TaxTMI 
TaxTMI 
2002 (12) TMI 191
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....3,36,982 (4) Unaccounted sale of machineries due to stock deficit Rs. 6,39,000 (5) Unaccounted purchase of materials Rs. 13,59,000 (6) Unaccounted income on account of various credits recorded in the diary maintained by Maltiben Rs. 2,27,000 (7) Unaccounted sale of scrap Rs. 3,79,700 (8) Unaccounted income due to forfeiture of advance money &n....
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....ponse to the said notice, the assessee firm filed the return for the Block Period on 18-4-1998 declaring total undisclosed income at Rs. NIL. 3. The Assessing Officer took up the assessment proceedings and on the basis of statement of Shri Ashwin B. Patel--partner and also that of Shri H.A. Patel--Technical Executive of the assessee firm, the Assessing Officer concluded that the assessee firm had earned huge unaccounted income on account of- (a) Under-invoicing of sale price of machineries (b) Unaccounted sale of machinery and parts (c) Unaccounted sale of scrap (d) Unaccounted purchase of machinery parts. 4. The Assessing Officer also gave a finding in the assessment order that Shri Ashwin B. Patel had admitted under-invoicing of Rs. 9.50 lakhs in respect of the following four parties, viz. M/s Anjani Synthetics Rs. 2.50 lakh M/s Shalu Dyeing & Ptg. Mills Rs. 2.00 lakh M/s York Fashion Mills &nb....
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....sp; Ex. Packing Expenditure Expenditure (A) B=A*1.25 --------------------------------------------------------------------------------------- (1) (2) (3) (4) (5) (6) --------------------------------------------------------------------------------------- l. Shalu Dyeing 11-10-86 10,00,000 12,5....
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....sp; 7-9-93 11,71,000 14,63,750 2,92,750 13. Dayaram Ptg.& Dyeing 29-11-93 19,73,264 24,66,580 4,93,316 14. Paras Fab. & Dyeing 18-5-94 14,61,000 18,26,250 3,65,250 15. Chamunda Textile 13-3-95 20,25,000 25,31,250 5,06,250 &n....
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....; Expenditure (A) B=A*1.25 --------------------------------------------------------------------------------------- (1) (2) (3) (4) (5) (6) --------------------------------------------------------------------------------------- 1. Rajlaxmi Textiles 28-6-93 23,31,000 29,13,750 5,82,750 2. Dhanesli Textiles 31-5-93 2,40,000 3,00,000 &nbs....
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....0 1,88,750 37,750 6. Ashok Fashion 31-8-95 2,50,000 3,12,500 62,500 31-8-90 2,28,930 2,86,162 37,232 &n....
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....nd during the course of search to indicate as to whether the sale price mentioned in the invoice was less than the sale consideration actually received by it. It was further submitted that Shri H.A. Patel was working with the assessee as a Technical Executive from 11-11-1991 and subsequently as Sales Marketing Executive for the last one year prior to the date of search. Accordingly, it was pleaded that how the sales effected by the assessee prior to this period could be known to him and as such the Assessing Officer was not justified in holding that the assessee has under-invoiced the sales effected by the assessee to all the parties mentioned in the assessment order at a uniform rate of 20 per cent. It was pleaded that the Assessing Officer has not been able to find from the purchasers as to whether they have paid any extra cash money over and above the invoiced price charged by the assessee from the prospective purchasers. It was submitted that the Assessing Officer has not brought any material or evidence on record except the statement of Shri H.A. Patel to allege that the extra sale price in cash was received by the assessee from all those parties mentioned in paras 7 and 9 abo....
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....addition of Rs. 36,975 on account of cancellation of contract, it was pleaded that the advance was duly recorded in the books of account and the assessee had offered the same as income in the subsequent year. In any case it was submitted that it cannot be said to be undisclosed income of the assessee as the advance was duly recorded in the books of account. He accordingly submitted that the computation of undisclosed income by the Assessing Officer at an exorbitant figure of Rs. 1,05,18,882 is not at all justified in the facts and circumstances of the case. 14. The learned DR strongly relied on the order of the Assessing Officer and further submitted that it is undisputed and is quite clear from the admission of Shri Ashwin B. Patel during the course of search that the assessee firm has received cash amounting to Rs. 9,77,000 over and above the invoiced price in relation to the four parties mentioned in para 4 above on account of under-invoicing of sale bills. Accordingly, it was pleaded that based on law of probability the assessee must also have under-invoiced the sale price in respect of machineries sold and mentioned in paras 7 and 9 above and as such the Assessing Officer w....
