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2015 (6) TMI 54 - ITAT DELHI

2015 (6) TMI 54 - ITAT DELHI - TMI - Unexplained stock of finished goods - CIT(A) deleted the addition on the basis that the books of account and documents pertaining to survey were not examined by the Assessing Officer as per directions of the ITAT and has simply followed the findings made in the assessment order which was passed under sec. 147/143(3) - Held that:- The Learned CIT(Appeals) has also reproduced his predecessorís order wherein it has been mentioned that the books of account were p .....

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cer; complete books of account and vouchers for purchases, sales and expenses were maintained; the purchases were made from the dealers registered with the sales-tax department and they were paid for by account payee cheques and the appellantís bank account corroborated this, etc. In absence of conduction of its independent investigation by the Assessing Officer in the matters, as directed by the ITAT, we are thus of the view that the Learned CIT(Appeals) was justified in deleting the additions .....

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, the Learned CIT(Appeals) has erred in deleting the addition of ₹ 1,14,95,416 made on account of unexplained stock of finished goods. 2.1 The Learned CIT(Appeals) ignored the finding recorded by the A.O. and the fact that the assessee did not file the requisite evidence during the course of reassessment proceeding despite having been provided with ample opportunities. 3. On the facts and in the circumstances of the case and in law, the Learned CIT(Appeals) has erred in deleting the additi .....

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be reserved for bogus purchases. 4.1The Learned CIT(Appeals) ignored the finding recorded by the A.O. and the fact that the assessee did not file the requisite evidence during the course of reassessment proceedings despite having been provided with ample opportunities. 2. Heard and considered the arguments advanced by the parties in view of orders of the authorities below, material available on record and the decisions relied upon. 3. Ground No.1 is general in nature, hence, does not need indepe .....

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med under sec. 147/143(3) of the Act on 31.3.2003 determining the total income at ₹ 1,64,21,220 after making the following additions of : 1. ₹ 1,14,95,416 on account of excess unexplained finished goods/raw-material; 2. ₹ 28,80,609 on account of shortage of finished goods/raw material, and 3. ₹ 19,88,497 on account of modvat claimed on bogus purchases. 5. Aggrieved with the assessment order, the assessee preferred appeal before the Learned CIT(Appeals) and the Learned CIT .....

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n account of shortage of finished goods/rawmaterial and ₹ 19,88,497 on account of modvat claimed on bogus purchases. …………. 16. We have carefully considered the entire material on record and the rival submissions. On going through the order of the Assessing Officer, it is found that he has not examined the material collected during survey conducted by the Income-tax Department. Similarly the Assessing Officer has himself not made independent inquiry and mostly pl .....

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ement Commission have not been finalized. It was also informed that the proceedings initiated on account of search conducted by the Central Excise Department have also not been finalized. The contention of the Learned AR was that at the time of survey, entire stock was available but the Assessing Officer has not considered the same. 18. In view of the above facts and particularly on account of the fact that in this matter while passing order under sec. 143/148 of the Act, the Assessing Officer h .....

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our opinion, it will be proper if the matter is properly examined and all relevant aspects relating to various additions made and deleted are thoroughly considered. In fact, the at the time of hearing, both the parties agreed to such a course. Hence we set aside the findings of the Learned CIT(Appeals) in deleting the additions and restore the matter back to the file of the Assessing Officer to decide it afresh after examining the entire relevant material in the light of observations as made ab .....

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pportunity, the assessee did not bother to furnish the required details, books of account along with supported bills and vouchers so as to prove that the findings of the Central Customs &Excise Department with regard to the glaring discrepancies relating to stock inventories were falls. Neither any fresh facts/evidences have been brought on record nor the details called for were furnished. The Assessing Officer was thus justified in repeating the same additions made earlier in the assessment .....

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made on behalf of the assessee before the Learned CIT(Appeals). He submitted further that the details of stock were submitted to the Assessing Officer vide letter dated 17.12.2008 and some details were also submitted on 8.12.2008 but the Assessing Officer has not given any finding on those details and has simply repeated the addition made on earlier occasion in the assessment framed under sec. 147/143(3) of the Act. The Learned AR also referred page No. 116 of the paper book filed on behalf of .....

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orders of the authorities below, order of the ITAT and material available on record, we find substance in the grievance of the assessee that the Assessing Officer has not made any independent verification of the relevant material in the light of the observations made by the ITAT. The ITAT had noted that the Assessing Officer while passing the order under sec. 143(3)/148 of the Act has himself not made any effective investigation in relation to excess stock or short stock and in relation to other .....

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c. 147/143(3) of the Act on 31.3.2003, the Assessing Officer had noted that in the reassessment proceedings, the assessee has filed part of the books, which have been duly considered by him. Thus, the Assessing Officer while passing the order on 31.3.2003, and the assessment order dated 30.12.2008 in question has not mentioned as to what were those details filed by the assessee stated to be in part and what he had found after examining those details. The Learned CIT(Appeals) has reproduced the f .....

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id not find any irregularity in stock. Hence addition made by the A.O. on the findings of Central Excise Department is totally illegal. There was also neither shortage of finished goods nor shortage of raw material on the date of search or even during the year under consideration. Had there been any shortage of finished goods or raw material then profit on the short goods would have been the income of the company instead of whole amount of shortage. We wish to submit that the appellant company h .....

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