TMI Blog2018 (8) TMI 1629X X X X Extracts X X X X X X X X Extracts X X X X ..... tion and co-relation. - I.T.A No. 84/Agra/2015, I.T.A No. 85/Agra/2015, I.T.A No. 86/Agra/2015, I.T.A No. 87/Agra/2015, C.O. No.10/Agra/2018, C.O. No.11/Agra/2018, C.O. No.12/Agra/2018 And C.O. No.13/Agra/2018, I.T.A No. 56/Agra/2015 And I.T.A No. 57/Agra/2015 - - - Dated:- 14-8-2018 - SHRI A. D. JAIN, JUDICIAL MEMBER AND DR. MITHA LAL MEENA, ACCOUNTANT MEMBER For The Revenue : Shri Inderjeet Singh, CIT.DR. For The Assessee : Shri Anurag Sinha, AR ORDER PER, A. D. JAIN, JUDICIAL MEMBER: These are Department s appeals and assessee s Cross-objections for Assessment Years 2005-06 to 2008-09 and assessee s appeals for A. Ys. 2009-10 2011-12 respectively. 2. Facts, for convenience, are being taken from I. T. A No. 87/Agra/2015 C. O. No. 13/Agra/2018 A. Y. 2005-06). 3. The sole ground taken by the Department is as follows: 1. Whether on the facts and in the circumstances of the case, the Ld. CIT (Appeals) was justified in law and on facts in deleting the addition of ₹ 10, 78, 27, 200/- made by the Assessing Officer to the income of the assessee on account of unaccounted production of Gutka Pouches. 4. The following cross-obje ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Hon ble High Court, as raised by the Department, was regarding the validity of the invocation of section 153A of the Act by the Revenue, as regarding AYs. 2000-01 to 2003-04. 8. The Hon ble High Court refused to agree with the Department s contention that the invocation of Section 153A of the Act to re-open concluded assessments of the AYs earlier to the year of search is justified even in the absence of incriminating material found during the search qua each such earlier AY. The decision in Kabul Chawla (supra), was reiterated, holding that the ITAT was justified in holding that the invocation of section 153A by the Revenue for the AYs 2000-01 to 2003-04 was without any legal basis, as there was no incriminating material qua each of those AYs. The question framed (supra) was answered in the negative, i. e. , in favour of the assessee and against the Revenue. It was held that in the facts and circumstances, the Revenue was not justified in invoking section 153A of the Act against the assessee in relation to AYs 2000-01 to AYs 2003-04. 9. In the present case, there is no dispute about the fact that no incriminating material / evidence was found in the search qua the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ently under consideration are for A. Ys. 2005-06 to 2008-09. The statement of Gulzari Lal Gupta is dated 07. 10. 2010. He, as rightly contended, has nowhere stated that the assessee was producing the goods out of books. As per Form No. 32 filed with the Registrar of Companies, copy whereof has been placed on record, Shri Gupta was appointed Director of the assessee company on 09. 05. 2009, i. e. , in A. Y. 2010-11. Therefore, he was not a Director for the period under consideration. 9. The Department has also placed reliance on APB 235, which is a copy of application dated 21. 08. 2010 filed by the assessee before the Assistant Commissioner, Custom and Central Excise, for grant of permission to dispose of six pouch packaging machines after extracting usable parts there-from. This application, as is self-evident there-from, does not pertain to the years under consideration and as such, has no relevance to the present controversy. 10. Further, the production, as to whether it concerned three or ten machines was worked out by the AO (AO, page 2, para 4. 3), on the basis of Excise Notification dated 01. 07. 2008. Again, this Notification does not pertain to the years before us. I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lacs on account of share application money received by the assessee. By way of additional grounds, the assessee has contended that this addition made u/s 153A of the IT Act, was not based on any incriminating material found as a result of search and that so, this addition is unsustainable in law. 15. It being a legal issue, not requiring any further material beyond that already on record for adjudication, the additional ground is admitted. 16. It has been pointed out that in para 3 of the assessment order, it has been observed by the AO as follows: 3. The assessee company is engaged in the business of manufacturing selling of Gutkha. On going through the various Schedules attach and forming part of Balance Sheet as at 31st March 2009 (Schedule (A' of Share Capital) it reveals that a fresh share application money amounting to ₹ 4, 00, 000/- has been introduced by the assessee company. The assessee vide questionnaire dated 27/11/2012 was asked to explain the identity, creditworthiness of the person and genuineness of the transactions as required u/s 68 of the Act. 17. Thus, it remains undisputed that the addition was not made on the basis of any incrimin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of closing stock adopted by the assessee is at cost. It has been requested that as such, the amount of ₹ 5, 27, 617/- be reduced from the income, since it has already been added and the AO be directed that as regards the remaining amount, verification be carried out by the AO apropos the discrepancies between the actual stock, as mentioned by the assessee. 23. The ld. DR has placed reliance on the impugned order. 24. The request of the assessee is justified. The amount of ₹ 5, 27, 617/- was declared by the assessee in the return of income filed. This comprised of shortfall of ₹ 4, 83, 487/- in raw material, representing the difference in the stock as per the record of the assessee and the stock found during the search, and of ₹ 44, 130/- in the case of finished goods. The assessee is entitled to the benefit of the amount of ₹ 5, 27, 617/-, as declared in the return of income filed, to be allowed against the stock. For the purpose, the matter is remitted to the file of the AO, subject to verification and co-relation, as above. 25. In the result, C. O. Nos. 10 to 13/Agra/2018, for A. Ys. 2005-06 to 2008-09, respectively, are allowed, whereas th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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