Law:

Section:

Section 143 of the Income-tax Act, 1961 - Assessment - Addition to income Where during search at premises of assessee-company and residential premises of its director, director surrendered certain sum on account of bogus purchases, addition of sum to assessee's income was justified; however Tribunal having made addition in hands of assessee-company, ought to have ordered for deletion of that amount from income of director The premises of the company and also the residential premises of its director were searched during the course of search, the books of account of the company were seized which reflected purchases from five parties. The statement of M, one of the directors of the company, was recorded during the course of search. His statement was also recorded under section 131 thereafter. In both the statements, he was not in a position to explain the source and expressed his willingness to surrender that amount to tax. Accordingly, addition of a sum as income from undisclosed sources was made on account of unaccounted purchases which were not found recorded in the seized books of the assessee-company. The Tribunal upheld the addition. Held that the addition of the sum in question in the hands of the assessee-company could not be said to be unjustified. The surrender of that amount for tax by its director in his individual capacity had no legal sanctity. However, the Tribunal having made the addition in the hands of the assessee-company ought to have ordered deletion of that amount from the income of the director. Sanjay Jhanwar for the Appellant. Ms. Parinitoo Jain for the Respondent. JUDGMENT R.M. Lodha, J.-1. The only contention raised by counsel for the appellant assessee-company in challenging the order of the Income-tax Appellate Tribunal, Jaipur Bench, Jaipur, dated June 10, 2002, is that if the Tribunal is held to be justified in making the addition of Rs. 4,37,048 in the hands of the appellant-company, then the said amount could not have been taxed in the hands of the director Shri Mahesh Toshniwal as was done by the Commissioner of Income-tax (Appeals) and the Tribunal ought to have, to that extent, modified the order of the Commissioner of…

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