ASSISTANT COMMISSIONER OF INCOME-TAX, MADURAI vs. GURUSAMY DHANASEKARAN, PALANI

3.4 However, Ld. AO rejected the explanation of the assessee and held that the assessee failed to furnish cash flows statements. The assessee also failed to furnish any bills for purchases. No evidence of land holding could be filed. The valuer estimated the valuation of the jewellery at Rs.609.61 Lacs which was added as unexplained investment u/s 69 in the hands of the assessee. Appellate Proceedings 4.1 During appellate proceedings, the assessee reiterated that it was member of Joint family of Sithanathan Group who was engaged in manufacturing of sacred ash for over 100 years. The assessee and all the family members live under one roof and the family was dependent on family business for income. The family owner certain properties also which fetched rental income for the assessee. The assessee drew attention to the fact that the three firms of the group preferred application before IBS and requested for grant of telescoping benefit of additional income offered therein against unexplained investment addition as made by Ld. AO in individual hands. The copy of order dated 12-06-2023 passed by Hon’ble IBS was also placed on record and particular reference was drawn to para 24.2 of the order wherein this benefit was extended by IBS. The assessee also tabulated that the sources available for telescoping for unexplained investment by family member would be available to the extent of Rs.17.06 Crores (Page-9 of the impugned order). The assessee also filed copies of wealth tax returns for AYs 2013-14 to 2015-16 and assessment framed therein to seek further concession. The assessee tabulated the sources available to the assessee against the settlement as under: - Particulars Amount Balance Sources available after Rs.1437.34 Lacs giving credit to Mr. Sivanasan Application of Source for the assessee Investment in accretion of Jewellery Rs.446.41 Lacs Cash Balance found with family Rs. 28.52 Lacs Rs.474.93 Lacs members of the assessee Balance Sources Available for Rs.962.40 Lacs appropriation to other family members 4.2 The Ld. CIT(A) perused the order of Hon’ble IBS for AYs 2014-15 to 2019-20 settling the application of assessee-group as under: - No. Name of the Firm Returned Total income Additional income settled u/s income 245D(4) 1. M/s S. Sithanathan Sons Rs.15.23 Lacs Rs.418.66 Lacs Rs.403.43 Lacs 2. M/s S. Sithanathan Grandsons Rs.17.87 Lacs Rs.298.94 Lacs Rs.281.06 Lacs 3. M/s S. Sithanathan Abisheka Stores Rs.16.57 Lacs Rs.998.05 Lacs Rs.981.48 Lacs Total Rs.1665.97 Lacs It was also noted that Hon’ble IBS allowed the prayer of the assessee that income determined in the present proceedings be telescoped with the cash and Jewellery of the partners and their family members seized during the course of search in view of the fact that the partners of the firm predominantly did not have any other income for making such investment in properties or Jewellery. 4.3 On the quantum, Ld. CIT(A) noted that the assessee disclosed sum of Rs.163.20 Lacs in the wealth tax returns filed by the assessee and the same was accepted by Ld. AO in scrutiny assessment proceedings vide order dated 18-03-2022. The aforesaid tabulation as made by the assessee in support of balances available for appropriation was also accepted considering the first appellate order in the case of three firms. Accordingly, the impugned addition was deleted against which the revenue is in further appeal before us.

Our findings and Adjudication 5. From the fact, it clearly emerges that the assessee group is engaged in one line of business for past more than 100 years. The family members have common business and common properties. The assessee and all the family members live under one roof and the substantial source of income for the family is family business only. It is undisputed fact that the three firms, on collective basis, preferred settlement before Hon’ble IBS and an order was passed therein on 12- 06-2023 accepting the settlement application. The terms of settlement has been tabulated in preceding para 4.2. It is also seen that vide para 24.1 of IBS order,the applicants requested that income determined in the present proceedings be telescoped with cash and jewellery of partners and their family members seized during the course of search proceedings, if any, in their respective hands in view of the fact that the partners of the firms predominantly do not have any other income for making such investment in properties or jewels.In Para 24.2 of the order, Hon’ble IBS has accepted the plea that the Gross Profit on unaccounted sales as added to the undisclosed income shall be given the benefit of telescoping as prayed for by the appellants. The Ld. AO was directed to grant telescoping benefits for investments. Thus, it clearly emerges that the settlement has been made for the group as a whole and the direction of Hon’ble IBS has to be applied in letter and spirit. The fact that the assessee has certain specific share in the firms would lose any significant or relevance while granting the benefit of telescoping of additional income since the settlement has been made for the group as a whole and the benefit of telescoping would be available on collective basis without any restrictions. Considering all these aspects, the impugned order would not warrant any interference on our part. We order so.