PER N.R.S. GANESAN, JUDICIAL MEMBER: All the appeals of the Revenue in respect of two independent assessees are arising out of the search conducted by the Revenue. The respective assessees have also filed cross- objections against the orders of the CIT(Appeals). Therefore, we heard all the appeals and the cross-objections together and disposing of the same by this common order.

2. The brief facts of the case are that there was a search in the premises of Sony Fireworks Private Limited on 21.10.2008 and in the residential premises of Shri P. Panjurajan. A simultaneous survey was also conducted under Section 133A of the Income-tax Act, 1961 (in short the Act) in the factory premises of the assessee- company on the same day. Incriminating materials were found and seized by Revenue authorities. M/s Ajantha Trading Corporation is one of the sister concerns of M/s Sony Fireworks Private Limited. M/s Ajantha Trading Corporation has not filed any return of income till the date of search. Shri P. Panjurajan and Shri Sundarappa Nadar were partners in the partnership firm M/s Ajantha Trading Corporation. The partnership firm M/s Ajantha Trading Corporation 3 I.T.A. Nos.1746 to 1750/Mds/14 C.O. Nos.74 to 78/Mds/14 I.T.A. Nos.2017 to 2020/Mds/13 C.O. Nos.188 to 191/Mds/13 involved itself in second sales of fireworks. During the assessment proceeding, the assessee claimed before the Assessing Officer that the income of the firm M/s Ajantha Trading Corporation shall be assessed in the hands of its partner Shri P. Panjurajan. This request of the assessee was rejected by the Assessing Officer. Since M/s Sony Fireworks Private Limited and M/s Ajantha Trading Corporation are engaged themselves in the business of trading in fireworks, the income of M/s Ajantha Trading Corporation needs to be substantively assessed in the hands of one of the partners Shri P. Panjurajan. Shri P. Panjurajan has also filed a revised return before the Assessing Officer. However, the request of the assessee was rejected by the Assessing Officer and the income of M/s Ajantha Trading Corporation was substantively assessed in the hands of M/s Sony Fireworks Private Limited. However, the very same income was protectively assessed in the hands of Shri P. Panjurajan also in his individual capacity.

4. First, lets take Revenues appeal in I.T.A. No.2017/Mds/2013 for assessment year 2005-06. 4 I.T.A. Nos.1746 to 1750/Mds/14 C.O. Nos.74 to 78/Mds/14 I.T.A. Nos.2017 to 2020/Mds/13 C.O. Nos.188 to 191/Mds/13

5. Shri M.S.V.M. Prasad, the Ld. Departmental Representative, submitted that the first ground of appeal is with regard to addition of `11,19,465/-. He further submitted that during the year under consideration, the CIT(Appeals) found that the advance received from customers was only to the extent of `11,19,465/-. The CIT(Appeals) by placing reliance on the details filed by the assessee, came to a conclusion that the fresh advance was only `11,19,465/- and after allowing set off of `25,65,922/- from the total addition of `44,76,271/-, confirmed the disallowance of ` 18,06,969/-. According to the Ld. D.R., the CIT(Appeals) committed an error in observing that the new credits to the extent of `25,65,922/- was already allowed for the assessment year 2003-04. Therefore, the CIT(Appeals) is not justified in deleting the addition of `11,19,465/- and also `25,65,922/-.

6. On the contrary, Shri V. Rajasekaran, the Ld. Departmental Representative, submitted that out of total addition of `45,89,651/-, the CIT(Appeals) found that since `1,13,380/- reflected in the Profit & Loss account of M/s Ajantha Trading Corporation and balance of `25,65,922/- was offered during the assessment year 2003-04. 5 I.T.A. Nos.1746 to 1750/Mds/14 C.O. Nos.74 to 78/Mds/14 I.T.A. Nos.2017 to 2020/Mds/13 C.O. Nos.188 to 191/Mds/13 After considering the advance of `1,13,380/- offered for the assessment year 2004-05, the CIT(Appeals) came to a conclusion what is remaining to be taxed is only `18,06,969/-. According to the Ld. representative, the entire advance was already offered as income. Therefore, no addition is called for.

