Asst. Commissioner of Income Tax,Central Circle-2, Belgaum V. M/s . Nirani Sugars Ltd., Belgaum

ITA 201/PAN/2014

• Counselvise Citation: [2015] 120 COUNSELVISE.COM (IT) 9495 (ITAT-PANAJI)
• Duration Of Justice: 6 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-01-2015
• Appeal Filed By: Department
• Bench Allotted: DB
• Next Hearing Date: 23-12-2014
• Assessment Year: 2001-2002
• Appeal Filed On: 19-06-2014
• Court: TRIBUNAL
• Department Lawyers: ASHA DESAI LD
• Keywords: Income from undisclosed sources; Peak credit
• Section: 68; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL ,PANAJI BENCH, PANAJI [BEFORE SHRI P. K. BANSAL, AM & SHRI D.T GARASIA, JM ] I.T . A NO S . 201 TO 204 /PNJ/2014 A.Y S. 2001 - 02 TO 2004 - 05 ACIT, C ENTRAL C IR - 2, BELGAUM VS. M/S. NIRANI SUGARS LT D PAN:AABCN 2166J ( DEPARTMENT ) ( RESPONDENT ) C.O NO S. 33 TO 36 /PNJ/2014 [ITA NOS. 201 - 204/PNJ/2014 A.Y 2001 - 02 TO 2004 - 05 ] M/S. NIRANI SUGARS LTD VS. ACIT, CENTRAL CIR - 2, BELGAUM ( CROSS OBJECTOR/ ASSESSEE ) ( RESPONDENT /DEPARTMENT ) FOR THE APPELLANT /DEPARTMENT : SHRI ASHA DESAI, LD.DR FOR THE CROSS OBJECTOR /ASSESSEE : SHRI ASHOK A KULKARNI, ADVOCATE, LD.AR DATE OF HEARING: 08 - 01 - 2015 DATE OF PRONOUNCEMENT: 08 - 01 - 2015 / ORDER PER SHRI D.T GARASIA, J M: ALL THESE APPEALS AND CROSS OBJECTIONS HAVE BEEN FILED BY THE DEPARTMENT AND ASSESSEE AGAINST THE COMMON ORDER OF THE LD. CIT (A) , BANGALORE DATED 28 TH MARCH 2014 FOR THE ASSESSMENT YEARS 2001 - 02 TO 2004 - 05. 2. THE A BOVE APPEALS AND CROSS OBJECTIONS PERTAIN TO ONE ASSESSEE, THEREFORE, THESE ARE DISPOSED OF BY THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE. 3. THE FOLLOWING COMMON GROUNDS ARE RAISED BY THE DEPARTMENT IN ITA NOS. 201 TO 204/ PNJ/2014 FOR THE ASSESSMENT YEARS 2001 - 02 TO 2004 - 05: - 1. THE LD.CIT(A) HAS ERRED IN GIVING RELIEF OF RS.1,09,97,469/ - , RS.2, 60,55,620/ - , RS.1,48,89,692 / - AND RS.5,91,05,139/ - ON ACCOUNT OF UN ACCOUNTED SALES WHICH THE ASSESSING OFFICER HAD ADDED AS UN ACCOUNTED SALES ON P ROTECTIVE BASE. 2. THE LD.CIT(A) HAS ERRED IN GIVING THE IMPUGNED RELIEF AFTER RELYING ON HER JUDGMENT IN ITA NOS. TR.41/42/43/44/ACIT, CC PANAJI/CIT(A) - VI/BNG/ 2 013 - 2014 FOR THE A.Y 2001 - 02 TO 2004 - 05 IN THE CASE OF SRI MURUGESH R. NIRANI & OT HERS (AOP), MUDHOL, WHICH IS NOT ACCEPTABLE AND ARE SEPARATELY BEING CONTESTED. 