Shri Namdev Panjwani, v. The ACIT, 3(1),

1 IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH INDORE BEFORE SHRI JOGINDER SINGH JUDICIAL MEMBER AND SHRI V.K. GUPTA ACCOUNTANT MEMBER ITA NO.296/IND/2007 A.YS. 1987-88 ITA NO. 321/IND/07 A.Y. 1988-89 ITA NO. 322/IND/07 A.Y. 1989-90 ITA NO. 343/IND/07 A.Y. 1990-91 ITA NO. 340/IND/07 A.Y. 1991-92 ITA NO. 341/IND/07 A.Y. 1992-93 ASSTT. COMMISSIONER OF INCOME TAX 3(1) INDORE APPELLANT VS SHRI NAMDEO PANJAWANI INDORE GIR NO. N-711 RESPONDENT C.O. NOS. 51 AND 56 TO 60/IND/07 (ARISING OUT ITA NOS.296 321 322 343 340 & 341 /IND/2007) NAMADEO PANJWANI INDORE OBJECTOR VS ASSTT. COMMISSIONER OF INCOME TAX 3(1) INDORE RESPONDENT 2 APPELLANT BY : SHRI K.K. SINGH CIT DR RESPONDENT BY : SHRI K.C. AGRAWAL O R D E R PER BENCH THIS IS A BUNCH OF SIX APPEALS BY THE REVENUE AND R ESPECTIVE CROSS OBJECTIONS BY THE ASSESSEE AGAINST THE ORDERS OF TH E LEARNED CIT(A) DATED 29.1.2007 AND 15.2.2007 FOR THE ASSESSMENT YE ARS MENTIONED ABOVE. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS :- ITA NO. 296/IND/07 ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) ERRED IN 1. REDUCING THE NET PROFIT RATE AT 12% AS AGAINST 1 5% APPLIED BY THE A.O. 2. DIRECTING TO DELETE AN ADDITION OF RS.3 18 000/- MADE ON ACCOUNT OF CASH CREDITS. ITA NO. 321/IND/07 ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) ERRED IN- 1. REDUCING THE SALES BY RS.2 LAKHS AND DIRECTING T O APPLY NET PROFIT RATE AT 12% AS AGAINST 15% APPLIED BY TH E ASSESSING OFFICER 3 2. DELETING THE AMOUNT OF RS. 2 85 000/- ADDED BY T HE ASSESSING OFFICER UNDER THE HEAD CASH CREDIT 3. DIRECTING DELETION OF RS.97 36 930/- WHICH WAS H ELD BY THE ASSESSING OFFICER AS TO BE UNEXPLAINED INVESTMENT I N SHARES ON PANJWANI PLASTIC & POLYSTER LTD. 4. DIRECTING RELIEF OF RS.82 000/- WHICH WAS HELD B Y THE ASSESSING OFFICER AS TO BE UNEXPLAINED INVESTMENT I N CAR NO. CII-9827 5. DELETING AMOUNT LYING IN THE NAME OF M/S KAMAL ENTERPRISES AT RS.1 84 000/- AND RS.29 450/- AND IN THE NAME OFSHRI KAMAL ENTERPRISES AT RS.1 84 000/- AND RS. 29 450/- AND IN THE NAME OF SHRI KAMAL PANJWANI AT RS. 15 200/- AS TO BE BELONGING TOSHRI KAMAL PANJWANI WITHOUT GOING INTO DETAILS OF THE PERSON WHO HAD INTRODUCED THESE AMOUNTS AND THAT KAMAL PANJWANI HA D NO INDEPENDENT SOURCE OF INCOME. ITA NO. 322/IND/07 ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) ERRED IN 1. DIRECTING TO CONSIDER FOLLOWING AMOUNTS ADDED IN THE HANDS OF THE ASSESSEE AS TO BE EXAMINED IN THE HAND S OF SHRI KAMAL PANJWANI 4 I. RS. 1 30 000/- BY WAY OF CAPITAL APPRECIATION IN THE BOOKS OF M/S KAMAL ENTERPRISES. II. RS.13 580/- BY WAY OF BANK DEPOSIT IN HIS SONS ACCOUNT III. CASH CREDITS OF RS.28 58 100/- AND RS.15 00 00 0/- WITHOUT REJECTING THE FACT ON RECORD THAT SHRI KAMA L PANJWANI HAD NO SOURCE OF INCOME OF HIS OWN. 2. BY DIRECTING THAT THE FOLLOWING SUMS OF I. RS.1 30 000/- BY WAY OF CAPITAL APPRECIATION IN THE BOOKS OF M/S KAMAL ENTERPRISES. II. RS.13 580/- BY WAY OF BANK DEPOSIT IN HIS SONS ACCOUNT III. CASH CREDITS OF RS.28 58 100/- AND RS.15 00 00 0/- BE EXAMINED U/S 153(3)(II) EXPLANATION 3 IN THE HANDS OF SHRI KAMAL PANJWANI 3. GIVING DIRECTIONS TO THE ASSESSING OFFICER TO EX AMINE U/S 153(3)(II) AND EXPLANATION 3 WHEREAS UNDER THESE I NCOME TAX PROVISION THE ORDER OF