TaxTMI 
TaxTMI 
2014 (7) TMI 1119
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....r 2005-06 claiming the following substantial questions of law : "(i) Whether, on the facts and in the circumstances of the case, the hon'ble Income-tax Appellate Tribunal has erred in law in cancelling the order dated November 20, 2008, of the Commissioner of Income- tax-I, Ludhiana, passed under section 263 of the Income-tax Act, 1961, which was solidly based on the information received from the Central excise authorities as well as the facts and circumstances narrated in detail in paragraphs 3 and 4 of the impugned order ? (ii) Whether, on the facts and in the circumstances of the case, the hon'ble Income-tax Appellate Tribunal has erred in law in cancelling the order under section 263 ignoring its own opinion expressed in this combined order related to I. T. A. No. 319/Chandi/2008 : assessment year 2004-05 in paragraph 18, 'As held by the hon'ble High Court (reproduced supra), proceedings under the Central Excise Act have relevance only for formation of opinion of escapement of income and, thereafter, the Income-t....
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....appeal before the Tribunal. The Tribunal, vide order dated June 24, 2011 (annexure A-IV) allowed the appeal and cancelled the order passed by the Commissioner of Income-tax under section 263 of the Act. In view of cancellation of order of the Commissioner of Income-tax under section 263 of the Act by the Tribunal, the appeal of the assessee against the assessment order was allowed by the Commissioner of Income-tax (Appeals) which was upheld by the Tribunal. Hence, the present appeals by the Revenue. I. T. A. No. 360 of 2011 raises issue relating to validity of proceedings initiated under section 263 of the Act whereas I. T. A. No. 246 of 2012 is regarding assessment order passed in pursuance of the order under section 263 of the Act for the assessment year 2005-06. I. T. A. No. 362 of 2011, I. T. A. No. 299 of 2012, I. T. A. No. 300 of 2012, I. T. A. No. 167 of 2012 and I. T. A. No. 301 of 2012 concern assessment years 2004-05, 2006-07, 2007-08, 2008-09 and 2009-10, respectively. 4. In I. T. A. No. 246 of 2012, the following substantial questions of law have been claimed : "(i) Whether, on the facts and in law....
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....on unaccounted production. It was not disputed by the learned counsel for the Revenue that the Commissioner of Income-tax (Appeals), the Central Excise Department had deleted the addition of excise duty levied which has been upheld by the Customs, Excise and Service Tax Appellate Tribunal, New Delhi (in short "the CESTAT"). A copy of order dated April 28, 2014, passed by the CESTAT has been produced by learned counsel for the Revenue wherein it has been held that there was no evidence to show that there was clandestine manufacture and clearance of the ingots in question. The Income-tax Department had not collected any independent material to arrive at the conclusion that there was unexplained sales or purchases made by the assessee. It was only on the basis of the statement of Shri Harmesh Arora before the excise authorities in which the Tribunal had noticed various contradictions and gaps. In the facts and circumstances, on the basis of the statement made by Shri Harmesh Arora alone before the excise authorities which did not find corroboration from any other material, no addition could have been validly made. 9. The Tribunal had noticed as under (page 278 of 12 ITR (Trib)) : ....
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....authorities, the capacity of the appellant's unit has been stated to be of 4 metric tonnes only. Therefore, the same Department is certifying that the installed capacity of the furnace is of 4 metric tonnes only. Further, as already mentioned, this is not possible that the appellant had installed a 5 metric tonnes furnace during the previous year relevant to the assessment year under consideration and that, however, furnace of 4 metric tonnes had been installed before and after that period. Also there is nothing on record that the appellant incurred any expenses for removal and installation of the furnace as above and that the sanctioned load during the relevant period was more than 2,250 KW which is a must for using 5 metric tonnes furnace . . .' 20. In our view, the view taken by the learned Commissioner of Income-tax (Appeals) is reasonable on the facts of the case. The entire addition has been made on the basis of the statement of Shri Harmesh Arora as recorded by the Central excise authorities in which he stated that the capacity of furnace was increased from 4 metric tonnes to 5 metric tonnes in December,....
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....ectricity load sanctioned, he opined that the average melting capacity of the furnace was 4 metric tonnes. No material has been placed before us to rebut the facts reported or the opinion expressed by the chartered engineer. (iv) Suppressed or unaccounted production was worked out by the Central excise authorities for the period December, 2003, to March 25, 2004, on the basis that the melting capacity of furnace was 5 metric tonnes during that period. The capacity of furnace being 4 metric tonnes after March 25, 2004, was not even doubted as the sup pressed production was worked out till March 25, 2004, which means that it was accepted thereafter, i.e., after March 25, 2004, that the melting capacity of the furnace was 4 metric tonnes. This sounds quite illogical. (v) Field inspection was carried out by the Central excise authorities on November 25, 2005, and a report to that effect has been recorded in the daily stock account. It is stated in the said report that 'the unit has installed 4 metric tonnes furnace'. No material has been placed b....