2 ITA NO S. 201 TO 204 & CO NOS. 33 TO 36 /PNJ/2014 - JM M/S. NIRANI SUGARS LTD 3. THE APPELLANT CRAVE LEAVE TO TAKE FURTHER ADDITIONAL GROUND IN COURSE OF HEARING OF THE CASE. 4. IN THE C.O NO .33 /PNJ/2014 [ITA NO.201/PNJ/2014 A.Y 2001 - 02] TH E ASSESSEE HAS RAISED FOLLOWING GROUNDS : - 1. THE HON'BLE COMMISSIONER OF INCOME TAX (APPEALS) OUGHT TO HAVE HELD THAT THE ADDITIONS MADE BY INVOKING PROVISIONS OF SECTION 68 OF THE INCOME TAX ACT ARE BAD IN LAW 2. THE CROSS OBJECTOR CRAVES FOR LEAV E TO, ADD TO, DELETE FROM THE GROUNDS OF CROSS OBJECTIONS . 5. IN THE C.O NOS. 34 - 36/PNJ/2014 [ITA NOS.20 2 ,203, & 204 A.YS. 200 2 - 03 , 03 - 04 & 04 - 05] THE ASSESSEE HAS RAISED FOLLOWING COMMON GROUNDS : 1. THE HON'BLE COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN UPHOLDING THE ADDITION OF RS.2,05,96,698,RS.1,48,89,692/ - AND RS.2,82,81,809/ - AS ARISING OUT OF THE UNACCOUNTED SALES OF SUGAR. 2. THE CROSS OBJECTOR CRAVES FOR LEAVE TO, ADD TO, DELETE FROM THE GROUNDS OF CROSS OBJECTIONS. 6 . SHORT FA CTS OF THE CASE ARE THAT A SEARCH U /S 132 OF THE ACT WAS CONDUCTED IN THE PREMISES OF M/S. NIRANI SUGAR LTD OF WHICH THE ASSESSEE HIMSELF WAS THE CHAIRMAN ON 28 - 01 - 2004 . DURING THE COURSE OF SEARCH AT THE PREMISES OF SHRI NAROTTAM PAREKH, ACCOUNTANT O F M/S. NIRANI SUGARS LTD THE BOOKS OF ACCOUNT ENLISTED I ANNEXURE A/ NP PANCHANAMA DATED 28 - 01 - 2004 WERE IMPOUNDED AND SEIZED. A STATEMENT OF SHRI NAROTTAM PAREKH RECORDED DURING THE COURSE OF SEARCH ON 28 - 01 - 200 , WHICH READS AS UNDER: - I AM WORKING AS A N ACCOUNTANT IN M/S. NIRANI SUGARS LIMITED. I AM MAINTAINING ALL THE REGULAR BOOKS OF THE COMPANY . THE PROCEDURE FOLLOWED FOR WRITING THE BOOKS IS THAT ALL THE TRANSACTIONS FOR THE DAY ARE NOTED DOWN IN A PAPER WHICH CONTAINS ALMOST ALL THE TRANSACTIONS F OR THE DAY LIKE THE CASH RECEIPTS, CASH PAYMENTS, SALES, BANK TRANSACTIONS ETC. ALL THESE TRANSACTIONS ARE THEN BIFURCATED AND ENTERED IN TWO DIFFERENT REGISTERS MARKED AS I AND II WHICH ARE MAINTAINED IN PARALLEL TO RECORD ACCOUNTED AND UNACCOUNTED TRANSACTIONS. THE REGISTER MARKED AS I CONTAINS THE ACCOUNTED TRANSACTIONS WHICH ARE LATER ENTERED INTO MANUAL DAY BOOK FOR THE RELEVANT YEAR AND THEN TO COMPUTERIZED ACCOUNTS. ON THE OTHER HAND, THE REGISTER MARKED AS II CONTAINS UNACCOUNTED TRANSAC TIONS