CIT(A) SHOULD BE A FIND ING OF FACT THAT IF SUCH INCOME IS EXCLUDED FROM THE INCOM E OF SHRI NAMDEV PANJWANI THEN IT IS HELD TO BE THE INC OME OF SHRI KAMAL PANJWANI 5 4. REDUCING THE AMOUNT OF EXPENDITURE INCURRED ON F OREIGN TOUR FROM RS.3 00 000/- AS HELD BY THE ASSESSING OF FICER TO RS.1 50 000/- WITHOUT COUNTERING THE LOGIC OF TH E ASSESSING OFFICER GIVEN IN THE ASSESSMENT ORDER 5. DIRECTING TO CONSIDER THE AMOUNT OF FDR WITH INT EREST AGGREGATING TO RS.1 02 500/- AS TO BE ASSESSABLE IN THE HANDS OF SHRI KAMAL PANJWANI WITHOUT REJECTING THE FACT ON RECORD THAT SHRI KAMAL PANJWANI HAD NO SOURCE FOR S UCH INVESTMENT. 6. DELETING THE AMOUNT OF UNEXPLAINED BANK DEPOSITS AGGREGATING TO RS.3 60 020/- WITHOUT ANY CONCRETE MATERIAL BEFORE HIM IN THIS REGARD. ITA NO. 343/IND/07 ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) ERRED IN 1. DELETING THE CONSIDER FOLLOWING AMOUNTS ADDED IN THE HANDS OF THE ASSESSEE AS TO BE EXAMINED IN THE HAND S OF SHRI KAMAL PANJWANI (A) RS.4 20 000/- BY WAY OF CASH DEPOSITS (B) RS.29 20 000/- BY WAY OF SHARE CAPITAL EMPLOYED IN M/S PANJWANI POLYPROPYLENE LTD. 6 (C) RS.50 000/- BY WAY OF PROFIT ON SALES OF STOCK WITHOUT REJECTING THE FACT ON RECORD THAT SHRI KAMAL PANJWA NI HAD NOT SOURCE OF INCOME OF HIS OWN. 2. REDUCING THE AMOUNT OF EXPENDITURE INCURRED ON M ARRIAGE AT RS.5 00 000/- & GOLD JEWELLERY AT RS.1 28 033/- AGGREGATING TO RS.6 28 033/- AS ASSESSED BY THE ASSESSING OFFICER TO RS.3 00 000/- WITHOUT TAKING I NTO CONSIDERATION THE STATUS OF THE ASSESSEE AND MATERI AL FACTS ON RECORD. 3. DIRECTING TO CONSIDER FOLLOWING AMOUNTS ADDED IN THE HANDS OF THE ASSESSEE AS TO BE EXAMINED IN THE HAND S OF SHRI KAMAL PANJWANI (A) RS.27 000/- AND RS.40 889/- BY WAY OF BANK DEPO SITS (B) RS.31 045/- AND RS.18 25 000/- BY WAY OF BANK DEPOSITS (C) RS.13 333/- BY WAY OF BANK FDR INTEREST WITHOUT APPRECIATING THE FACT ON RECORD THAT SHRI K AMAL PANJWANI HAD NO SOURCE OF INCOME OF HIS OWN. 4. DIRECTING DELETION OF INCOME OF RS.4 30 000/- AS ASSESSED BY THE ASSESSING OFFICER IN THE HANDS OF THE ASSESS EE BY WAY OF UNEXPLAINED AMOUNT OF LOANS FROM THREE PERSO NS 7 5. GIVING DIRECTIONS TO THE ASSESSING OFFICER TO EX AMINE U/S 153(3)(II) AND EXPLANATION 3 WHEREAS UNDER THESE INCOMETAX PROVISION THE ORDER OF CIT(A) SHOULD BE A FINDING OF FACT THAT IF SUCH INCOME IS EXCLUDED FRO M THE INCOME OF SHRI NAMDEO PANJWANI THEN IT IS HELD TO BE THE INCOME OF SHRI KAMAL PANWJANI. ITA NO. 340/IND/07 ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) ERRED IN 1. DELETING THE AMOUNT OF UNSECURED LOAN OF RS.16 2 3 000/- 2. ALLOWING RELIEF OF RS.53 848/- BEING THE AMOUNT OF NET PROFIT ON WASTAGE SALES. 3. DELETING THE AMOUNT OF BANK DEPOSIT OF RS.23 000 /- IN THE NAME OF SHRI KAMAL PANJWANI IGNORING THE FACT THAT SHRI KAMAL PANJWANI HAS NO INDEPENDENT SOURCE OF HIS INCOME. 4. DELETING THE AMOUNT OF RS.1 43 784/- BEING THE A MOUNT OF BANK DEPOSIT IN STATE BANK OF INDORE PY ROAD INDO RE. 5. DELETING THE AMOUNT OF RS.20 000/- BEING THE AMO UNT OF INTEREST ON FDR LYING IN THE NAME OF SHRI KAMAL PAN JWANI IGNORING THE FACT THAT THE LATER HAS NO HIS INDEPEN DENT SOURCE OF INCOME. 