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2015 (5) TMI 1192 - AT - Income TaxAddition on account of suppressed sales and profit - material collected by Excise Department relied to make addition - CIT-A restricted of profit on suppressed sale @ 9% as against 25% as determined by AO - HELD THAT:- It is undisputed that Income Tax proceedings are arising from the rate of Excise Department and material collected during search proceedings culminated into issuance of show cause notice for recovery of unpaid Excise Department and penalty in given cases. Without prejudice to the finding of Custom, Excise Department, question before us is whether on mere show cause notice issued by Excise Department can be made basis of addition for the purpose of Income Tax Act. Income Tax Officer has utilized the material collected by Excise Department including statement of petitioner and other relevant persons as discussed above and on the basis of same. He would have been justified in making addition for the purpose of Income Tax Department in present case by independent enquiries by concern Income Tax Authorities. No such exercise was undertaken by Income Tax Department at all. AO has simply relied on show cause notice issued by Excise Department. Nowhere did he conclude that there was a large scale removal of goods without payment of tax under Income Tax Act. Merely because Excise Department issued show cause notice, that alone cannot be a ground to assume and conclude that there was evasion of Income Tax Act as well. It is not even the case of Department that such show cause notice proceeding has culminated into any final order against petitioner. This makes it clear that concern ITOhas acted upon in mechanical manner and passed order of assessment merely on premises of Excise Department issued show cause notice alleging large scale removal of goods - See FUTURA CERAMICS PVT. LIMITED VERSUS STATE OF GUJARAT THRO SECRETARY [2013 (11) TMI 1752 - GUJARAT HIGH COURT] - Decided in favour of assessee.
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