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.... to prove that the purchasers of these machines have in fact paid any "on money" in cash to the assessee over and above the invoiced price noted by the assessee while supplying those machines to the respective purchasers. The learned AR of the assessee has furnished correspondence entered into between the Assessing Officer and those parties noted in paras 7 and 9 of this order above (except the four parties in respect of which "on money" receipts of Rs. 9,77,000 were admitted by the assessee and confirmed by the purchasers of machines) wherein the Assessing Officer called for information under section 133(6) from those parties and those parties have replied to the Assessing Officer stating that they have only paid the considerations for purchases made as noted in the invoice. All these put-chasers are assessed to tax. The relevant correspondence has been furnished to us at pages 1 to 77 of the paper book. The Assessing Officer has not brought any material on record (except the statement of Shri H.A. Patel--so called Technical Executive that the assessee was charging "on money" varying from 10 per cent to 30 per cent in respect of the machines sold by it) to indicate that the assess....
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....e by Shri Ashwin B. Patel in the statement according to which the valuation of stock should be Rs. 44.09 lakhs as per the calculation given at page 11 of the assessment order. Since the valuation of stock found by the Survey party was Rs. 37.56 lakhs, there was an apparent shortage of Rs. 7.43 lakhs in the valuation of stock. The contention of the assessee before us was that there was no such discrepancy as alleged by the Assessing Officer because the assessee was following Cardex System regularly and consistently from year to year and the valuation of stock as per the working given by the Assessing Officer at pages 100 to 101 of the paper book comes to Rs. 40,45,968. This valuation included the stock valuing Rs. 1,55,000 given by the assessee to three outside parties viz. Lathia Rubber (P.) Ltd., M/s. Western Engg., and M/s Mukta Rubber noted by the Assessing Officer at page 10 of the assessment order but for which credit was not given by him while making the addition. The Assessing Officer however reduced the amount of Rs. 1,04,000 on account of alleged unaccounted stock considered in the hands of sister concern M/s Babros Machinery Mfg. (P.) Ltd. and accordingly made an addition....
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....unt has to be allowed under section 37 because the expenditure has been incurred for the purpose of acquiring goods/raw materials for the purpose of business of the assessee. We find force in this submission which is duly supported by the decision of the Ahmedabad Bench of the Tribunal in the case of Ruby Builders. Accordingly, the addition of Rs. 13,59,000 on account of alleged unaccounted purchase of material is directed to be deleted. 18. Ground of appeal No. (6) relates to the addition made on account of unaccounted income represented by various credits entered into the diary maintained by Smt. Maltiben-partner. The Assessing Officer has discussed this issue in para 4 at pages 16 and 17 of the assessment order. The assessee has furnished zerox copies of the diary at pages 146 to 155 of the paper book. The facts relating to this addition are that Smt. Maltiben used to make record of various amounts received by her from her husband Shri Naresh B. Patel and her brother-in-law Shri Ashwin B. Patel. She has also recorded various payments made to different parties. Out of the various credits found in the diary the Assessing Officer has made an addition in respect of the following ....
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....hose diaries the Assessing Officer has worked out the addition of Rs. 2,44,700 and also included Rs. 1,35,000 on account of unaccounted sale of scrap for a period of nine years on the basis of Rs. 15,000 per year. We have considered the rival submissions. It is undisputed that the assessee admitted Lochru receipts of Rs. 13,000 and Rs. 52,500 for assessment years 1992-93 and 1994-95 which has not been reflected in the books of account. Further there are notings of various items on account of sale of scrap in the diaries maintained by the two partners copies of which have been given to us at pages 140 to 145 and 156 to 159 of the paper book. A perusal of these pages indicates that there is overlapping of receipts on account of sale of Lochru in both the diaries. For example, in the diary maintained by Shri Naresh B. Patel, at page 143 at item No. 3 Rs. 15,000 on 26-7-1993 has been recorded as Lochru receipt. The same amount has been recorded by Shri Ashwin B. Patel in his diary at page 158 and the assessee has also given explanation before the Assessing Officer vide his letter dated 24-12-1998 at page 134 of the paper book. Therefore, taking into consideration the totality of the fa....
