2012 (10) TMI 1244 - AT - Income Tax

Tribunal dismisses Revenue's appeals, orders deletion of income additions based on estimation without evidence

The Assistant Commissioner of Income Tax, Versus M/s Susee Cars and Trucks (P) Limited, Madurai

The Tribunal dismissed the Revenue's appeals and ordered the deletion of income additions made by the Assessing Officer for various assessment years. The ... - Issues Involved:1. Addition of income based on excess amount collected for vehicle registration.2. Validity of evidence from a group concern applied to the assessee.3. Estimation of income without direct evidence.Summary:Issue 1: Addition of income based on excess amount collected for vehicle registration.The Assessing Officer (A.O.) made an addition to the assessee's income by estimating a sum of Rs. 2000 per vehicle as excess amount collected for registration charges. The amounts considered for each assessment year were Rs. 41,02,000 (2003-04), Rs. 10,42,000 (2004-05), Rs. 7,60,000 (2005-06), Rs. 13,14,000 (2006-07), and Rs. 11,28,000 (2007-08).Issue 2: Validity of evidence from a group concern applied to the assessee.The CIT(Appeals) opined that evidence found during the search of another concern could not be universally applied to all concerns within the same group. In the assessee's case, no evidence was found to show any amount was collected from customers. The CIT(Appeals) relied on the decision of the Hon'ble jurisdictional High Court in CIT v. S. Khader Khan Son (300 ITR 157), stating that additions based on estimates without rejecting or finding defects in the books of accounts could not be justified.Issue 3: Estimation of income without direct evidence.The Tribunal noted that a similar issue had been decided in favor of the assessee's sister concern, Susee Auto Plaza (P) Ltd., where it was held that additions based on alleged collections without incriminating documents could not be sustained. The Tribunal emphasized that no incriminating evidence was found directly related to the assessee-company, and any addition based on statements not confronted to the assessee could not be sustained legally. The Tribunal concluded that the entire addition made by the A.O. was based on sheer estimation and not supported by direct evidence.Conclusion:Respectfully following the decision in the case of Susee Auto Plaza (P) Ltd., the Tribunal agreed with the CIT(Appeals) that the addition made for all these years should be deleted. Consequently, the appeals filed by the Revenue were dismissed. The order was pronounced in the Court on Thursday, the 11th of October, 2012, at Chennai.