RATHI BARS LIMITED,NEW DELHI vs. ACIT, CENTRAL CIRCLE-16, NEW DELHI

PER BENCH :

2. In various grounds of appeal, the assessee has mainly challenged the following additions:-

ITA No. Assessment Addition made by the Ld. AO Amount Years (in Rs.) 1163/Del/2018 2009-10 Undisclosed income on sales 31,61,395/- made to M/s. Hari Iron India Ltd. 1258/Del/2018 2010-11 Undisclosed income on sales 4,84,675/- made to M/s. Hari Iron India Ltd. 1259/Del/2018 2011-12 Undisclosed income on sales 4,96,572/- made to M/s. Hari Iron India Ltd. 1260/Del/2018 2012-13 1. Undisclosed income on 5,27,142 sales made to M/s. Hari Iron India Ltd.

2. Undisclosed income on sales made out of 2,45,856/- books

3. Since, in all the years in the case of both the assessees, issues are identical arising out of similar facts and similar findings of the AO and ld. CIT (A), therefore, the same were heard together and are being disposed off by way of this consolidated order.

“Q.1 Please identify yourself? Ans. My name is Amit Gupta S/o Sh. Ram Kishan Gupta R/o 95, Espace, Nirvana Country, Sec.50, Gurgaon (Aadhar No.661688102028).

Q.5 Please give details of your source of income. Ans. I am deriving income from business of trading of cement and steel. Apart from these, I also get rental income in the form of interest from savings.

Q.7 Give details of assessment particulars of company / concern you own.

5 1252 to 1256 & 1327 /Del./2018 ITA Nos.1163, 1258 to 1262/Del./2018 Ans. I don't own any company. Neither I am director of any company. I work in Hari Iron (India) Ltd company in the capacity of chief operating officer. I draw salary of Rs.One lakh per month.

Q.14 Please give details about the nature of business of the company Hari Iron (India) Ltd. Ans. M/s Hari Iron India Ltd. is a channel development partner of M/s Lafarge Cement Ltd. for Gurgaon and Mewet district taking care of the dealers and motivating them for enhancing the sale. Apart from this we are the distributors of Rathi Steel and maintain their dealers end motivate them to enhance sales. We are also responsible for enhancing sale of Monnet Ispat Ltd., for Lafarge Cement Ltd. and Monnet Ispat Ltd. we are sole channel partners of these two companies.

Q.24 What is ‘W’ and do you deal in ‘W’? Ans. ‘W’ is without bill it refers to transfer of good without bill. When a client approaches for products in ‘W’ we sell the goods in ‘W’. Here, I am only a distributor. I don’t stock goods. I simply forward the request to Rathi Bars Ltd. and Rathi Special Steel Ltd. They sell the goods directly to the clients. I receive my commission. If the sale is through bill i.e. no ‘W’ the client makes the payment to my company which in turn pays to either Rathi Bars Ltd. or Rathi Special Steels Ltd. after deducting my commission. But in case if the sale is made in ‘W’ i.e. without bills I receive my commission in cash from the client and Rathi Bars/Rathi Special Steels Ltd. either takes the cash directly from the client or Sh. Anurag Rathi requests me to tell the client to make payment directly to ingot supplier like Munna Rathi, Jhanardhan Beriwal, Alok Goenka amongst others. At other times, Sh. Anurag Rathi requests me to ask the client to make the cash payment directly to scrap supplier like Vijay Pal, Sandeep, Mahavir amongst others.

Q.25 How much is your commission as a distributor? Ans. My commission is usually around Rs.150 per metric ton.

Q.26 Which are the companies to whom you are a distributor of Iron & Steel Bars?

Ans. I am the distributor for the following companies in the field of Iron & Steel Bars :

1. 1. Rathi Bars Limited 2. Rathi Special Steels Limited 3. Vinayak Rathi Steel Rolling Mills Pvt. Ltd.

4. Monnet Ispat Limited Q.28 What is the turnover of your company M/s. Hari Iron India Limited? Ans: During the last 2-3 years, it has revolved around 30 crores.

Q.29 What is the quantum of sales in ‘W' during the year? Ans: The total 'W' is nearly 30% of the tola1 sales that is nearly 9 crores.

Q.32 Where do you keep your record of Kachcha Bills or ‘W’? Ans. I destroy the pages same day and don't keep records of it.

In view of the above facts, as the chief operating officer has admitted that 30% of total sales effected by the company remains out of books, and in reply to question No.24 he has clearly mentioned the name of your company, it can be safely inferred that you have only offered 70% of sales in the return of income arising out of sales through M/s. Hari Iron (India) Ltd. One of your directors Mr. Anurag Rathi was also confronted with this fact during the course of assessment proceeding. Hence, you are requested to explain why suitable additions arising involving such sales should not be made to your total income. You are further requested to file ledger of Hari Iron (India) Ltd. as appearing in your books of account for the relevant previous year.”