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....sp; Rs. 13,59,000 (6) Unaccounted income on account of various credits recorded in the diary maintained by Maltiben Rs. 2,27,000 (7) Unaccounted sale of scrap Rs. 3,79,700 (8) Unaccounted income due to forfeiture of advance money received from M/s Mahendra Suitings Rs. 36,975 &nbs....
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.... that the assessee firm had earned huge unaccounted income on account of (a) Under-invoicing of sale price of machineries (b) Unaccounted sale of machinery and parts (c) Unaccounted sale of scrap (d) Unaccounted purchase of machinery parts. 5. Regarding under-invoicing of sale price of machineries, the Assessing Officer observed that incriminating evidence collected at the time of search action indicated that the assessee has earned huge unaccounted income on account of (a) under-invoicing of sale price of major machineries, and (b) charging income in cash over and above the billed sale price outside the books of account. Regarding the fact where the assessee firm had taken cash over and above the billed sale price of machineries, in response to question No. 5 of the statement recorded on 8-9-1995 under section 133A. Shri Ashwin B. Patel, a partner of the firm admitted that indeed the cash was taken over and above the sale bill price. Question No. 5 and its answer are reproduced as under: Q.5: Have you or your concern ever taken cash against the sale which is not accounted for in the books of account. Ans: Yes. 6. In response to question Nos. 7, 8, 10, 11, 1....
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....nbsp; the loose paper --------------------------------------------------------------- Page No. 121 seized from Rs. 2,77,000 received the residence of Ashwin from M/s Anjani Synthetics B. Patel & Naresh B. Patel inventorised at Sr. No. 10 of Annexure A-1. Page 155 seized from the Rs. 3,00,000 received residence of A. B. Patel & from M/s York Fashion/ N.B. Patel inventorised at York Fabrics Sr. No. 10 of Annexure A-1 Diary seized from residence Received Rs. 2 lakh of N.B. Patel written in the from M/s Dayaram Ptg. handwriting of Mrs....
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....bsp; machine Amount(Rs.) -------------------------------------------------------------------------- 1. 27-12-90 Anjani Synth. 5 Ch. Pin & Clip 15,15,000 91-92 Stenter + 3BPM 2. 11-10-86 Shalu Dyeing, Hot Air Stent. 10,96,000 86-87 Surat. M/C + 3BPM 3. 7-2-93 York Fabrics 3 Ch. Pin & Clip 18,10,254 93-94 &nb....
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....arly one month from the original confessional statement recorded under oath under section 133A of the IT Act, to this effect which was made by the assessee under free will and without any pressure. The Assessing Officer further found from the various notings made in the loose paper 155 seized from the residence of assessee inventorised at Sr. No. 10 of Annexure A-1 as discussed in para 1.2 of the assessment order and confessional statement by Shri Ashwin B. Patel wherein response to question No. 20 recorded under section 133A and also confessional statement made by Shri H.A. Patel, Technical Executive of the firm as discussed in para 1.3 of the assessment order, prove that subsequent retraction with respect to receipt of cash of Rs. 3 lakhs from M/s York Fabrics is an afterthought and baseless. Therefore the entire receipt of Rs. 9.77 lakhs is unaccounted income on account of under-invoicing of sale bills to four parties as discussed above, during the relevant accounting year in which these machineries were sold. 14. The Assessing Officer further found that the assessee has under-invoiced the sale price of machinery in almost every other Stenter and other machines supplied by it....
