M/S. LILASONS INDUSTRIES LIMITED, Bhopal V. THE ACIT 1(2), Bhopal

ITA 308/IND/2015

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 5921 (ITAT-INDORE)
• Duration Of Justice: 1 year(s) 1 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-06-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Assessment Year: 2011-2012
• Appeal Filed On: 11-05-2015
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: RAJEEV VARSHANEY
• Assessee Lawyers: N D PATWA S
• Keywords: Income from undisclosed sources; Loose papers
• Section: 132; 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, INDORE BENCH, INDORE BEFORE SHRI D.T. GARASIA, JUDICIAL MEMBER AND SHRI B.C.MEENA, ACCOUNTANT MEMBER I.T.A.NO.308/IND/2015 A.Y. :2011-12 M/S.LILASONS INDUSTRIES LIMITED, ACIT, 1(2), BHOPAL BHOPAL. VS APPELLANT RESPONDENT PAN NO. AAACL5311N I.T.A.NO.314/IND/2015 A.Y. :2011-12. M/S.LILASONS BREWERIES LIMITED, ACIT, 1(2), BHOPAL BHOPAL. VS APPELLANT RESPONDENT PAN NO. AAACL5312R APPELLANTS BY : SHRI ASHISH GOYAL AND SHRI N. D. PATWA, ADVOCATES RESPONDENT BY : SHRI RAJEEV VARSHANEY, CIT DR DATE OF HEARING : 04.05.2016 DATE OF PRONOUNCEMENT : 30.06.2016 I.T.A.NOS. 308 & 314/IND/2015 LILASONS INDUSTRIES AN D LILASONS BREVARIES, BHOPAL VS. ACIT, 1(2), BHOPAL A.Y. 2011-12 2 2 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 TH E 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 RS. 17,77,64,300/- AND IN LILASONS IND USTRIES LTD. (LIL), THE ADDITION WAS RS. 6,93,84,000/-. THE ADDITION HAS BEEN DELETED BY LD CIT(A). HOWEVER, THE APPELLA NT- ASSESSEE IS CHALLENGING THE DIRECTIONS OF LD CIT(A) DIRECTING ADDITION OF THE SAID AMOUNT IN A.Y. 2009-10 AND A.Y . 2010- 11. THE GROUNDS TAKEN ARE AS UNDER :- GROUND NOS. 1 TO 4 OF LILASONS INDUSTRIES LTD (LIL) : 1. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(A) ERRED IN NOT ACCEPTING THE EXPLANATION 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 I.T.A.NOS. 308 & 314/IND/2015 LILASONS INDUSTRIES AN D LILASONS BREVARIES, BHOPAL VS. ACIT, 1(2), BHOPAL A.Y. 2011-12 3 3 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. 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 THAT IF, FOR THE SAKE OF ARGUMENT, IT IS ACCEPTED THAT THE PAYMENT AS PER DIARY SEIZED IS RS. 1,26,13,000/- EVEN THEN, THE SAME SHOULD BE ADJUSTED AGAINST THE TOTAL INCOME SURRENDERED BY THE APPELLANT IN THE RETURN OF INCOME RS. 1,50,00,000/- AND AFTER ADJUSTING THE SAME, NO ADDITION REMAINS. GROUND NO. 1 TO 4 OF LILASONS BREWERIES LTD (LBL): 1. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(A) ERRED IN NOT ACCEPTING THE EXPLANATION 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. I.T.A.NOS. 308 & 314/IND/2015 LILASONS INDUSTRIES AN D LILASONS BREVARIES, BHOPAL VS. ACIT, 1(2), BHOPAL A.Y. 2011-12 4 4 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. 