8 ITA NO. 341/IND/07 ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) ERRED IN 1. DELETING THE ADDITION MADE AT RS.73 000/- ON ACC OUNT OF SHARE CERTIFICATES FOUND IN THE NAME OF SHRI KAMAL PANJWANI WITHOUT GOING INTO DETAILS OF THE PERSONS WHO HAD INTRODUCED THIS AMOUNT AND THAT SHRI KAMAL PANJ WANI HAD NO INDEPENDENT SOURCE OF INCOME. 2. DELETING THE AMOUNT OF SHARE CERTIFICATES AMOUNT ING TO RS.11 000/-. 3. DELETING THE AMOUNT OF RS.2 50 000/- INCURRED TO WARDS PURCHASE OF DEMAND DRAFT. 4. DIRECTING DELETION OF RS.10 00 000/- WHICH WAS A DDED BY THE ASSESSING OFFICER AS TO BE UNEXPLAINED INVESTME NT IN SHARES OF PANJWANI PACKAGING LTD. 5. DELETING ADDITION ON ACCOUNT OF UNEXPLAINED AMOU NT OF JEWELLERY BY RS. 1 36 238/-. 6. DELETING THE AMOUNT OF RS.1 22 100/- ADDED BY TH E ASSESSING OFFICER ON ACCOUNT OF UNEXPLAINED CASH FO UND 7. DELETING THE AMOUNT OF RS.50 943/- ADDED BY THE ASSESSING OFFICER ON ACCOUNT OF UNEXPLAINED BANK DEPOSIT. 9 2. THE ASSESSEE IN THE CROSS OBJECTIONS HAS RAISED THE FOLLOWING CROSS OBJECTIONS :- C.O. NO. 51/IND/07 1. THE RESPONDENT SUBMITS THAT THE LEARNED CIT(APPE ALS)-I INDORE HAS ERRED IN ADOPTING THE NP RATE AT 12% AF TER DEPRECIATION ON ESTIMATED TURNOVER OF RS.0.50 CRORE S AS AGAINST THE DECLARED SALES OF RS.0.31 CRORES WITHOU T ANY BASIS. IT IS THEREFORE PRAYED THAT THE ORDER OF THE LEARNED CIT(APPEALS)-I INDORE MAY PLEASE BE QUASHED AND N P RATE MAY PLEASE BE DIRECTED TO BE CALCULATED ON ACTUAL T URNOVER THAT TOO ON THE BASIS OF MATERIAL AVAILABLE ON RECO RD. 2. THE RESPONDENT SUBMITS THAT THE LEARNED CIT(APPE ALS)-I INDORE HAS RIGHTLY DELETED THE ADDITION MADE ON AC COUNT OF CASH CREDITS IN THE BOOKS OF ACCOUNT AT RS.3 18 000 /- U/S 68 OF THE ACT. IT IS THEREFORE PRAYED THAT THE ORDE R OF THE LEARNED CIT (APPEALS)-I INDORE MAY PLEASE BE SUSTA INED ON THIS POINT. C.O. NO. 56/IND/07 1. THE RESPONDENT SUBMITS THAT THE LEARNED CIT(APPE ALS)-I INDORE HAS ERRED IN ADOPTING THE NP RATE AT 12% AF TER DEPRECIATION ON ESTIMATED TURNOVER OF RS. 2 LACS AS AGAINST THE DECLARED SALES OF RS. 1.76 LACS WITHOUT ANY BAS IS. IT IS 10 THEREFORE PRAYED THAT THE ORDER OF THE LEARNED CIT (APPEALS)- I INDORE MAY PLEASE BE QUASHED AND NP RATE MAY PL EASE BE DIRECTED TO BE CALCULATED ON ACTUAL TURNOVER TH AT TOO ON THE BASIS OF MATERIAL AVAILABLE ON RECORD. 2. THE RESPONDENT SUBMITS THAT THE LEARNED CIT(APPE ALS)-I INDORE HAS RIGHTLY DELETED THE ADDITION MADE ON AC COUNT OF CASH CREDITS IN THE BOOKS OF ACCOUNT AT RS.2 85 000 /- U/S 68 OF THE ACT. IT IS THEREFORE PRAYED THAT THE ORDE R OF THE LEARNED CIT(APPEALS)-I INDORE MAY PLEASE BE SUSTA INED ON THIS POINT. 3. THE RESPONDENT SUBMITS THAT THE LEARNED CIT(APPE ALS)-I INDORE HAS ERRED IN MAINTAINING THE ADDITION MADE ON ACCOUNT OF HOUSEHOLD EXPENSES AT RS.1 50 000/- WHIC H IS ON THE BASIS OF ESTIMATION AND BASELESS. THE RESPONDEN T AND HIS FAMILY MEMBERS HAVE AVAILABILITY OF AMPLE FUNDS OUT OF INTANGIBLE ADDITIONS MADE IN EEARLIER YEARS AND HEN CE THE ORDER OF THE CIT(APPEALS)-I MAY PLEASE BE SET ASID E ON THIS POINT. 4. THE RESPONDENT SUBMITS THAT THE LEARNED CIT(APPE ALS)-I INDORE HAS ERRED IN MAINTAINING THE ADDITION MADE ON ACCOUNT OF INVESTMENT IN GROUP COMPANIES AT RS.14 8 1 000/- WHEREAS THE RESPONDENT AND FAMILY MEMBERS HAVE 11 AVAILABILITY OF AMPLE FUNDS OUT OF INTANGIBLE ADDIT IONS MADE IN EARLIER YEARS AND HENCE THE ORDER OF THE CIT(APPEAL S)-I INDORE MAY PLEASE BE SET ASIDE ON THIS POINT. 