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2015 (6) TMI 874 - ITAT LUCKNOW

2015 (6) TMI 874 - ITAT LUCKNOW - TMI - Revision u/s 263 - as per CIT(A) excess production was made by the assessee - Held that:- No evidence in the form of paper book has been filed in support of the grounds raised by the assessee. We, however, have carefully perused the orders of the authorities below and we find that during the course of search, the search team conducted test run of Pouch Packaging Machine in order to ascertain the production of pouches of Pan Masala and arrived at a conclusi .....

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completing the assessment in order to work out the excess production and sales out of the books of account. Therefore, we are of the view that the ld. Commissioner of Income-tax has rightly held that the assessment orders are erroneous and prejudicial to the interest of the Revenue. - Decided against assessee. - ITA Nos.636 to 642/LKW/2014, ITA Nos.643 to 649/LKW/2014, ITA Nos.650 to 656/LKW/2014 - Dated:- 24-4-2015 - Shri Sunil Kumar Yadav And Shri. A. K. Garodia JJ. For the Appellant : None F .....

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ed late by 70 days, for which application for condonation of delay is filed along with the appeal memo in which reason for delay has been shown that the appeal could not be filed due to the tragedy in the family of the assessee. Having gone through the contents of the application for condonation of delay, we find force therein and we accordingly condone the delay and admit these appeals for hearing. 3. These appeals were listed for hearing on 20.3.2015, but none appeared on behalf of the assesse .....

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preparation for prosecuting the appeals. Accordingly, these appeals were listed for hearing on 20.3.2015 and on this very day, the ld. counsel for the assessee has chosen not to appear before the Tribunal. Since none appeared on behalf of the assessee despite having knowledge of date of hearing, we have no option but to hear the appeals ex-parte in the light of the Instruction issued by the Head Office of the Tribunal that appeal filed against the order passed u/s. 263 of the Act should be heard .....

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he Assessing Officer has correspondingly made additions after taking into account the surrender amount in different assessment years, against which appeals were preferred before the ld. CIT(A) and later on before the Tribunal. 5. The Assessing Officer has not examined the issue with regard to the generation of profits on account of production of Pan Masala out of the books of account. During the course of search, a test run was conducted in order to ascertain the production of Pouches Packaging .....

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roducts, proprietorship concern of Shri. Raj Kumar Chaurasia. The aspect of excess production of Pan Masala and its sale through these proprietorship concerns were not examined by the Assessing Officer in his order. The ld. Commissioner of Income-tax accordingly issued a show cause notice under section 263 of the Act and in response thereto assessee has filed written submissions. The ld. Commissioner of Income-tax has taken into account the written submissions and was of the view that with respe .....

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r to adjudicate this issue, after partly setting aside the assessment orders. The relevant observations of the ld. Commissioner of Income-tax in the case of Shri. Udai Chand Chaurasia are extracted hereunder for the sake of reference:- In short, the facts of the case are that the assessee initially surrendered certain sum u/s 132(4) of the IT Act in the year in which the surrender was carried. This income was surrendered on account of sum invested in the various properties. However, when the mat .....

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could have been incurred that the entire sum was assessed in the current financial year. It has further been mentioned by the A.O. is seen that on the day of search when test run was conducted, that time Pouches packaging Machine is said to have shown speed of 240 pouches per minutes. It is also said that the A.O. has not considered undisclosed production based on the test run of packaging machine conducted at the time of search on the factory premises and subsequent statement recorded on oath .....

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hed beyond doubt. This undisclosed production has been routed through M/s Udai Traders , before reaching the end concern, which js the proprietorship concern of Shri Udai Chand Chaurasia . This undisclosed sale by concern M/s Udai Traders had led to the generation of undisclosed while formulating the assessments for A.Y. 2004-05 to 2009-10. Regarding undisclosed sale, the assessee has submitted that "that as required that we are trading concern and deals in sale and purchase of Katha, Sttpa .....

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Though this is a case for payment of excess excise duty there is no evidence that the pouches packing machine had run in the speed of 240 pouches per minute during the entire period of relevant assessment years. However, on the payment of test run the machine is said have shown test run of 240 pouches per minutes as per statement dated 26.06.2009 of Shri Udai Chand Chaurasia . The relevant portions of statement are as under: It is seen that the statement therein itself does not lead to an infer .....

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l as of operation of machine on various dates. It is also not mentioned that all the machines are capable of operating on such higher speed for such long time. In order to come to a definite conclusion that there has been production outside the books by running machine at higher speed , there should have been some corroborative evidence to show higher consumption of raw material, packaging material .No such case has been made out by the Addl. CIT (Central). Shri Udai Chand Chaurasia is engaged i .....

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. Asha Chaurasia, the additional profit from the sale same would have been assessable in the hands of Shri Udai Chand Chaurasiaon account of profit come from trading of excess production by Smt. Asha Chaurasia . According these assessments also would have to be partially set-aside to be framed afresh after taking into account the excess production made by Smt. Asha Chaurasia. 6. Since the facts in all these appeals are almost similar, we find no justification to reproduce the findings of the ld. .....

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