1,53,62,000/- 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 RS. 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 THAT IF, FOR THE SAKE OF ARGUMENT, IT IS ACCEPTED THAT THE PAYMENT AS PER DIARY SEIZED IS RS. 94,66,000/- EVEN THEN, THE SAME SHOULD BE ADJUSTED AGAINST THE TOTAL INCOME SURRENDERED BY THE APPELLANT I.T.A.NOS. 308 & 314/IND/2015 LILASONS INDUSTRIES AN D LILASONS BREVARIES, BHOPAL VS. ACIT, 1(2), BHOPAL A.Y. 2011-12 5 5 IN THE RETURN OF INCOME RS. 1,00,00,000/- AND AFTER ADJUSTING THE SAME, NO ADDITION REMAINS. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE- COMPANIES ARE A PART OF LILASONS GROUP OF BHOPAL. T HE LILASONS GROUP IS ENGAGED IN THE BUSINESS OF MANUFA CTURE AND SALE OF BEER. THE GROUP IS WELL-KNOWN FOR ITS F AMOUS 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, S HRI 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 SE ARCH COVERED THE PREMISES OF THE AFORESAID TWO COMPANIES LBL AND LIL, AND ALSO THE RESIDENCES OF THE DIRECTORS A ND RELATED PERSONS. FURTHER, THE BANK LOCKERS OF THE DIRECTORS WERE ALSO COVERED BY SEARCH. THE ASSESSEE-COMPANY LIL FI LED ITS RETURN FOR A.Y. 2011-12 ON 27.09.2011 DECLARING INC OME OF RS. 1,98,08,350/- AFTER INCLUDING SURRENDERED INCOM E AT RS. I.T.A.NOS. 308 & 314/IND/2015 LILASONS INDUSTRIES AN D LILASONS BREVARIES, BHOPAL VS. ACIT, 1(2), BHOPAL A.Y. 2011-12 6 6 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/- AF TER INCLUDING SURRENDERED INCOME AT RS. 1,00,00,000/-. 4. DURING SEARCH, INTER-ALIA, A BANK LOCKER, NO. 2-114 , INDIAN OVERSEAS BANK, HAMIDIA ROAD, BHOPAL WAS OPER ATED. THIS LOCKER WAS JOINTLY OWNED BY SHRI ARUN KUMAR LI LA AND RAKESH LILA. IN THIS LOCKER 28 LOOSE PAPERS MARKED AS BS-3 (PB 1-28) WERE FOUND AND SEIZED APART FROM CASH OF RS. 1,60,00,000/- AND INSURANCE POLICIES. AS PER THE AO , THESE PAGES CONTAINED CASH PAYMENTS AMOUNTING TO RS. 1,76,40,000/- PAID BY APPELLANT COMPANY TO SHRI ARU N LILA. IT WAS NOTICED FROM THE ENTRIES RECORDED IN THE PAG ES OF DIARY THAT PAYMENTS WERE MENTIONED TO BE RECEIVED F ROM LIL WHICH IS SHORT FORM OF LILASONS INDUSTRIES L TD AND LBL WHICH IS SHORT FORM OF LILASONS BREWERIES LT D. 5. IN RELATION TO LIL, THE AO NOTED THAT THERE ARE 48 ENTRIES IN THE NAME OF THE LIL AGGREGATING TO 176.4 0 IN CODE FIGURES WHICH AS PER HIM REPRESENTED RUPEES IN LACS . IT WAS NOTICED THAT THE DETAILS OF EXPENSES INCURRED IN TH E NATURE OF MEDICINE, GRASS ETC. WERE ALSO ENTERED ON SOME O F THE LOOSE PAPERS. THE AO FURTHER NOTICED THAT THE FAMIL Y OF ARUN I.T.A.NOS. 308 & 314/IND/2015 LILASONS INDUSTRIES AN D LILASONS BREVARIES, BHOPAL VS. ACIT, 1(2), BHOPAL A.Y. 2011-12 7 7 LILA HOLDS 8.14% OF THE SHARES IN THE APPELLANT COM PANY AND THE LILA FAMILY GROUP HOLDS 82.03% OF THE TOTAL SHARES OF THE COMPANY. THE AO OBSERVED THAT SINCE THE APPELLA NT COMPANY