5. THE RESPONDENT SUBMITS THAT THE LEARNED CIT(APPE ALS)-I INDORE HAS RIGHTLY DELETED THE ADDITION MADE ON AC COUNT OF INVESTMENT MADE IN SHARES OF M/S PANJWANI PLASTICS & POLYSTERS LTD. AT RS.97 36 930/- WHICH WAS MADE WIT HOUT ANY BASIS. IT IS THEREFORE PRAYED THAT THE ORDER OF THE LEARNED CIT(APPEALS)-I INDORE MAY PLEASE BE SUSTAINED ON THIS POINT. 6.ATHE RESPONDENT SUBMITS THAT THE LEARNED CIT(APPE ALS)-I INDORE HAS ERRED RIGHTLY DELETED THE ADDITION MADE ON ACCOUNT OF INVESTMENT MADE IN CAR AT RS.82 000/- WH EREIN THE INVESTMENT IS MADE OUT OF AMOUNT WITHDRAW3N OUT OF BANK ACCOUNT. IT IS THEREFORE PRAYED THAT THE ORD ER OF THE LEARNED CIT(APPEALS)-I INDORE MAY PLEASE BE SUSTA INED ON THIS POINT. 6.B THE RESPONDENT SUBMITS THAT THE LEARNED CIT(APP EALS)-I INDORE HAS ERRED IN SUSTAINING THE ADDITION MADE O N ACCOUNT OF INVESTMENT MADE IN ANOTHER CAR AT RS.67 000/- WH EREIN THE INVESTMENT IS MADE OUT OF FUNDS AVAILABLE WITH THE RESPONDENT AND/OR HIS FAMILY MEMBERS OUT OF INTANGI BLE 12 ADDITIONS MADE IN EARLIER YEARS. IT IS THEREFORE PRAYED THAT THE ORDER OF THE LEARNED CIT(APPEALS)-I INDORE MA Y PLEASE BE SET ASIDE ON THIS POINT. 7. THE RESPONDENT SUBMITS THAT THE LEARNED CIT(APPE ALS)-I INDORE HAS RIGHTLY DELETED THE ADDITION MADE ON TH E BASIS OF BALANCE SHEET OF M/S KAMAL ENTERPRISES (PROP. SHRI KAMAL PANJWANI) AT RS.1 84 000/- AND AT RS.29 450/- AND D EPOSITS IN PERSONAL BANK ACCOUNT OFSHRI KAMAL PANJWANI AT RS.15 200/- WHO IS SEPARATELY BEEN ASSESSED TO TAX. IT IS THEREFORE PRAYED THAT THE ORDER OF THE LEARNED CIT (APPEALS)- I INDORE MAY PLEASE BE SUSTAINED ON THIS POINT. CO NO. 57/IND/07 1. THE RESPONDENT SUBMITS THAT THE LEARNED CIT(APPE ALS)-I INDORE HAS DELETING THE ADDITION MADE ON THE BASIS OF BALANCE SHEET OF M/S KAMAL ENTERPRISES (PROP. SHRI KAMALPAN JWANI) AT RS.1 30 000/- CASH CREDITS IN THE BALANCE SHEET OF M/S PANJWANI POLYPROPELENE (PROP. SHRI KAMAL PANJWANI) DEPOSITS IN PERSONAL BANK ACCOUNT OF SHRI KAMAL PAN JWANI AT RS.13 580/- AND FDR IN THE NAME OF SHRI KAMAL PANJW ANI AT RS.1 02 500/- WHO IS SEPARATELY BEEN ASSESSED TO TA X. IT IS THEREFORE PRAYED THAT THE ORDER OF THE LEARNED CIT (APPEALS)-I INDORE MAY PLEASE BE SUSTAINED ON THIS POINT. 13 2. THE RESPONDENT SUBMITS THAT THE LEARNED CIT(APPE ALS)-I INDORE HAS ERRED IN MAINTAINING THE ADDITION MADE ON ACCOUNT OF HOUSEHOLD EXPENSES AT RS.1 60 000/- WHICH IS ON THE BASIS OF ESTIMATION AND BASELESS AND THAT TOO WITHOUT CON SIDERING THE FACT THAT THE SURRENDER OF RS.1 00 000/- HAS BE EN MADE ON THIS ACCOUNT AND THE RESPONDENT AND HIS FAMILY MEMB ERS HAVE AVAILABILITY OF AMPLE FUNDS OUT OF INTANGIBLE ADDIT IONS MADE IN EARLIER YEARS AND HENCE THE ORDER OF THE CIT(APPEAL S)-I INDORE MAY PLEASE BE SET ASIDE ON THIS POINT. 3. THE RESPONDENT SUBMITS THAT THE LEARNED CIT(APPE ALS)-I INDORE HAS ERRED IN MAINTAINING THE ADDITION MADE ON ACCOUNT OF CREDITS FOUND IN THE BOOKS OF ACCOUNTS AT RS.2 0 0 000/- WHICH ARE OUT OF EXPLAINED SOURCES AND HENCE NOT LI ABLE FOR ADDITION. IT IS THEREFORE PRAYED THAT THE ORDER O F THE LEARNED CIT(APPEALS)-I INDORE MAY PLEASE BE SET ASIDE ON THIS POINT. 