TaxTMI 
TaxTMI 
2016 (11) TMI 1682
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....e decision of the ld. CIT(A) in deleting the addition of Rs. 66,00,000/- made by the A.O. on account of share capital and share premium is not acceptable since the Hon'ble ITAT has accepted the share capital in the case of Lunkad Group of companies as genuine in the A.UY. 2004-05 and 2005-06 the facts of which were entirely different to that of this year. 2.1 On the facts and in the circumstances of the case, the Decision of the ld. CIT(A) in deleting the addition of Rs. 40,00,000/- on account of unsecured loan and Rs. 3,16,143/- in respect of interest thereon observing that the A.O. has accepted the loan as genuine in another case for A.Y. 2007-08 because the assessment order referred by the ld. CIT(A) is proposed to be set aside u/s 263 being erroneous and prejudicial to the interest of the revenue. 2.2 On the facts and in the circumstances of the case, the ld. CIT(A) erred in deleting the addition of Rs. 5,30,000/- made by the A.O. on account of cash expenditure made for providing entire holding that the main ground (ground no. 2 and 2.1 above) are allowed because on these points the decision is not accepted and appeal is preferred. 3. On the facts and in the circumsta....
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....see submitted the reply vide letter dated 10.12.2010, as mentioned below :- "1. In this respect it is clarified that the assessee has duly accounted for entire amount of sales in its books of account and there was no suppression of any sale as per excise record/act also. A reconciliation statement of excise duty paid/adjusted through excise record as compared to the financial statement was filed before you. The said chart is again enclosed for your ready reference. 2. On perusal of the said chart you will find that assessee company had paid following amount of excise duty during the year under consideration :- Through RG-23 Part IIA (Modvat) Rs. 7639917 Through RG-23 Part IIC (Modvat) Rs. 103351 Through PLA Rs. 430531 Rs. 8173799 3. That as per the mercantile system of accounting the assessee has to make provision of excise duty on closing stock of finished goods as on 31st March of every year. 4. That as per the books of accounts provision of excise duty of finished goods as appearing in the books of accounts as on 01.04.2000 was of Rs. 732279.89. That out of the said provision of excise duty the assessee had adjusted an amount of Rs. 661612.05 towards sale ....
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..... 231081/- in the P & L account and from this amount the AO worked out consequential concealment in turnover of Rs. 5160039/-. The appellant had filed objections which remained to be decided by the AO at the time of passing of the original assessment order on 29-12-2006. The appellant had preferred an appeal, before the Ld CIT(A) and in the appeal the assessment order was quashed by stating that the AO has not followed the decision of the Hon'ble Apex Court in the case of GKN Driveshaft (India) Limited as reported in 259 ITR 19 and Ld.CIT(A) also held that there was also no merit in the reason as recorded by the AO for reopening of the case. 4.1.1 The department has challenged the order of my predecessor before the Hon'ble ITAT. Hon'ble ITAT vide its order dt 20.10.2009 following the decision of the Hon'ble Jurisdictional High Court in the case of SICA Educational Trust as reported in 10 ITJ 05 has held that non- disposing of the objection is the curable defects and accordingly directed the AO to first dispose off the objection against reopening of assessment of the appellant and then proceed further. 4.1.2 The AO while passing the order following the direction ....
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....vision made during the year 119521.77 852801.66 Less:- Excise duty adjusted towards sale of old stock 661612.05 190189.61 4.1.4 The AO while deciding the objection of the appellant, in Para F.2 has stated that, reconciliation statement of excise duty paid/ adjusted through excise record as compared to financial statements were filed which were placed on record however the same will be subject to verification from the books of account vis a vis supporting papers and excise records. The AO in Para F.3 has observed that the appellant has failed to disclose fully and truly all material facts necessary for assessment and in Para F.4 the AO stated that it is apparent that the AO had the sufficiency of reason to believe that sales was suppressed to the extent of Rs. 5160039/-. 4.1.5 I have considered the reason as recorded by the AO for reopening of the completed assessment. The notice was issued on the behest of the revenue audit party and the AO obtained prior permission of the CIT even when only JCIT/ Addl CIT is authorised to give permission. The appellant has also challenged the reassessment by stating that there was no tangible material in possession of the ....
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....ssible to come to a conclusion from such reported numbers that certain sales of Rs. 51,60,039/- were transacted outside books of account, estimated from that figure of Rs. 2,31,082/- by applying excise duty rate. Without any iota of evidence of unaccounted sales, the figures reported in books cannot be used to come to such absurd conclusion. 4.1.8 In view of these facts as also of specific direction of the Hon'ble ITAT, the AO was required to examine reconciliation statement filed by appellant and to find any mistake or gap in the explanation. But AO has remained silent on such reconciliation not only in the order deciding issue of reopening, but also in the reassessment order, which proves that stand of appellant was correct. 4.1.9 Thus, the basic intention of the decision of the Hon'ble Apex Court in the case of GKN Driveshaft (India) Limited has been defeated. The AO has therefore not followed the direction given by the Hon'ble ITAT, Indore Bench. If the AO considered the objection in right perspective in that case , there was no reason for him to justify the reopening of the case. I am therefore of the considered opinion that the AO has grossly erred in not deciding....
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....der payment of Central Excise Duty through Modvat credit. It was found that the assessee company has utilised the Modvat credit. Moreover, the company has also concealed the sales. Therefore, the Assessing Officer was of the view that as per the books of accounts the provisions of excise duty on finished goods, as appearing in the books of accounts, as on 1.4.2002 was Rs. 732279/-. Out of the said provisions of excise duty, the assessee has adjusted the amount of Rs. 661612/- towards sale of old stock during the year under consideration. Thus, the assessee has made payment of excise duty adjusting the excise duty towards the sale of old stock. This, this was a new information. Therefore, the Assessing Officer has reopened the assessment and the reopening is justified. The Assessing Officer has reopened the assessment on the information which was available to him. Therefore, the learned CIT(A) is not justified in allowing the appeal on the ground that the reopening is not correct. 6. On the other hand, the learned counsel for the assessee relied upon the order of the learned CIT(A) and the decision in the case of CIT vs. Kelvinator of India Ltd.; 320 ITR 561 and Orient Craft Ltd. (....