TMI Blog2013 (6) TMI 666X X X X Extracts X X X X X X X X Extracts X X X X ..... a. AO made the estimated GP addition by working out the unaccounted sale whereas in case of C & F Agent the income is only the commission as agreed between the parties and not any profit margin from purchase and sale because the purchase is made by the traders and dealers and the sale is made by the manufacturer. There cannot be any purchase and sale by the C & F Agent but it facilitates the purchase and sale between the Trader/Dealer and the manufacturer. AO adopted the GP rate admitted by the Assessee on its business of Trade which is not permitted to be adopted for the income being commission of C & F Agent. AO worked out unaccounted sale for 10 months on the reason that the search was conducted by the Sales Tax Department on 20th January. Therefore the 10 months sale was worked out from the April 2007 to January. 2008. But it is material to note that the search was conducted on 20th January.2009 and not on 20th Janyary.2008, therefore the record found during the search cannot be said to be upto to 20th January.2008 so that the unaccounted sale on the basis of that record can be worked out upto 20th January.2008. Also when the Sales Tax Department who carried out the sear ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rose to the appellant and, therefore, was not assessable in the hands of the appellant. iv) iv) On the facts and in the circumstances of the case and in law, the learned C.l.T.(A) erred in confirming the addition of Rs.2,97,36,067/- being estimated G.P. on alleged estimated sale of Rs.38,00,31,758/- ignoring the facts brought on record by the appellant to show that the A.O. has committed a basic mistake in calculating the quantity of Gutkha alleged to be sold by the appellant. v) v) On the facts and in the circumstances of the case and in law, the learned C.l.T.(A) erred in rejecting the appellant's submission that the paper containing entries of Rs.10,19,182/- as alleged cash payments did not belong to the appellant as the paper did neither bear the signature of the appellant nor the name of the appellant on the said paper. vi) Without prejudice to the aforesaid grounds of appeal and without admitting the fact that the appellant himself had carried out business in Gutkha outside the books of accounts, on the facts and in the circumstances of the case and in law, the CIT(A) erred in not accepting the appellant's submission that the appellant had stated in the statement on oat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .65% for computing the GP of the Assessee on unaccounted sale at Rs. Rs. 2,97,36,067/- . The Said GP rate of 9.65% was adopted by the Assessing Officer being declared by the Assessee as per the books of accounts for the year under consideration. Accordingly the Assessing Officer made an addition of Rs. 2,97,36,067/- based on the estimated GP on unaccounted sale and added the same to the total income of the Assessee. On appeal before the CIT(A) the Assessee mainly contended that the Assessing Officer made an addition on the basis of the statement of the Assessee record subsequent to the survey which was retracted by the Assessee by filing two affidavits immediately after two days of the statement. Thus the Assessee contended that in the absence of material, the addition made merely on the basis of statement is not sustainable. The Assessee also raised the objection that the alleged record was not given to the Assessee despite specific request /demand and further the alleged seized record by the Sales Tax Department does not belong to the Assessee as there was no panchnaa showing the seizure of the said record from the place of the assessee. The Ld. CIT(A) did not accept the contenti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tries. The CIT(A) in the case of Godhwat Industries has deleted the addition made by the Assessing Officer on account of unaccounted sales. He has filed the copies of the statement of the assessee recorded by the Assessing Officer and cross- examined by the representative of Godhwat Industries in the assessment proceedings of the Company and submitted that the addition made on the basis of the statement of the Assessee has been deleted by the CIT(A) in case of Godhwat Industries. He has filed the copy of the order of the CIT(A) in the case of Godhwat Industries. The Ld. AR of the Assessee has referred the show cause notice of Sales Tax Department dated 12.03.2009 placed at page No.59 of the Paper Book and submitted that the Sales Tax Department processed to taxed the unaccounted sale of Rs. 2.33 Crores for the assessment year 2009-10. The Ld. AR of the Assessee thus submitted that the Sales Tax Department did not proposed to make any addition on account of unaccounted sales for the assessment year 2008-09 then based on the alleged material there is no question of any addition under the Income Tax Act. He has further submitted that the unaccounted sale to be taxed by the Sales Tax D ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt to which the Assessee has given the specific reply in the statement recorded under section 131. Therefore the said statement is a good evidence being an admission by the Assessee. He has further submitted that mainly because Sales Tax Department did not make any addition would not affect the assessment under Income Tax Act because it cannot be concluded that no addition can be made in the Income Tax Assessment, if a corresponding addition has not been made by the Sales Tax Department. The record does exist and it may not be in the possession of the Assessing Officer as it was seized by the Sales Tax Department. The addition made on the basis of search record is proper and justified. The evidence was gathered from the Sales Tax Department and it is immaterial whether the Sales Tax Department has seized the material by following the proper procedure or not. He has relied upon an orders of the Assessing Officer and CIT(A). 