NOTED IN CODED FIGURES DELETING TWO ZEROS, FOR EXAMPLE ANY TRANSACTION OF RS.10,000 IS WRITTEN AS RS.100. I BIFURCATE AND FILTER THE TRANSACTIONS AS PER THE DIRECTIONS OF THE VICE CHAIRMAN OF THE COMPANY. THE MANAGEMENT OF THE COMPANY IS AWARE OF T HE ABOVE MENTIONED ACCOUNTING PRACTICE. THE ACCOUNTED AND UNACCOUNTED BUSINESS TRANSACTIONS WERE SUBMITTED TO THE VICE CHAIRMAN DAY TO DAY. 3 ITA NO S. 201 TO 204 & CO NOS. 33 TO 36 /PNJ/2014 - JM M/S. NIRANI SUGARS LTD 7 . IN THE SEIZED NO.2 BOOKS, THE LEDGER ACCOUNTS OF SHRI MURGESH NIRANI, CHAIRMAN OF THE COMPANY AND SHRI BHAGWAN DAS JAJU ARE MAINTAINED. DURING THE COURSE OF SEARCH A STATEMENT OF SHRI SRIKANT V.BAHETI, MANAGING DIRECTOR OF THE COMPANY WAS ALSO RECORDED ON 8 - 4 - 2004 . HE HAS STATED THAT SH. NAROTTAM PAREKH, ACCOUNTANT OF THE COMPANY WAS WRITING THE BOOKS ON THE INS TRUCTIONS ISSUED BY HIM AS MANAGING DIRECTOR AND SHRI MURALI JAJU, VICE CHAIRMAN OF THE COMPANY. THE ASSESSEE COMPANY ALSO ADMITTED THAT CERTAIN UNACCOUNTED TRANSACTIONS HAVE BEEN MADE AS PER NO.2 BOOKS FOUND AND SEIZED AS IS EVIDENT FROM THE FACT THAT THE COMPANY HAS DISCLOSED THE UNACCOUNTED SALES IN THE RETURNS FILED FOR A.YS 2002 - 03 AND 2003 - 04. THE AO HAS WORKED OUT THE PEAK CREDIT ON THE BASIS OF LEDGER ACCOUNTS APPEARING IN NO.2 BOOKS IN THE CASE OF SHRI MURGESH NIRANI AND SHRI BHAGWANDAS JAJU. TH E PEAK CREDITS WERE WORKED OUT AT RS.37,68,375/ - AND RS.72,29,094/ - RESPECTIVELY. THE BOOKS AND DOCUMENTS WERE FOUND AND SEIZED SO THAT THERE WAS TRANSACTION ON UNACCOUNTED SALES OF SUGAR TAKEN PLACE IN THE SUBSEQUENT ASSESSMENT YEARS. THE AO WAS OF THE VIEW THAT THERE CASH CREDITS OUT OF UNACCOUNTED SALES OF SUGAR. THUS, THE ADDITION OF RS.1,09,97,469/ - HAS BEEN MADE AND ASSESSED IN THE HANDS OF S/SHRI MURGESH R.NIRANI AND BHAGWANDAS JAJU ON PROTECTIVE BASIS. SIMILARLY, IN THE A.YS 2002 - 03, 03 - 04 AND 04 - 05 THE AO HAS MADE THE ADDITIONS OF RS.2,60,55,620/ - , RS.1,48,89,692/ - AND RS.5,91,05,139/ - IN THE HANDS OF THE AOP ON PROTECTIVE BASIS. 