TMI Blog2018 (8) TMI 1847X X X X Extracts X X X X X X X X Extracts X X X X ..... verified. The Hon ble High Court was further pleased to observe, since the addition made by the Assessing Officer had no basis, the question of percentage of the sales at which stage additions should be made would become redundant. The appeals before us since identical in nature having same set of facts are covered by the ratio of the said order above 8 passed by the Hon ble High Court at Gujarat. We, therefore delete the quantum order passed by the authorities below and thereby allow the appeals preferred by the assessee - I.T.A. No. 133, 100, 105, 138, 109, 146, 113, 150, 117, 142, 125, 169/Rjt/2013 (Assessment Year : 2008-09) - - - Dated:- 10-8-2018 - Shri Waseem Ahmed And Ms. Madhumita Roy, JJ. Assessee by: M.J. Ranpura, A.R. Revenue by: Ranjeet Singh, CIT (D.R.) ORDER PER BENCH: This bunch of 6 cross appeals have been filed before us by the Assessee and Revenue against the 6 separate orders, all dated 06.02.2013, passed by the Commissioner of Income Tax (Appeals)-IV, Ahmedabad [Ld. CIT(A) in short] for Assessment Year (A.Y.) 2008-09 arising out of 6 separate orders dated 15.12.2011 and 29.12.2010 passed by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ora Grantio P. Ltd. AY 08-09 - Italica Tiles P. Ltd. AY 08-09 5. Though the validity of the notice of re-opening and the quantum additions proposed by the assessing officer was challenged by the assessees, ignoring such objection the assessment order was passed on 15.12.2011 holding that the assessee has suppressed sale of ₹ 98.18 lakhs (the amount of addition is different in each case). Applying the Gross Profit rate of 25%, the AO made addition of ₹ 24.54 lakhs (the amount of addition is different in each case) in the assessee s total income in total 27 cases (the amount of addition is different in each case). 6. Against the said orders the assessee preferred an appeal before the learned CIT (Appeals) on the ground of reopening of assessment and the additions made by the assessing officer. The learned CIT(A) granted partial relief by restricting addition adopting gross profit rate of 9% on the suppressed sale instead of 25% as was determined by the assessing officer rejecting the ground of reopening of assessment as agitated by the assessee. 7. Cross appeals arose before the Learned Tribunal out of the said orders passed by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which the excise duty was allegedly not paid by the assessee, was income chargeable to income tax and has escaped the assessment under the Income Tax Act. 21. In our considered view the information contained in the show cause notice of the Excise Department can be reason to suspect by the AO but without verifying the relevant particulars declared in the income tax return, it cannot be reason to believe about the escapement of taxable income under the Income Tax Act. 22. In view of this, in our considered view, the reopening of the assessment based on the above recorded reasons, is bad in law and cannot be sustained. We, therefore, hold accordingly, and consequently, cancel the impugned reassessment orders for all the years. Similar appeals against the impugned orders of ld. CIT(A) in respect of regular assessment of A.Y. 2008-09 were disposed of by the Learned ITAT by and under common order dated 25.05.2015 with the following observations setting aside the orders passed by the ld. CIT(A) :- We find that ITAT, Rajkot Bench in ITA No. 141/Rjt/2011 for A.Y. 200708 in case of Vrundavan Ceramics Pvt. Ltd. in similar set of facts has restricted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d ₹ 13,45,295/- in the case of Gokul out of the total addition sustained by CIT(A) are deleted. 21. The learned representatives of the parties submitted that facts of the case in Gokul Ceramics Pvt. Ltd. are similar. Therefore, the cross appeal of that case is also decided in accordance with above discussion. 22. In the result, appeals of assessee are partly allowed and appeals by revenue are dismissed. Subsequently Hon ble Gujarat High Court in Special Civil Application No.6500 of 2012 in case of Futura Ceramic Pvt. Ltd. vs. State of Gujarat in its dated 20th December, 2012, in similar situation observed as under: From the above, it can be seen that the assessment which was previously concluded was reopened on the premise that during the excise raid, it was revealed that the petitioner had clandestinely removed goods without payment of excise duty. The Sales Tax Department, therefore, formed a belief that the value of goods plus excise duty evaded should form part of the turnover of the assessee for the purpose of tax under the Value Added Tax Act. It may be that the raid carried out by the Excise Department and the materia ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng final assessment order merely on the premises that Excise Department has issued a show cause notice alleging clandestine removal of goods. Such order was quashed. 