HAD MADE PAYMENT OF RS. 1,76,40,000/- TO SH RI 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 RS. 17,77,64,300/- FOR THE ENTIRE HOLDING OF 82.03% OF SHARES BY THE LILA GROU P. THE AO THEREFORE HELD THAT THE APPELLANT COMPANY HAD MA DE PAYMENTS TO THE FAMILY MEMBERS OF LILA GROUP OF RS. 17,77,64,300/- OUTSIDE THE BOOKS OF ACCOUNT AS UNDI SCLOSED PAYMENTS. ACCORDINGLY, AO MADE ADDITION OF RS. 17,77,64,300/- INTO THE TOTAL INCOME OF THE APPELLA NT FOR A.Y. 2011-12. HOWEVER, IT WAS NOTICED BY THE AO THA T THE ASSESSEE HAD DISCLOSED UNACCOUNTED INCOME OF RS. 1,50,00,000/- AND AFTER GIVING CREDIT OF SAME, THE NET ADDITION IN THE RETURNED INCOME WAS MADE AT RS. 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 ENTRIES IN THE NAME OF THE LBL AGGREGATING TO 153.6 2 IN CODE FIGURES WHICH AS PER HIM REPRESENTED RUPEES IN LACS . IT WAS I.T.A.NOS. 308 & 314/IND/2015 LILASONS INDUSTRIES AN D LILASONS BREVARIES, BHOPAL VS. ACIT, 1(2), BHOPAL A.Y. 2011-12 8 8 NOTICED THAT THE DETAILS OF EXPENSES INCURRED IN TH E NATURE OF MEDICINE, GRASS ETC. WERE ALSO ENTERED ON SOME O F THE LOOSE PAPERS. THE AO FURTHER NOTICED THAT THE FAMIL Y OF ARUN LILA HOLDS 21% OF THE SHARES IN THE APPELLANT COMPA NY AND THE LILA FAMILY GROUP HOLDS 94.85% OF THE TOTAL SHA RES OF THE COMPANY. THE AO OBSERVED THAT SINCE THE APPELLANT COMPANY HAD MADE PAYMENT OF RS. 1,53,62,000/- TO SH RI ARUN LILA AND HIS FAMILY FOR 21% OF SHAREHOLDING, T HE TOTAL PAYMENT WHICH MUST HAVE BEEN PAID TO OTHER MEMBERS OF THE LILA GROUP WORKS OUT TO RS. 6,93,84,000/- FOR T HE ENTIRE HOLDING OF 94.85% OF SHARES BY THE LILA GROUP. THE AO ,THEREFORE, HELD THAT THE ASSESSEE COMPANY HAD MAD E PAYMENTS TO THE FAMILY MEMBERS OF LILA GROUP OF RS. 6,93,84,000/- OUTSIDE THE BOOKS OF ACCOUNT AS UNDIS CLOSED PAYMENTS. ACCORDINGLY, THE AO MADE ADDITION OF RS. 6,93,84,000/- INTO THE TOTAL INCOME OF THE APPELLAN T 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 NE T ADDITION IN THE RETURNED INCOME WAS MADE AT RS. 5,93,84,000 [RS. 6,93,84,000 1,00,00,000]. I.T.A.NOS. 308 & 314/IND/2015 LILASONS INDUSTRIES AN D LILASONS BREVARIES, BHOPAL VS. ACIT, 1(2), BHOPAL A.Y. 2011-12 9 9 7. THE MATTER CARRIED TO THE LD. CIT(A) AND THE LD. CI T(A) HAS DELETED THE ADDITION VIDE HIS ORDER DATED 18.02 .2014 HOLDING THAT THE LOOSE PAPER SET BS-3 DOES NOT PERT AIN 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 MENTIONED ABOVE, THESE DOCU MENTS WERE FOUND AND SEIZED FROM LOCKER NO. 2 -114 WITH INDIAN OVERSEAS BANK OF SHRI ARUN KUMAR LILA DURING THE COURSE OF SEARCH IN OCTOBER, 2010. THE LAST OPERATION OF THE LOCKER, BEFORE THE DATE OF SEARCH OF LOCKER BY THE DEPARTMENT, WAS ON 18.05.2010. AS MEN TIONED ABOVE, THE LOOSE PAPERS CONTAIN THE TRANSACTIONS FOR 20 MO NTHS FROM JULY TO APRIL OF NEXT YEAR. THEREFORE, IT IS EVIDENTLY CLEA R THAT THE