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....en cash over actual sales invoice at 20 per cent (i.e., average of 10 per cent to 30 per cent as admitted by Shri H.A. Patel) in respect of sale of Stenter machines during the block period. 16. During the block period the assessee has sold at least 15 Stenter machines. The recorded price as per books i.e., under-invoiced price, the date of sale, name of the party, the actual price (i.e., estimated by multiplying 1.25 to the recorded price), the difference is given below: --------------------------------------------------------------------------------------- Sr. Name of the Date of Invoice Price Actual Price Difference No. Party Sale before sales before ST/CST ....
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....; 25-3-91 20,97,837 26,22,296 5,24,459 7. Digvijay Synth. 28-9-91 20,00,000 25,00,000 5,00,000 8. Gauhati Cotton Mills 25-2-92 23,64,500 29,55,625 5,91,125 9. Aspief Textile Prints 30-3-92 17,00,000 21,25,000 4,25,000 10. York Fabrics 7-2-93 16,59,000 20,73,750 4,14,750 11. Rama Raju Surgicals 16-8-93 16,53,000 &nbs....
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....to Rs. 9,77,000 added separately. 17. The Assessing Officer also observed the concealment on account of under-invoicing of sales of machinery by the assessee other than the Stenter machines. The Assessing Officer observed in paras 1.2 to 1.5 of the assessment order that the assessee himself admitted to have concealed income on account of under-invoicing of sales of machinery. As discussed in para 1.6 of his order, Technical Executive of the assessee firm Shri H.A. Patel in response to question No. 11 of the statement recorded under section 131 on 9-8-1995 has categorically stated that 10 per cent to 30 per cent of the sale price of the machinery was taken in cash and the balance is taken by cheques. Further during the course of search in response to question Nos. 46, 47 and 48 of the statement recorded on 9-9-1995 the assessee has categorically stated that he had received the cash in respect of number of parties in addition to four parties as discussed in para 1.5 of the assessment order in which specific quantum of concealment was admitted by him. However, the assessee failed to give specific quantum of cash receipt due to under-invoicing of machinery except in respect of four ....
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....sp; (2) (3) (4) (5) (6) --------------------------------------------------------------------------------------- 1. Rajlaxmi Textiles 28-6-93 23,31,000 29,13,750 5,82,750 2. Dhanesh Textiles 31-5-93 2,40,000 3,00,000 60,000 3. Gurdayal Shyamlal(P)Ltd. 21-4-93 3,21,000 4,01,250 80,250 4. Advance Synthetics 24-3-90  ....
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....; 62,500 31-8-90 2,28,930 2,86,162 37,232 -------- &nbs....
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....e Assessing Officer has also not brought on record any material or evidence except the statement of Shri H.A. Patel to allege that the extra sale price in cash was received by the assessee from four parties mentioned above in preceding paras. The learned AR of the assessee relied on the decision in the case of NR. Paper & Boards Ltd. 19. On the other hand, the learned DR still relied on the order of the Assessing Officer and further submitted that it is undisputed and quite clear from the admission of Shri Ashwin B. Patel that the assessee had received cash amounting to Rs. 9,77,000 over and above the invoiced price in relation to four parties mentioned above in para 1.6 on account of under invoicing of sale price. Accordingly it was pleaded that based on law of probabilities the assessee must also have under-invoiced the sale price in respect of machinery sold and mentioned in para above and as such the Assessing Officer was fully justified in making the addition on account of under-invoicing of sale price in respect of all machineries mentioned in the assessment order. It was also pleaded that Shri H.A. Patel, Technical Executive of the assessee firm has admitted that under-in....
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....ized from the residence of Shri Ashwin B. Patel and Shri N.B. Patel inventorised at Sr. No. 10 of Annexure A-1, the assessee received Rs. 3 lakhs from M/s York Fashion/Fabrics. As per diary seized from residence of Shri N.B. Patel written in the handwriting of Mrs. Maltiben wife of Shri N.B. Patel, the assessee received Rs. 2 lakhs from M/s Dayaram Printing & Dyeing Mills on 27-12-1993. Further receipt of on money was corroborated by the statement of Shri H.A. Patel, Technical Executive whose statement was recorded under section 131 of the Act on 8-9-1995 at factory premises of B & Bros. Engg. Works wherein he stated that as per proposal of the customers 10 to 30 per cent of the sale price of the machinery was taken in cash and balance by cheque which is decided by Shri Ashwinbhai B. Patel. He also stated that as per his knowledge it was decided in his presence to take cash from M/s York Fashion at Rs. 3 lakhs and with Dayaram Ptg. & Dyeing Mills at Rs. 2 lakhs. Besides this, the Assessing Officer also found that in addition to the above under-invoicing, the assessee was found involved in doing wrong classification of machinery in bills mainly to justify low sale price in books of ....