10.1 Similar view has been taken by Hon ble Gujarat High Court in Special Civil Application No. 1038 of 2013 in case of Futura Ceramic Pvt. Ltd. vs. State of Gujarat in its order dated 13.11.2013 by observing as under: [6.0] In view of the above decision of Division Bench of this Court, the impugned reassessment order deserves to be quashed and set aside. However liberty can be reserved in favour of the department to pass an order afresh in accordance with law and on merits after giving an opportunity to the petitioner and if permissible under the law now. [6.1] In view of the above and for the reasons stated above, petition succeeds. Impugned order passed by the Assistant Commercial Commissioner Tax (2), Nadiad [AnnexureF to the petition] dated 31.03.2012 is hereby quashed and set aside. However, it is observed that the same shall not affect the proceedings under the Central Excise Act for which the showcause notice has been issued. A liberty is also reserved in favour of the department ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ances, order of CIT(A) cannot be sustained. Accordingly, order of Assessing Officer on this issue is quashed. In view of above, issue raised in Revenue s appeal goes academic. Same may be raised as and when situation arises for this. 10.3 Similar issue arose in other assessees case. Facts being similar, so following same reasoning, we hold that orders passed by Income Tax Officer cannot be sustained and same are upheld. 11. In result, appeals of Revenue are dismissed and that of assessees are allowed. 8. Being aggrieved by and/or dissatisfied with the orders passed by the Hon ble Income Tax Appellate Tribunal the department preferred appeal before the Hon ble High Court at Gujarat. On 29.06.2016 the Hon ble High Court in respect of 52 appeals (out of 54) pleased to pass orders inter alia setting aside the order passed by the Learned Tribunal upholding the re-assessment and remanded the matters to the Learned Tribunal for deciding the same on merits of the additions made by the authorities below. However, no observation was made in 12 appeals in respect of the regular assessment for the assessment year 2008-2009 of the assessee. The following two sets ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... - Italica Tiles P. Ltd. AY 05-06 to 07-08 6 (A+D) - Gokul Cera. Pvt. Ltd. AY 2008-09 2 (A+D) - Ganga Glazed Tiles AY 2008-09 1 (D) - Ganga Glazed Tiles P. Ltd. AY 2008-09 1 (A) 12. Ultimately by and under a common order dated 16.01.2018 the Learned ITAT was pleased to dispose of the 40 cases out of the said 44 matters on merit. The remaining 4 matters are still pending consideration before the learned ITAT. 13. On the other hand, the Hon ble High Court have been pleased to dispose of the appeals on review preferred by the assessee in their favour in respect of the 8 matters for the assessment years 2008-09 by and under a common judgment and order dated 25.04.2018 with the following observation: 10. Having thus cleared the peripheral issues, we may examine the central question viz. did the Assessing Officer have sufficient material at his command to believe evasion of tax? ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sent assessees are yet to be adjudicated. What would be the material on record during such proceedings is not possible for us to foresee. Secondly, the Tribunal has mainly proceeded on the basis of absence of section 4A of the Central Excise Act at the relevant time which, in the opinion of the Tribunal, alone could have permitted the department to substitute the sale price by the transaction value of the goods. Such is not the case in the present group of cases. We would, therefore, be well advised to clear such controversy. 13. When we find that the Assessing Officer did not have the basis for making additions, the question of percentage of the sales at which stage additions should be made would become redundant. 14. In the result, question is decided against the Revenue. All Tax Appeals are dismissed. 14. Consequently the decision passed by the Learned ITAT dated 25.05.2015 was affirmed by the said judgment and order dated 25.04.2018 passed by the Hon ble High Court at Gujarat. 15. Considering the said judgment and order dated 25.04.2018 as mentioned hereinabove the assessee prayed before us for reconfirming the earlier order pa ..... X X X X Extracts X X X X X X X X Extracts X X X X
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