8 . MATTER CARRIED TO LD. CIT(A) AND CIT(A) HAS DISPOSED OF THE APPEALS BY HIS COMMON ORDER BY OBSERVING AS UNDE R: - PARAS 8 TO 12 8 . AFTER GOING THROUGH THE FACTS OF THE CASE AND THE EVIDENCES ON RECORD, AND ALSO MY DECISION IN THE CASE OF AOP ORDER IN ITA NOS. TR - 12/TR - 13/TR - 14/TR - 15/ACIT, CC, PANAJI/CIT(A) - VI/BNG/2013 - 2014 OF EVEN DATE FOR A.YS 2001 - 02 TO 2004 - 0 5, I FIND THAT NO CLEAR EVIDENC ES OF EXISTENCE OF AOP AND ASSESSMENT IN THE HANDS OF AOP AND CAN BE JUSTIFIED IN RESPECT OF THESE EVIDENCES FOUND DURING THE COURSE OF SEARCH IN THE CASE OF THE APPELLANT COMPANY AND FROM THE EMPLOYEE, THE CASHIER CUM ACC OUNTANT OF THE APPELLANT COMPANY. 9. FROM THE STATEMENTS RECORDED AND OTHER EVIDENCES SEIZED, IT APPEARS THAT THE SALES WERE MADE I.E UNACCOUNTED TRANSACTIONS WERE CARRIED OUT ON BEHALF OF THE APPELLANT COMPANY (THOUGH NOT ACCOUNTED). AS SUCH, IN MY VIEW THESE UNACCOUNTED PROFITS ARE TO BE TREATED AS INCOME OF THE APPELLANT COMPANY ITSELF AND ASSESSMENT IS BE MADE ON SUBSTANTIVE BASIS. ACCORDINGLY, INCOME ASSESSED OF R S. 2,60,55,620/ - IS CONFIRMED AS FOUND RECORDED FOR A.Y 2002 - 03, AS AGAINST TOTAL UNACCO UNTED SALES OF RS.4,31,80,366/ - . THESE UNACCOUNTED SALES FOR A.Y 2002 - 03 IS NOT DISPUTED. THE ONLY ISSUE IS THAT AS PER THE APPELLANT, INCOME IS ONLY RS.54,57,922/ - [DECLARED AFTER SEARCH IN RETURN OF INCOME UNDER SECTION. 153A] AFTER CLAIMING EXCESSIVE EXPENSES, WHEREAS, THE ASSESSING OFFICER HAS TAKEN RS.2,60,55,620/ - , AS THE INCOME WHICH IS THE AMOUNT CREDITED IN NAMES OF A 4 ITA NO S. 201 TO 204 & CO NOS. 33 TO 36 /PNJ/2014 - JM M/S. NIRANI SUGARS LTD NUMBER OF PERSONS, WHICH IS APPARENTLY FROM THE PROFITS THEREOF. THE APPELLANT IS UNABLE TO OFFER ANY OTHER EXPLANATION EVEN DU RING THE COURSE OF APPEAL. THEREFORE, IN MY VIEW, THE ACTION OF THE ASSESSING OFFICER IN ASSESSING RS.2,60,55,620/ - AS THE ADDITIONAL PROFIT FROM UNACCOUNTED SALES IS IN ORDER AND IS UPHELD. 10. FOR A.Y 2004 - 05, THE CLAIM OF THE APPELLANT FOR REASONABLE EXPENSES IS EXAMINED. IT IS SEEN THAT FOR A.Y 2002 - 03, AS AGAINST ADMITTED UNACCOUNTED SALES OF RS.4,31,80,366/ - THE PROFIT IS RS.2,06,65,210/ - , THE PERCENTAGE OF PROFIT IS THEREFORE 2,06,65,210/ - /4,31,80,366 X 100 =47.85% . APPLYING THE SAME PERCENTAGE T O THE ADMITTED UNACCOUNTED SALES FOR A.Y 2004 - 05 PF RS.5,91,05,135/ - , THE ADDITIONAL INCOME TO BE ASSESSED COMES TO 47.85/100X RS.5,91,05,139= RS.2,82,81,809/ - . THEREFORE, THE INCOME FOR THE A.Y 2004 - 05 IS TO BE COMPUTED AFTER TAKING INTO ACCOUNT THE SAI D INCOME AS UNACCOUNTED PROFITS FROM UNACCOUNTED SALES CARRIED OUT BY THE APPELLANT COMPANY. THE ADDITION MADE BY THE ASSESSING OFFICER IS UPHELD TO THIS EXTENT. 