7. We have considered the rival submissions on either side and perused the relevant material available on record. After considering the advance of `25,65,922/- for the assessment year 2003-04 and advance of `1,13,380/- for the assessment year 2004-05, the balance remaining to be taxed is only `18,06,969/-. In the absence of any material available on record, this Tribunal is of the considered opinion that the advance of `18,06,969/- cannot be allowed while computing the total income. Therefore, the same is rightly added to the income of the assessee.

8. Now coming to I.T.A. No.2018/Mds/2013 for assessment year 2006-07, the Ld. D.R. submitted that M/s Ajantha Trading Corporation is one of the sister concerns of M/s Sony Fireworks Private Limited. The copies of the partnership deed was not filed before the lower authorities. Therefore, the Assessing Officer 6 I.T.A. Nos.1746 to 1750/Mds/14 C.O. Nos.74 to 78/Mds/14 I.T.A. Nos.2017 to 2020/Mds/13 C.O. Nos.188 to 191/Mds/13 proposed to assess the income in the hands of M/s Sony Fireworks Private Limited. The assessee-company M/s Sony Fireworks Private Limited is trading in fireworks. Similarly, M/s Ajantha Trading Corporation is also trading in fireworks. Therefore, the advance said to be received and income accrued to M/s Ajantha Trading Corporation need to be assessed in the hands of the assessee-firm. Accordingly, a sum of `2,07,80,111/- was assessed substantively in the hands of M/s Sony Fireworks Private Limited. However, protective assessment was made in the case of Shri P. Panjurajan for the very same amount. The Ld. D.R. submitted that the CIT(Appeals) ought not to have taken the bank transfer of OD amount while giving relief to the assessee.

9. On the contrary, Shri V. Rajasekaran, the Ld. representative for the assessee, submitted that the income of M/s Ajantha Trading Corporation cannot be assessed in the hands of M/s Sony Fireworks Private Limited at all. Shri P. Panjurajan has filed a revised return claiming that income of M/s Ajantha Trading Corporation has to be assessed only in his hands. Therefore, 7 I.T.A. Nos.1746 to 1750/Mds/14 C.O. Nos.74 to 78/Mds/14 I.T.A. Nos.2017 to 2020/Mds/13 C.O. Nos.188 to 191/Mds/13 according to the Ld. representative, the CIT(Appeals) ought to have deleted the addition made by the Assessing Officer.

10. We have considered the rival submissions on either side and perused the relevant material available on record. M/s Ajantha Trading Corporation, a partnership firm, was said to be constituted by two persons including Shri P. Panjurajan. However, the partnership deed was not filed before the authorities below. Therefore, the authorities below had no occasion to examine the same. The fact remains that the advance received by M/s Ajantha Trading Corporation was solely for fireworks by M/s Sony Fireworks Private Limited. Therefore, this Tribunal is of the considered opinion that the Assessing Officer has rightly rejected the contention of the assessee that the income of M/s Ajantha Trading Corporation is to be assessed only in the hands of Shri P. Panjurajan and not in the hands of M/s Sony Fireworks Private Limited. This Tribunal is of the considered opinion that M/s Ajantha Trading Corporation needs to be assessed in the hands of M/s Sony Fireworks Private Limited and not in the hands of Shri P. Panjurajan. Now the only contention of the Revenue before this Tribunal is that the bank OD limit was 8 I.T.A. Nos.1746 to 1750/Mds/14 C.O. Nos.74 to 78/Mds/14 I.T.A. Nos.2017 to 2020/Mds/13 C.O. Nos.188 to 191/Mds/13 considered in deleting the addition of `1,66,66,283/-, this Tribunal is of the considered opinion that it is found on record that there was transfer from sister concern OD limit of `1,25,00,000/-. This OD limit cannot be ignored by the authorities below. Therefore, we do not find any justification in the contention of the Ld. D.R. Accordingly, the order of the lower authority is confirmed.

