TaxTMI 
TaxTMI 
2017 (10) TMI 992
X X X X Extracts X X X X
X X X X Extracts X X X X
....ble in law and on facts." 3. The assessee has raised the following grounds of appeal in CO No. 279/Del/2016 for Assessment Year 2005-06:- l(i) That the assessment order u/s 153A is illegal, arbitrary and without jurisdiction inabsence of any incriminating material found during the course of search u/s 132 of the Income Tax Act, 1961. (ii) That seizure of incriminating material is sine qua non for initiation of proceedings u/s153A and in the absence of same, the order u/s 153A is illegal and without jurisdiction. 2(i) That even otherwise, the addition of Rs. 83,03,137/- based on search conducted byExcise department and documents found at the premises of 3 rd party is not sustainable in the absence of recording of satisfaction by the Assessing Officer of the assesse in terms of provisions of sec. 153C of the Income Tax Act, 1961. (ii) Further, since the proceedings u/s 153A are solely based on information received from excise department, there is no case of any addition in terms of provisions of section 153 A of the Income Tax Act, 1961. 4. The revenue has raised the following grounds of appeal in ITA No. 905/Del/2014 for Assessment Year 2006-07:- 1. That the Commiss....
X X X X Extracts X X X X
X X X X Extracts X X X X
....diction in absence of any incriminating material found during the course of search u/s 132 of the Income Tax Act, 1961. (ii) That seizure of incriminating material is sine qua non for initiation of proceedings u/s 153A and in the absence of same, the order u/s 153A is illegal and without jurisdiction. 2(i) That even otherwise, the addition of Rs. 110192860/- based on search conducted by Excise department and documents found at the premises of 3 rd party is not sustainable in the absence of recording of satisfaction by the Assessing Officer of the assesse in terms of provisions of sec. 153C of the Income Tax Act, 1961. (ii) Further, since the proceedings u/s 153A are solely based on information received from excise department, there is no case of any addition in terms of provisions of section 153 A of the Income Tax Act, 1961." 8. First we take up the appeal of the revenue for Ay 2005-06. Brief facts and assessment proceedings 9. Assessee is a private limited company engaged in the business of manufacturing of Guthka. A search and seizure operation under section 132 of the income tax act was conducted by the Department on „Chaurasia group‟ of companies on 2....
X X X X Extracts X X X X
X X X X Extracts X X X X
....T (A) who vide order dated 29/11/2013 deleted the above addition after obtaining the remand report from the Ld. assessing officer and rejoinder of the assessee giving following reasons:- a. that the income tax department had carried out search on the assessee under section 132 on 29/04/2008 but no material or incriminating evidence have been found in the search indicating that appellant had indulged in any unaccounted purchase, production or sale of the goods. b. The Ld. assessing officer, having the information from the Central excise authorities regarding the above seizure from the transporter, neither the Ld. assessing officer carried out any examination or cross examination or verification of the information available to trace out the unaccounted sales of the assessee. c. vide letter dated 28/12/2001 The Ld. assessing officer was intimated by the assessee that the alleged sales of 2404 bags of Guthkha has already recorded in the books of accounts and therefore it cannot be said that they are unaccounted sales of the assessee. d. Further, on the principles of the natural Justice as well as the information received from Central excise authorities to which the assessing of....