TRANSACTIONS RECORDED ON THESE PAGES RELATE TO THE MONTHS FROM JULY, 2009 TO APRIL, 2010 AND THE DOCUMENTS WERE PLACED I N THE LOCKER IN THE MONTH OF MAY, 2010. AS FAR AS THE APPELLANT COM PANY IS CONCERNED, THESE DOCUMENTS REFLECT THE PAYMENTS REC EIVED FROM THE APPELLANT COMPANY UPTO THE MONTH OF MARCH, 2010. TH EREFORE, IT IS CLEAR THAT THESE 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 REMA ND 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 THE SE LOOSE PAPERS SEIZED PERTAIN THE PREVIOUS YEAR RELEVANT TO A.Y. 2 011-12 UNDER CONSIDERATION. SINCE, THERE WAS NO TRANSACTIONS PER TAINING 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 SE IZED DOCUMENTS, I.T.A.NOS. 308 & 314/IND/2015 LILASONS INDUSTRIES AN D LILASONS BREVARIES, BHOPAL VS. ACIT, 1(2), BHOPAL A.Y. 2011-12 10 10 THE ADDITION MADE BY THE AO IN A.Y. 2011-12 CANNOT BE SUSTAINED. HENCE, THE NET ADDITION OF RS. 16,27,64,300/- (RS. 17,77,64,300 - RS. 1,50,00,000) MADE BY THE AO IN THE RETURNED INC OME 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. AGAINST THIS ORDER OF THE LD. CIT(A), THE DEPARTMEN T IS NOT IN APPEAL. THE ASSESSEE IS CHALLENGING THE DIRE CTION OF THE LD CIT(A) TO TAKE REMEDIAL ACTION AS PER LAW FOR THE RELEVANT A.Y. 2009-10 AND A.Y. 2010-11 IN THE CASE OF APPELLANT COMPANY IN BOTH THE CASES. 10. DURING THE COURSE OF HEARING, THE LD. AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE SUBMITTED THAT THE FINDINGS OF THE LD. CIT(A) GIVING DIRECTIONS FOR YEARS NOT I N APPEAL IS UNSUSTAINABLE ON TWO COUNTS: - 1. LD. CIT(A) HAS NO JURISDICTION LEGALLY TO GIVE SUCH DIRECTIONS 2. MOREOVER, SUCH FINDINGS/ DIRECTIONS COULD NOT BE GI VEN IN THE FACTS OF THE CASE. I.T.A.NOS. 308 & 314/IND/2015 LILASONS INDUSTRIES AN D LILASONS BREVARIES, BHOPAL VS. ACIT, 1(2), BHOPAL A.Y. 2011-12 11 11 11. SO FAR AS THE FIRST COUNT I.E. LD. CIT(A) HAS NO JURISDICTION LEGALLY TO GIVE SUCH DIRECTIONS, IT WA S SUBMITTED THAT UNDER SECTION 251, THE POWERS OF LD. CIT(A) A RE WORDED. IT IS A SETTLED LAW THAT THE LD. CIT(A) HAS CO- TERMINUS POWERS WITH THAT OF THE LD. AO. LD. CIT(A) COULD CONDUCT ANY ENQUIRY AS HE THINKS FIT, AND DO ENHANC EMENT OF ASSESSMENT. THE JURISDICTION OF LD. CIT(A) IS NO T LIMITED TO THE SUBJECT MATTER OF APPEAL, BUT TO THE SUBJECT MA TTER OF ASSESSMENT. HE CAN DO WHAT THE LD. AO HAS FAILED TO DO. 12. FOR THIS CONTENTION, THE LD. AUTHORIZED REPRESENTAT IVE FOR THE ASSESSEE PLACED RELIANCE ON THE FOLLOWING C ASE 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. C IT(A) HAS UNLIMITED POWERS. THERE ARE FETTERS ON THE POWERS O F LD. CIT(A). PROCEEDINGS BEFORE LD. CIT(A) ARE CONFINED THE YEAR WHICH IS PENDING BEFORE HIM. IF APPEAL FOR A.Y. 201 1-12 ARE I.T.A.NOS. 308 & 314/IND/2015 LILASONS INDUSTRIES AN D LILASONS BREVARIES, BHOPAL VS. ACIT, 1(2), BHOPAL A.Y. 2011-12 12 12 