TaxTMI 
TaxTMI 
2018 (2) TMI 1880
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....e present proceedings. 3. Thus apart from this minor distinction the other arguments of the both the parties in 2005-06 Assessment year, it was submitted would continue to remain the same as apart from this distinction the facts, circumstances and position of law on the grounds would continue to remain the same. 4. Accordingly we reproduce hereunder the grounds raised by the assessee from ITA No. 46/CHD/2015: 1. That the Learned C.I.T. (A) wrongly upheld issue of notice u/s 147/148 after lapse of four years of assessment completed u/s 143 (3). 2. That the Learned C.I.T. (A) wrongly upheld the issue of Notice u/s 147/148 on the information received from Central Excise department which based on surmises and conjectures. 3. That the Learned C.I.T. (A) wrongly upheld the impugned order u/s 147/143 (3) of the Income Tax Act, 1961 without considering various facts, explanations, evidences and material on record. 4. That the Learned C.I.T. (A) wrongly upheld addition by applying Gross Profit Rate on sales estimated by the Central Excise Authority, thereby making impugned addition of Rs. 77,77,645/-. 5. That the Learned C.I.T. (A) wrongly ....
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.... ITA No. 46/Chd/2015 for 2005-06 assessment year it was his submission that the departmental action was contrary to law and facts in the said assessment year also. 7.1 Carrying us through the assessment order and the impugned order it was submitted that in the facts of the present case notice under section 148 was issued on 24/02/2012 and thus admittedly it was after a lapse of four years of completion of the assessment under section 143 (3) which was finalised on 27/12/2007. Accordingly it was his submission that the reopening was not sustainable on account of this fact alone as there was no failure as per record on the part of the assessee to disclose the facts. The action consequently was bad in law. Addressing the assessment order it was his submission that the AO has blindly accepted as correct and true the half baked allegations in the form of information received as correct without even caring to independently apply his mind whether they are applicable to the assessee's case in the income tax proceedings. It was argued that he has blindly reproduced in the copy of the show cause notice u/s 148 the exact information received copy of which has been placed at paper book 1 to....
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....rity i.e; CESTAT has already had an occasion to consider and come to a conclusion that the action of the Central Excise Authorities was not to be upheld. In these circumstances relying on the order it was his submission that in the income tax proceedings to still insist that the action be sustained would not been accordance with law. 7.3 Inviting attention to the assessment order it was submitted that inferences had been drawn on the basis of certain documents found from the police check post by the Central excise authority and also qua Sh. Vinod Khullar assessee representative. For the said purposes attention was invited to the assessment order and the order of the CESTAT. Carrying us through the order of the said authority it was submitted that the additions were not ultimately maintained . In this background referring to the record it was his submission that the Assessing Officer has blindly accepted the so-called receipt of information as correct and true and proceeded to reopen a closed and concluded assessment without caring to carry out any independent enquiry. It was his submission that the Central Excise Department has nowhere mentioned that any bill of sales or quantit....
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....athered from Shri. Vinod Khullar during the search who was a sales representative of the assessee which fact has also weighed with the AO as he has blindly accepted the information without carrying any exercise that there was a formation of belief is was submitted that the evidence relatable to Mr. Khullar has also been considered and the final fact finding authority has held that the allegations were baseless. 7.4 Referring to the record it was also his submission that the CIT(A) has taken the position that the assessee has gone before the Settlement Commission for 2004- 05, 2007-08 and 2008-09 assessment years accordingly, it was presumed that in the years under consideration also the assessee must necessarily be penalized by reopening his concluded assessments. It was his submission that this position taken by the CIT (A) is contrary to facts and record addresses the departmental mindset in upholding the Assessment Orders on some ground or the other. It was submitted that the order of the Settlement Commission was received on 22/06/2012 and the notice under section 148 was issued on 24/02/2012 thus the assumption of jurisdiction cannot be said to be justified on the ground as....
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....s available with the AO on 08/08/2008. The notices were issued on 24/02/2012. The AO simply slept over the information . In the circumstances it was his submission that there was more than sufficient time with the Assessing Officer to call for any details of any sales outside the books of the Central Excise Department which exercise admittedly was not deemed to be necessary by the assessing officer. Referring to the settled legal position it was his submission that in the present case between the reasons recorded and the information received there is no live link to demonstrate that there was sufficient material for the formation of any belief that income has escaped assessment. Reliance was also placed upon the decision of the jurisdictional High Court in the case of ACIT vs. Bharat Bhushan (2015) 377 ITR 189 (P & H) copy of which had also been placed at pages 98-102 of the paper book for the proposition that merely because the assessee was being prosecuted for keeping sugar beyond the permissible limit and was trading in the same by carrying out sale and purchase it would not entitled the assessing officer to add the value of the sugar to his undisclosed income on the basis of co....