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....e had categorically stated that he had received cash in respect of number of parties in addition to four parties in which specific quantum of concealment was admitted by him. Though the assessee admitted concealment in respect of other parties but quantum of concealment could not be given only to avoid payment of tax in respect of concealed income during the entire period. In this situation, taking into consideration the statement of Shii H.A. Patel, Technical Executive of the assessee firm and the statement of Shri Ashwin B. Patel as discussed above and other corroborative evidence discussed in para 1.1 to 1.6 of the assessment order, the Assessing Officer has rightly concluded that the assessee had taken cash over actual sale invoice at 20 per cent (i.e., average 10 per cent to 30 per cent) as admitted by Shri H.A. Patel in respect of sales of Stcntcimachines during the block period. Therefore, in my view, the additional concealment of Rs. 55,63,025 (65,40,025 - 9,77,000) has been correctly added as undisclosed income to the total income of the assessee. Hence ground No. (2) of assessee's appeal is rejected. 23. As regards unaccounted income due to under-invoicing of sale of m....
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....recorded in books of account has been exposed by proceedings of search. Various notings in the loose papers, statements of Shri Ashwin B. Patel, Shri H.A. Patel and admission by purchasers referred to in earlier para of this order fully support that the aforesaid income referred to in ground numbers 2 and 3 are assessable as undisclosed income in assessment for Block Period under Chapter XIVB. 26. It may now be imperative to make a useful reference to the judgment of the Hon'ble Supreme Court in the case of H.M. Esufali, H.M. Abdulali to support the conclusion arrived at by the Assessing Officer and confirmed by me that receipt of on money can be validity estimated on the basis of few admitted specific instances of receipt of such on money on sale of four Stenter machines based on the aforesaid material/statements etc. discussed above. The Head Note of the aforesaid judgment of the Hon'ble Supreme Court is reproduced below: "Held, that the reassessments were valid. From the circumstances that the assessee had dealings outside the accounts of the value of Rs. 13,171.28 for 19 days, it was open to the officer to infer that the assessee had large-scale dealings outside the accou....
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....ord by the Assessing Officer that the assessee has in fact received any "on money" over and above the invoice price in relation to the transactions with various parties, is correct, OR the view of the Judicial Member that the disputed additions made by the Assessing Officer on account of under-invoicing of Stenter machines to the extent of Rs. 55,63,025 and under-invoicing of machines other than Stenter machines to the extent of Rs. 13,36,982 is required to be sustained on the basis of statement of Shri H.A. Patel, an employee called 'Technical Executive' with the assessee, that the assessee was charging "on money" varying from 10 pct cent to 30 per cent in respect of every machinery sold by it, is justified. ORDER UNDER SECTION 255(4) OF I.T. ACT, 1961 As there was difference of opinion between the two members who heard the appeal in IT(SS)A No. 2/'Ahd./1999 block period 1-4-1985 to 8-9-1995 in the case of M/s B & Brothers Engineering Works v. The Deputy Commissioner of Income-tax, Hon'ble Accountant Member framed difference of opinion under section 255(4) of the I.T. Act, 1961. 1 find that all the points raised in my dissenting order have not been incorporated in the ....
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.... Per Shri R.M. Mehta, Vice President.--This is a reference under section 255(4) of the I.T. Act, 1961 pursuant to a difference of opinion between the ld. Members constituting the Division Bench. Both the ld. Members have dissented on two issues and I must at the outset mention that both of them have proposed separate questions as would be apparent from the reproduction herein under but in as much as these pertain to two additions made by the Assessing Officer in the course of the block assessment, I need not say anything more: QUESTIONS PROPOSED BY THE ACCOUNTANT MEMBER Q. Whether in the facts and circumstances of the case, the view of the Accountant Member that no addition on account of alleged undisclosed income due to alleged under-invoicing of Stenter machinery to the extent of Rs. 55,63,025 and alleged undisclosed income due to under-invoicing of machinery other than Stenter machinery to the extent of Rs. 13,36,982 made by the Assessing Officer under Chapter XIVB cannot be sustained in absence of any specific material brought on record by the Assessing Officer that the assessee has in fact received any "on money" over and above the invoice price in relation to the tran....