11. Now coming to assessment years 2007-08 and 2008-09, the only contention of the Revenue is that the advance received from customers represent increase in the credit balance in the name of M/s Ajantha Trading Corporation in the books of the sister concern. According to the Ld. D.R., even if the name of the customers are same as before the earlier assessment year, the credits introduced during the year under consideration were fresh credits, therefore, these are all different credits than the earlier one. The CIT(Appeals), however, deleted the addition on the ground that these represent the credits found in the earlier assessment year.

12. On the contrary, Shri V. Rajasekaran, the Ld. representative for the assessee, submitted that the income of M/s Ajantha Trading Corporation has to be assessed only in the hands of Shri P. 9 I.T.A. Nos.1746 to 1750/Mds/14 C.O. Nos.74 to 78/Mds/14 I.T.A. Nos.2017 to 2020/Mds/13 C.O. Nos.188 to 191/Mds/13 Panjurajan and not in the hands of M/s Sony Fireworks Private Limited. Therefore, the authorities below are not justified in considering the advance received by the assessee from sale of fireworks by M/s Ajantha Trading Corporation, in the hands of M/s Sony Fireworks Private Limited. However, the CIT(Appeals) after considering the transfer of OD limits and advance received in the earlier assessment years, deleted the addition. According to the Ld. representative, the entire income has to be assessed only in the hands of Shri P. Panjurajan and not in the hands of M/s Sony Fireworks Private Limited.

13. We have considered the rival submissions on either side and perused the relevant material available on record. The CIT(Appeals) after considering the Profit & Loss account and the entire credit statements filed by the assessee, found that there was negative figure. Therefore, there is no accretion to the credits of M/s Ajantha Trading Corporation in the books of sister concern. The CIT(Appeals) found that the onus is on the assessee to explain the credits in the bank account. Accordingly, the sum of `5,05,201/- was found credited in the books is added as unaccounted income of 10 I.T.A. Nos.1746 to 1750/Mds/14 C.O. Nos.74 to 78/Mds/14 I.T.A. Nos.2017 to 2020/Mds/13 C.O. Nos.188 to 191/Mds/13 M/s Ajantha Trading Corporation for assessment year 2007-08. After considering, other credits found in the other assessment years, the CIT(Appeals) found that the advance received by the M/s Ajantha Trading Corporation is for sale of fireworks. M/s Ajantha Trading Corporation being a sister concern of the assessee, in the absence of material document of the partnership of the M/s Ajantha Trading Corporation and the assessee, the income has to be assessed in the hands of M/s Sony Fireworks Private Limited substantively. Therefore, the contention of the assessee that it has to be assessed in the hands of Shri P. Panjurajan was rightly rejected. This Tribunal is of the considered opinion that the income of M/s Ajantha Trading Corporation needs to be assessed only in the hands of M/s Sony Fireworks Private Limited since the advance received by M/s Ajantha Trading Corporation was on behalf of M/s Sony Fireworks Private Limited for supply of fireworks. Therefore, this Tribunal do not find any infirmity in the order of the lower authority and accordingly, the same is confirmed.

