DCIT, New Delhi V. Shri Mahabir Prasad Gupta, Delhi

ITA 713/DEL/2011

• Counselvise Citation: 71320114 RSA 2011
• Duration Of Justice: 1 year(s) 9 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-11-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: E
• Next Hearing Date: 30-10-2012
• Assessment Year: 2000-2001
• Appeal Filed On: 04-02-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: GUNJAN P RASAD
• Assessee Lawyers: SANJIV JAIN
• Keywords: Business income; Income from undisclosed sources; Search and seizure; Assessment record
• Section: 69

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH E NEW DELHI) BEFORE SHRI RAJPAL YADAV AND SHRI A.N. PAHUJA ITA NOS. 713 & 714/DEL/2011 ASSESSMENT YEARS: 2000-01 & 2006-07 DEPUTY COMMISSIONER OF IT, VS. M/S. MAHABIR PRASAD GUPTA, CENTRAL CIRCLE 15, PROP. SUPARIWALA & CO, NEW DELHI. 555-567, KATRA ISHWAR BVN, KHARI ROAD, DELHI. (PAN: AAEPG9144G) (APPELLANT) (RESPONDENT) APPELLANT BY: SHRI GUNJAN P RASAD, CIT (DR) RESPONDENT BY: SHRI SANJIV JAIN , CA ORDER PER RAJPAL YADAV: JUDICIAL MEMBER THE PRESENT TWO APPEALS ARE DIRECTED AT THE INSTAN CE OF REVENUE AGAINST THE SEPARATE ORDERS OF EVEN DATE I.E. 04.11.2010 PA SSED BY THE LEARNED CIT(APPEALS) FOR ASSESSMENT YEARS 2000-01 AND 2006- 07. 2. FIRST, WE TAKE ITA NO. 713/DEL/2011 IN ASSESSMEN T YEAR 2000-01. THE AMOUNTS MENTIONED IN THE GROUND OF APPEAL ARE NOT S IMILAR AS STATED IN THE ORDER DATED 03.02.2011 PASSED BY THE LEARNED CIT WH EREBY HE HAS AUTHORIZED TO FILE THE APPEAL AGAINST THE ORDER OF LEARNED CIT(APPEALS) DATED 04.11.2010. THE AUTHORIZED GROUNDS AS PER THI S ORDER ARE AS UNDER: GROUNDS OF APPEAL: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(APPEALS) HAS ERRED IN DELETING THE ADDITION OF RS.1.04 CRORE 2 MADE BY THE A.O. ON ACCOUNT OF INVESTMENT MADE OUTS IDE BOOKS OF ACCOUNT. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(APPEALS) HAS ERRED IN DELETING THE ADDITION OF RS.65,446 MADE BY THE A.O. ON ACCOUNT OF INTEREST EARNED ON M ONEY ADVANCED OUTSIDE THE BOOKS OF ACCOUNT, 3. (A) THE ORDER OF THE CIT(A) IS ERRONEOUS AND NOT TE NABLE IN LAW AND ON FACTS. (B) THE APPELLANT CRAVES LEAVE TO ADD, ALTER OR AME ND ANY/ALL OF THE GROUNDS OF APPEAL BEFORE OR DURING THE COURS E OF THE HEARING OF THE APPEAL. 