TaxTMI 
TaxTMI 
2015 (12) TMI 445
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....was the common stand of the parties before the Bench that the arguments advanced are same due to similarity in facts and law would apply mutatis mutandis to both the appeals. 02. Brief facts of the case is that assessee is a private limited company engaged in manufacturing of M S Ingots at Hardiwar and income derived by the company form its eligible unit is subject to deduction u/s 80 IC of the Income tax Act. a. For A Y 2008-09 it filed its return of income on 29.09.2008. In assessment proceedings, u/s 143(3) ofthe act AOissued inquiryletters u/s 133(6) of the act to some of the parties to whom sales were made in cash. Out of which one inquiry letter addressed to Shri NavinJain at mandi Gobindgarh Punjab cameback with postal remarks ....
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....havebeenaccepted merely because sales is made in cash, no additions can be made. Therefore AO was of the view that cash sales made by the assessee of Rs. 6,25,10,89/- is bogus and hence after comparing stock turnover and G P ratio with other company has estimated net profit @ 2.72% at Rs. 17,00,296/- and added the same as undisclosed income u/s 68 and denied the benefit of Section 80 IC on that. Against this assessee preferred appeal before CIT (A) who allowed the appeal of the assessee and therefore revenue is now aggrieved and is in appeal before us raising several grounds of appeal but effectively contesting the deletion of addition of Rs. 17,00,296/- on account of fake cash sales. b. For AY 2009-10 Assessee field return of income on ....
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....f having any business connection with the assessee. He further submitted that excise and sales tax departments are not concerned with the booking of sales in cash and therefore there verification does not justify the deletion of the addition. Therefore, he submitted that order of AO be restored. 04. In response to this Ld AR submitted that for AY 2008-09 books of accounts were produced before AO along with the voucher and bills and those were examined. Those books were also produced before CIT (A) at his direction for verification. Further original assessment for that year was also completed u/s 143(3) of the act where in 133 (6) inquiry letters were sent to other parties also and in that proceedings the books of accounts were produced. ....
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....ed the rival submission and orders of lower authorities. Assessee is a companyengaged in manufacturing of M S Ingots at Haridwar and undisputedly eligible for deduction u/s 80 IC of the act. While going through orders of lower authorities we have come to an understanding that the facts of the case for both the years are not similar however, the manner of making additions is similar. In this background we are deciding the issue for both the years separately as under. 07. For AY 2008-09, Company recorded sales of Rs. 31,03,42,972/- out of which Rs. 6,25,10,899/- is recorded as cash sales. On inquiry in original assessment, one Shri Navin Jain buyer of the goods in cash "refused to accept" the inquiry letter and thereforesubsequently furthe....
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....so not alleged by the revenue that rates mentioned in those sales are not comparable or the goods have not moved out of the factory of assessee. Merely because some of the persons who have purchased goods from the asseseee in cash and issued sales tax forms to the assessee, have not responded to the queries or refuses the transactions cannotbe the sole basis for the making of this kind of addition particularly when the sales on credit or through cheques and purchases and production of the goods is accepted. Further AO has also not examined these parties by issuing summons u/s 131 of the act and then confronting the assessee by giving an opportunity of cross-examination.It may be possible that those parties will not have recorded these trans....
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....rovided any relevant details on which AO could have made any inquiry of cash sales in contradistinction to facts of AY 2008-09 where assessee has provided the relevant details available with it including C forms issued by the parties. Therefore, for this year AO was handicapped in absence of any details and made addition of net profit of ACIT V Dev Bhoomi Steels Private Limited Rs. 12,00,652/- u/s 68. Ld CIT (A) has deleted the addition based on his order for AY 2008-09 without appreciating that as compared to AY 2008-09 where assessee has furnished relevant details in AY 2009-10 assessee has not furnished any details except the amount of cash sales. Further, in this year there is no finding whether even CIT (A) has examined the sales and v....