14. Now coming to cross-objections in C.O. Nos.188 to 191/Mds/2013, the contention of the assessee is that Shri P. 11 I.T.A. Nos.1746 to 1750/Mds/14 C.O. Nos.74 to 78/Mds/14 I.T.A. Nos.2017 to 2020/Mds/13 C.O. Nos.188 to 191/Mds/13 Panjurajan filed revised return claiming the income of M/s Ajantha Trading Corporation as his income. This Tribunal is of the considered opinion that M/s Ajantha Trading Corporation received advance on behalf of M/s Sony Fireworks Private Limited for supply of fireworks. In the absence of any partnership deed, the contention of the assessee that it has to be assessed in the hands of Shri P. Panjurajan cannot be sustained. As discussed earlier, income of M/s Ajantha Trading Corporation has to be assessed either in the hands of M/s Ajantha Trading Corporation itself or in the hands of M/s Sony Fireworks Private Limited and definitely not in the hands of Shri P. Panjurajan or the so-called other partner. This Tribunal is of the considered opinion that M/s Ajantha Trading Corporation is another limb of M/s Sony Fireworks Private Limited. Therefore, the income accrued to M/s Ajantha Trading Corporation has to be assessed only in the hands of M/s Sony Fireworks Private Limited and not in the hands of Shri P. Panjurajan. Therefore, this Tribunal do not find any merit in the cross-objections of the assessee.

15. Now coming to Revenues appeals in the case of Shri P. Panjurajan, we have heard Shri M.S.V.M. Prasad, the Ld. 12 I.T.A. Nos.1746 to 1750/Mds/14 C.O. Nos.74 to 78/Mds/14 I.T.A. Nos.2017 to 2020/Mds/13 C.O. Nos.188 to 191/Mds/13 Departmental Representative and Shri V. Rajasekaran, the Ld. representative for the assessee. The CIT(Appeals) deleted the addition on the ground that substantive addition made in the hands of M/s Sony Fireworks Private Limited was confirmed. Admittedly, substantive assessment was made in the hands of M/s Sony Fireworks Private Limited and protective assessment was made in the hands of Shri P. Panjurajan. Now the claim of the assessee before this Tribunal is that Shri P. Panjurajan filed revised return claiming the income of M/s Ajantha Trading Corporation as his income. Therefore, the income of M/s Ajantha Trading Corporation has to be assessed only in the hands of Shri P. Panjurajan. This Tribunal is of the considered opinion that M/s Ajantha Trading Corporation being a limb of M/s Sony Fireworks Private Limited, the income of M/s Ajantha Trading Corporation has t be assessed only in the hands of M/s Sony Fireworks Private Limited. In the absence of partnership deed before the authorities below, this Tribunal is of the considered opinion that the income of M/s Ajantha Trading Corporation has rightly been assessed in the hands of M/s Sony Fireworks Private Limited. Since Shri P. Panjurajan claims that the income has to be assessed only in his hands and he has also filed 13 I.T.A. Nos.1746 to 1750/Mds/14 C.O. Nos.74 to 78/Mds/14 I.T.A. Nos.2017 to 2020/Mds/13 C.O. Nos.188 to 191/Mds/13 revised return before the Assessing Officer, now this Tribunal confirms the substantive addition made in the hands of M/s Sony Fireworks Private Limited, therefore, the protective assessment cannot stand in the eye of law.

16. In view of the above, this Tribunal do no find any reason to interfere with the order of the lower authority and the same is confirmed.

17. The cross-objections filed by Shri P. Panjurajan in C.O. Nos.74 to 78/Mds/2014 are in support of the order of the CIT(Appeals). Therefore, the cross-objections become infructuous.

18. In the result, all the appeals of the Revenue are allowed and the cross-objections filed by the assessees are dismissed. Order pronounced on 1 st April, 2016 at Chennai. sd/- sd/- (. ) (... ) (A. Mohan Alankamony) (N.R.S. Ganesan) /Accountant Member  /Judicial Member /Chennai, 4/Dated, the 1 st April, 2016. 14 I.T.A. Nos.1746 to 1750/Mds/14 C.O. Nos.74 to 78/Mds/14 I.T.A. Nos.2017 to 2020/Mds/13 C.O. Nos.188 to 191/Mds/13 Kri. , .56 76 /Copy to:

1. +/Appellant

2. ./+ /Respondents

3. 8 ()/CIT(A)-I, Madurai

4. 8 ()/CIT(A)-I, Madurai

5. 8/CIT, Central-II, Chennai

6. 6 . /DR

7. /GF.