TaxTMI 
TaxTMI 
2015 (10) TMI 2556
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.... the Income Tax Act, 1961 for Rs. 2,55,000/-." 2. Brief facts of the case are that the assessee filed the return of income on 31.02.2006 declaring Nil income. The assessment was completed under section 143(30 of the I.T. Act, 1961 on 30.12.2008 at a total income of Rs. 1,72,64,760/-. In the said income the profit earned on the unrecorded sales was mentioned at Rs. 2,54,572/- and investment in purchase of unrecorded sales was made to the tune of Rs. 15,33,570/-. After completing the assessment, a show cause notice under section 274 read with section 271(1)(c) of the Act was issued for concealing the particulars of income/furnishing inaccurate particulars of income. In response to the show cause notice, the ld. A/R of the assessee has elab....
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....s which was admitted by it before the hon'ble settlement commission of Excise, but the fact is that the assessee did not earn any profit on the same ..........There was no proof with your predecessor to prove earning of any accounted income on such unaccounted sale and whatever income was added by him was purely on estimations. It is also not out of place to mention that during the search proceedings undertaken by the Excise Department and during the course of scrutiny nothing came to the notice about application of such unaccounted income. Therefore, this addition is also purely on estimation without any corroborative evidence. Therefore, this addition also can not be made as a basis for levy of penalty." Similarly in respect of investm....
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....mation only which fact is apparent for the assessment order .............. On appeal before the hon'ble CIT 9A), such addition was reduced to Rs. 5,00,000/- and such verdict of the hon'ble CIT (A) was also sustained by the hon'ble ITAT also. This treatment itself is a proof to the fact of application of assumption and presumption while making this addition". He has also made reliance upon the decisions awarded by the Raj. High Court in the case of Shiv Lal Tak vs. CIT (251 ITR 373) and others. The submission filed by the AR on both the issues, is considered but not found correct. From the above facts, it is a established facts that the assessee had made unrecorded sales and concealment of income by way of not disclosing sale in his regul....
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.....) 247 ITR 541. CIT vs. Dhillon Rice Mills (P&H) 256 ITR 47. CIT vs. J.H. Parabia (Transport) P. Ltd. (2006) 284 ITR 361 (Guj.) 7. On the contrary, the ld. D/R for the revenue has relied on the orders passed by the authorities below and justified the imposition of penalty. 8. We have heard rival contentions and perused the material available on record. In the present case the Tribunal has confirmed the estimated profit of Rs. 2,54,572/- earned on unaccounted sales made on the basis of GP rate of 0.83% declared by the assessee in the immediately preceding year on the basis of " the assessee agreed to pay the additional excise duty of Rs. 50,50,575/- which was 16.32% of unaccounted sales". The estimate of profit derived by the AO ....
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....for the assessee would have been right if it was a simple case of one estimation against the other. However, in our opinion, there are incriminating material which were gathered during the course of search conducted by the Excise Department and admitted by the assessee before the Excise Settlement Commission. On the basis of admission made by the assessee, the income was estimated on the basis of past history of the assessee and that was based on the material found referred herein above . The addition made by the AO, though was challenged before ld. CIT (A) and before the ITAT, but the Tribunal sustained the addition on the basis of the material admitted by the assessee in the proceedings initiated by the Excise Department. In our view, the....