PENDING BEFORE LD. CIT(A) ANY OBSERVATION FOR ANY O THER ASSESSMENT YEAR WOULD BE IMPROPER IN DECIDING THE APPEAL FOR A.Y. 2011-12. FOR THIS CONTENTION, LD. AUTHORIZ ED REPRESENTATIVE FOR THE ASSESSEE RELIED ON FOLLOWING JUDGMENTS: - (A) CIT VS C.M. RAJGARHIA 121 ITR 778 (PAT.), 785. (B) C.M. RAJGARHIA 121 ITR 778 (PAT.). (C) PT. HAZARI LAL 39 ITR 265 (ALL.) (D) LAXMI NARAIN AGARWAL 47 ITR 456 (ALL.) (E) MATHURADAS B. MOHTA 56 ITR 269 (BOM.) (F) N. KT. SIVALINGAM CHETTIAR 66 ITR 586 (SC) (G) DURGA PRASAD 57 ITR 583 (ALL.) (H) NATHALAL DHANJIBHAI 59 ITR 615 (GUJ.) (I) DAVE (MRS. RH) 140 ITR 1035 (CAL.) (J) ITO VS MURLIDHAR BHAGWAN 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). I.T.A.NOS. 308 & 314/IND/2015 LILASONS INDUSTRIES AN D LILASONS BREVARIES, BHOPAL VS. ACIT, 1(2), BHOPAL A.Y. 2011-12 13 13 (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 ARU N 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 S UBMITTED THAT THESE ENTRIES ARE VERY OLD AND MIGHT BY AS OLD AS 10 YEARS. IT WAS SUBMITTED THAT THE INK USED AND THE Q UALITY OF PAPERS PROVES THAT THESE DOCUMENTS WERE WRITTEN PER HAPS MORE THAN TEN YEARS BACK. A REFERENCE WAS MADE TO P B 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), THE AO TRIED TO CORRELATE THE ENTRIES WITH THAT OF F.Y. 2008-09 AND 2009-10. THE OBSERVATIONS OF THE LD. AO ARE GIVEN AS UNDER: - I.T.A.NOS. 308 & 314/IND/2015 LILASONS INDUSTRIES AN D LILASONS BREVARIES, BHOPAL VS. ACIT, 1(2), BHOPAL A.Y. 2011-12 14 14 4.0 REGARDING THE CONTENTION OF THE ASSESSEE THAT THESE PAPER WERE WRITTEN MORE THAN TEN YEARS BACK, AFTER CLOSE EXAMINATION OF THE SAID LOOSE PAPERS AGAIN, IT WAS FOUND THAT BY NO STRETCH OF IMAGINATION, THE LOOSE PAPERS CAN BE SAID TO BE PERTAINING TO SUCH OLD TIME PERIOD. THE FACT PROVIDING THE SAME ARE SUMMARIZED AS UNDER: 4.1 TNCP EXPENSES- (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 I.T.A.NOS. 308 & 314/IND/2015 LILASONS INDUSTRIES AN D LILASONS BREVARIES, BHOPAL VS. ACIT, 1(2), BHOPAL A.Y. 2011-12 15 15 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 EXPENSES UNDER THE HEAD TNCP EXPENSES WERE INCURRED IN FY 2009-10 AND 2010-11 (UP TO MAY 2010 ). 4.2 BIRTHDAY EXPENSES- THE STATEMENT OF SHRI ARUN LILA WAS RECORDED U/S 131 OF THE IT ACT ON 17.12.2014 (ANNEXURE-1 ). IN REPLY TO QUESTION NO 5, HE STATED THAT YATI, DAUGHTER OF HIS BROTHER SHRI RAKESH LILA IS NICKNAMED NUDU WHO WAS BORN ON 30.07.2004. ON PAGE 9 OF ANNEXURE BS-1, RS. 10,000/- IS A PART OF TOTAL EXPENSES OF RS. 32.90.000 INCURRED THE MONTH OF JULY AS DISCUSSED ABOVE. THE ASSESSEES ARGUMENT THAT THESE DOCUMENTS ARE WRITTEN MORE THAN 10 YEARS BACK IS CLEARLY FALSE IN VIEW OF THE FACT THAT BIRTHDAY EXPENSES OF RS. 