TNCP expenses in the BS-3 are 143.3. As per ld. AO, these figures are in thousands. So the figure ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d 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 was in question in the appeal before him, was not income relevant to the assessment year 1947-48, which was in appeal in that case. The question whether this income accrued or was earned in the previous year relevant to the assessment year 1946-47 (i.e. the year not in appeal), was not before him for decision, nor was it a point on which it was essential for him to record a finding before appropriately deciding appeal before him. We also observe in the case of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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