8. We have considered the rival submissions as well as the relevant material on record the Assessing Officer worked out the unaccounted sale of Gutkha and Pan Masala purportedly on the basis of the details contained in the loose papers seized by the Sales Tax D ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... out unaccounted sale for 10 months ostensibly on the reason that the search was conducted by the Sales Tax Department on 20th January. Therefore the 10 months sale was worked out from the April 2007 to January. 2008. But it is material to note that the search was conducted on 20th January.2009 and not on 20th Janyary.2008, therefore the record found during the search cannot be said to be upto to 20th January.2008 so that the unaccounted sale on the basis of that record can be worked out upto 20th January.2008. It appears that the Assessing Officer took this clue of 10 months from the show case notice to the Sales Tax Department wherein the proposed unaccounted sale was to be taxed for a 10 months w.e.f. 01.04.2008 to 31. January.2009. For ready reference we reproduced the show cause notice issued by the Sales Tax Department as under:- Officer of the Dy. Commr. Of Sales Tax (INV) Thane 4th Floor, Collector's Officer Comp. Above Treasury Officer, Thane (W) To, M/s Shri Ambika Enterprises 110, Narayan Udyog Bhavan, Lalbaug Industrial Estate, Ganeshnagar, Lalbaug, Mumbai-400 012 No. DCST/INV/THN/INV No.41/08-09/B-28 Dt.12/03/2009 Sub:- Show Cause Notice in the cas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s no question of seized material to be considered only upto 20th January.2008. This clearly shows a serious lacuna in the assessment order and the casual approach of the Assessing Officer without application of mind. It creates a serious doubt on the action of the Assessing Officer because on the basis of the same seized material the Sales Tax Department has made an addition for unaccounted sale of Rs. 2.33 Crores to be taxed for the assessment year 2009-10, then how on the basis of same material the Assessing Officer has made the addition for the assessment year 2008-09. Keeping in mind that the record in question was seized by the Sales Tax Department and the Income Tax Authorities have requisitioned the same from Sales Tax Department there may be some variation in appreciation of the evidence by different authorities but it cannot be said that one could completely discard the other. Therefore it cannot be two conflicting views on the same evidence so that when it put to the test of sustainability one bound to fail. The primary evidence is with the Sales Tax Department being seized material and the record gathered by the Income Tax Authorities is only secondary evidence as the or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... een signed by, or to be in the handwriting of, any particular person, are in that person's handwriting, and in the case of a document stamped, executed or attested, that it was duly stamped and executed or attested by the person by whom it purports to have been so executed or attested.] [(2) Where any books of account, other documents or assets have been delivered to the requisitioning officer in accordance with the provisions of section 132A, then, the provisions of sub-section (1) shall apply as if such books of account, other documents or assets which had been taken into custody from the person referred to in clause (a) or clause (b) or clause (c), as the case may be, of sub-section (1) of section 132A, had been found in the possession or control of that person in the course of a search under section 132.] It is prerequisite condition for invoking the presumption under section 292 C that the Books of Accounts, other document or assets are either found in the possession or control of any person in the course of search under section 132 or survey under section 133A or requisitioned in the course of search under section 132. In the case of the Assessee before us there is no sea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee and the Revenue has also not produce the same before us, therefore we are unable to approve the view of the authorities below which is contradictory to the view of the Sales Tax Department. 14. In view of the above discussion and in the fact and circumstances of the case we set-aside the orders of the authorities below qua this issue and delete the addition of estimated GP towards unaccounted sales. 15. Ground No.(v) regarding the addition on account of cash payment on the basis of the seized material in the search by Sales Tax Department. The Assessing Officer has made an addition of Rs. 10,19,182/- treating the same as undisclosed income being cash payment as per the documents seized by the Sales Tax Department. The CIT (A) has confirmed the addition made by the Assessing Officer. 16. We have heard the Ld. AR as well as Ld. DR and considered the relevant material on record. Since the addition is made on the basis of the seized material by the Sales Tax Department therefore in view of our finding in respect of the issue of addition on account of unaccounted sale as well as the conflicting view taken by the Sales Tax Authority and Income Tax Authorities on the same e ..... X X X X Extracts X X X X X X X X Extracts X X X X
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