11. FOR A.Y 2003 - 04, THE UNACCOUNTED PROFIT AS RECORDED IN BOOKS OF ACCOUNT AT RS.1,48,89,69 2/ - IS ACCEPTED IN ABSENCE OF PROOF OF ANY FURTHER PROFIT/INCOME. THE APPELLANT DID NOT PRESS THE ITS CLAIM FOR ASSESSMENT OF RS.91,71,971/ - (AS DECLARED IN RETURN OF INCOME FILED UNDER SECTION.153A) AS ITS UNACCOUNTED INCOME. ALSO , FOR A.Y 2001 - 02, THE C REDITS IN NAMES OF LEDGER ACCOUNTS OF INDIVIDUAL PERSONS TOTALING RS.1,09,97,469/ - IN BOOKS OF APPELLANT COMPANY IS UPHELD AS UNACCOUNTED INCOME OF THE COMPANY ON BASIS OF FINDINGS OF SEARCH FOR ALL THE A.YS IN QUESTION AND THE ADMISSION MADE BY THE APP ELLANT COMPANY THAT THE COMPANY HAD BEEN INDULGING IN NO.2 SALES AND THAT INCOME WAS EARNED FROM THESE SALES UNACCOUNTED. THE ACTION OF THE ASSESSING OFFICER IS UPHELD. 12. IN THE RESULT, UNACCOUNTED INCOME OF THE APPELLANT COMPANY IS UPHELD AS UNDER: - A.Y 2001 - 02 RS.1,09,97,469/ - (AS PER PARA 11 ABOVE) A.Y 2002 - 03 RS. 2,60,65,210/ (AS PER PARA 9 ABOVE) A.Y 2003 - 04 RS. 1,48,89,692/ - ( AS PER PARA 11 ABOVE) A.Y 2004 - 05 RS. 2,82,81,809? - (AS PER PARA 10 ABOVE) HOWEVER, IT IS RELEVANT TO NOTE THAT THE SAID COMPANY, M/S. NIRANI SUGARS LTD, THOUGH A PUBLIC LTD COMPANY, HAS NOT TAKEN ANY STEPS EITHER TO BRING INTO ITS BOOKS THE UNACCOUNTED INCOME EARNED OR TO RECOVER THE SAME FROM THE AID PERSONS TO WHOM THE PROFITS ARE CREDITED AS PER THE UNACCOUNTED BOOKS. WITH THESE FINDINGS, THE APPEALS ARE TREATED AS DISMISSED FOR A.YS 2001 - 02 TO 2003 - 04 AND PARTLY ALLOWED FOR A.Y 2004 - 05. 9 . THE DEPARTMENT AND ASSESSEE BOTH ARE IN APPEAL AGAINST THE DECISION OF THE LD.CIT(A). 10 . WE HAVE HEARD RIVAL CONTENTIO NS OF BOTH THE PARTIES. W E FIND THAT A SEARCH U /S 132 OF THE ACT WAS CONDUCTED ON 28 - 01 - 2004 IN THE PREMISES OF M/S. NIRANI SUGARS LTD . THE ASSESSEE COMPANY IS ENGAGED IN THE BUSINESS OF MANUFACTURING AND SELLING OF SUGARS. WHEN THE SEARCH WAS CONDUCTED SHRI NAROTTAM PAREKH, ACCOUNTANT WAS ASKED AND HIS STATEMENT WAS RECORDED. WE FIND THAT UNACCOUNTED SALES OF SUGARS WERE MADE. THUS, THE AO HAS BROUGHT TO TAX TOTALING TO RS.1,09,97,469/ - IN THE HANDS OF SHRI MURGESH R.NIRANI AND SHRI BHAGWANDAS JAJU F OR THE 5 ITA NO S. 201 TO 204 & CO NOS. 33 TO 36 /PNJ/2014 - JM M/S. NIRANI SUGARS LTD ASSESSMENT YEAR 2001 - 02. SIMILARLY, IN THE A.YS 2002 - 03, 03 - 04 AND 04 - 05 THE AO HAS MADE THE ADDITIONS OF RS.2,60,55,620/ - , RS.1,48,89,692/ - AND RS.5,91,05,139/ - IN THE HANDS OF THE AOP ON PROTECTIVE BASIS. WE FIND THAT THE ASSESSEE COMPANY IS ASS ESSED TO TAX. THE ASSESSEE COMPANY HAS FILED ITS RETURNS FOR THE ASSESSMENT YEARS 2001 - 02 TO 2004 - 05 BY DECLARING LOSS . WHATEVER THE INCOME AS ASSESSED, THE SAME HAS ALREADY BEEN ORDERED TO TAX IN THE HANDS OF THE COMPANY . THEREFORE, THE LD.CIT(A) HAS DEL ETED THE ADDITIONS IN HANDS OF SHRI MURGESH NIRANI & ORS AND AOP. THE LD.CIT(A) ALSO HELD THAT ASSESSED INCOME HAS ALREADY BEEN ASSESSED TO TAX IN THE HANDS OF THE ASSESSEE COMPANY , M/S. NIRANI SUGARS LTD. THUS, THE LD.CIT(A) HAS DELETED THE ADDITIONS MAD E IN THE HANDS OF AOP . THE LD.CIT(A) HAS PASSED HIS COMMON ORDER IN BOTH THE CASES. WE FIND THAT THE LD.CIT(A) HAS UPHELD THE UNACCOUNTED INCOME OF THE ASSESSEE COMPANY AS UNDER: - A.Y 2001 - 02 RS.1,09,97,469/ - (AS PER PARA 11 ABOVE) A.Y 2002 - 03 RS.2,6 0,65,210/ (AS PER PARA 9 ABOVE) A.Y 2003 - 04 RS.1,48,89,692/ - ( AS PER PARA 11 ABOVE) A.Y 2004 - 05 RS.2,82,81,809? - (AS PER PARA 10 ABOVE) 10 .1 WE FIND THAT THE ASSESSEE HAS NOT DISPUT ING THE DECISION OF THE LD.CIT(A). THEREFORE, WE ARE OF THE VIEW THA T THE LD. CIT(A) IS JUSTIFIED IN HIS ACTION AND OUR INTERFERENCE IS NOT REQUIRED. WE UPHOLD THE SAME. 10.2 T HE ABOVE DEPARTMENTAL APPEALS ARE DISMISSED. 1 1 . THE ASSESSEE HAS FILED THE C.O NO . 33/PNJ/2014 ARISING OUT OF ITA NO. 201/PNJ/2014 FOR THE ASSESSM ENT YEAR 2001 - 02 ON THE GROUND THAT THE AO HAS INVOKED THE PROVISIONS OF SECTION 68 OF THE I.T ACT 1961 IN RESPECT OF PEAK WORKED OUT TO RS.37,68,375/ - AND RS.72,29,094/ - ON THE BASIS OF LEDGER ACCOUNT APPEARING IN NO.2 BOOKS IN THE CASE OF S/SHRI MURGESH NIRANI AND BHAGWANDAS JAJU. THE AO HAS HELD THAT THERE WAS SUBSTANTIAL EVIDENCE TO SHOW THAT TRANSACTION ON UNACCOUNTED SALE OF SUGARS HAS BEEN TAKEN PLACE IN SUBSEQUENT YEAR . SINCE THE ABOVE CASH CREDITS ARE NOT SATISFACTORILY EXPLAINED BY SHRI MURGESH N IRANI AND BHAGWANDAS JAJU, IT WAS CONCLUDED THAT THE C A SH CREDITS ARE OUT OF UNACCOUNTED SALE OF SUGARS . THUS, THE AO HAS MADE THE ADDITION ON ACCOUNT OF PEAK CREDITS AS APPEARING IN THE LEDGER ACCOUNT IN NO.2 BOOKS IN THE CASE OF S/SHRI MURGESH NIRANI A ND BHAGWANDAS JAJU. THE TOTAL PEAK CREDITS WORKED OUT BY THE AO WERE OFT RS. 37,68,375/ - AND RS.72,29,094/ - RESPECTIVELY. 