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 I.T.A.NOS. 308 & 314/IND/2015 LILASONS INDUSTRIES AN D LILASONS BREVARIES, BHOPAL VS. ACIT, 1(2), BHOPAL A.Y. 2011-12 16 16 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 TOTAL EXPENSES CLOSING BALANCE 20 JAN 12 18.2 30.2 7.6 2.6 28 FEB 22.6 11.8 34.4 8.6 25.8 27 MARCH 25.8 12.5 38.3+6.0 (BANK WITHDRAWAL) 16.82 27.48 24 APRIL 27.48 16.29 43.77 14.77 29 8 MAY 29 12.8 41.8 26 15.8 6 JUNE 15.8 20.53 36.33 3.33 33 5 JULY 33 16.5 49.5 32.9 16.6 1 AUGUST 16.6 19.82 36.42 12.92 23.5 2&3 SEPTEMBER 23.5 60.16 17 FEB 23 12.2 35.2 8.57 26.63 THE DETAILS OF THE EXPENSES OF 26,00,000/- INCURRED IN THE MONTH OF MAY ARE CONTAINED IN PAGES 21,22,23. THE DETAILS OF EXPENSES OF RS. 7,60,000/- INCURRED IN THE MONTH OF JANUARY ARE RECORDED IN THE BACKSIDE PAGE 20. THE DETAILS OF EXPENSES OF RS. 16,82,000/- INCURRED IN THE MONTH OF MARCH ARE RECORDED IN THE PAGES 11, 12 AND 13. THE DETAILS OF EXPENSES OF RS. I.T.A.NOS. 308 & 314/IND/2015 LILASONS INDUSTRIES AN D LILASONS BREVARIES, BHOPAL VS. ACIT, 1(2), BHOPAL A.Y. 2011-12 17 17 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 I.T.A.NOS. 308 & 314/IND/2015 LILASONS INDUSTRIES AN D LILASONS BREVARIES, BHOPAL VS. ACIT, 1(2), BHOPAL A.Y. 2011-12 18 18 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 MA DE A REFERENCE TO TNCP EXPENSES WHICH IS PLACED AT PB 11 5. IT WAS SUBMITTED THAT GOING BY THE FINDINGS OF THE LD. AO HIMSELF, THE TNCP EXPENSES IN THE BS-3 ARE 143.3. A S PER LD. AO, THESE FIGURES ARE IN THOUSANDS. SO THE FIGU RE SHALL COME TO RS. 1,43,300/-. LD. AO WRONGLY STATED THIS TO BE RS. 14,33,000/-. THE AO TRIED TO CO-RELATE THIS DOCUME NT WITH LILASONS INFRASTRUCTURE LTD. NO NAME WAS MENTIONE D IN THE LOOSE PAPERS. ALSO, THE AMOUNT DID NOT TALLY. I N THE LOOSE PAPER LPS A-10 PG. 11 (ENCLOSED AS ANNEXURE-1 TO TH E SYNOPSIS) THE AMOUNT MENTIONED WAS RS. 21,43,000/-. NEITHER THE AMOUNT TALLIED, NOR THE NAME OF LILASO NS INFRASTRUCTURE LTD. MATCHED. FURTHER, THE DOCUMENT LPS A- 10 PG. 11 DID NOT CONTAIN DATE. THUS, HOW IT COULD BE MADE I.T.A.NOS. 308 & 314/IND/2015 LILASONS INDUSTRIES AN D LILASONS BREVARIES, BHOPAL VS. ACIT, 1(2), BHOPAL A.Y. 2011-12 19 19 OUT THAT THE EXPENDITURE WAS RELATED TO F.Y. 2008-0 9 OR F.Y. 2009-10. 16. LD. AR FOR THE ASSESSEE FURTHER SUBMITTED THAT IN PARA 4.2 ABOVE, THE LD AO HAS MADE REFERENCE TO BIRTHDAY EXPENSES WHICH IS PLACED AT PB 112. IT WAS SUBMITTE D BY THE LD. AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE THAT THE AO HIMSELF ACCEPTED IN THE REMAND REPORT THAT THESE EX PENSES MAY RELATE TO A PERIOD AFTER 30.07.2004, BUT MAY RE LATE TO ANY YEAR THEREAFTER. THE CHILD YATI (NUDU) WAS BORN ON 30.07.2004 AND RELATES TO BIRTHDAY EXPENSES. IT MAY RELATE TO 30.07.2005 OR ANY OTHER BIRTHDAY THEREAFTER. IT IS NOT CLEAR AS TO WHICH BIRTHDAY IT RELATES. THUS, RELATI NG IT TO F.Y. 2009-10 OR 2008-09 WOULD BE A WILD GUESS ONLY. NOTH ING WAS FOUND TO SHOW THAT IT RELATES TO THESE FINANCIA L YEARS. 