X X X X Extracts X X X X
X X X X Extracts X X X X
....hat no addition can be made without any incriminating evidence found during the course of search. He also submitted that finding of the ld CIT (A) to that effect in para no 7 of the order has not been contested by the revenue. Even otherwise, referring to the paper book filed by the Ld. departmental representative, he submitted that assessee has shown to the Central excise authorities that that assessee has already accounted the sales of 2404 bags in the books of accounts of the assessee by invoice No. 101 to 122 issued between 8/10/2006 to 14/10/2006. He submitted that when the sales has already been accounted in the books of the assessee there cannot be double addition of sale of this quantity once again in the hands of the assessee when the books of account shows the sales of the above goods at market rates on cash sales basis and consequent profit thereon have been offered for taxation. He further submitted that merely because these excise authorities have not believed the above sales and recovered the excise duty from the assessee, which has been paid by the assessee, profit on the above sales cannot be once again taxed in the hands of the assessee. He further referred to the ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....lso entered into the excise records of the assessee. The Central excise authorities have rejected these bills for the reason that these invoices are been raised on Cash sale basis to various individual persons who took the delivery of the goods themselves. However, it cannot be denied that assessee has already booked sales of these parties of the identical bags. As assessee has already booked the sales then the profit thereto on the sale of this material has also already been recorded in the books of the assessee and hence once again the addition made of the gross profit arising out of the same sale will definitely amount to the double addition in the hands of the assessee. It is not the case of the revenue that assessee has not booked the sales of this material in its books of accounts and has not taken it to the credit side of the profit and loss account and resultant gross profit/net profit thereon has not been offered for the taxation. It is also true that assessee has deposited the excise duty demanded by the Central excise authorities and once again taken the possession of 2404 bags of the material and entered them in its excise records. It is also not the case of the revenue....
X X X X Extracts X X X X
X X X X Extracts X X X X
....hases, sales, opening and closing stock. 18. Furthermore, the reliance placed by the Ld. CIT DR on the decision of Hon‟ble Delhi High Court in CIT versus Jan sampark advertising and marketing private limited 375 ITR 373 does not apply to the facts of the case. In that particular case, it was held by the Hon‟ble Delhi High Court that in case of unaccounted entries found in the books of accounts of the assessee, it is an obligation of the assessing officer to conduct proper scrutiny of material, in the event of assessing officer failing to discharge function properly, obligation to conduct proper enquiries shifts to the Commissioner (A) and the tribunal and they cannot simply delete addition made by the assessing officer on ground of Lack of enquiry. We are of the opinion that present case is not the case of Lack of enquiry but it is a case of not understanding the accounting entries made by the assessee in the books of accounts. The Ld. assessing officer has failed to appreciate that when the assessee has already booked sales of 2404 bags in the books of accounts by crediting the sales account and debiting the cash on hand, there cannot be once again an addition on acco....
X X X X Extracts X X X X
X X X X Extracts X X X X
....refore estimated gross profit of 13.81% thereon amounting to Rs. 1 031 5150/- and the same is added in the hands of the assessee. 24. The Ld. CIT (A) has deleted the above addition vide order dated 29/11/2013. 25. The Ld. departmental representative and the Ld. authorised representative submitted that the facts of the case are similar to the issue involved in the appeal of the assessee and revenue for assessment year 2005 - 06, except that in this year the Ld. assessing officer has computed the sales of clandestinely removal determined by the Central excise authorities hereby is on the basis of number of months involved therein. They also submitted that their arguments remains the same. 26. We have carefully considered the rival submissions and also perused the orders of the lower authorities. We have already given our detailed reasons for deleting the addition for assessment year 2005 - 06 confirming the order of the Ld. CIT (appeals). Therefore, for the same reasons and further that during the year there is no unrecorded sales found by the Ld. assessing officer and the sales have been extrapolated without any reasons and evidences found by the assessing officer, we confirm the....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... to the issue involved in the appeal of the assessee and revenue for assessment year 2005 - 06, except that in this year the Ld. assessing officer has computed the sales of clandestinely removal determined by the Central excise authorities hereby is on the basis of number of months involved therein. They also submitted that their arguments remains the same. 34. We have carefully considered the rival submissions and also perused the orders of the lower authorities. We have already given our detailed reasons for deleting the addition for assessment year 2005 - 06 confirming the order of the Ld. CIT (appeals). Therefore, for the same reasons and further that during the year there is no unrecorded sales found by the Ld. assessing officer and the sales have been extrapolated without any reasons and evidences found by the assessing officer, we confirm the finding of the Ld. CIT (appeals) for this year also deleting the addition of Rs. 110192860/-. In the result appeal filed by the revenue for assessment year 2007-08 in ITA No. 906/del/2014 is dismissed. CO No 279 , 280 and 281/Del/2016 A Y 2005-06, 2006-07 and 2007-08 35. Coming to the cross objections filed by the assessee in all th....