TMI Blog2014 (7) TMI 1119X X X X Extracts X X X X X X X X Extracts X X X X ..... lusion that there was unexplained sales or purchases made by the assessee. It was only on the basis of the statement of Shri Harmesh Arora before the excise authorities in which the Tribunal had noticed various contradictions and gaps. In the facts and circumstances, on the basis of the statement made by Shri Harmesh Arora alone before the excise authorities which did not find corroboration from any other material, no addition could have been validly made Tribunal had rightly come to the conclusion that there was no unexplained income on account of sales or purchases of material. - Decided in favour of the assessee. - I. T. A. Nos 360, 362 of 2011 and 167, 246, 299, 300 and 301 of 2012. - - - Dated:- 21-7-2014 - MR. AJAY KUMAR MITTAL AND MR. JASPAL SINGH, JJ. For the Appellant : Mr. Rajesh Katoch, Advocate ORDER Ajay Kumar Mittal J.- 1. This order shall dispose of a bunch of seven appeals bearing I. T. A. Nos. 360, 362 of 2011, 167, 246, 299, 300 and 301 of 2012 as, according to the learned counsel for the appellant, similar issue arises in these appeals. For brevity, the facts are being taken from I. T. A. No. 360 of 2011. 2. This appeal has been filed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is of the information received from the Central Excise Department, the Commissioner of Income-tax ( the CIT ), vide order dated November 20, 2008 (annexure A-II), passed under section 263 of the Act held the order of the Assessing Officer to be erroneous and prejudicial to the interests of the Revenue. The Commissioner of Income-tax set aside the assessment order to be framed de novo on the issue of the installed capacity of the furnace, unrecorded purchase of raw material, production of ingots and sale of the same out of books of account. The assessment de novo was to be framed after taking into consideration the statement of Shri Harmesh Arora, Director before the Central excise authorities who admitted the capacity of furnace to be 5 metric tonnes instead of 4 metric tonnes per heat vide which it was concluded that the assessee had produced 624 metric tonnes of non-alloys ingots from December, 2003, to March 24, 2004, on the basis of the capacity of furnace but not recorded in the books of account. In compliance with the order dated November 20, 2008 (annexure A-II), the Assessing Officer, vide order dated December 31, 2009 (annexure A-III) assessed the income of the assessee at ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d that there was concealment of income inasmuch as the assessee had utilised the capacity of 5 metric tonnes instead of 4 metric tonnes per hour and, therefore, the Tribunal was in error in cancelling the order under section 263 of the Act and also in deleting the additions made by the Assessing Officer. 6. After hearing learned counsel for the Revenue, we do not find any merit in the appeal. 7. The following issues arise in the appeals for consideration of this court : (a) Whether the Revenue was justified in making an addition on account of unexplained sales and unexplained purchases in the facts and in the circumstances of the present case ? (b) Whether the action of the Commissioner of Income-tax ('the CIT') under section 263 of the Act was valid as the assessment order passed was erroneous and prejudicial to the interests of the Revenue ? 8. The Tribunal had accepted that there was no unexplained income on account of either sales or purchases. The addition was sought to be made by the Income-tax Department on the basis of statement made by Shri Harmesh Arora before the Central excise authorities in the context of levy ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of income and, thereafter, the Income-tax authorities have to independently finalise the reassessment irrespective of the final view in the excise proceedings. We find that the Assessing Officer has reassessed the income and made the impugned additions solely on the basis of the information received by him from the Central Excise Department without bringing any material on record to justify or support the additions. The impugned additions are liable to be cancelled on this ground alone and are, accordingly, cancelled. 19. Without prejudice to the aforesaid materials available on record do not establish that the melting capacity of the furnace was 5 metric tonnes or increased to 5 metric tonnes from 4 metric tonnes. After careful consideration of the materials available on record, the learned Commissioner of Income-tax (Appeals) has held as under : 'Further, as brought out above on a subsequent surprise inspection by the excise authorities, the capacity of the appellant's unit has been stated to be of 4 metric tonnes only. Therefore, the same Department is certifying that the installed capacity of the furnace is of 4 metric tonnes only. Further, as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y, wattage, etc. No detail has been placed before us to show that the technical specifications of the furnace found at the time of visit by the Central excise authorities on March 25, 2004, were different from the one procured by the assessee in 2002. Neither the Assessing Officer made the inquiry in this behalf at the assessment stage nor preferred to do so when he was given the opportunity by the Commissioner of Income-tax (Appeals) to do so. (iii) Report dated May 2, 2007, given by Er. J. S. Oberoi, chartered engineer/valuer, shows that he visited the factory of the assessee and found that the furnace of 4 tonnes, which was procured in 2002, was being used by the assessee. After noting the technical specifications of the furnace, the weight of the ingots produced, the electricity load sanctioned, he opined that the average melting capacity of the furnace was 4 metric tonnes. No material has been placed before us to rebut the facts reported or the opinion expressed by the chartered engineer. (iv) Suppressed or unaccounted production was worked out by the Central excise authorities for the period December, 2003, to March 25, 2004, on the basis that the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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