3. BOTH THE SUBSTANTIAL GROUNDS ARE INTER-CONNECTED TO EACH OTHER. THE BRIEF FACTS OF THE CASE ARE THAT A SEARCH AND SEIZ URE OPERATION WAS CARRIED OUT ON 15.12.2004 AT A PREMISES OF SHRI BRIJ MOHAN GUPT A. A DIARY CONTAINING ENTRIES IN THE CODED LANGUAGE WAS FOUND FROM THE PR EMISES OF SHRI BRIJ MOHAN GUPTA. IT WAS INVENTORISED AS ANNEXURE A-50. STATEMENT OF SHRI BRIJ MOHAN GUPTA, HIS SON RAJIV GUPTA AND HIS ACCOUNTANT SHRI RAM AVTAR SINGHAL WERE RECORDED. SHRI RAM AVTAR SINGHAL WHILE DISCLOSING THE ENTRIES MADE IN THE DIARY IN ABBREVIATED FORM POINTED OUT T HAT 667 DATED 31.3.2003 WRITTEN ON THIS PAGES MEANS RS.6,67,000. THESE WERE RECEIVED FROM ONE PERSON WHOSE NAME IN ABBREVIATED FORM IS NOTED ON T HE DIARY AND THESE WERE ADVANCED AS A LOAN. SHRI BRIJ MOHAN GUPTA IS CHARGI NG COMMISSION FOR THIS 3 BUSINESS. HE USED TO TAKE LOAN FROM ABC AND FURTHER ADVANCED IT TO XYZ, IN A WAY HE WAS WORKING AS A BROKER IN ARRANGING THE F INANCE. LEARNED ASSESSING OFFICER HAS NOTICED ENTRIES AVAILABLE ON PAVE 34 OF ANNEXURE A- 50 AS WELL AS ON PAGE 25. ACCORDING TO THE ASSESSIN G OFFICER, THE ASSESSEE HAS ADVANCED A SUM OF RS.1,04,00,000 THROUGH SHRI B RIJ MOHAN GUPTA. ON THE BASIS OF THAT OUTCOME, HE MADE AN ADDITION OF T HIS AMOUNT UNDER SEC. 69 OF THE INCOME-TAX ACT, 1961 AS UNDISCLOSED INVESTME NT. LEARNED ASSESSING OFFICER FURTHER ESTIMATED THE INTEREST INCOME ON TH IS INVESTMENT AND MADE AN ADDITION OF RS.65,446. 4. ON APPEAL, LEARNED CIT(APPEALS) DELETED THE ADDI TION ON THE GROUND THAT REVENUE COULD NOT COLLECT SUFFICIENT EVIDENCE. THE ADDITION ON THE BASIS OF NARRATION MADE IN THE DIARY OF A THIRD PERSON CA NNOT BE MADE. IT IS NOT ASCERTAINED WHETHER MP GUPTA MEANS MAHABIR PRASAD G UPTA I.E. ASSESSEE ONLY. IT CAN BE SOME OTHER PERSON ALSO. ACCORDINGLY , LEARNED CIT(APPEALS) HAS DELETED THE ADDITION. 5. THE LEARNED COUNSEL FOR THE ASSESSEE AT THE VERY OUTSET SUBMITTED THAT IN THE DIARY, NAMES OF NUMBER OF PERSONS WERE MENTI ONED. THE ADDITIONS MADE IN THE HANDS OF ALL THOSE PERSONS. THESE ADDIT IONS WERE DELETED BY THE 4 LEARNED CIT(APPEALS). THE APPEALS OF THE REVENUE WE RE ALSO DISMISSED. IN THE PRESENT CASE, LEARNED CIT(APPEALS) HAS FOLLOWED THE ORDERS OF THE ITAT. FOR BUTTRESSING HIS CONTENTIONS, HE PLACED ON RECOR D COPY OF THE ITATS ORDER IN ITA NOS. 4417 TO 4420/DEL/2009 IN THE CASE S OF DEV DUTT PRASAD, RAJ KUMAR GARG VS. ITO, IN THE CASE OF ITO VS. PAWA N KUMAR GUPTA, ATUL GUPTA VS. DCIT IN ITA NO. 24/DEL/2011 AND ORS. 6. LEARNED DR ON THE OTHER HAND RELIED UPON THE ORD ER OF THE ASSESSING OFFICER. HOWEVER, HE COULD NOT CONTROVERT THE AVAIL ABILITY OF LARGE NUMBER OF ITATS ORDERS PERTAINING TO SIMILARLY SITUATED PERS ONS. 7. WE HAVE HEARD THE RIVAL CONTENTIONS AND GONE THR OUGH THE RECORD CAREFULLY. WE FIND THAT SIMILAR ISSUE WAS CONSIDERE D BY THE ITAT IN A NUMBER OF CASES. THE FINDINGS RECODED IN THE CASE O F ATUL