TMI Blog2023 (3) TMI 771X X X X Extracts X X X X X X X X Extracts X X X X ..... t perspective and there was no material possessed by the Revenue, which can demonstrate unaccounted sales made by the assessee in both the years. The additions have been rightly deleted by the ld. 1st Appellate Authority and we do not find any merit in these appeals, these are dismissed. - I.T.A. No. 106/PAT/2020 And I.T.A. No. 114/PAT/2020 - - - Dated:- 15-3-2023 - Shri Rajpal Yadav, Vice-President (KZ) And Shri Rajesh Kumar, Accountant Member For the Revenue : Smt. Rinku Singh, CIT (D.R.) For the Assessee : Shri A.K. Ras togi, Sr. Advocate ORDER PER RAJPAL YADAV, VICE-PRESIDENT (KZ):- The present two appeals are directed at the instance of Revenue against the separate orders of ld. Commissioner of Income Tax (Appeals), Patna-1 dated 13.08.2020 passed for A.Ys. 2008-09 and 2009-10. 2. The Revenue has taken three grounds of appeal in both the assessment years. However, its grievances revolve around a single issue, namely ld. CIT(Appeals) has erred in deleting the Gross Profit addition of Rs.3,79,19,183/- and Rs.39,42,318/- respectively in A.Ys. 2008-09 and 2009-10. 3. The facts on all vital points are identical therefore, for the facility of refe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce Act unless the originals are produced for verification / inspection. This legal proposition has recently been propounded by the Apex Court in the case reported in (2011) 4 SCC 240- H. Siddiqui Vs A. Ramalingam .... (3) Page nos. 9 to 51 of the bundles (photocopies given on 23.12.2011) - Year (as presumed by the department - F.Y.20007-08) has not been suffixed after the dates in any pages and, therefore, the whole allegation of unaccounted sale and GP thereon for A.Y.2008-09 is wholly misconceived and contrary to the facts on record. Kindly provide us the material / evidence on the basis of which the presumption has been raised of it belonging to F.Y.2007-08 corresponding to A.Y.2008- 09. As stated above, year (2007/2008) has not suffixed after the dates, it would be wholly illegal to read something which does not exist and / or found written on the seized material i.e. year and to charge the petitioner with the liability of tax without there being any evidence or material. (4) There has been an allegation of sale of 29652.800 MT as against the installed capacity of 7000 MT per annum and in support photocopy of certificate, issued by District Industries Centre dated 12 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ama of Excise Authorities it is evident that there is no charge of evasion of Central Excise Duty. (6) It is respectfully submitted that the seized material do not indicate any evasion of Excise Duty by the petitioner rather the seized material supports the case of the petitioner that no discrepancy/evasion whatsoever was found or detected in course of search or thereafter. The Excise Authorities do not possess any material even to allege any discrepancy an/or evasion of Excise Duty by the petitioner and, therefore, the Excise Authrories even after a lapse of 32 months from the date of search have not been able to point out any discrepancy/evasion on the basis of the seized material or otherwise and have not issued any show cause notice alleging any evasion of Duty. In the circumstances, it is requested that your honour would be kind enough to accevt the returned income as the authority who has searched the premises on 25/03/2009 has not drawn any adverse inference so far on the basis of the material seized lying in-their possession for the last more than 32 months. 7. The above reply of the A.R. is considered. It is already on record that although copy of seized mat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e I.T. Act 1961. An addition of Rs.3,79,19,183 is made on account of profit on unaccounted sale in the F.Y. 2007-08. The same is to be added in the total income of the assessee concern. 4. On same analogy, he made the addition of Rs.39,42,318/- in A.Y. 2009-10. The ld. Assessing Officer has applied Gross Profit on unaccounted sales at 3.36%. 5. Dissatisfied with the assessment orders, assessee has filed appeals in both the years. In A.Y. 2008-09, it has challenged reopening of assessment along with challenging the additions on merit. The ld. CIT(Appeals) upheld the reopening and rejected this ground of appeal, however, concurred with the submissions of the assessee on merit and deleted the additions in both the years. 6. As far as reopening part is concerned, no Cross Objection has been filed by the assessee before the Tribunal, hence that aspect attains finality. On merit, the ld. CIT(Appeals) recorded a well reasoned finding and it is worth to note:- I have gone through the assessment order, written submission and remand report as well as rejoinder of the remand report submitted by the A.R. of the appellant that a search seizure operation was conducted by DGCEI, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd was found. (7) The books of accounts such as cash book, ledger, stock register, purchase and sale registers were found written upto 24.03.2009. (8) The statement of the two employees have been recorded by the A.O. on 24.05.2017 wherein they have categorically stated that the statement given by them as to the nature of entries in the seized material were as per dictates of the authorities who have threatened for putting them behind bar in case they failed to follow their dictates. (9) The employees in their statement before the A.O. have category explained the nature and purpose of entries in the very seized materials to be the record of loading unloading, internal movement of goods, etc. (10) The Central Excise Authorities have not proved the charge of unaccounted production and clandestine removal by any independent document such as proof of slae of goods, mode of transportation, payment to transporter, confirmation from the buyers of the goods, receipt of consideration and its utilization, except on relying on the statement of the employees on the seized materials which as per settled proposition of law is only the starting point of investigation. (1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ur dated 31.08.2009, wherein he has relied on the confessional statement of the two employees on the seized material, without there being any supporting evidence of production of higher quantity than the installed capacity and higher consumption of electricity for producing such higher quantity. It is a case where the A.O. has made addition of GP by relying on oral statement recorded by Central Excise Authorities on the seized materials. Undoubtedly, confessional statement is extremely important piece of evidence but it cannot be said to be conclusive and the same is required to be corroborated from other material/ evidence and in absence of any circumstantial evidence, the same cannot be made sole basis for drawing adverse inference. In the instant case, there is no other corroborative or circumstantial evidence to support the determination of sales and addition of GP by the A.O. The undisputed fact on record of production capacity, consumption of electricity which is commensurate to disclose/ production, absence of any discrepancy in stock and cash in hand as on the day of search i.e. 25.03.2009 and the fact that books of accounts were found written upto the date i.e. upto 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce drawn by him. The second reasoning given by him is that the assessee has been receiving materials from its sister concern. If that be so, how it will become unaccounted production of the assessee whose sale has been made. The receipt of material if to be treated as a gospel truth can be for number of reasons. On page no. 37 of the paper book, ld. 1st Appellate Authority has made reference of two statements namely Mr. Sobhagmal Jain and Mr. Sanjay Kumar Sinha. He also made reference to the statements of these persons in other parts also. The statements of these employees have been recorded during the remand proceedings also and in these statements, it was demonstrated the background how their statements were taken and it was also explained how loading and unloading details are there, which some of them relates to taken the goods towards kilns. 9. It is pertinent to note that the actual sale declared by the assessee in A.Y. 2008-09 was 6901.13 M.T. This sale has been assumed by the ld. Assessing Officer at 30015.124 M.T. The assessee has declared production of 6744.420 M.T. The production capacity of the assessee-company in the relevant year was 7000 M.T. per annum and it was e ..... X X X X Extracts X X X X X X X X Extracts X X X X
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