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TMI Blog2016 (7) TMI 1314X X X X Extracts X X X X X X X X Extracts X X X X ..... nexplained expenditure in purchases towards the clandestine sales of Steel Bars. 2. The learned CIT(A) erred in law and on facts in confirming addition of Rs.3,10,000/- towards undisclosed purchase of steel bars and Rs.36,785/- towards gross profit. 3. The learned CIT erred in law and on facts in not appreciating that the additions are made on the basis of search conducted by Central Excise Department and the assessments made under the Central Excise Act are under dispute. 4. The learned CIT(A) failed in making an enhancement on the basis of statements recorded from Shri Umesh Modi which was not confronted to the appellant nor the appellant had any opportunity to request for the cross examination the person. 3. The ground of appeal N ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ice under section 148 of the Act, in response to which, the assessee furnished return of income declaring total income at Rs. 7,09,580/-. The assessee in the revised return of income had declared income from other sources i.e. Gross Profit @ 5.3% on undisclosed sale of TMT bars of value of Rs. 30,62,540/- and also 5.3% on undisclosed corresponding purchases at Rs. 2,25,100/-. The Assessing Officer noted that though the assessee had declared 5.3% of Gross Profit for the year under consideration but for assessment year 2008-09, the assessee had shown gross profit of 7.4%. After discussion with the assessee, the gross profit of 6.5% was taken for calculating the undisclosed income out of clandestine sale of goods, which works to Rs. 1,99,100/- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... shown gross profit rate of 5.3%, the cost of unexplained purchases of 155.020 MT of TMT bars was worked out and addition was made to the extent of Rs. 29,00,225/- as undisclosed income of assessee. The Assessing Officer had worked out at Rs. 3,46,785/- and hence, the income was enhanced by Rs. 25,53,440/-. 6. The assessee is in appeal against the order of CIT(A) in enhancing the income by Rs. 29,00,225/-. The assessee is also aggrieved by the order of CIT(A) in confirming the addition of Rs. 36,785/- on account of gross profit and of Rs. 3,10,000/- on account of undisclosed purchases of steel bars. The claim of the assessee before the Tribunal was that where assessment made under the Central Excise was under dispute and where the statemen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion of goods, which were clandestinely removed without payment of Excise duty. The Income Tax Authorities in the case of such persons had taken the said investigation as base for making addition in the hands of respective assessees. No further investigation was carried out by the Income Tax Department and the sole basis for making the addition was the investigation carried out by the Excise authorities. The Tribunal in series of cases took note of the facts and with lead order in Shree Om Rolling Mills Pvt. Ltd. Vs. Addl. CIT in ITA Nos.125 & 127/PN/2012 and cross appeals in ITA Nos.430 & 431/PN/2012, relating to assessment years 2007-08 & 2008-09 vide order dated 15.07.2015 had considered the issue at length vide paras 54 to 87 and vide pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... years. Accordingly, we direct the Assessing Officer to verify from the records for the respective years and include the additional income on account of such admitted clandestine removal of material without payment of Excise duty, by the assessee either before the Settlement Commission or before the Excise authorities, in the hands of the assessee. We have heard bunch of appeals and in some years, there is no admission of clandestine removal of material without payment of Excise duty and in those years in the absence of any evidence and / or any investigation or inquiry made by the Assessing Officer and where the Assessing Officer has failed to collect additional evidence, no addition can be made in the hands of the assessee, by way of extr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... um order and the para 88 i.e. from line 17 to 22 would now be substituted by following para. "88. ...... Admittedly, the assess ee had offered additional income on the said clandestine removal of material without payment of Excise duty, which is to be added as income in the hands of the assessee. The learned Authorized Representative for the assessee fairly admitted that in case the said additional income has not been added while computing the income in the hands of the assessee for the respective years, the same may be directed to be added in the hands of the respective assessee in respective years. Accordingly, we direct the Ass essing Officer to verify from the records for the respective years and include the additional income on accou ..... X X X X Extracts X X X X X X X X Extracts X X X X
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