4. THE RESPONDENT SUBMITS THAT THE LEARNED CIT(APPE ALS)-I INDORE HAS ERRED IN MAINTAINING THE ADDITION MADE ON ACCOUNT OF FOREIGN TOUR EXPENSES AT RS.1 50 000/- OUT OF T OTAL AMOUNT ESTIMATED BY THE LEARNED ASSESSING OFFICER AT RS.3 00 000/- WHEREIN ALL THE EXPENSES ARE INCURRED FOR THE BUSIN ESS OF THE GROUP COMPANIES AND HENCE NOT LIABLE FOR ADDITION I N THE HANDS OF THE RESPONDENT. IT IS THEREFORE PRAYED T HAT THE ORDER 14 OF THE LEARNED CIT(APPEALS)-I INDORE MAY PLEASE B E SET ASIDE ON THIS POINT. 5. THE RESPONDENT SUBMITS THAT THE LEARNED CIT(APPE ALS)-I INDORE HAS ERRED IN SUSTAINING THE ADDITION MADE O N ACCOUNT OF INVESTMENT MADE IN FIXED DEPOSITS AT RS.2 50 000 /- WHEREIN THE INVESTMENT IS MADE OUT OF FUNDS AVAILABLE WITH THE RESPONDENT AND/OR HIS FAMILY MEMBERS OUT OF INTANGI BLE ADDITIONS MADE IN EARLIER YEARS. IT IS THEREFORE PRAYED THAT THE ORDER OF THE LEARNED CIT(APPEALS)-I INDORE MAY PL EASE BE SET ASIDE ON THIS POINT. 6. THE RESPONDENT SUBMITS THAT THE LEARNED CIT(APPE ALS)-I INDORE HAS ERRED IN SUSTAINING THE ADDITION MADE O N ACCOUNT OF DEPOSITS IN BANK ACCOUNT AT RS.20 000/- WHEREIN THE DEPOSIT IS MADE OUT OF WITHDRAWALS FROM ANOTHER BAN K ACCOUNT. IT IS THEREFORE PRAYED THAT THE ORDER O F THE CIT(APPEALS)-I INDORE MAY PLEASE BE SET ASIDE ON T HIS POINT. 7. THE RESPONDENT SUBMITS THAT THE LEARNED CIT(APPE ALS)-I INDORE HAS RIGHTLY DELETED THE ADDITION MADE ON AC COUNT OF BANK DEPOSITS AT RS.3 60 000/- WHICH ARE EITHER OUT OF BANK WITHDRAWALS OF RECOVERIES FROM SUNDRY DEBTORS. IT I S THEREFORE PRAYED THAT THE ORDER OF THE LEARNED CIT(APPEALS)-I INDORE MAY PLEASE BE SUSTAINED ON THIS POINT. 15 CO NO. 58/IND/07 1. THE RESPONDENT SUBMITS THAT THE LEARNED CIT(APPE ALS)-I INDORE HAS RIGHTLY DELETED THE ADDITION MADE ON AC COUNT OF CASH CREDITS IN THE CASH BOOK OF M/S PANJWANI POLYP ROPELENE (PROP. SHRI KAMAL PANJWANI) AT RS.4 20 000/- AND FD R INTEREST OF SHRI KAMAL PANJWANI AT RS.13 333/- WHO IS SEPARATELY BEEN ASSESSED TO TAX. IT IS THEREFORE PRAYED THAT THE ORDER OF THE LEARNED CIT(APPEALS)-I INDORE MA Y PLEASE BE SUSTAINED ON THIS POINT. 2. THE RESPONDENT SUBMITS THAT THE LEARNED CIT(APPE ALS)-I INDORE HAS ERRED IN MAINTAINING THE ADDITION MADE ON ACCOUNT OF HOUSEHOLD EXPENSES AT RS.1 70 000/- WHICH IS ON THE BASIS OF ESTIMATION AND BASELESS AND THAT TOO WITHOUT CON SIDERING THE FACT THAT THE SURRENDER OF RS.1 00 000/- HAS BE EN MADE ON THIS ACCOUNT AND THE RESPONDENT AND HIS FAMILY MEMB ERS HAVE AVAILABILITY OF AMPLE FUNDS OUT OF INTANGIBLE ADDIT IONS MADE IN EARLIER YEARS AND HENCE THE ORDER OF THE CIT(APPEAL S)-I INDORE MAY PLEASE BE SET ASIDE ON THIS POINT. 3. THE RESPONDENT SUBMITS THAT THE LEARNED CIT(APPE ALS)-I INDORE HAS RIGHTLY DELETED THE ADDITION MADE ON TH E BASIS OF BALANCE SHEET AT RS.29 20 000/- BANK DEPOSITS OF RS.31 045/- AND RS.18 25 000/- AND PROFIT ON SALE O F SCRAP AT 16 RS.50 000/- RELATED TO M/S PANJWANI POLYPROPELENE L TD. WHICH IS HAVING SEPARATE LEGAL ENTITY AND IS SEPARATELY B EEN ASSESSED TO TAX. IT IS THEREFORE PRAYED THAT THE ORDER OF THE LEARNED CIT(APPEALS)-I INDORE MAY PLEASE BE SUSTA INED ON THIS POINT. 4. THE RESPONDENT SUBMITS THAT THE LEARNED CIT(APPE ALS)-I INDORE HAS ERRED IN MAINTAINING THE ADDITION MADE ON ACCOUNT OF FOREIGN TOUR EXPENSES AT RS.75 000/- RS. 50 000 /- AND RS.1 25 000/- WHEREIN ALL THE EXPENSES ARE INCURRED FOR THE BUSINESS OF THE GROUP COMPANIES AND HENCE NOT LIABL E FOR ADDITION IN THE HANDS OF THE RESPONDENT. IT IS THE REFORE PRAYED THAT THE ORDER OF THE LEARNED CIT(APPEALS)-I INDOR E MAY PLEASE BE SET ASIDE ON THIS POINT. 