| The Tax Publishers2019 TaxPub(DT) 5198 (Guj-HC) INCOME TAX ACT, 1961
Section 68
Addition of suppressed sales using material collected by Excise Department could not be made by AO as from the perusal of the entire order of assessment, there was no independent material brought on record by the AO other than those which were already collected by the Excise Department and which were yet to be verified.
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Income from undisclosed source - Addition under section 68 - Addition of suppressed sale using material collected by Excise Department -
Assessee was in the business of manufacturing ceramic items. It was subjected to investigation at the hands of Central Excise which led to show-cause notice being issued for adjudication and levy of unpaid excise duty with interest and penalty. On the basis of such exercise and the materials collected by Intelligence Wing of the Excise Department, Revenue also made additions of suppressed sales using the material collected by the Excise Department including the statements of relevant witnesses recorded during the search. Held: As decided in case of Pr. CIT v. Vrundavan Ceramics (P) Ltd. 2018 TaxPub(DT) 2720 (Guj-HC), it was held that by merely producing the copies of the statements of the witnesses accompanying the show-cause notices, such statements and the veracity thereof does not get automatically established. Further, as evident fram perusal of the entire order of assessment, there was no independent material brought on record by the AO other than those, which were already collected by Excise Department and which, were yet to be verified. Therefore, AO did not have any basis for making addition and thus, such addition made was required to be deleted
REFERRED : The Pr. CIT Rajkot-3 v. Vrundavan Ceramics (P) Ltd. in (R/Tax Appeal No. 82 of 2016 with R/Tax Appeal No. 78 of 2016 with R/Tax Appeal No. 79 of 2016 with R/Tax Appeal No. 83 of 2016 with R/Tax Appeal No. 84 of 2016 with R/Tax Appeal No. 85 of 2016 with R/Tax Appeal No. 86 of 2016, dt. 25-4-2018) : 2018 TaxPub(DT) 2720 (Guj-HC) Futura Ceramics (P) Ltd. & Anr. v. State of Gujarat & Ors. (2013) 62 VST 488 (Guj) Ganga Glazed Tiles (P) Ltd., Vrundavan Ceramics (P) Ltd., Italica Floor Tiles (P) Ltd., Varmora Granito (P) Ltd., Gokul Ceramics (P) Ltd., Gangotri Glazed Tiles (P) Ltd. v. A.CIT, Central Circle-1, Rajkot And Vice-Versa. in (I.T.A. No. 133, 100, 105, 138, 109, 146, 113, 150, 117, 142, 125, 169/Rjt/2013 (Assessment year 2008-09), dt. 10-8-2018)
FAVOUR : In assessee's favour
A.Y. :
IN THE GUJARAT HIGH COURT
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