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.... operation under section 133A was also carried out at the business premises of the firm as also its sister concern viz. M/s B. & Brothers -Machinery Manufacturing Private Limited. The Authorized Officer recorded the statement of Shri Ashwin B. Patel, the partner of the firm on 8-9-1995. 3. During the subsequent assessment proceedings, the Assessing Officer on the basis of the statement of Shri Ashwin B. Patel, Partner as also of one Shri H.A. Patel, Technical Executive of the assessee firm took the view that the firm had earned huge unaccounted income due to under-invoicing of sale price of machineries as also the unaccounted sale of machinery and parts, scrap and unaccounted purchase of machinery parts. In the present reference, I am apparently concerned with the additions pertaining to the first item i.e., under-invoicing of sale price of machineries. 4. The Assessing Officer recorded a finding in the assessment order to the effect that Shri Ashwin B. Patel had admitted under-invoicing of a sum of Rs. 9.50 lakhs in respect of the following four parties: M/s Anjani Synthetics Rs....
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....recorded in the books of account. It was emphasized that Shri Ashwin B. Patel had stated before the Assessing Officer that he would have to verify the relevant files, which were found during the course of search to indicate as to whether sale price mentioned in the invoice was lower than the sale consideration actually received. The further submission was to the effect that Shri H.A. Patel was working as a Technical Executive w.e.f. 11-11-1991 and subsequently as Sales Marketing Executive for the last one year prior to the date of search. The plea in other words was that the details of sales effected by the assessee prior to the said period could not be in the know of Shri H.A. Patel and the Assessing Officer therefore was not justified in opining that the assessee had under-invoiced the sales effected by the assessee to all the parties mentioned in the assessment order at a uniform rate of 20 per cent. 9. The further submission on the part, of the assessee before the Division Bench was that the Assessing Officer has not been able to find out from the purchasers as to whether they had paid any extra money in cash over and above the invoice price charged by the assessee from the ....
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....ideration as noted in the invoice. The ld. Accountant Member further observed that all the respective purchasers were assessed to tax and the Assessing Officer had not brought any material on record other than the statement of Shri H.A. Patel the so-called Technical Executive to indicate that the assessee had in fact received any "on money" in respect of the transactions of sale of machineries to such parties. 12. According to the ld. Accountant Member Chapter XIV-B dealt with a special procedure for the assessment of search cases and was a code in itself for the computation of undisclosed income. It was the view of the ld. Accountant Member that whereas provisions of sections 68, 69, 69A, 69B and 69C could be applied but it was nowhere provided in the said chapter that provisions of section 145 would be applicable in computing the undisclosed income in block assessment. The view in other words was that undisclosed income could not be computed/ added on estimate basis by invoking the provisions of section 145 on the basis of a vague statement made by one of the employees of the assessee firm. According to ld. Accountant Member in case the Assessing Officer was not satisfied with....
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....e I.T. Act on 8-9-1995 at the factory premises also proved that during the negotiation of the bill price, the amount to be paid by cheque and the amount to be paid by cash were also finalized and further as per the proposal of the customers, 10 per cent to 30 per cent of the sale price of the machinery was taken in cash and the balance by cheque; (vii) That the receipt of Rs. 9.77 lakhs was the unaccounted income of the assessee as a result of under-invoicing of sales to four parties and that it stood proved not only from the material available on record but also as a result of confessional statement made by Shri Ashwin B. Patel as also the confessional statement made by Shri H.A. Patel, Technical Executive of the assessee firm; (viii) That the Assessing Officer had found that the assessee had under invoiced the sale price of every other machinery supplied by it in addition to what was originally admitted during the course of search action. A reference was also made to the deposition under oath of Shri H.A. Patel, Technical Executive of the firm; (ix) It was found by the Department during the course of the search that the assessee was making wrong classification of the mac....