17. THE LD. AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE SUBMITTED THAT LD. CIT(A) MERELY RELIED ON THE REMA ND REPORT TO CONCLUDE ON PG. 33 TO HOLD THAT THESE TRANSACTIO NS RELATE TO A.Y. 2009-10 AND 2010-11. THERE IS NO SUCH BASIS . THUS, EVEN ON MERITS, FINDING THAT THESE DOCUMENTS RELATE TO A.Y. 2009-10 AND 2011-12 WERE NOT CALLED FOR AND WERE LI ABLE TO BE QUASHED. THUS, THE LD. AUTHORIZED REPRESENTATIVE FOR THE I.T.A.NOS. 308 & 314/IND/2015 LILASONS INDUSTRIES AN D LILASONS BREVARIES, BHOPAL VS. ACIT, 1(2), BHOPAL A.Y. 2011-12 20 20 ASSESSEE PRAYED THAT BOTH IN LAW AND IN THE FACTS O F THE CASE, THE FOLLOWING FINDINGS OF THE LD. CIT(A) SHAL L BE EXPUNGED: 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 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 WE RE 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 AD DITION. THE DIRECTION OF THE LD CIT(A) THAT REMEDIAL ACTION MAY BE TAKEN IN OTHER YEAR, IS NOT APPEALABLE AT ALL, AS ASSESSE E CANNOT BE AGGRIEVED OUT OF SUCH ORDER. 19. THE LD. DEPARTMENTAL REPRESENTATIVE RELIED UPON TH E ORDERS OF THE AUTHORITIES BELOW. 20. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PARTIES. WE HAVE ALSO GONE THROUGH THE CASE LAWS RE LIED UPON BY THE LD. AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE. I.T.A.NOS. 308 & 314/IND/2015 LILASONS INDUSTRIES AN D LILASONS BREVARIES, BHOPAL VS. ACIT, 1(2), BHOPAL A.Y. 2011-12 21 21 WE FIND THAT THE GIST OF THE PLETHORA OF JUDGMENTS QUOTED ABOVE IS THAT WHERE ANY ASSESSMENT YEAR WAS NOT BEF ORE 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 T O RECORD THE FINDING THAT THE SUM, WHICH WAS IN QUEST ION IN THE APPEAL BEFORE HIM, WAS NOT INCOME RELEVANT TO T HE ASSESSMENT YEAR 1947-48, WHICH WAS IN APPEAL IN THA T CASE. THE QUESTION WHETHER THIS INCOME ACCRUED OR WAS EAR NED IN THE PREVIOUS YEAR RELEVANT TO THE ASSESSMENT YEAR 1 946-47 (I.E. THE YEAR NOT IN APPEAL), WAS NOT BEFORE HIM F OR DECISION, NOR WAS IT A POINT ON WHICH IT WAS ESSENTIAL FOR HI M TO RECORD A FINDING BEFORE APPROPRIATELY DECIDING APPE AL BEFORE HIM. WE ALSO OBSERVE IN THE CASE OF MATHURADAS B. M OHTA, 56 ITR 269 (BOM.), RELYING ON SUPREME COURT IN ITO VS. MURLIDHAR BHAGWAN DAS 52 ITR 335, WHEREIN IT WAS HE LD THAT THE JURISDICTION OF THE AAC UNDER SECTION 31 O F THE 1922 ACT WAS STRICTLY CONFINED TO THE ASSESSMENT OR DER OF THAT PARTICULAR YEAR UNDER APPEAL. THE AAC NO DOUBT WAS COMPETENT TO HOLD WHETHER A PARTICULAR ITEM OR A PA RTICULAR AMOUNT WAS INCOME OF THAT ASSESSMENT YEAR, BUT HE H AD NO I.T.A.NOS. 308 & 314/IND/2015 LILASONS INDUSTRIES AN D LILASONS BREVARIES, BHOPAL VS. ACIT, 1(2), BHOPAL A.Y. 2011-12 22 22 JURISDICTION FURTHER TO DECIDE IN THAT APPEAL THE A PPROPRIATE YEAR IN WHICH THE SAID INCOME WOULD FALL. WE ALSO O BSERVE