TMI Blog2022 (6) TMI 1111X X X X Extracts X X X X X X X X Extracts X X X X ..... e been sustained by Ld. CIT(Appeals) on purely estimate basis, as is evident from the observations made by Ld. CIT(Appeals) while passing the appeal order. It is well-settled law that no addition could be made on estimated basis without rejecting books of account of assessee as held by various Courts in the case of Asian Grantio India Ltd [ 2019 (10) TMI 1193 - ITAT AHMEDABAD] , Royal Marwar Tobacco Product [ 2007 (12) TMI 321 - ITAT AHMEDABAD ], Anil Kumar Company [ 2016 (3) TMI 184 - KARNATAKA HIGH COURT ] and Ercon Composites [ 2013 (12) TMI 902 - ITAT JODHPUR ] Accordingly, we are of the considered view that Ld. CIT(Appeals) has erred in facts and in law in confirming the addition. - Decided in favour of assessee. - ITA Nos. 265 And 266/Ahd/2020 - - - Dated:- 22-6-2022 - Shri Waseem Ahmed, Accountant Member And Shri Siddhartha Nautiyal, Judicial Member For the Assessee : Shri Chintan Shah. A.R. For the Revenue : Shri Sudhendu Das, Sr. D.R. ORDER PER : SIDDHARTHA NAUTIYAL, JUDICIAL MEMBER:- These two appeals have been filed by the assessee against the order of the ld. Commissioner of Income Tax (Appeals)-5, Ahmedabad in Appeal nos. CIT(A)-5/ACIT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ddition relying only on the basis of few elements of Financial Statement by stating that accounts are not much manipulated in A.Y.2010-11 without rejecting books of accounts for A.Y. 2008-09. It is submitted and explained that books of accounts are also subject to Audit by Independent Tax Auditor in view of Income tax Act, 1961, and no adverse comments has been found in the Tax Audit Report. Accordingly Appellant raised ground that learned CIT (Appeals) has erred in making addition without pointing out any specific defects and arbitrarily. The learned C.I.T.(A) cannot decide manipulation of books of accounts based on few factors on prime facie, without going in details scrutiny, where no cogent material is put forth to substantiate such findings. The approach of learned CIT (Appeals) is very casual. CIT (Appeals) grossly neglect the order of Hon'ble CESTAT which has already considered/redressed all the allegations viz. Consumption of fuel, Turnover, etc. raised by CIT (A] by giving Speaking Order and which is final fact findings. Accordingly, CIT(A] has also ignored the order of Hon'ble ITAT which clearly, in para 5 of its order, stats that CIT(A) to pass order in light of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 50/KM3 TO 7422.51/KM3. Turnover and fuel exp had nothing to do with each other and comparison for the same is not having any meaning for addition. 2.4. Further CIT (Appeals) has erred in order considering the statement of Shri Haribhai K. Patel without corroboration of even single evidence. Not even single document has been found which can support allegation of C.I.T.(A). Even Hon'ble CESTAT have also considered the same and quashed the entire allegation by doing sufficient enquiries and procedures. Here again CIT(A) fails to appreciate the order of CESTAT and Accordingly CIT(A) has also ignore the order of Hon'ble ITAT which clearly, in Para 5 of its order, stats that CIT(A) to pass order in light of CESTAT order by providing reasonable opportunity of being heard. 3. C.I.T. (A) erred in deciding manipulation/non manipulation of books of accounts based on the assumptions and surmises and that cannot be base for making addition under the Scheme of the Act, which is bad and illegal in the eyes of law. The learned CIT (Appeals) cannot make additions on the basis of other A.Y. without rejection of books of accounts of such Assessment Year. The learned CIT (Appeals) ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t any corroborative evidences and without carrying out any independent inquires. It is very settled law that in the scheme of the Act, no addition can be made without bringing on record any corroborative evidences to prove so and addition made merely on the basis of presumptions, assumptions and surmises is bad in law 3. Hon'ble ITAT set a side orders of lower Authority for AY 2008- 09, in Para. 5 of its order dtd, 19/08/2014 vide ITA No. 1697/Ahd/2012. Further Facts for the AY under consideration is based on the same facts of AY 2008-09 only. The learned C.I.T.(A) has exceeded his jurisdiction by making additions considering facts other than considered by AO Hence additions of AY 2010-11 itself has no validity in law. Hence additions made non sustainable in Law. 4. The learned C.I.T.(A) has erred in law and on facts in not properly appreciating and considering various submissions, evidences and supporting placed on the record during the course of the proceedings and not properly appreciating various facts and law in its proper perspective. 5. That the learned CIT(A) has also erred in proceeding to uphold the levy of penalty on wholly irrelevant, extraneous, and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o ₹ 40 lakhs. While passing order, Ld. CIT(Appeals) made the following observations: In the circumstances and as per ratio laid down in the case laws relied upon by the appellant and the fact that GP ratio is quite reasonable for AY 2010-11, and addition of Rs.20,00,000/- is confirmed while deleting rest of the amount of all the four additions made by the Assessing Officer. This addition is purely on estimation basis to take care of short comings noticed in the accounts of the appellant. Similarly an addition and addition of Rs.40,00,000/- is confirmed while deleting rest of the amount of all the four additions made by the Assessing Officer as the expenses are inflated and seriousness of the shortcomings is at much higher scale for assessment year 2008-09. Rs. 69,98,589/- (14.13% of under valuation of sales of Rs. 4,95,30,000/-.) Rs. 42,51,889/- (14.13% of sale outside the books of Rs. 3,00,91,218/-.) Rs. 1,47,075/- (14.13% of excess shortage of Rs. 10,40,875/-.) Rs. 14,130/- (14.13% of parallel invoices of Rs. 1,00,000/-.) The ground no. 1 to 7 are partly allowed. 4. The assessee is in appeal before us against the aforesaid order of Ld. C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... even though CESTAT had deleted the additions proposed by the Excise Department. In view of the above order of CESTAT giving complete relief to the assessee and directions of ITAT in assessee s own appeal for assessment year 2008- 09, we are of the considered view that additions to the tune of ₹ 40 lakhs sustained by the Ld. CIT(Appeals) are liable to be set aside. Further, we also note that the additions have been sustained by Ld. CIT(Appeals) on purely estimate basis, as is evident from the observations made by Ld. CIT(Appeals) while passing the appeal order. It is well-settled law that no addition could be made on estimated basis without rejecting books of account of assessee as held by various Courts in the case of Asian Grantio India Ltd.[2020] 113 taxmann.com 445 (Ahmedabad - Trib.), Shree Asutosh Transport Co.[1997] 90 Taxman 331 (Ahmedabad - ITAT), Royal Marwar Tobacco Product (P.) Ltd.[2009] 29 SOT 53 (Ahmedabad) (URO), Anil Kumar Company [2016] 67 taxmann.com 278 (Karnataka), Ercon Composites[2014] 49 taxmann.com 489 (Jodhpur - Trib.), etc. to name a few. Accordingly, we are of the considered view that Ld. CIT(Appeals) has erred in facts and in law in confirming t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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