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....uestion Nos. 46, 47 and 48 of the statement recorded on 9-9-1995 of Shri Ashwin B. Patel where he is purported to have stated that he had received cash from numerous other parties in addition to the four parties in respect of which specific receipts in cash outside the books of account had been admitted. On the basis of the aforesaid observations/line of reasoning the ld. Judicial Member confirmed the addition of Rs. 55,63,255 and coming to the other addition of Rs. 13,36,982 in respect of sales of machinery other than Stenter machines, the ld. Judicial Member once again referred to the earlier facts including the statement of Shri H.A. Patel, Technical Executive and the relevant questions being No. 11 of the statement recorded on 9-9-1995 and wherein he had categorically stated that 10 per cent to 30 per cent of the sale price was taken in cash and the balance was taken by cheque. A reference was once again made to Question Nos. 46, 47 and 48 of the statement recorded on 9-9-1995. The ld. Judicial Member thereafter proceeded to confirm the addition of Rs. 13,36,982. Coming to the decisions relied upon by both the parties, the ld. Judicial Member proceeded to distinguish the judgme....
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..... but the outcome had not been mentioned in the assessment order probably because no one had confirmed paying cash over and above the invoice value; (vii) The additions had proceeded on presumptions and surmises without bringing on record any evidence, which would show that the assessee had in fact received cash over and above the sale price. That even the seized material did not indicate any under-invoicing; (viii) It was an accepted proposition of law that addition on estimate basis could not be made in a block assessment; (ix) That even the calculation at page 7 of the assessment order was arbitrary and based on presumptions since the multiplier of 1.25 was a hypothetical figure; (x) That in respect of the addition pertaining to machines other than Stenter machines, the submission of Shri Hiralal Patel could not be relied upon since he had not said anything pertaining to receipt of extra cash in respect of the sale of machineries other than Stenter machines; (xi) As in the case of Stenter machines, this addition was also on estimate basis whereas it was an accepted position of law that the Assessing Officer was to restrict himself to the evidence/material found as....
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.... v. Asstt. CIT [2000] 66 TTJ (All.) 508/75 TTJ 185 and D.N. Kamani (HUF) v. Dy. CIT [1999] 70 ITD 77 (Pat.) (TM). 18. I may mention that during the course of the hearing of this reference, the ld. counsel for the appellant also placed on record an order dated 19-12-2000 passed by the Additional Commissioner (Central Excise), Ahmedabad--I am reading through the said order, the ld. counsel contended that no case was made out vis-a-vis the allegation of the Income-tax Department that the assessee had received "on money" in respect of the sale of Stenter machinery as also machinery other than the Stenter machinery. I may also mention that during the course of hearing, the ld. counsel made an alternative submission pertaining to the estimate made by the Assessing Officer in a sum of Rs. 65.40 lakhs and his submission was that four items in which under-invoicing had been admitted to the tune of Rs. 9.77 lakhs were to be excluded. I must categorically state that ultimately this alternative submission was not pressed and nothing more is required to be said on it. 19. The ld DR on behalf of the Department vehemently supported the view expressed by the ld. Judicial Member and in as muc....
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....essee and had also been proved by the enquiries conducted by the Assessing Officer from the buyers of the machineries; (3) In respect of the remaining parties including those to whom machines other than Stenter machines had been sold, the Assessing Officer had not been able to prove that the purchasers of such machines had paid "on money" in cash to the assessee over and above the invoice price; (4) There was correspondence between the Assessing Officer and various parties other than the four in respect of which "on money" receipts had been confirmed and such parties had in replies to the Assessing Officer furnished under section 133(6) of the I.T. Act, 1961 stated that they had paid only the amount mentioned in the invoice; (5) All the purchasers aforesaid were assessed to tax and copies of the correspondence between the parties had been placed on the paper book; (6) The Assessing Officer had not brought any material on record except the submission of one Shri Hiralal Patel, the so-called Technical Executive to indicate that the assessee had in fact received "on money" in respect of transaction of sale of machinery to various parties other than those in respect of whic....