GUPTA READ AS UNDER: 16. WE HAVE DULY CONSIDERED THE RIVAL CONTENTIONS AND GONE THROUGH THE RECORD CAREFULLY. THE ISSUE FOR OUR ADJ UDICATION IS WHETHER THE NARRATION FOUND IN THE DIARY OF SHRI BRIJ MOHAN GUPTA RECOVERED DURING THE COURSE OF SEARCH CARRIED OUT AT HIS PREM ISES IN 2004 IS A CONCLUSIVE EVIDENCE AGAINST THE ASSESSEE TO HOLD TH AT ASSESSEE MADE INVESTMENT IN ADVANCING THE LOAN TO CERTAIN PARTIES THROUGH SHRI BRIJ MOHAN GUPTA. THE REVENUE IN ORDER TO PROVE ITS CASE IS HARPING UPON 5 THE NARRATIONS AVAILABLE IN THE DIARY, STATEMENT OF SHRI RAM AVTAR SINGLA AND SHRI BRIJ MOHAN GUPTA. WE HAVE PERUSED T HE SEIZED MATERIAL AVAILABLE ON PAGE 46 OF THE ASSESSEES PAP ER BOOK. ON THIS PAGE, THERE ARE VARIOUS ENTRIES AGAINST THE NAMES O F VARIOUS PERSONS, THEY ARE IN ABBREVIATED FORM OR IN A CODED FORM. AT THE BOTTOM OF THE PAGE AGAINST ATUL, THERE ARE CERTAIN ENTRIES, NAM ELY, 4, 4, 2, 1 & 1.5 TOTALLING TO 12.50 ARE AVAILABLE. NO DOUBT, THIS IS A NARRATION MADE BY SHRI RAM AVTAR SINGLA IN HIS HANDWRITINGS. SHRI RAM AVTAR SINGLA HAS EXPLAINED WHAT FOR THE LATTER MENTIONED IN ABBR EVIATED FORM STANDS FOR E.G. HD MEANS HANUMAN DASS. KMF, KRISHAN KUMAR MANOJ KUMAR, KAROL BAGH, NEW DELHI. LEARNED INVESTIGATING OFFIFER AT THE TIME OF RECORDING THE STATEMENT OF SHRI RAM AVTAR S INGHLA ALMOST PUT EVERY ABBREVIATED LETTER TO SHRI RAM AVTAR SINGHLA. HE WAS ABLE TO GIVE THE COMPLETE FORM BUT NOT THE ADDRESS. WITH RE GARD TO THE ASSESSEE, NO QUESTION WAS PUT. THE REVENUE FAILED T O ESTABLISH A LIVE LINK BETWEEN THE INFORMATION NOTED IN ABBREVIATED F ORM BY SHRI RAM AVTAR SINGHLA AND THE ASSESSEE. THE REVENUE COULD N OT ESTABLISH THAT ATUL NOTED IN THIS DIARY IS AS ATUL KUMAR GUPTA I.E . THE ASSESSEE. THUS, NEITHER THE DIARY WAS FOUND FROM THE PREMISES OF THE ASSESSEE NOR IT IS IN THE HANDWRITING OF THE ASSESSEE, ANY T HIRD PERSON MAY RIGHT THE NAME OF ANY PERSON AT HIS SWEET WILL THEN AN AS SESSEE CANNOT BE BURDENED WITH LIABILITY ON THE BASIS OF SUCH WRITIN G. THAT CAN BE STARTING POINT OF INVESTIGATION BUT REVENUE HAS TO ESTABLISH THAT IT IS THE ASSESSEE WHO HAS PAID THE MONEY TO CERTAIN CONCERNS WITHOUT RECORDING THEM IN THE BOOKS OF ACCOUNT. LEARNED FIR ST APPELLATE AUTHORITY HAS DISCUSSED THIS ASPECT WHILE DELETING THE ADDITION AND WE DO NOT SEE ANY REASON TO INTERFERE IN HIS FINDINGS. THE FINDINGS IN ALL 6 THE OTHER ASSESSMENT YEARS ARE ALMOST SIMILAR EXCEP T VARIATION IN THE QUANTUM OF ADDITIONS. THEREFORE, ALL THE APPEALS OF THE REVENUE ARE DE VOID OF ANY MERIT AND THEY ARE DISMISSED. 