6 ITA NO S. 201 TO 204 & CO NOS. 33 TO 36 /PNJ/2014 - JM M/S. NIRANI SUGARS LTD 12. THE MATTER CARRIED TO THE LD.CIT(A) AND THE LD.CIT(A) HELD THAT THE ASSESSEE HAS NOT DECLARED ANY INCOME, BUT THE CREDIT IN THE NAME OF SAID TWO PERSONS WERE NOT EXPLAINED . THEREFORE, THE LD.CIT(A) HAS CONFIRMED THE ADDITION. 13. THE LD.AR SUBMITTED BEFORE US THAT THE ASSESSEE HAS ADMITTED THE UNACCOUNTED SALE OF SUGARS IN THE HANDS OF THE ASSESSEE COMPANY. WE FIND THAT THE ADDIT ION ON PEAK CREDITS IN RESPECT OF SAID TWO PERSONS S/SH. MURGESH NIRANI AND BHAGWANDAS JAJU ARE MAINTAINED BY SHRI NAROTTAM PAREKH, ACCOUNTANT. IF THIS PEAK CREDIT IS ADDED IN THE HANDS OF THE ASSESSEE COMPANY IN THE SUBSEQUENT ASSESSMENT YEAR, THIS PEAK CREDIT MAY BE GRANTED. HE FURTHER ARGUED THAT THE AO HAS NOT MADE ANY EFFORT TO SHOW THAT THESE UNACCOUNTED PEAK CREDITS ARE FOUND IN THE BOOKS. THEREFORE, IT MAY BE DELETED. MOREOVER, IT IS DISPUTED THAT NO ADDITION CAN BE MADE U /S 68 OF THE ACT IN T HE A.Y 2001 - 02 IN THE CASE OF M/S.NIRANI SUGARS LTD. 14. THE LD.DR HAS RELIED ON THE ORDER OF THE AO. 15. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PARTIES. WE FIND THAT DURING THE COURSE OF SEARCH A STATEMENT OF SHRI SRIKANT V.BAHETI, MANAGING D IRECTOR OF THE COMPANY WAS ALSO RECORDED ON 8 - 4 - 2004. IN ANSWER TO QUESTION NOS.6,7 & 8 HE HAS STATED THAT THE ACCOUNTANT WAS WRITING THE BOOKS ON THE INSTRUCTIONS ISSUED BY HIMSELF AS THE MANAGING DIRECTOR AND SHRI MURALI JAJU AS THE VICE CHAIRMAN OF T HE COMPANY . THE COMPANY HAS ALSO ADMITTED THAT CERTAIN UNACCOUNTED TRANSACTIONS HAVE BEEN MADE AS PER NO.2 BOOKS FOUND AND SEIZED AS IS EVIDENT FROM THE FACT THAT THE COMPANY HAS DISCLOSED THE UNACCOUNTED SALES IN THE RETURNS FILED FOR A.YS 2002 - 03 AND 2003 - 04. WE FIND THAT NO.2 BOOKS WERE FOUND AND SEIZED. WE FIND THAT THE ASSESSEE HAS ADMITTED THE UNACCOUNTED SALES OF SUGARS. THEREFORE, WE ARE OF THE VIEW THAT THE AO IS JUSTIFIED IN ADDING THE SAME TOWARDS PEAK CREDITS IN THE HANDS OF THE ASSESSEE CO MPANY . THUS, WE UPHOLD THE ORDER OF THE LD.CIT(A) ON THIS ISSUE. THE CO NO.33/PNJ/2014 IS DISMISSED. 