TMI Blog2024 (3) TMI 143X X X X Extracts X X X X X X X X Extracts X X X X ..... e on protective basis in the hands of the assessee. Decided in favour of assessee. - SHRI DUVVURU RL REDDY, HON BLE JUDICIAL MEMBER SHRI S BALAKRISHNAN, HON BLE ACCOUNTANT MEMBER For the Appellant : Sri M.V. Prasad, AR For the Respondent : Dr. Satyasai Rath, CIT-DR ORDER PER BENCH: All the captioned appeals are filed by the assessee against the orders of the Ld. Commissioner of Income Tax (Appeals)-3, Visakhapatnam [Ld. CIT(A)] in the following DIN Order Nos. Sl. No DIN Order No. Date of order AY 1 ITBA/ APL/ S/ 250/ 2023-24/ 1054062901(1) 30/ 6/ 2023 2013-14 2 ITBA/ APL/ S/ 250/ 2023-24/ 1054063437(1) 30/ 6/ 2023 2014-15 3 ITBA/ APL/ S/ 250/ 2023-24/ 1054063740(1) 30/ 6/ 2023 2015-16 4 ITBA/ APL/ S/ 250/ 2023-24/ 1054064028(1) 30/ 6/ 2023 2016-17 5 ITBA/ APL/ S/ 250/ 2023-24/ 1054064681(1) 30/ 6/ 2023 2017-18 6 ITBA/ APL/ S/ 250/ 2023-24/ 1054064911(1) 30/ 6/ 2023 2018-19 7 ITBA/ APL/ S/ 250/ 2023-24/ 1054065097(1) 30/ 6/ 2023 2019-20 8 ITBA/ APL/ S/ 250/ 2023-24/ 1054065249(1) 30/ 6/ 2023 2020-21 All these orders are arisen out of the orders passed u/s. 143(3) of the Income Tax Act, 1961 [the Act]. Since the assessee has raised identical grounds in all these appeals involving t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the tobacco exporting group based in Guntur, Andhra Pradesh ie., Polisetty Somasundaram Group on 28/01/2020. As a part of search operations conducted u/s. 132 of the Act in the group case of M/s. Polisetty Somasundaram, a search operation u/s. 132 of the Act was conducted at the business premises at D. No. 8-24-31, Mangalagiri Road, Guntur and residence of Sri Polisetty Shyam Sundar. The case was centralized to ACIT / DCIT vide order u/s. 127 of the Act vide F.No. 127/Pr.CIT/VJA/2020-21 issued by the Ld. Pr. CIT, Vijayawada on 16/02/2021. Subsequently, a notice u/s. 153A was issued to the assessee on 27/11/2021 and in response, the assessee filed a return of income on 04/12/2021 declaring a total income of Rs. 7 lakhs as admitted in the original return of income filed on 6/3/2016. During the course of search proceedings, in the case of M/s. Polisetty Somasundaram Group, it was found by the Revenue that Sri Shyam Sundar was involved in huge cash transactions with M/s. Polisetty Somasundaram and the details of which are not recorded in his regular books of account. It was further observed from the unaccounted cash book maintained by M/s. Polisetty Somasundaram, Mr. Polisetty Sham S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m and since the impugned expenditure is not allowable in the hands of the firm, taxing the same in the hands of the partner would amount to double addition and therefore, the Ld.AO made an addition of Rs. 2,25,13,508/- on protective basis towards withdrawal from M/s. Polisetty Somasundaram treating as income in the hands of the assessee. The Ld. AO also made an addition of Rs. 11,48,96,159/- on substantive basis and determined the assessed income at Rs. 13,81,09,667/-. Aggrieved by the order of the Ld. AO, the assessee filed an appeal before the Ld. CIT(A). On appeal, the Ld. CIT(A) with regard to the addition of Rs. 2,25,13,508/- sustained the addition of 20% of the impugned expenses in the hands of the assessee, while observing that in the case of M/s. Polisetty Somasundaram Firm a similar addition of 20% was sustained in the hands of the firm and thereby to maintain consistency, the Ld. CIT(A) has sustained 20% of the impugned expenditure in the hands of the assessee on protective basis. Aggrieved by the order of the Ld. CIT(A), the assessee is in appeal before the Tribunal by raising the following grounds of appeal: 1. The Ld. CIT(A) erred in both law and facts. 2. On the facts ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l as the orders of the Ld. Revenue Authorities. It is an admitted fact that 20% of the amount of Rs. 2,25,13,508/- has been subjected to tax in the hands of the firm M/s. Polisetty Somasundaram. It was also confirmed by the order of this Bench of the Tribunal in ITA No.173/Viz/2023 (AY: 2013-14). Therefore, the same amount cannot be taxed in the hands of the assessee on protective basis. It is a trite law that any income shall be subjected to tax only once in the hands of the assessee. On this issue, we find that the Ld. CIT(A) has subjected another 20% in the hands of the assessee wherein the same amount has already been subjected to tax in the hands fo the firm M/s. Polisetty Somasundaram on substantive basis which was also confirmed by the order of this Bench of the Tribunal in ITA No. 173/Viz/2023 (supra). We extract below the relevant paras from the Tribunal s order dated 18/8/2023 for reference: 52. Ground Nos. 5 and 6 raised by the assessee on merits and they are extracted herein below: 5. On the facts and circumstances of the case, the Ld. CIT(A) is not justified in allowing deduction of expenditure towards purchases of tobacco as reflected in the seized material to the ext ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lready shown in its books of accounts about the grey market purchases and it is included in the gross profit. Hence, the Ld. AR pleaded to restrict the estimation to 12.5% instead of 20%. However, since the legal grounds raised by the assessee have been adjudicated in favour of the assessee, as per the foregoing paragraphs and hence adjudication of the grounds raised vide Ground No. 5 and 6 on merits needs no separate adjudication. 9. No material has been placed before us that the above decision of allowing the grounds raised by the assessee in ITA No. 173/Viz/2023 (supra) in the case of the firm M/s. Polisetty Somasundaram was contested by the Revenue in any higher judicial forums. We therefore find no merit in the argument of the Ld. Revenue Authorities and thereby direct the Ld. AO to delete the addition made on protective basis in the hands of the assessee. Accordingly, we are inclined to allow the grounds No.1 to 4 and 6 raised by the assessee. Ground No.5 is a legal ground and the same is not adjudicated as the other grounds raised by the assessee are allowed in favour of the assessee. It is ordered accordingly. 10. In the result, appeal filed by the assessee for the AY 2013- ..... X X X X Extracts X X X X X X X X Extracts X X X X
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