8. THERE IS NO DISPARITY ON FACTS. THE REVENUE COUL D ONLY ABLE TO LAY ITS HANDS ON THE DIARY OF SHRI BRIJ MOHAN GUPTA WHERE N AMES OF PERSONS WERE RECORDED IN CODED WORDS E.F. HD MEANS HAMAMM DASS , R.K. MEANS RAM KUMAR. THE REVENUE COULD NOT ESTABLISH THAT MPG M EANS MAHABIR PRASAD GUPTA ONLY I.E. ASSESSEE. THE REVENUE HAS NOT PLACED ON RECORD STATEMENTS OF SHRI BRIJ MOHAN GUPTA OR RAM AVTAR SI NGAL OR RAJIV GUPTA BEFORE US. THEREFORE, IN OUR OPINION, THE ISSUE IN DISPUTE IS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE BY THE ORDERS OF THE ITAT PASSED IN THE CASE OF OTHER PERSONS I.E. ASHOK PRASAD GUPTA, ATUL GUPTA, DEV DUTT PRASAD ETC. 9. ON DUE CONSIDERATION OF ALL THESE MATERIAL, WE D O NOT FIND ANY MERIT IN THIS APPEAL. IT IS DISMISSED. 10. IN ITA NO.714/DEL/2011, THE GROUNDS OF APPEAL T AKEN BY THE REVENUE READ AS UNDER: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE, LEARNED CIT(APPEALS) HAS ERRED IN DELETING THE ADDITION OF RS.21,06,777 MADE BY THE A.O. HOLDING THAT THE ASSESSEE IS A BENAMI O WNER OF M/S. MOUNT FRAGRANCES. 7 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, THE LEARNED CIT(APPEALS) HAS ERRED IN HOLDING THAT THE ASSESSEE IS THE OWNER OF ONLY 75% OF THE PROFITS OF M/S. MOUNT FRAGRANCES. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, THE LEARNED CIT(APPEALS) HAS ERRED IN CLUBBING THE UNACCOUNTED INCOME FOR A.Y. 2003-04 TO A.Y. 2006-07 AND ALLOWING THE ADJUSTMENT OF EXCESS SURRENDER OF RS.19.00 LAKHS AGAINST THIS INCOME. 4. A) THE ORDER OF THE CIT(A) ERRONEOUS AND NOT TE NABLE IN LAW AND ON FACTS. B) THE APPELLANT CRAVES LEAVE TO ADD, ALTER OR AMEN D ANY/ALL OF THE GROUNDS OF APPEAL BEFORE OR DURING THE COURSE O F THE HEARING OF THE APPEAL. 11. THE BRIEF FACTS OF THE CASE ARE THAT A SEARCH AND SEIZURE OPERATION WAS CARRIED OUT AT THE PREMISES OF THE ASSESSEE ON 23.3 .2006. THE ASSESSEE HAS FILED HIS RETURN OF INCOME ON 30 TH OCTOBER 2006 DECLARING AN INCOME OF RS.541,95,570. LEARNED ASSESSING OFFICER HAS MADE AN ADDITION OF RS.21,06,777 IN THE INCOME OF THE ASSESSEE BY OBSER VING AS UNDER: 3. IT WAS FOUND AT THE TIME OF SEARCH THAT THE ASS ESSEE IS A BENAMI OWNER OF M/S. MOUNT FRAGRANCES WHOSE PROPRIETOR ON RECORD WAS SHOWN AS SH. GAURAV MITTAL. WHILE FRAMING THE ASSES SMENT OF SH. GAURAV MITTAL, SO CALLED PROPRIETOR OF M/S. MOUNT F RAGRANCES FOR A.Y. 2002-03, IT WAS HELD THAT THE FIRM M/S. MOUNT FRAGR ANCES IS A BENAMI CONCERN OF SH. MAHABIR PRASAD GUPTA. SIMILARLY, IT WAS HELD IN THE A.Y. 2003-04 TO A.Y. 2006-07. DETAILED FACTS ARE AV AILABLE IN THE 8 ASSESSMENT RECORD OF SH. GAURAV MITTAL. KEEPING THO SE