THAT IN THE CASE OF NATHALAL DHANJIBHAI 59 ITR 615 (GUJ), WHEREIN IT WAS HELD THAT A FINDING, THEREFORE, COUL D ONLY BE THAT WHICH WAS NECESSARY FOR THE DISPOSAL OF AN APP EAL IN RESPECT OF THE ASSESSMENT OF A PARTICULAR YEAR. HON 'BLE SUPREME COURT OBSERVED THAT THE AAC MIGHT HOLD ON T HE EVIDENCE THAT THE INCOME SHOWN BY THE ASSESSEE WAS NOT THE INCOME OF THE RELEVANT YEAR AND THEREBY EXCLUDE THA T INCOME FROM THE ASSESSMENT OF THE YEAR UNDER APPEAL. WE FI ND THAT IN THE CASE OF DAVE (MRS. RH) 140 ITR 1035 (CAL), W HERE ASSESSEES LAND WAS ACQUIRED BY GOVERNMENT IN MAY 1 961 BUT COMPENSATION WAS RECEIVED AND ASSESSED IN ASSES SMENT YEAR 1971-72 AS INCOME FROM OTHER SOURCES. LD. CIT( A) WHILE DELETING THE IMPUGNED ADDITION ON THE GROUND, INTER -ALIA, HELD THAT RELEVANT CAPITAL GAINS HAD ALREADY BEEN T AXED IN ASSESSMENT YEAR 1962-63 WHEN LAND WAS ACQUIRED, DIR ECTED ITO TO BRING IT TO TAX IN CURRENT ASSESSMENT YEAR. SUCH DIRECTIONS OF THE LD. CIT(A) WERE HELD TO BE UNSUST AINABLE. WE FIND THAT IN ONKAR NATH, 64 ITR 347 (ALL.), HON 'BLE ALLAHABAD HIGH COURT HELD THAT THE LAW GIVES THE AA C THE I.T.A.NOS. 308 & 314/IND/2015 LILASONS INDUSTRIES AN D LILASONS BREVARIES, BHOPAL VS. ACIT, 1(2), BHOPAL A.Y. 2011-12 23 23 POWER TO GIVE DIRECTION THAT A CERTAIN SUM WHICH WA S DELETED FROM THE ASSESSMENT OF THE FIRM SHOULD BE ASSESSED IN THE HANDS OF A PARTNER AS HIS INDIVIDUAL INCOME. FOR TH E ASSESSMENT YEAR 1957-58, THE ITO MADE AN ADDITION W HICH INCLUDED CERTAIN SUM INTRODUCED IN THE HEAD OFFICE CASH BOOK IN NOVEMBER 1955. ON APPEAL, THE AAC DELETED T HE ADDITION OF SAID SUM ON THE GROUND THAT THE SAID SU M WAS OUTSIDE THE FINANCIAL YEAR 1956-57, RELEVANT TO THE ASSESSMENT YEAR IN QUESTION. THE COURT FURTHER OBSE RVED THAT IN THE INSTANT CASE THE AAC WAS DEALING WITH T HE PROPRIETY OF THE ASSESSMENT FOR ASSESSMENT YEAR 195 7-58. HE FOUND THAT THE SAID SUM DID NOT RELATE TO THAT Y EAR. THAT FINDING WAS SUFFICIENT TO DISPOSE OF THE ITEM. HE W OULD NOT RECORD A DEFINITE FINDING THAT THIS VERY ITEM REPRESENTED INCOME OF THE ASSESSEE FROM AN UNDISCLOSED SOURCE F OR ASSESSMENT YEAR 1956-57. WE FIND THAT IN THE INSTA NT 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 JURISDICTIO N OF THE LD. CIT(A), AS BEFORE HIM NO SUCH ASSESSMENT YEAR W AS PENDING. AS THE ISSUE IS SQUARELY COVERED BY HON'BL E I.T.A.NOS. 308 & 314/IND/2015 LILASONS INDUSTRIES AN D LILASONS BREVARIES, BHOPAL VS. ACIT, 1(2), BHOPAL A.Y. 2011-12 24 24 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/201 5 IN THE CASE OF M/S. LILASONS INDUSTRIES LIMITED AND I. T.A.NO. 314/IND/2015 IN THE CASE OF M/S. LILASONS BREWERIES LIMITED ARE ALLOWED. THIS ORDER HAS BEEN PRONOUNCED IN THE OPEN COURT ON 30 TH JUNE, 2016. SD/- (B.C.MEENA) ACCOUNTANT MEMBER SD/- ( D.T.GARASIA) JUDICIAL MEMBER DATED : 30 TH JUNE, 2016. CPU*