9911796707
TMI Blog2025 (5) TMI 614X X X X Extracts X X X X X X X X Extracts X X X X ..... passed under s. 143(3) of the Act pertaining to assessment year 2014-15. 2. Briefly stated, the assessee company is engaged in the business of manufacturing of paper and iron ignots for AY 2014-15 in question. The assessee filed return of income declaring total income of INR 2,60,32,880/- on 29.11.2014. In the course of regular assessment, the AO found that a search was conducted by the Central Excise Department ('CED') on 04.07.2013 in the case of M/s. Trikoot Iron and Steel Castings Ltd. (Trikoot). Pursuant to search on Trikoot by the Central Excise Department, certain seizure of documents from the premises of Trikoot purportedly led to alleged unearthing of undisclosed sales by the assessee to Trikoot. Consequently, a search was also c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he sales assumed by the AO to 12.5% of the sales. Thus, the additions of INR 83,12,887/- made by the AO towards undisclosed capital purportedly utilized for undisclosed sales was brought down to INR 51,12,425/-. 6. The CIT(A) further revised the estimated disallowances towards telephone and vehicle running expenses to INR 1,52,270/- as against the additions of INR 3,04,739/- made by the AO by revising the assumptions from 20% to 10%. 7. Aggrieved by the additions and disallowances partially sustained by the CIT(A), the assessee preferred appeal before the Tribunal. 8. At the time of hearing, the Ld. Counsel for the assessee submitted that a search was conducted at Trikoot as well as on the assessee by Central Excise Department. No incrim ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or making such additions. 8.3. The Ld. Counsel for the assessee submitted that the only basis on which the AO has made addition is the information which the AO has got consequent to search carried out by the Central Excise Department on Trikoot. The quantification of sales has been made on the basis of some computer printout taken from the hard disk and pen drive recovered from the premises of Trikoot in the search carried out by Central Excise Department. Undoubtedly, the panchnama prepared at the premises of Trikoot by the Central Excise Department does not mention the details of recovery of the hard disk and pen drive. Accordingly, the conditions stipulated in s. 36B of the Central Excise Act have not been complied with in respect of re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and 'business purpose test' would be sole consideration. Thus, estimated disallowance initiated by the AO and sustained by the CIT(A) is not justifiable. The Ld. Counsel thus urged for reversal of the additions/disallowances sustained by the CIT(A) as per the grounds of appeal. 9. The Ld. Sr. DR for the Revenue relied upon the first appellate order. 10. We have carefully considered the rival submissions and perused the material available on record. The estimated additions made arising from undisclosed sales outside books of accounts and estimated additions towards undisclosed capital employed on such undisclosed sales is in controversy. It is the case of the assessee that the entire basis of additions towards undisclosed sales and conseq ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of DG of Central Excise Intelligence on Trikoot and reference to some loose papers therein. As pointed out on behalf of the assessee, the appellate authority of Central Excise Department has quashed the proceedings against Trikoot. The relevant paras of the judgement are reproduced hereunder:- 18. "Thus, we find that according to the Tribunal the assessing officer had merely relied upon information received from the Sales Tax Department, Government of Maharashtra without carrying out any independent enquiry. Tribunal had recorded as finding that assessing officer had failed to show that the purchased materials were bogus and held that there was no justification to doubt genuineness of the purchases made by the respondent-assessee. 19. W ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