ASSESSMENT ORDERS IN VIEW, IT IS HELD THAT THE ASSESSEE WAS A PROPRIETOR OF ABOVE NAMED FIRM. INCOME OF THE ABOVE FIRM HAS BEEN WORKE D OUT IN THAT ORDER AS RS.2106777. KEEPING ABOVE ORDER IN VIEW AN D BENAMI NATURE OF THE FIRM, INCOME OF RS.2106777 IS ADDED IN THE H ANDS OF THE ASSESSEE AS THE REAL BENEFICIARY. PENALTY PROCEEDIN GS UNDER SEC. 271(1) OF THE I.T. ACT ARE INITIATED SEPARATELY FO R CONCEALING OF INCOME ON THIS SCORE. 12. ON APPEAL, LEARNED CIT(APPEALS) HAS DELETED THE ADDITION BY OBSERVING AS UNDER: 2. THE FIRST ISSUE RAISED IN THIS APPEAL AGAINST A DDITION OF RS.21,06,777 MADE TO THE TAXABLE INCOME OF THE ASSE SSEE ON ACCOUNT OF INCOME FROM M/S. MOUNT FRAGRANCES. THE ASSESSING OFFICER HAS MADE THIS ADDITION ON THE BASIS OF HIS FINDINGS IN THE CASE OF SHRI GAURAV MITTAL IN A.Y. 2003-04 IN THE CASE OF THE AP PELLANT FOR A.YS 2003-04 TO 2006-07. I HAVE ALREADY DEALT WITH THIS ISSUE IN DETAIL IN MY ORDER IN A.NO.125/09-09 IN THIS APPELLANTS OWN CASE APPEAL IN A.Y. 2003-04. AS HAS BEEN HELD BY ME IN THE A.Y. 20 03-04 IN THE CASE OF THE APPELLANT, ONLY AN AMOUNT OF RS.1,41,50 0 IS REQUIRED TO BE ADDED IN THE HANDS OF THE ASSESSEE FOR THE INSTANT YEAR AND ACCORDINGLY BALANCE AMOUNT OF RS.19,61,177 IS DELETED. IN THE R ESULT THE ADDITION IS SUSTAINED TO THE EXTENT OF RS.1,41,500 AND THE ASSE SSEE GETS A RELIEF OF RS.19,61,177. 9 13. LEARNED DR WHILE IMPUGNING THE ORDER OF THE LEA RNED CIT(APPEALS) SUBMITTED THAT THE BASIC ISSUE INVOLVED WITH REGARD TO THIS GROUND IS WHETHER ASSESSEE IS TO BE TREATED AS 100% OWNER OF A FIRM, NAMELY, MOUNT FRAGRANCE OR HE BE TREATED OWNER TO THE EXTENT OF 75%. LEARNE D CIT(APPEALS) HAS RELIED UPON HIS ORDER PASSED IN ASSESSMENT YEARS 20 03-04 TO 2005-06. IN ASSESSMENT YEAR 2003-04, THIS ISSUE WAS AGITATED. L EARNED ASSESSING OFFICER HAS TREATED THE ASSESSEE AS BENAMI OWNER OF THE FIR M MOUNT FRAGRANCE TO THE EXTENT OF 100%. ON APPEAL, ASSESSEE CONTENDED THAT SHRI GAURAV MITTAL IS ALSO A PARTNER IN THE FIRM TO THE EXTENT OF 25%. IN SUPPORT OF HIS CONTENTIONS, ASSESSEE HAS FILED SALES-TAX REGISTRATION CERTIFICA TE SHOWING GAURAV MITTAL AS PROPRIETOR, SALES TAX ASSESSMENT ORDER. CERTIFICATE OF IMPORT/EXPORT CODE SHOWING GAURAV MITTAL AS PARTNER. COPY OF THE RETUR N OF GAURAV MITTAL WHEREIN HE HAS ADMITTED TO BE OWNER OF MOUNT FRAGRA NCES. LEARNED FIRST APPELLATE AUTHORITY HAS GONE THROUGH ALL THESE EVID ENCES AND THEREAFTER HELD THAT ONLY EVIDENCE POSSESSED BY THE ASSESSING OFFIC ER FOR TREATING THE ASSESSEE AS BENAMI OWNER IS THE STATEMENT OF SHRI R AM BABU MITTAL FATHER OF SHRI GAURAV MITTAL. IN