TaxTMI 
TaxTMI 
2013 (6) TMI 666
X X X X Extracts X X X X
X X X X Extracts X X X X
....tan Magistrate Courts, Esplanade, Bombay has no bearing on the assessment since the statement was recorded U/s. 131 of the l.T. Act, 1961. iii) On the facts and in the circumstances of the case and in law, the learned C.l.T.(A) ought not to have relied upon few questions and answers thereto in the statement dated 02.04.2009 of the appellant when in fact a reading of the entire statement dated 02.04.2009 would show that the business in Gutkha was carried on, on behalf of Ghodawat Group only as the entire sale proceeds were passed on to Ghodawat Group and, therefore, no income there from arose to the appellant and, therefore, was not assessable in the hands of the appellant. iv) iv) On the facts and in the circumstances of the case and in law, the learned C.l.T.(A) erred in confirming the addition of Rs.2,97,36,067/- being estimated G.P. on alleged estimated sale of Rs.38,00,31,758/- ignoring the facts brought on record by the appellant to show that the A.O. has committed a basic mistake in calculating the quantity of Gutkha alleged to be sold by the appellant. v) v) On the facts and in the circumstances of the case and in law, the learned C.l.T.(A) erred in rejecting the ap....
X X X X Extracts X X X X
X X X X Extracts X X X X
....essee retracted his statement by filing two affidavits dated 04.04.2009 and 08.04.2009 one is attested by a Public Notary and another by the Registrar of Judicial Magistrate respectively. Bases on the statement of the Assessee and the materials seized by the Sales Tax Department the Assessing Officer worked out the unaccounted sale of Rs. 26,70,26,465/- for ten months. The AO has also projected unaccounted sales for two months at Rs. 5,34,05,293/-. Thus the total unaccounted sale was worked out by the Assessing Officer for the entire year at Rs. 32,04,31,758/- The Assessing Officer applied GP at 9.65% for computing the GP of the Assessee on unaccounted sale at Rs. Rs. 2,97,36,067/- . The Said GP rate of 9.65% was adopted by the Assessing Officer being declared by the Assessee as per the books of accounts for the year under consideration. Accordingly the Assessing Officer made an addition of Rs. 2,97,36,067/- based on the estimated GP on unaccounted sale and added the same to the total income of the Assessee. On appeal before the CIT(A) the Assessee mainly contended that the Assessing Officer made an addition on the basis of the statement of the Assessee record subsequent to the sur....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... by filing the two affidavits respectively. Further the Assessing Officer has not brought on record any material to show that the alleged material was seized by the Income Tax Department from the Assessee. When there is no time gap between the statement recorded by the Tax Authorities and retracted by the Assessee then the addition made by the Assessing Officer based on the retracted statement is not sustainable. Even in the assessment proceedings of Godhwat Industries (India) Pvt. Ltd. the assessee was summoned and cross-examined by the Assessing Officer as well as the counsel of the Godhwat Industries. The CIT(A) in the case of Godhwat Industries has deleted the addition made by the Assessing Officer on account of unaccounted sales. He has filed the copies of the statement of the assessee recorded by the Assessing Officer and cross- examined by the representative of Godhwat Industries in the assessment proceedings of the Company and submitted that the addition made on the basis of the statement of the Assessee has been deleted by the CIT(A) in case of Godhwat Industries. He has filed the copy of the order of the CIT(A) in the case of Godhwat Industries. The Ld. AR of the Assessee....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e the unaccounted sale and purchase. The record was requisitioned from the Sales Tax Department and therefore it cannot be doubted that the said record does not belong to the Assessee. He has submitted that it may be a case where the ADIT did not transfer seized material to the Assessing Officer, but the same does not mean that the record was not in existence and seized by the Sales Tax Department. He has referred the assessee's statement recorded under section 131 and submitted that the Assessee has admitted the fact that the books of accounts and other records were seized by the Sales Tax Department to which the Assessee has given the specific reply in the statement recorded under section 131. Therefore the said statement is a good evidence being an admission by the Assessee. He has further submitted that mainly because Sales Tax Department did not make any addition would not affect the assessment under Income Tax Act because it cannot be concluded that no addition can be made in the Income Tax Assessment, if a corresponding addition has not been made by the Sales Tax Department. The record does exist and it may not be in the possession of the Assessing Officer as it was seized b....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ent but it facilitates the purchase and sale between the Trader/Dealer and the manufacturer. Even otherwise an agent acts being a representative of the principle therefore there cannot be any purchase and sale in the name of the agent. The Assessing Officer adopted the GP rate admitted by the Assessee on its business of Trade which is not permitted to be adopted for the income being commission of C & F Agent. Though the assessee denied that he is C & F Agent of M/s Godhwat Industries, however the Assessing Officer proceeded on the basis that assessee is C & F Agent. 9. The Assessing Officer worked out unaccounted sale for 10 months ostensibly on the reason that the search was conducted by the Sales Tax Department on 20th January. Therefore the 10 months sale was worked out from the April 2007 to January. 2008. But it is material to note that the search was conducted on 20th January.2009 and not on 20th Janyary.2008, therefore the record found during the search cannot be said to be upto to 20th January.2008 so that the unaccounted sale on the basis of that record can be worked out upto 20th January.2008. It appears that the Assessing Officer took this clue of 10 months from the s....
X X X X Extracts X X X X
X X X X Extracts X X X X
....onths w.e.f. 01.04.2008 till the date of search i.e. 20.01.2009 which is obvious because it could be at the best up to the date of search. But when the Assessing Officer attempted to make addition of the unaccounted sale for the assessment year 2008-09 the same is not contemporaneous to the period which the addition is made by the Sales Tax Department on the basis of same seized material. Further it is not unsustainable as to how only 10 months sale has been worked out by the Assessing Officer and remaining two months was projected when the search was on 20th. January.2009 and there is no question of seized material to be considered only upto 20th January.2008. This clearly shows a serious lacuna in the assessment order and the casual approach of the Assessing Officer without application of mind. It creates a serious doubt on the action of the Assessing Officer because on the basis of the same seized material the Sales Tax Department has made an addition for unaccounted sale of Rs. 2.33 Crores to be taxed for the assessment year 2009-10, then how on the basis of same material the Assessing Officer has made the addition for the assessment year 2008-09. Keeping in mind that the recor....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ssion or control of any person in the course of a search under section 132 [or survey under section 133A], it may, in any proceeding under this Act, be presumed-- (i) that such books of account, other documents, money, bullion, jewellery or other valuable article or thing belong or belongs to such person; (ii) that the contents of such books of account and other documents are true; and (iii) that the signature and every other part of such books of account and other documents which purport to be in the handwriting of any particular person or which may reasonably be assumed to have been signed by, or to be in the handwriting of, any particular person, are in that person's handwriting, and in the case of a document stamped, executed or attested, that it was duly stamped and executed or attested by the person by whom it purports to have been so executed or attested.] [(2) Where any books of account, other documents or assets have been delivered to the requisitioning officer in accordance with the provisions of section 132A, then, the provisions of sub-section (1) shall apply as if such books of account, other documents or assets which had been taken into custody from the pe....