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TMI Blog2025 (2) TMI 531X X X X Extracts X X X X X X X X Extracts X X X X ..... Total Income of the appellant merely on the basis of statement recorded during course of Survey, which was subsequently retracted while filing Income Tax Return, nor the Id. Commissioner of Income Tax (Appeals) was justified in confirming the same. 3. That the appellant craves leave to submit and/or alter any ground/s on or before the hearing of the appeal." 3. The brief facts of the case of the assessee are that the assessee is engaged in the business of card-box manufacturing and filed its return of income for the impugned assessment year showing total income of Rs. 4,31,836/- and deduction under Chapter VIA was claimed on the same amount. A survey u/s 133A of the Act was conducted in the case of the assessee on 15.09.2016 in the office and factory premises cum godown and certain loose sheets were impounded and the inventory of stock was also prepared. The statement of Sh. Pinaki Ghose, Plant Head was recorded u/s 133A of the Act and the statement of Sh. Vivek Agarwal, Partner of the assessee firm was also recorded u/s 133A of the Act on 16.09.2016 who made disclosure of 1,25,00,000/- as undisclosed income of the assessee firm. It was distributed among 4 assessment years i.e. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing to the Excise, GRN register, Diesel record and Diesel issue register. It was submitted that no incriminating material was found. At page 9 of the paper book, there is inventory of machinery while pages 10 to 13 contain the inventory of raw material. Our attention was also drawn to pages 12 and 13 in support of the submission that while the format of the inventory of stocks mentions cost price/MRP, however it is not apparent from the list prepared whether the stock was valued at the cost or the market price. Further, our attention was also drawn to page 31 which is a summary of the inventory valued at Rs. 1,33,06,964/-. Pages 32 to 35 of the paper book contain details of finished goods. Our attention was also drawn to page 35, specifically last three items which at Sl. Nos. 39 to 41 mention corrugated box, loose sheet and old reels etc. and the amount of Rs. 30,00,000/- Rs. 20,00,000/- and Rs. 40,00,000/- respectively has been mentioned therein making the total inventory of work-in-progress at factory premises at Rs. 9,34,130/- in respect of 8 items. Thus, the entire inventory was valued at Rs. 1,33,06,964/- and it is observed that the work-in-progress of Rs. 90,00,000/- has bee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... verified our Stock on 31/3/20L7, a list of Stock in Trade as on 31/03/2017 is attached herewith. At the time of Survey our books of accounts were not completed and I had replied in my statement keeping in mind my books of accounts and not physical verification of stock. As regards disclosure of Rs 65,00,000/- during the F.Y.: 2016-17, I diseased on assumption of future turnover and business. However, the Financial Year 2016-17 was the worst Year for our business in regard to Sale s/Tu mover. Moreover some of our business expenses had gone up substantially e.g. Salary, Electricity Expenses etc. Details of Sales turnover for last 5 years are as under: Financial Year Sale Turnover Stock in Trade 2012-13 7,95,10,284 1,35,62.361 2013- 14 7,65.71,083 2,40.40,552 2014- 15 7,53.18,004 2,48,17,641 2015 - 16 4,89,18,873 3,08.96.620 2016- 17 2,88,90,326 3,33.99,079 All our financial transactions are duly recorded in our books of accounts. We had submitted our audited financial statements for F. Y. 2016-17. Under the above facts and circumstances we request your goodself to please not to add the amount of Rs. 65,00,000/- and assess our income as we had disclosed in o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... observing as under: "It is observed from the records that on the day of survey, Manufacturing & Trading Account were drawn and physical verification of stock was done. On comparison, discrepancy of Rs. 1.68 crores was found in the stock. The statement of a partner of the assessee-firm, Mr Vivek Agarwal was recorded and he was asked to explain the discrepancy. As he could not reconcile the same, he declared total undisclosed income of Rs. 1.25 crores for several years, out of which Rs. 0.65 crores was declared for AY 2017-18. Subsequently, the assessee filed its ITR for AY 2017-18 declaring total income of Rs. Nil, which did not include the additional income declared during the survey. The AO then issued show cause notice to the assessee to explain why the undisclosed income should not be added back to the income. In response to the same, Mr Agarwal submitted that he declared undisclosed income on the day of survey on the basis of incomplete Books of account and with future turnover in mind. The AO rejected the assessee's argument and went ahead with the addition of Rs. 65,00,000/-. During the appellate proceedings, notice u/s 250 of the IT Act, 1961 was issued to the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n. In the present case before us, even though the assessee had made its submissions along with supporting documents before the Ld. AO which are on record, the Ld. CIT(A) has not mentioned the reasons after examining the records while disposing of the appeal. The Ld. CIT(A) has neither adjudicated upon various grounds of appeal nor has passed a reasoned order for arriving at the decision, as is required u/s 250(6) of the Act. We further note that in Ajji Basha Vs. CIT (2019) 111 taxmann.com 348 (Madras) it has been held that a speaking order on merits with reasons and findings is to be passed by Commissioner (Appeals) on basis of ground raised in assessee's appeal; he cannot dispose assessee's appeal merely by holding that Assessing Officer's order is a self-speaking order which requires no interference. The relevant extract from the order is as under: "6. ... The first respondent is the appellate authority. Needless to state that the Appellate Authority is also a fact finding authority and therefore, he has to consider the order of assessment on the grounds raised in the appeal and thereafter, pass a speaking order on merits and in accordance with law by giving his ow ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) . . . . . . . . . . . . . . . . . . Powers of the Commissioner (Appeals) "Section 251(1) In disposing of an appeal, the Commissioner (Appeals) shall have the following powers - (a) in an appeal against an order of assessment, he may confirm, reduce, enhance or annul the assessment. (aa) . . . . . . . . . . . . . . . . . . (b) in an appeal against an order imposing a penalty, he may confirm or cancel such order or vary it so as either to enhance or to reduce the penalty." (c) . . . . . . . . . . . . . . . . . . (2) The Commissioner (Appeals) shall not enhance an assessment or a penalty or reduce the amount of refund unless the appellant has had a reasonable opportunity of showing cause against such enhancement or reduction. Explanation. - In disposing of an appeal, the Commissioner (Appeals) may consider and decide any matter arising out of the proceedings in which the order appealed against was passed, notwithstanding that such matter was not raised before the Commissioner (Appeals) by the appellant.' 8. From the aforesaid provisions, it is very clear once an appeal is preferred before the CIT(A), then in disposing of the appeal, he is obliged to make such f ..... X X X X Extracts X X X X X X X X Extracts X X X X
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