HIS STATEMENT, HE HAS DISCLO SED THAT GAURAV MITTAL IS A PARTNER ONLY FOR NAME SAKE. LEARNED CIT(APPEALS) HA S HELD THAT THIS STATEMENT IS NOT SUFFICIENT TO TREAT THE ASSESSEE A S 100% OWNER OF MOUNT FRAGRANCES. LEARNED CIT(APPEALS) HAS FURTHER HELD T HAT PROFIT TO THE EXTENT 10 OF 75% FROM THIS FIRM IS TO BE ASSESSED IN THE HAND S OF THE ASSESSEE. THIS ORDER WAS NOT CHALLENGED BY THE REVENUE IN FURTHER APPEAL. 14. LEARNED DR TOOK US THROUGH THE FINDINGS OF THE LEARNED CIT(APPEALS) IN ASSESSMENT YEAR 2003-04 AVAILABLE O N PAGE NOS. 93 TO 106 OF THE PAPER BOOK. HE SUBMITTED THAT EVEN IF REVENU E HAS NOT CHALLENGED THE ORDER OF THE LEARNED CIT(APPEALS) IN ASSESSMENT YEA R 2003-04, IT CAN CHALLENGE THOSE FINDINGS WHICH ARE STILL EFFECTIVE IN THE PRESENT ASSESSMENT YEAR. IN THIS WAY, HE SUBMITTED THAT NO DISCUSSION IS DISCERNIBLE IN THE IMPUGNED ORDER AND, THEREFORE, FOR THE PURPOSE OF T HE FACTS AND REASONING, TRIBUNAL IS REQUIRED TO LOOK INTO THE ORDER OF THE LEARNED CIT(APPEALS) IN ASSESSMENT YEAR 2003-04. LEARNED DR CONTENDED THAT LEARNED CIT(APPEALS) IN THIS YEAR HAS ERRED IN HOLDING THAT THE ASSESSEE IS OWNER TO THE EXTENT OF 75% OF MOUNT FRAGRANCES. HE FURTHER RELIED UPON THE FINDINGS OF THE ASSESSING OFFICER. 15. THE LEARNED COUNSEL FOR THE ASSESSEE WHILE REBU TTING THE STATEMENT OF LEARNED DR SUBMITTED THAT ORDERS OF THE LEARNED CIT (APPEALS) IN ASSESSMENT YEAR 2003-04 TO 2005-06, TREATING THE AS SESSEE AT 75% OWNER OF M/S. MOUNT FRAGRANCE HAVE BEEN ACCEPTED. HE FURTHER SUBMITTED THAT IN THIS 11 YEAR, LEARNED CIT(APPEALS) HAS NOT GRANTED ANY SUBS TANTIAL RELIEF TO THE ASSESSEE. THE LEARNED COUNSEL FOR THE ASSESSEE DREW OUR ATTENTION TOWARDS PAGE 87 OF THE PAPER BOOK AND SUBMITTED THAT ASSESS EE HAS SURRENDERED AN INCOME OF RS.9 CRORES. THE BREAK UP OF INCOME AS TO HOW IT WAS ALLOCATED IN DIFFERENT ASSESSMENT YEARS HAS BEEN PLACED ON PAGE 87 OF THE PAPER BOOK. ON THE STRENGTH OF THESE DETAILS, HE POINTED OUT THAT A SUM OF RS.19 LACS OUT OF RS. 9 CRORES SURRENDERED INCOME WAS REMAINED TO BE ALLOCATED AGAINST STOCK OR ASSETS. LEARNED CIT(APPEALS) HAS GRANTED BENEFIT OF SET OF THIS AMOUNT. IN THE PRESENT ASSESSMENT YEAR, ASSESSING OFFICER HAS ACCEPTED THAT TOTAL SALES OF RS. 4870,36,149 ARE RECORDED IN THE BOOKS. ASSES SEE HAS SHOWN PROFIT @ 7.5%. ON THE OTHER HAND, ASSESSEE HAS SHOWN UNRECOR DED SALES AT COST PRICE AT RS.5184,45,534. THE PROFIT AT THE RATE OF 7.5% C OMES OUT TO RS.388,82,965. AS AGAINST THIS AMOUNT, ASSESSEE HAS DISCLOSED RS.5.40 CRORES. IT CAN TAKE CARE OF ALL SHORTCOMINGS, THERE FORE, ACCORDING TO LEARNED COUNSEL FOR THE ASSESSEE, LEARNED CIT(APPEALS) HAS NOT DELETED ANY ADDITION, HE JUST GRANTED TELESCOPING. 