16. THE ASSESSEE HAS ALSO FILED CO NOS.34 - 36/PNJ/2014 ARISING OUT OF ITA NOS.202 - 204/PNJ/2014 FOR THE A.YS 2002 - 03 TO 2004 - 05 OBJECTING TO THE ACTION OF THE LD.CIT(A) IN UPHOLDING THE ADDITIONS MADE IN RESPECT OF TWO ASSESSMENTS OUT OF UNACCOUNTED SALE OF SUGARS . WE FIND THAT THE AO IN HIS ASSESSMENT ORDER IN PARAG RA PH 2 HAS STATED THAT A STATEMENT OF SHRI NAROTTAM PAREKH WAS RECORDED DURING THE COURSE OF SEARCH ON 28 - 1 - 2004. IN HIS STATEMENT HE 7 ITA NO S. 201 TO 204 & CO NOS. 33 TO 36 /PNJ/2014 - JM M/S. NIRANI SUGARS LTD HAS STATED THAT HE WAS WORKING AS AN ACCOUNTANT IN M/S. NIRANI SUGARS LIMITED . HE IS MAINTAINING ALL THE REGULAR BOOKS OF THE COMPANY . THE PROCEDURE FOLLOWED FOR WRITING THE BOOKS IS THAT ALL THE TRANSACTIONS FOR THE DAY ARE NOTED DOWN IN A PAPER WHICH CONTAINS ALMOST ALL THE TRANSACTIONS FOR THE DAY LIKE THE CASH RECEIPTS, CASH PAYMENTS, SALES, BANK TRANSACTIONS . THE ASSESSEE COMPANY WAS ALSO MAINTAINING UNACCOUNTED TRANSACTIONS NOTED IN CODED FIGURES DELETING TWO ZEROS, FOR EXAMPLE ANY TRANSACTION OF RS.10,000/ - IS WRITTEN AS RS.100. THESE BOOKS WERE MAINTAINED/WRITTEN ON THE INSTRUCTIONS OF CHAIRMAN AND VICE - CHAIRMAN OF THE COMPANY. A STATEMENT OF SHRI SRIKANT V.BAHETI, MANAGING DIRECTOR OF THE COMPANY WAS ALSO R ECORDED ON 8 - 4 - 2004. HE HAS ADMITTED THAT UNACCOUNTED TRANSACTION HAS BEEN MADE AS PER NO.2 BOOKS FOUND AND SEIZED AS IS EVIDENT FROM THE FACT THAT THE COMPANY HAS DISCLOSED THE UNACCOUNTED SALES IN THE RETURNS FOR A.Y S 2002 - 03 AND 2003 - 04. WE FIND THAT FROM THIS DOCUMENTARY EVIDENCE AND THE ADMISSION BY THE COMPANY, WE ARE OF THE VIEW THAT WHEN THE COMPANY HAS ALREADY ADMITTED THAT THE COMPANY HAS ENTERED INTO UNACCOUNTED SALE OF SUGARS BY MAINTAINING NO.2 BOOKS, WHICH WAS FOUND AND SEIZED. THUS, THE LD.CIT(A) IS JUSTIFIED IN HIS ACTION. OUR INTERFERENCE IS NOT REQUIRED. THEREFORE, THE CO NOS.34 - 36/PNJ/2014 ARISING OUT OF ITA NO.202 TO 204/PNJ/2014 FOR THE A.Y S 2002 - 2004 ARE DISMISSED. 1 7 . IN THE RESULT, APPEAL S OF THE DEPARTMENT AND CROSS OBJ ECTIONS OF THE ASSESSEE ARE DISMISSED. ORDER IS PRONOUNCED IN THE OPEN COURT ON 08 - 01 - 2015 SD/ - SD/ - ( P. K. BANSAL ) ( D.T GARASIA) ACCOUNTANT ME MBER JUDICIAL MEMBER DATED : 08 - 01 - 2015 **PRADIP (SR.P.S.) COPY OF THE ORDER FORWARDED TO: 8 ITA NO S. 201 TO 204 & CO NOS. 33 TO 36 /PNJ/2014 - JM M/S. NIRANI SUGARS LTD 1. A PPELLANT 2 RESPONDENT 3. THE CIT(A) CONCERNED 4. 5. THE CIT CONCERNED THE D . R 6. GUARD FILE TRUE COPY, BY ORDER, ASSTT. REGISTRAR .