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M/s. KOTTAKKAL WOOD COMPLEX Versus THE DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-2, KOZHIKODE

Assessment based only on the statement under Section 133A - Levy of penalty under Section 67 of the KVAT Act - finding of excess stock and suppression of sale - Held that:- It is seen that the Revenue relied on letter dated 18.09.2007 issued by V. Ahammed to the Assistant Director of Income Tax (Investigation) clarifying his statement under Section 133A of the Act. This shows that the maker of the statement himself has re-affirmed the statement and nothing has been produced by the assessee to sh .....

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n detected was only ₹ 2,10,595/-. This means that the penalty proceedings were initiated on the basis that there was excess stock of ₹ 14,38,785. In the final order that was passed, the said amount is now reduced to ₹ 2,10,595. Since the assessment under the Income Tax Act has been completed quantifying the suppression of sale based on the excess stock detected in the inspection conducted by the authorities under the KVAT Act on 17.08.2006, the reduction in the excess stock as .....

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orders taking into account the order dated 08.08.2007 passed by the Intelligence Officer, Squad No.II, Tirur. - The appeals are accordingly disposed of remitting the matter to the Assessing Officer to pass fresh orders as directed above. - I.T.A. Nos. 27, 28,29, 35, 36, 42 & 53 of 2013 - Dated:- 4-7-2016 - ANTONY DOMINIC AND DAMA SESHADRI NAIDU, JJ. For The Appellant : ADV. SRI.ANIL D. NAIR For The Respondent : ADV. SRI.P.K.R.MENON,SR.COUNSEL, GOI(TAXES), ADV. SRI.GEORGE K. GEORGE, SC FOR IT .....

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e Income Tax Act was conducted in the premises of the appellant on 12.09.2007 in connection with the search under Section 132 of the Act in the concern, viz, M/s.Classy the Antique Designed Furniture. This resulted in an assessment under Section 153C for the assessment years 2002-2003 and 2007-2008 and an assessment under Section 143 for the assessment year 2008-2009. 3. The assessee filed appeals before the Commissioner (Appeals), which were partly allowed. Further appeals that were filed befor .....

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tive evidence, the assessments are illegal. In support of this contention, the learned counsel has placed reliance on the judgments of this Court and the Madras High Court in Paul Mathews and Sons v. Commissioner of Income Tax 263 ITR 101 and Commissioner of Income Tax v. S. Khader Khan Son[2008] 300 ITR 157 (Mad) respectively and the judgment of the Apex Court in Commissioner of Income Tax v. S. Khader Khan Son [2013] 352 ITR 480 (SC) where the judgment of the Madras High Court was confirmed. O .....

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for imposition of penalty under Section 67 of the KVAT Act on the allegation of suppression of stock. He also invited our attention to the assessment order where reliance has been placed on letter dated 18.09.2007 issued by Sri. V. Ahamed, a salesman of the appellant. Therefore, according to him, the principle laid down in the judgments of this Court and Madras High Court cannot be applied to the facts of this case. In fact, the learned counsel invited our attention to the judgment of the Bombay .....

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Paul Mathews and Sons v. Commissioner of Income Tax 263 ITR 101, wherein this Court has held thus: Section 133A(3)(iii) enables the authority to record the statement of any person which may be useful for, or relevant to, any proceeding under the Act. Section 133A, however, enables the income-tax authority only to record any statement of any person which may be useful, but does not authorize taking any sworn statement. On the other hand, we find that such a power to examine a person on oath is sp .....

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ficer to examine a person on oath and any statement made by such person during such examination can also be used in evidence under the Income-tax Act. On the other hand, whatever statement is recorded under Section 133A of the Income-tax Act it is not given any evidentiary value obviously for the reason that the officer is not authorised to administer oath and to take any sworn statement which alone has evidentiary value as contemplated under law. Therefore, there is much force in the argument o .....

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e Revenue that the assessments made is not based only on the statement under Section 133A of the Act. On the other hand, the assessment order itself reveals that the Revenue has placed reliance on the proceedings initiated against the appellant for imposition of penalty under Section 67 of the KVAT Act based on an inspection held on 17.08.2006. It is seen that the Revenue relied on letter dated 18.09.2007 issued by V. Ahammed to the Assistant Director of Income Tax (Investigation) clarifying his .....

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ppression allegedly made by the assessee is based on the quantity detected by the authorities under the KVAT Act in the inspection held on 17.08.2006. It is stated that the proceedings for levy of penalty under Section 67 of the KVAT Act were initiated on finding of excess stock of ₹ 14,38,785, and that the suppression of sale was worked out at ₹ 17,81,971 by adding gross profit to the excess stock. This is evident from the assessment order, wherein it has been stated thus: The conte .....

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s found and the Department of Commercial Taxes has issued a show cause notice bearing No. TRL-08/06-07 dated 16.10.2007 for imposing penalty u/s.67(6) of the KVAT Act. In response to the said show cause notice assessee vide letter dated 10.04.2007 replied that the stock difference existed only in the case of 12 items out of 31 items. This shows that the assessee is regularly suppressing the sale of goods while computing the understated sale, branded items, sales to Banks etc. are excluded. Furth .....

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