5. THE RESPONDENT SUBMITS THAT THE LEARNED CIT(APPE ALS)-I INDORE HAS ERRED IN MAINTAINING THE ADDITION MADE ON ACCOUNT OF MARRIAGE EXPENSES OF THE DAUGHTER OF THE RESPOND ENT AT RS.3 00 000/- (OUT OF TOTAL AMOUNT ASSESSED AT RS.5 00 000/- BY THE LEARNED A.O.) WHICH IS OVER AND ABOVE THE SU RRENDER MADE AT RS. 1 00 000/- AND VALUE OF JEWELLERIES GIF TED AT THE SAID OCCASION. IT IS THEREFORE PRAYED THAT THE OR DER OF THE LEARNED CIT(APPEALS)-I INDORE MAY PLEASE BE SUSTA INED ON 17 THIS POINT. IT IS THEREFORE PRAYED THAT THE ORDER OF THE LEARNED CIT(APPEALS)-I INDORE MAY PLEASE BE SET ASIDE ON THIS POINT. 6. THE RESPONDENT SUBMITS THAT THE LEARNED CIT(APPE ALS)-I INDORE HAS RIGHTLY DELETED THE ADDITION MADE ON AC COUNT OF BANK DEPOSITS OF RS.27 000/- AND RS. 40 889/- IN TH E PERSONAL BANK ACCOUNT OF THE HUF OF THE RESPONDENT WHICH IS HAVING SEPARATE LEGAL ENTITY AND IS SEPARATELY BEEN ASSESS ED TO TAX. IT IS THEREFORE PRAYED THAT THE ORDER OF THE LEARNED CIT(APPEALS)-I INDORE MAY PLEASE BE SUSTAINED ON THIS POINT. 7. THE RESPONDENT SUBMITS THAT THE LEARNED CIT(APPE ALS)-I INDORE HAS ERRED IN SUSTAINING THE ADDITIONS MADE ON ACCOUNT OF DEPOSITS IN BANK ACCOUNTS AT RS.1 23 000/- WHERE IN THE DEPOSIT IS MADE OUT OF WITHDRAWALS FROM ANOTHER BAN K ACCOUNT AND/OR RECOVERIES FROM SUNDRY DEBTORS. IT IS THERE FORE PRAYED THAT THE ORDER OF THE LEARNED CIT(APPEALS)-I INDOR E MAY PLEASE BE SET ASIDE ON THIS POINT. 8. THE RESPONDENT SUBMITS THAT THE LEARNED CIT(APPE ALS)-I INDORE HAS RIGHTLY DELETED THE ADDITION MADE ON AC COUNT OF BOGUS LIABILITY SHOWN IN THE WEALTH TAX RETURN WHIC H IS SIGNED BY THE WIFE OF THE RESPONDENT AND THE RESPONDENT IS NOWHERE CONCERNED WITH THE SAID RETURN. IT IS THEREFORE P RAYED THAT THE 18 ORDER OF THE LEARNED CIT(APPEALS)-I INDORE MAY PL EASE BE SUSTAINED ON THIS POINT. CO NO. 59/IND/07 1. THE RESPONDENT SUBMITS THAT THE LEARNED CIT(APPE ALS)-I INDORE HAS RIGHTLY DELETED THE ADDITION MADE ON AC COUNT OF DEPOSITS IN PERSONAL BANK ACCOUNT OF SHRI KAMAL PAN JWANI AT RS.23 000/- AND FDR INTEREST AT RS.20 000/- IN THE NAME OF SHRI KAMAL PANJWANI WHO IS SEPARATELY BEEN ASSESSE D TO TAX. IT IS THEREFORE PRAYED THAT THE ORDER OF THE LEAR NED CIT(APPEALS)-I INDORE MAY PLEASE BE SUSTAINED ON THIS POINT. 2. THE RESPONDENT SUBMITS THAT THE LEARNED CIT(APPE ALS)-I INDORE HAS ERRED IN MAINTAINING THE ADDITION MADE ON ACCOUNT OF HOUSEHOLD EXPENSES AT RS.1 85 000/- WHICH IS ON THE BASIS OF ESTIMATION AND BASELESS AND THE RESPONDENT AND H IS FAMILY MEMBERS HAVE AVAILABILITY OF AMPLE FUNDS OUT OF INT ANGIBLE ADDITIONS MADE IN EARLIER YEARS AND HENCE THE ORDER OF THE CIT(APPEALS)-I MAY PLEASE BE SET ASIDE ON THIS POI NT. 3. THE RESPONDENT SUBMITS THAT THE LEARNED CIT(APPE ALS)-I INDORE HAS RIGHTLY DELETED THE ADDITION MADE ON AC COUNT OF CASH CREDITS AT RS.16 323 000/- ESTIMATION OF NET PROFIT % 12% ON SALE OF SCRAPE AT RS.53 848/- AND DEPOSITS I N BANK ACCOUNT IN THE HANDS OF M/S PANJWANI POLYPROPELENE LTD. 19 WHICH IS HAVING SEPARATE LEGAL ENTITY AND IS SEPARA TELY BEEN ASSESSED TO TAX. IT IS THEREFORE PRAYED THAT THE ORDER OF THE LEARNED CIT(APPEALS)-I INDORE MAY PLEASE BE SUSTA INED ON THIS POINT. 