Sachin Metal Coats, Vapi vs Department Of Income Tax

अपीलाथ% ओर से / Appellant by : Shri Nimesh Yadav, Sr.DR &'यथ% क) ओर से/Respondent by : Shri Rajesh Upadhyay, AR

ु वाई क) तार,ख / सन Date of Hearing 18/03/2015 घोषणा क) तार,ख /Date of Pronounce ment 27/03/2015

आदे श / O R D E R

PER SHRI KUL BHARAT, JUDICIAL MEMBER :

This appeal by the Revenue is directed against the order of the Ld.Commissioner of Income Tax(Appeals)-Valsad ('CIT(A)' in short) dated 04/10/2010 pertaining to Assessment Year (AY) 2005-06. The Revenue has raised the following grounds of appeal:-

ITA No.3310/Ahd/2010 Asst.CIT vs. M/s.Sachin Metal Coats Asst.Year - 2005-06 -2-

1) On the facts and circumstances of the case and in law, the ld.

CIT(A) has deleted addition of Rs.9,07,400/- made by the A.O. as the assessee had not furnished any third party confirmation regarding the turnover.

2) It is therefore prayed that the order of the learned CIT(A) be set aside and that of the Assessing Officer be restored.

The appellant craves to add, alter or amend any grounds of appeal.

2. Briefly stated facts are that the case of the assessee was reopened and the assessment u/s.143(3) r.w.s.147 of the Income Tax Act,1961 (hereinafter referred to as "the Act") was framed vide order dated 16/12/2009. While making the assessment order, the AO made addition of Rs.9,07,400/- on account of difference of turnover as reported by the Preventive Wing of Central Excise to the AO.

3. The ld.counsel for the assessee submitted that the finding of the AO is solely based upon the records of the Central Excise Department. He submitted that the accounts of the assessee are duly audited. He further submitted that the officials of the Central Excise could not read the accounts properly and has given a faulty picture of the turnover. He submitted that even the AO added the entire sales without deducting the corresponding purchases which tantamount to 100% Gross Profit. The ld.counsel for the assessee submitted that the veracity of book result is not challenged by the AO u/s.145 of the Act. The AO has not called any ITA No.3310/Ahd/2010 Asst.CIT vs. M/s.Sachin Metal Coats Asst.Year - 2005-06 -3-

party u/s.131. No cross-examination of the witness is even offered. The AO has wrongly made the guesswork of only suppressed alleged sales and not overstated sales as can be seen from above chart.

3.1. On the contrary, the ld.Sr.DR supported the order of the AO.

4. We have heard the rival submissions, perused the material available on record and gone through the orders of the authorities below. We find that the ld.CIT(A) has given a finding on fact by observing as under:-

"7.3. DECISION:- I have carefully considered the finding of the AO and the submissions made by the appellant. It is not disputed that the additions made by the AO was mainly based on the documents received from the Excise Deptt. The AO had not brought on record any other materials in support of such additions. The appellant had contended before the AO that the Excise Deptt. had wrongly calculated the sales figure taken receipts of the deposit side of the Bank Statements which includes receipts of Sales, Realization of Sundry Debtors, Loan transactions, transfer from one A/c to another A/c etc. The AO ought to have verified the factual position in this regard before arriving at the actual sales suppression but did not do. The additions made by the AO suffers from many deficiencies. First, the accounts of the appellant has been audited by the certified CA and the AO had not rejected the books of a/c. if there was discrepancies in the books of a/c. Second, out of the figures worked out by the Excise Deptt. for 4 years, the difference as per B/S and as calculated by them, for two years the differences are in ITA No.3310/Ahd/2010 Asst.CIT vs. M/s.Sachin Metal Coats Asst.Year - 2005-06 -4-

negative and for other two years the difference was in positive. This shows that there is some errors in their calculation. Third, the aggregate turnover shown by the appellant as per B/S for 4 years was Rs.3,45,57,400/- as against Rs.3,12,98,160/- calculated by the Excise Deptt. That is the appellant had shown excess turnover of Rs.32,59,240/-. How does the finding of Excise Deptt.explain this excess? This clearly shows that the was a need for reconciliation of those figures before coming to the conclusion that there was a sales suppression by the appellant. Fourth, presuming that the there was sales suppression by the appellant but can the entire sales be added as income in the hand of the appellant. The answer is no because the profits is only taxable not the sales. That means the AO should have done microscopic before making additions. The appellant had demonstrated by the reconciliation that there was no sales suppressions during the relevant periods. The AO failed to appreciate the submissions made before him and heavily relied upon the information received from the Excise Department and made additions. Definitely, the information from Excise Deptt. was a means not the end itself. Considering the factual matrix in my view the appellant has made a case for himself by putting cogent evidence/explanations that it had not suppress the sales in the R/I filed. Thus, the additions made by the AO is not sustainable in the eyes of law. Therefore, the AO is directed to delete the additions made in this ground. Thus this ground of appeal is allowed."

4.1. The above finding on fact of the ld.CIT(A) is not rebutted by the Revenue by placing any contrary material on record, therefore we do not see any reason to interfere with the order of the ld.CIT(A), same is hereby upheld. Thus, this ground of Revenue's appeal is rejected.

ITA No.3310/Ahd/2010 Asst.CIT vs. M/s.Sachin Metal Coats Asst.Year - 2005-06 -5-

5. In the result, the appeal of the Revenue is dismissed.

Order pronounced in the Court on Friday, the 27th day of March, 2015 at Ahmedabad.

Sd/- Sd/- (जी.डी.अ वाल) (कुल भारत) उपा य या यक सद य ( G.D. AGARWAL ) ( KUL BHARAT ) VICE PRESIDENT (AZ) JUDICIAL MEMBER Ahmedabad; Dated 27/ 03 /2015 ट,.सी.नायर, व. न.स./T.C. NAIR, Sr. PS

आदे श क" # त%ल&प अ'े&षत/Copy of the Order forwarded to :

1. अपीलाथ% / The Appellant

2. &'यथ% / The Respondent.

3. संबं6धत आयकर आयु8त / Concerned CIT

4. आयकर आयु8त(अपील) / The CIT(A)-Valsad

5. 9वभागीय & त न6ध, आयकर अपील,य अ6धकरण, अहमदाबाद / DR, ITAT, Ahmedabad

6. गाड< फाईल / Guard file.

आदे शानुसार/ BY ORDER,

स'या9पत & त //True Copy//

उप/सहायक पंजीकार (Dy./Asstt.Registrar) आयकर अपील य अ धकरण, अहमदाबाद / ITAT, Ahmedabad

1. Date of dictation .. 19.3.15 (dictation-pad 3- pages attached at the end of this File)

2. Date on which the typed draft is placed before the Dictating Member ..20.3.15

3. Other Member...

4. Date on which the approved draft comes to the Sr.P.S./P.S.................

5. Date on which the fair order is placed before the Dictating Member for pronouncement......

6. Date on which the fair order comes back to the Sr.P.S./P.S.......27.3.15

7. Date on which the file goes to the Bench Clerk.....................27.3.15

8. Date on which the file goes to the Head Clerk..........................................

9. The date on which the file goes to the Assistant Registrar for signature on the order..........................

10. Date of Despatch of the Order..................