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2025 (6) TMI 1550

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....nue are as under:- 2. The grounds of Appeal of the parties are as under:- ITA No. 7761/DEL/2018 (A.Y. 2014-15) (Assessee) "1. That on the Facts and circumstances of the case, the Assessment order passed by the Ld. CIT(A) is bad in law. 2. That Ld. CIT(A) has erred both in law and on the facts of the case in passing the assessment order pending the final order from excise department. 3. That Ld. CIT(A) has erred both in law and on the facts of the case in relying on documents recovered from premises of third party pertaining to other parties and using the same as corroborative evidence against the assessee. 4. That Ld. CIT(A) has erred both in law and on facts in applying an ad hoc G.P rate of 4.57% on the total sales. However, the....

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....000/- and the same has not been recorded in the books of account. 4. The CIT(A), Muzaffarnagar has erred in law and on facts in accepting the current year GP i.e. (-)5.38% of the assessee ignoring the fact that the GP rate of year under consideration was low. 5. The CIT(A), Muzaffarnagar has erred in law and on facts in deleting total additions of Rs. 3,56,648/- { Rs. 1,00,000/- (freight) Rs. 5,648/- (repairs) Rs. 1,50,000/- (wages) Rs. 1,00,000/- (other expenses) made on account of unverifiable expenses ignoring the facts that the books of accounts & supporting documents in respect of expenses claimed by the assessee were not properly maintained." 3. Brief facts of the case are that, the Assessee filed return of income declaring loss ....

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.... submitted that the sole basis for the addition made by the A.O. was the information shared by Central Excise Department consequent to search conducted upon on M/s Trikoot Iron and Steel Pvt. Ltd. Muzaffarnagar, however, A.O. without making any independent enquiry with either Trikoot or from Excise Department or any other person, made additions in the hands of the Assessee. The Ld. Counsel further submitted that the Hon'ble Custom, Excise and Service Tax Appellate Tribunal (CESTAT) vide order dated 09/09/2024 in Excise Appeal No. 55779/2023 (M/s Trikoot Iron and Steel Ltd. vs. Additional Directorate General of GST Intelligence), allowed the Appeal of the Appellant therein. Thus, the very basis of the addition made by the A.O. in the present....

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....rried out by the Central Excise Department. However, the panchnama prepared at the premises of Trikoot does not bear any reference to recovery of hard disk and pen drive. Consequently, adverse opinion towards undisclosed sales made by the assessee to Trikoot flowing from such pen drive etc. is neither admissible as evidence nor it can be examined for this purpose as held in appellate order passed by Excise Tribunal. It is further a case of the assessee that consequent upon search in the case of Trikoot, a search was carried out at the premises of the assessee as well. However, Central Excise Department could not recover any adverse material from the premises of the assessee either. 11. The AO in the instant case has also not brought any m....

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....ons without carrying out independent enquiry and without affording due opportunity to the respondent-assessee to controvert the statements made by the sellers before the other authority. Accordingly, we do not find any good ground to entertain this question for consideration as well. 20. Consequently, we find no merit in the appeal preferred by the Revenue. Appeal is dismissed." 13. Significantly, the AO has also not made any independent enquiry in the course of search to assert the additions. No independent material to corroborate the allegation of unrecorded sales is available on record. The ratio of judgement referred in the case of PCIT vs SapoorjiPallonji& Co. Ltd. (supra) would thus squarely apply. The Hon'ble Bombay High Court in....