4. THE RESPONDENT SUBMITS THAT THE LEARNED CIT(APPE ALS)-I INDORE HAS ERRED IN MAINTAINING THE ADDITION MADE ON ACCOUNT OF FOREIGN TOUR EXPENSES AT RS.75 000/- WHEREIN ALL THE EXPENSES ARE INCURRED FOR THE BUSINESS OF THE GROUP COMPANIES AND HENCE NOT LIABLE FOR ADDITION IN THE HANDS OF THE RESPONDENT. IT IS THEREFORE PRAYED THAT THE O RDER OF THE LEARNED CIT(APPEALS)-I INDORE MAY PLEASE BE SET A SIDE ON THIS POINT. 5. THE RESPONDENT SUBMITS THAT THE LEARNED CIT(APPE ALS)-I INDORE HAS ERRED IN MAINTAINING THE ADDITION MADE ON ACCOUNT OF INVESTMENT IN SHARE OF M/S PANJWANI PACKAGINGS L TD. AT RS.10 00 000/- WHICH IS THE AMOUNT OF SURRENDER MAD E U/S 132(4) IN THE HANDS OF THE COMPANY AND IN THE HANDS OF THE RESPONDENT HI9MSELF AND HENCE IF ANY AMOUNT IS LOIA BLE TO BE ADDED THE SHOULD BE IN THE HANDS OF THE COMPANY AND NOT IN THE HANDS OF THE RESPONDENT. IT IS THEREFORE PRAY ED THAT THE ORDER OF THE LEARNED CIT(APPEALS)-I INDORE MAY PL EASE BE SET ASIDE ON THIS POINT. 20 6. THE RESPONDENT SUBMITS THAT THE LEARNED CIT(APPE ALS)-I INDORE HAS ERRED IN SUSTAINING THE ADDITIONS MADE ON ACCOUNT OF DEPOSITS IN BANK ACCOUNTS AT RS.33 000/- (68 000/- MINUS 35 000/-) AND RS. 35 950 WHEREIN THE DEPOSITS ARE MADE OUT OF WITHDRAWALS FROM ANOTHER BANK ACCOUNT AND/OR RECOVE RIES FROM SUNDRY DEBTORS. IT IS THEREFORE PRAYED THAT THE O RDER OF THE LEARNED CIT(APPEALS)-I INDORE MAY PLEASE BE SET A SIDE ON THIS POINT. CO NO. 60/IND/07 1. THE RESPONDENT SUBMITS THAT THE LEARNED CIT(APPE ALS)-I INDORE HAS RIGHTLY DELETED THE ADDITION MADE ON AC COUNT OF SHARE CERTIFICATES FOUND IN THE NAME OF SHRI KAMAL PANJWANI AT RS.73 000/- WHO IS SEPARATELY BEEN ASSESSED TO TAX. IT IS THEREFORE PRAYED THAT THE ORDER OF THE LEARNED CIT (APPEALS)-I INDORE MAY PLEASE BE SUSTAINED ON THIS POINT. 2. THE RESPONDENT SUBMITS THAT THE LEARNED CIT(APPE ALS)-I INDORE HAS ERRED IN MAINTAINING THE ADDITION MADE ON ACCOUNT OF HOUSEHOLD EXPENSES AT RS.2 00 000/- WHICH IS ON THE BASIS OF ESTIMATION AND BASELESS AND THAT TOO WITHOUT CONSID ERING THE FACT THAT SURRENDER OF RS. 2 00 000/- HASA BEEN MAD E ON THIS ACCOUNT AND THE RESPONDENT AND HIS FAMILY MEMBERS H AVE AVAILABILITY OF AMPLE FUNDS OUT OF INTANGIBLE ADDIT IONS MADE IN 21 EARLIER YEARS AND HENCE THE ORDER OF THE CIT(APPEAL S)-I MAY PLEASE BE SET ASIDE ON THIS POINT. 3. THE RESPONDENT SUBMITS THAT THE LEARNED CIT(APPE ALS)-I INDORE HAS RIGHTLY DELETED THE ADDITION MADE ON AC COUNT OF INVESTMENT MADE IN SHARES OF M/S PANJWANI PLASTICS & POLYESTERS LTD. AT RS.10 00 000/- WHICH WAS MADE WI THOUT ANY BASIS. IT IS THEREFORE PRAYED THAT THE ORDER OF T HE LEARNED CIT(APPEALS)-I INDORE MAY PLEASE BE SUSTAINED ON THIS POINT. 4. THE RESPONDENT SUBMITS THAT THE LEARNED CIT(APPE ALS)-I INDORE HAS RIGHTLY DELETED THE ADDITION MADE ON AC COUNT OF INVESTMENT IN SHARES OF M/S PANJWANI PACKAGING P. L TD. AT RS.11 000/-. IT IS THEREFORE PRAYED THAT THE ORDE R OF THE LEARNED CIT(APPEALS)-I INDORE MAY PLEASE BE SUSTAINED ON THIS POINT. 5. THE RESPONDENT SUBMITS THAT THE LEARNED CIT(APPE ALS)-I INDORE HAS RIGHTLY DELETED THE ADDITION MADE ON AC COUNT OF VALUE OF DEMAND DRAFT PURCHASED AT RS.2 50 000/- MA DE FOR ILPCL AGAINST SUPPLIES. IT IS THEREFORE PRAYED TH AT THE ORDER OF THE LEARNED CIT(APPEALS)-I INDORE MAY PLEASE BE S USTAINED ON THIS POINT. 