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....volumes about the conduct of the assessee. Accordingly, it was her submission that the Assessing Officer has reopened the proceedings on the basis of information which evidently demonstrated that the income of the assessee has escaped assessment and the exercise of power vested in the Assessing Officer it was her submission is fully in accordance with law. Relying upon the written submissions filed before the Bench it was submitted that she would want to rely upon of the decision of the Delhi High Court dated 14/02/2017 in the case of Principal CIT vs. Paramount Medications Private Limited reported in (20 17) 392 ITR 0444. It was her submission that the facts are fully identical and SLP against this judgement of the Hon'ble Delhi High Court has been dismissed by the Supreme Court vide order dated 11/9/20/06/2017 as would be evident from 2017 - TIOL- 253- SC- IT. Addressing the order of the CESTAT which has been filed as an additional evidence though it is available in the public domain it was her submission that the assessee is under a mistaken belief that it would be of any help to the assessee. Since written submissions were filed and relied upon for ready reference the relevant ....
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....r section 143 (3) on 27/12,/2007. On a reading of the assessment order it is seen that on 06.06.2007 the Central Excise Authorities carried out searches at the factory premises of the assessee situated at Jagadhri Road, Bilaspur, Haryana and also its registered office at 17-18F, DAY Market, Jagadhri Road, Yamuna Nagar, residential premises of its directors, officers, buyers, dealers, raw material suppliers etc. The Excise Authority during the course of search noticed that the assessee company M/s Kunal Calcium Ltd., V&PO Shahpur (Bilaspur), District Yamuna Nagar had floated three bogus firms and finished goods manufactured by the assessee company were being sold. It was also discovered by the Excise Authority during the search that invoicing/billing of the goods manufactured and sold was grossly under valued. The assessee company as per record was engaged in mainly Manufacturing of Calcium Carbonate. However, the manufactured goods while being sold as per the Excise Authority were being represented/shown in the bills as Calcite Powder, Lime Powder or-Quick Lime Powder, which involved comparatively very low value as against value of Calcium Carbonate and thus the value shown in the ....
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....ecipitated calcium carbonate. 9. With regard to the demand, Rs. 1,03,69,193/-, the demand has been confirmed on account of clandestine clearance of calcium carbonate on the basis of ledger of Shri Vinod Khullar having account of Shri Varun Khullar and others. It is submitted that the samples were drawn on 6.6.2007 from Shri Varun Khullar - partner of M/s. Mahavir Chemicals, Delhi and test report says that the samples do not conform specification of precipitated calcium carbonate and nothing has been brought on record that the appellant has cleared precipitated calcium carbonate to Vinod Khullar/Varun Khullar and others. 10. Regarding the demand of Rs. 45,21,421/-, which has been confirmed on the basis of documents/notebook recovered from Mukul Kumar, Lab Assistant. Shri Mukul Kumar was maintaining diary for different products and therefore, it cannot be stated that it was only for precipitated calcium carbonate and there is no corroborative evidence to support that charge, 11. Regarding the demand of Rs. 9,58,622, which has been confirmed on the basis of blank GR's recovered from premises of M/s.Satnam Transport Co. The quantity and commodity @ 12 MT ....
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....indings of the impugned order and submitted that the appellant is engaged in the activity of clandestine manufacture and clearance of precipitated calcium carbonate in the guise of lime stone powder, calcite, quick lime which are exempted from duty and the same has been confirmed by CRCL in their report dated 29. fc5.200.8 as the drawn of samples has not been disputed by the appellant. Therefore, the said report is admissible evidence, to hold against the appellant. In view above, the adjudicating authority has rightly held that the appellant was engaged in the activity of clandestine manufacture and clearance of precipitated calcium carbonate in the guise of lime stone powder, calcite, quick lime to evade payment of duty. 10.3 The decision arrived at on considering the allegations and evidences relied upon by the Central Excise Authority has been arrived at in the following speaking finding of CESTAT: 16. Heard both sides and considered the submissions. 17. We have heard both sides in detail and also verified the records placed before us. On the basis of records placed before us, we find that the demands have been confirmed against the appellant on the followi....
