2010 (10) TMI 848

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.... of the assessee?   2. Whether the Tribunal was correct in relying on certain extraneous material not relevant to facts of the present case and proceeded to form an opinion based on conjectures and surmises that there was no sales outside the books of accounts by accepting the unreasonable explanation offered by the assessee without recording a finding as to whether the missing spirit could be treated as income of the assessee and consequently recorded a perverse finding?   The revenue is before the Court challenging the orders of the Income Tax Appellate Tribunal, Bangalore Bench 'C' in ITA No.665/97 dated 31.7.2003.   2. The respondent assessee is a company carrying on its business in liquor. We are concerned with ....

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.... Therefore, the authorities were not justified in holding that no material was found during the search that the stock had been removed by the assessee. In other words, the Tribunal accepted the explanation offered by the assessee and allowed the appeal of the assessee on 31.7.2003.   5. From the orders of the three authorities, we note that there is no dispute so far as search being conducted on 6.8.92 at the premises of the assessee at Peenya. Observation of the search party regarding shortage of rectified spirit to the extent of 33,980 its, was confirmed from the statements of Sri. A.G.K. Shenoy, Distillery Manager and Sri. S.K. Bhowmik, Brew Master, recorded during the course of search. On 10.8.1992 the Executive Director of the ....

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.... was taken note of by the excise officials. The appellate authority - the CIT (A) also was justified in holding that it was possible that the assessee has devised ways and means to get over the irregularities committed by him concealing them from excise authorities.   7. On 6.8.1992 when the search was made at the premises by the I.T. officials in the presence of responsible employees of the company and also mahazar witnesses, the employees without any resistance or protest have accepted the shortage of stock of rectified spirit If at all the employees knew that the quantity of the stock taken by the officials was not correct, they should have signed the statements and the mahazar under protest. As a matter of fact, the stock was ta....