6. THE RESPONDENT SUBMITS THAT THE LEARNED CIT(APPE ALS)-I INDORE HAS ERRED IN MAINTAINING THE ADDITION MADE ON ACCOUNT OF INVESTMENT IN PANJWANI PACKAGING LTD. AS PROMOTE R QUOTE 22 SHARES AT RS. 13 00 000/- AND EMPLOYEE QUOTE SHARES ATG RS. 5 00 000/- WHICH HAVE BEEN ADDED AND SURRENDERED U/ S 132(4) IN THE HANDS OF THE COMPANY AND HENCE NOT LIABLE FO R ADDITION IN THE HANDS OF THE RESPONDENT. IT IS THEREFORE PRA YED THAT THE ORDER OF THE LEARNED CIT(APPEALS)-I INDORE MAY PL EASE BE SET ASIDE ON THIS POINT. 7. THE RESPONDENT SUBMITS THAT THE LEARNED CIT(APPE ALS)-I INDORE HAS ERRED IN MAINTAINING THE ADDITION MADE ON ACCOUNT OF ENTRIES RECORDED IN THE DIARY FOUND DURING THE C OURSE OF SEARCH AT RS. 2 08 100/- WHEREIN THE DIARY IS RELAT ED WITH THE BUSINESS OF M/S PANJWANI PLASTICS & POLYESTGERS AND THE RECEIPTS ARE RELATED WITH THE RECOVERIES FROM THE S UNDRY DEBTORS AND/OR SALES REALIZATION. IT IS THEREFORE PRAYED THAT THE ORDER OF THE LEARNED CIT(APPEALS)-I INDORE MAY PLEASE BE S ET ASIDE ON THIS POINT. 8. THE RESPONDENT SUBMITS THAT THE LEARNED CIT(APPE ALS)-I INDORE HAS ERRED IN MAINTAINING THE ADDITION OF RS .2 00 000/- OUT OF TOTAL JEWELLERIES FOUND AT RS.3 36 328/- WHE REIN THE ADDITION FOR THE SAME HAS ALREADY BEEN EXPLAINED IN THE HANDS OF SMT. JAYSHREE PANJWANI (WIFE OF THE RESPONDENT) AND HENCE NO LIABLE FOR ADDITION IN THE HANDS OF THE RESPONDE NT. IT IS 23 THEREFORE PRAYED THAT THE ORDER OF THE LEARNED CIT (APPEALS)-I INDORE MAY PLEASE BE SET ASIDE ON THIS POINT. 3. DURING THE COURSE OF HEARING OF THESE APPEALS T HE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE LEGAL HEIR(S) W ERE TO BE BROUGHT ON RECORD WHICH COULD NOT BE DONE SO FAR AS THERE WERE DISPUTES AMONG THE HEIRS OF THE ASSESSEE. HENCE IN THIS SITUATION E ITHER NOTICES COULD BE ISSUED TO ALL THE LEGAL HEIRS OR THE MATTER COULD B E KEPT PENDING TILL THE LEGAL HEIRS WERE BROUGHT ON RECORD. THE LD. COUNSE L FOR THE ASSESSEE HOWEVER FURTHER SUBMITTED THAT SOME OF THE ISSUES RAISED IN THESE APPEALS AND SOME OF THE MATTERS OF THE ASSESSEE IN OTHER YEARS ON IDENTICAL ISSUES ARE ALREADY BEFORE THE ASSESSING O FFICER AND EVEN IN THE CASES OF CONNECTED ASSESSEES SOME OF THE ISSUES ID ENTICAL TO THESE APPEALS ARE BEFORE THE ASSESSING OFFICER AND THERE FORE IN ALL FAIRNESS THESE MATTERS COULD ALSO BE RESTORED TO THE FILE OF THE ASSESSING OFFICER INSTEAD OF KEEPING THE SAME PENDING BEFORE THE TRIB UNAL AS IN THE COURSE OF SUCH PROCEEDINGS THE LEGAL HEIRS WOULD B E DULY BROUGHT ON RECORD ALSO BY THE ASSESSING OFFICER. THE LEARNED CIT DR CONSENTED TO THE PRAYER MADE BY THE LD. COUNSEL FOR THE ASSESSEE . ACCORDINGLY ALL THE ISSUES RAISED IN THESE APPEALS AS WELL AS CROSS OBJECTIONS ARE RESTORED TO THE FILE OF THE ASSESSING OFFICER FOR A DJUDICATION THEREOF AFRESH AS PER LAW AFTER BRINGING THE LEGAL HEIRS O N RECORD AND GIVING ADEQUATE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE . 24 4. IN THE RESULT ALL THE APPEALS AND THE CROSS OBJ ECTIONS ARE ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN OPEN COURT IN THE PRESENCE OF LEARNED REPRESENTATIVES OF BOTH THE SIDES AT THE CONCLUSION OF HEARING ON 7 TH APRIL 2010. SD SD (V.K. GUPTA) (JOGINDER SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER 7 TH APRIL 2010 COPY TO: APPELLANT RESPONDENT CIT CIT(A) DR G UARD FILE *DBN/