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2020 (3) TMI 594 - ITAT JAIPURUndisclosed production and sale - Addition based on search action carried out by DGCEI conducted at the assessee’s factory premises wherein it was found that the assessee was involved in clandestine manufacture and clearance of finish goods - HELD THAT:- Findings of CESTAT where the whole demand relating to clandestine manufacture and clearance of finished goods has been set-side, the findings of the AO which are solely based on the proceedings under Central Excise therefore doesn’t survive and the consequential addition made by him are liable to be deleted. At the same time, the Revenue would be at liberty to take action as per law where the matter so decided by the CESTAT is appealed against by the Revenue and is decided in its favour by the Courts. As decided in case of M/s Natani Rolling Mills Pvt. Ltd. [2019 (9) TMI 1336 - ITAT JAIPUR] whole case of the Revenue regarding undisclosed sales rest on the orders of the Central Excise authorities which has since been set-aside by the CESTAT vide its order dated 7.02.19. In view of the same, the additions so made by the Assessing officer towards gross profit on unrecorded sales and unaccounted purchases is directed to be deleted. At the same time, the Revenue would be at liberty to take action as per law where the matter so decided by the CESTAT is appealed against by the Revenue and is decided in its favour. - Decided in favour of assessee.
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