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..../CLD/Int/Misc/28 1/07-08 97.8 25.7 1.0 42.9 5. C. Ex/CLD/Int/Misc 1/07-08 98.0 17.0 1.2 45.4 6. C. Ex/CLD/Int/Misc/30 9/kunal/07 98.2 24.0 1.1 43.7 7. C. Ex/CLD/Int/Misc/31 8/kunal/07 97.8 22.0 1.2 44.0 8. C. Ex/CLD/Int/Misc/32 7/kunal/07 98.0 25.1 1.1 43.8 9. C. Ex/CLD/Int/Misc/33 5/kunal/07 98.3 26.0 1.0 43.6 10. C. Ex/CLD/Int/Misc/34 ....... 98.1 23.4 1.2 43.2 On the basis of analytical finding as above samples do not conform to the specification of precipitated calcium carbonate as per IS: 8767-1978. Sealed remnant returned. 19. The said report clearly shows that the samples drawn do not confirm to the specification of Precipitated calcium carbonate as per 15:8767-1978. On the said report, no finding has been given by the chemical examiner with regard to classification but clearly stated that these are the samples drawn are not of precipitated calcium carbonate. As it is fact on record, the appellant is manufacture of lime stone, quick lime powder, calcite which are chargeable to nil rate of duty under CTH 2521 00 90. 252....
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....he basis of diary recovered from Mukul Kumar,Lab Assistant, who was maintain the diary for all products. In that circumstance, in the absence of any corroborative evidence to show that all records maintained by Shri Mukul Kumar of ;-pGBPC.' the demand is not sustainable and therefore, the demand of Rs. 45,21,421/- is set aside. (iv) The duty of Rs. 9,58,622/- has been demanded on the basis of blank GR-s recovered from premises of M/s.Satnam Transport- We have seen GR's recovered from premises of M/s.Satnam Transport are blank GR's. GR does not described the quantity and description of the goods, the demand cannot be confirmed on the basis of assumption and presumption. As no corroborative evidence has been produced on record, therefore, the demand of Rs. 9,58,622/-is set aside. (v) The demand of Rs. 1,06,41,860/-, the said demand has been confirmed on account of under valuation by considering the goods cleared as precipitated calcium carbonate- We have seen that it is alleged that the appellant has not declared the true value of the goods on the charge that the goods were precipitated calcium carbonate which is having higher value whe....
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....is not imposable on this ground. 21. We have seen that during the course of investigation it is alleged that stock of 337 MT of precipitated calcium carbonate and 42 MT of quick lime powder which are not entered in the RG-1 register. We have seen that opening balance on 5.6.2007 as per RG- 1 register. As. 95. MT, 27 MT, 118 MT, 110 MT and 11 MT of precipitated calcium carbonate and production for the day 5.6.2007 was to be recorded on 6.6,2007 and the same could not be recorded due to visit of DGCEI officers on 6.6.2007. if all these record taken into consideration, it cannot be alleged that the seized goods were not entered in the RG-1 regiser. Therefore, the said charged is not sustainable and the demand on this account is set aise. 22. We further find that the raw material i.e. lime stone 40000 MT, pet coke 1000 MT and charcoal 1000 MT were also seized. The said quantity has been arbitrary taken by eye estimation and no verification report/chart prepared and it is not possible to verify the said huge quantity of raw material in a single day. Therefore, the raw material and finished goods cannot be seized. In that circumstance, the allegation of non accountal of....
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....ing of the assessment orders for the two years under consideration and on a careful reading of the findings arrived at in the impugned orders it is seen that the allegation consistently made on behalf of the assessee that there was no independent enquiry by the assessing officer is borne out to be correct and true. Nothing has been placed before us by the Ld. SR. DR to meet the challenge that there were any independent enquiries by the assessing officer. The argument that the assessee has gone before the Settlement Commission in the preceding assessment year and subsequent years cannot be the basis for a decision in the years under challenge. The said fact at best can be a reason for arousing suspicion that all may not be correct in the facts of a particular assessee however the presumption that necessarily it must be a case where reopening can be said to be justified would require drawing of presumptions conjectures and surmises . In the facts of the present case admittedly no effort was made by the assessing officer to call for any record from the Central excise authority or look into any material before the formation of his belief . It is seen that infact whether anything was do....
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....h Court it is seen that the decision has been rendered in the peculiar facts where the information received by the assessing officer through the Commissioner of Central excise was that with regard to the bogus purchases made from a company which did not have any manufacturing facility accordingly it was this information which was held to be amounting to "tangible material". For ready reference the relevant extract is reproduced hereunder: " The information received through the Commissioner of Central Excise with regard to the bogus purchases made from a company which did not have any manufacturing facility, amounted to "tangible material" pointing to suppression of material facts." (Emphasis Supplied) 10.6 However we note that apart from the other reasons which have been elaborated in this order earlier even otherwise the case cited is materially distinguishable. As opposed to this the said the Ld. AR in his reply has invited attention to the latest decision also of the the Hon'ble Delhi High Court in the case of Pr. CIT Vs. Meenakshi Overseas(P) Ltd. ( cited supra). Copy of the said decision has also been placed at paper book page No. 135 to 140. Referring to ....