16. WE HAVE HEARD THE RIVAL CONTENTIONS AND GONE TH ROUGH THE RECORD CAREFULLY. AS FAR AS SECOND GROUND OF APPEAL IS CON CERNED, THE REVENUE HAS ALREADY ACCEPTED FINDINGS OF THE LEARNED CIT(APPEAL S) IN ASSESSMENT YEAR 12 2003-04 THAT ASSESSEE IS OWNER TO THE EXTENT OF 75% OF THE PROFITS OF M/S. MOUNT FRAGRANCES. WE HAVE GONE THROUGH THE ORDER OF THE LEARNED CIT(APPEALS) IN ASSESSMENT YEAR 2003-04 ALSO, THOUG H IT IS NOT UNDER CHALLENGE BEFORE US BUT, THE REASONING ARE CONTAINE D IN THAT ORDER. LEARNED CIT(APPEALS) HAS TREATED THE ASSESSEE AS OWNER TO T HE EXTENT OF 75% AFTER EXAMINING THE RECORD. THE REVENUE WAS ONLY POSSESSI NG THE STATEMENT OF SHRI RAM BABU MITTAL WHO HAS DISCLOSED DURING THE C OURSE OF SEARCH THAT HIS SON IS A PARTNER ONLY FOR NAME SAKE. LEARNED CIT(AP PEALS) HAS OBSERVED THAT STATEMENT OF GAURAV MITTAL WAS NEVER RECORDED. IN H IS ASSESSMENT ORDER, IT WAS OBSERVED BY THE ASSESSING OFFICER THAT IT MAY B E POSSIBLE, THEREFORE, MAY BE DRAWING SALARY IN THE SHARE OF 25%. LEARNED CIT(APPEALS) ALSO CONSIDERED SALES-TAX REGISTRATION CERTIFICATE, BANK STATEMENT, RETURN OF GAUTAV MITTAL ETC., MORE SO, THIS ORDER WAS NOT CHALLENGED . THUS, WE DONT FIND ANY MERIT IN GROUND NO.2 OF THE REVENUE. 17. AS FAR AS GROUND NO.1 IS CONCERNED, AFTER LOOKI NG INTO PAGE 87 OF THE PAPER BOOK, WHEREIN DETAILS OF SURRENDER INCOME OF RS. 9 CRORES, HOW IT IS ALLOCATED TO THE STOCK AND ASSETS AND DETAILS OF UN RECORDED SALES, WE ARE OF THE OPINION THAT A SUM OF RS.19 LACS WAS STILL AVAI LABLE WITH THE ASSESSEE FOR ALLOCATION. BENEFIT OF SET OFF OF THIS AMOUNT HAS B EEN GIVEN TO THE ASSESSEE BY 13 THE LEARNED CIT(APPEALS), OTHERWISE IN PRINCIPLE LE ARNED CIT(APPEALS) HAS CONFIRMED THE ADDITION OF RS.21,06,777 IN THE FINDI NGS EXTRACTED SUPRA. TAKING INTO CONSIDERATION THE FINDINGS OF THE LEARN ED CIT(APPEALS), WE ARE OF THE VIEW THAT ONLY TELESCOPING BENEFIT HAS BEEN GRANTED BY THE LEARNED CIT(APPEALS) AFTER TREATING THE ASSESSEE AS OWNER T O THE EXTENT OF 75% OF THE PROFIT OF MOUNT FRAGRANCES. THERE IS NO ERROR IN TH E ORDER OF THE LEARNED CIT(APPEALS). ACCORDINGLY, THE APPEAL OF THE REVENU E IS DISMISSED. 18. IN THE RESULT, BOTH THE APPEALS ARE DISMISSED. DECISION PRONOUNCED IN THE OPEN COURT ON 23.11.201 2 SD/- SD/- ( A.N. PAHUJA ) ( RAJPAL YADAV ) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 23/11/2012 MOHAN LAL COPY FORWARDED TO: 1) APPELLANT 2) RESPONDENT 3) CIT 4) CIT(APPEALS) 5) DR:ITAT ASSISTANT REGISTRAR