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2022 (9) TMI 38 - GUJARAT HIGH COURTUndisclosed profit and unaccounted investment in undervalued goods - survey action under section 133A - CIT-A deleted the addition also confirmed by ITAT - AO has made addition based on the information received from DRI - HELD THAT:- AO has not mentioned any independent investigation carried out by him which leads to finding of making addition and further the Assessing Officer simply relied upon the information received from the Customs authority regarding the search action conducted by the officers of the DRI. It is held by both the authorities below that the Assessing Officer has committed an error by solely relying on information received from the customs authority and treated the undervaluation of the imported goods as unaccounted investment and thereby making peak addition on account of the same. Assessing Officer also made addition of Gross Profit by taking such unaccounted purchase as sale made by the assessee in cash without making any independent inquiry. It was observed by both the authorities that the Assessing Officer has solely relied upon the information from the Customs authority and statement of Pragnesh Jariwala - Director of the assessee-company made before DRI which was retracted later on. Tribunal has also considered the fact of the appeal being allowed by the Custom, Excise & Service Tax Appellate Tribunal, Mumbai Bench in case of assessee holding that the allegation of undervaluation of imported goods was not established and therefore, directed the Customs Authority to grant the refund of customs duty collected by them. It was observed by the Tribunal that when the very basis on which the addition was made by the Assessing Officer stands deleted by the CESTAT in appeal preferred by the assessee, the addition based on their information does not survive and hence, the CIT(Appeals) has rightly deleted the addition on account of unaccounted investment and Gross profit. No substantial question of law. - Decided against revenue.
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