TaxTMI 
TaxTMI 
2016 (11) TMI 1682
X X X X Extracts X X X X
X X X X Extracts X X X X
.... 2. On the facts and in the circumstances of the case, the 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....
X X X X Extracts X X X X
X X X X Extracts X X X X
....31081 x 22.33) by utilizing excess MODVAT credit." The assessee vide notice issued u/s 142(1) dated 03.21.2010 was asked to explain the discrepancy as mentioned above. The assessee 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 pr....
X X X X Extracts X X X X
X X X X Extracts X X X X
....the amount of Excise duty as mentioned in the Tax Audit report in form of MODVAT utilised of Rs. 7743268/- did not tally with the amount as debited in the Profit & Loss Account of Rs. 7512187/- and thereby it was observed that the appellant had debited lesser amount of excise duty of Rs. 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 re....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... 103,351 430,531 8,173,799 Closing Balance 1,651,590 110,402 192,264 1,954,256 Total Excise duty payment during the year 8173799 Less:- Excise duty adjusted towards sale of old stock [ Out of opening stock of finished goods ] 661612 Excise duty charged to the Profit & Loss Account 7512187 PROVISION OF CENTRAL EXCISE DUTY ON FINISHED GOODS Opening Balance 733279.89 Add;- Provision 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 b....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... of income. The AO picked up two figures of excise duty from the return of appellant itself, namely the excise duty of Rs. 7512186/- claimed as expense in profit and loss account and tax audit report of appellant was showing Modvat credit claim of Rs. 77,43,268/-. As both these figures are picked up from the return of appellant itself, it is difficult to comprehend as to how it could lead to a conclusion that the difference of these two figures of Rs. 2,31,082/- was a suppressed claim of excise duty and consequently it is impossible 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....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e assessee's original assessment was completed u/s 143 read with section 147 of the Act. Thereafter, the matter travelled to the Tribunal and the Tribunal allowed the appeal of the department and the matter was restored to the file of the Assessing Officer and the preliminary ground was directed to be disposed of. The assessee's objection was for reopening the assessment order and after the objection, the Assessing Officer was of the view that during the assessment proceedings it was found that the assessee is manufacturing utensils and sold them under 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 ....
X X X X Extracts X X X X
X X X X Extracts X X X X
..... From the above table, the learned CIT(A) was of the view that the assessee has explained in the tax audit report that the requirement is only to provide information about Modvat credit, as claimed and utilised by the assessee. The total amount of excise duty was Rs. 8173799/- and not Rs. 7743268/-. The assessee has filed reconciliation statement and as per the reconciliation table, excise duty paid comes to Rs. 8173799/- including excise duty actually paid Rs. 430531/- and Modvat credit of Rs. 7743268/-. Out of this, Rs. 661612/- as excise duty was utilised towards the provision in respect of opening stock of finished goods which resulted in balance figure of Rs. 7512187/- which is claimed as excise duty expenses in the profit and loss account. The learned CIT(A) was of the view that the Assessing Officer has picked and chose two different figures from the return of income filed by the assessee. The assessee has shown excise duty payment in his return of income. The Assessing Officer has taken up two figures of excise duty from the return of the assessee that the excise duty of Rs. 7512186/- claimed as expenses in profit and loss account and in tax audit report Modvat credit clai....