7 1252 to 1256 & 1327 /Del./2018 ITA Nos.1163, 1258 to 1262/Del./2018 “On behalf of the above captioned assessee, we acknowledge the receipt of the above notice and in this regard, we hereby submit that the assessee company has made sales to M/s Hari Iron (India) Ltd during these years under consideration, however all the sales made by the assessee company has been properly booked in the regular books of accounts and no any sales have made by assessee company to the said party or any other party that has not been recorded in its books of accounts. Further, in this regard, we hereby submit that assessee is required to prepare various records as per the Sales Tax Law as well as Excise laws prevailing and all the details such as Sales Tax Returns as well as Excise Returns have already been submitted before your goodself further each and every sales entry has to be entered in the excise records and the documents are in possession of your goodself being part of the seized records whereby gram by gram quantity of sales made by the assessee company has been recorded and by perusal of the same, your goodself will find that no any sales has been made by assessee company without bills and not booked in the books of accounts of the assessee company In this regard, we hereby further submit that search action u/s 132 of the act was made by the Income Tax Department at the office premises of Assessee Company and not a single iota of documents was found during the course of search which can indicate that Assessee Company has made sales out of book of accounts i.e. without bills to the said party. Further with regards to the statement of Amit Gupta we hereby submit that the statement in the absence of any incriminating material found during the search may be based on the dictates of the search officials In absence of any incriminating material such statement could not be treated as genuine and could not be used against the assessee company. Further coming to the statement of Amit Gupta, he has stated that the word 'W' has been written where sales have been made without bills but during the course of search, not a single entry/sales have been found which states the word 'W and it is seems that the same is only the story scripted during the course of search and without corroborating the same with any documentary evidence

8 1252 to 1256 & 1327 /Del./2018 ITA Nos.1163, 1258 to 1262/Del./2018 found during the course of search from the premises of the assessee as well as Hari Iron India Ltd. Further we hereby submit that the party statements could not used against the assessee without confronting the same with the assessee and without not based on any corroborative evidence found during the course of search. Further, various High Courts in the judicial pronouncements has held that third party statements could not be used against the assessee without confronting the same with the assessee and without any documentary evidence in this regard. Further, your goodself has stated that the statement of Amit Gupta was confronted with the assessee company in this regard. it is hereby submitted that the statement of Amit Gupta was never confronted with any of the directors of the assessee company except of the following questions asked during the course of search from Sh. Anurag Rathi stated as under :- Q. Do you know Mr Amit Gupta? How is he related to your Business? Ans He is a distributors of M/s Rathi Bars Ltd. and M/s Rathi Special Steels Ltd. in North India. Q. How do you deal with Mr Amit Gupta in business and /or business activities? Ans. Mr Amit Gupta is a distributor of my companies.

From the perusal of the above, your goodself will find that directors of assessee Company were never confronted with the statement given by Amit Gupta during the search proceedings as well as post search investigation and it clearly proves that even the search team does not found the statement of Amit Gupta reliable and realistic. In view of the above, we again submit before your goodself that all the sales made by the assessee company has been duly recorded in the books of accounts and the assessee company has not made any sales without bills i.e. outside books of accounts and therefore, no any adverse inference

9 1252 to 1256 & 1327 /Del./2018 ITA Nos.1163, 1258 to 1262/Del./2018 should be taken against the assessee company in this regard. However, as required by your goodself, ledger accounts of M/s. Hari Iron India Ltd. in the books of Assessee Company for each of the assessment year have been enclosed herewith for your kind perusal. Further, it is event form the perusal of the Show Cause notice that your goodself intends to make estimated additions to the income of the assessee company by relying on the statement of Amit Gupta without corroborating the same with any incriminating material found during the course of search relating to these transactions. Without prejudice to the submission made above, we hereby submit that no any addition could be made in case of the assessee as the assessee has not entered into any such transactions during the years under consideration and even otherwise no any purchases in this regards, has been entered into the books of accounts of the assessee company, no any expenses relating to such sales have been entered into the books of accounts of assessee company; then in such circumstances, any addition to the income of the assessee company, without any corroborating evidences, without any incriminating material found during the course of search in this regard and without confronting the statement of Amit Gupta with the assessee company.”

Moreover, it is also a fact that some torn papers were also recovered from the chamber of one of the directors of the assessee company Sh. Anurag Rathi situated at A-24/7 and A-24/8 at Mohan Co-operative Industrial Estate, Delhi and inventorised under Annexure A-22, page 09 to 17 having clear evidences of sales out of books. Thus, the statement of Amit Gupta is getting corroborated with the seized material also. Hence it is held that the assessee has shown only 70% of its sales to M/s. Hari Iron India Ltd. and at least 30% of the sales remained outside the books, on which the assessee has suppressed its income. The assessee has also held as suppressed its capital which was used for affecting such unaccounted sales income arising out of such sales as well as capital deployment is being calculated as under :- Asst. Sales to Hari Sales Profit Total Sales Capital Undisclosed Year Iron India remained earned made during Employed Capital (F) Ltd. out of (taking the year (D) (including [B/DxE] recorded in books (B) [A N.P. as share books (A) x 30%/70%] disclosed premium) (E) in regular books for relevant previous year (C) 2009- 13,05,95,264 5,59,69,399 3,63,801 258,89,40,790 34,18,74,995 73,90,875 10 Thus, total addition on account of undisclosed capital and income arising out of sales comes to Rs.77,54,676/-.

11 1252 to 1256 & 1327 /Del./2018 ITA Nos.1163, 1258 to 1262/Del./2018 to M/s. Hari Iron India Ltd. 2012-13 Undisclosed income on sales made 5,27,142 to M/s. Hari Iron India Ltd. 2013-14 Undisclosed income on sales made 5,91,847/- to M/s. Hari Iron India Ltd. 2014-15 Undisclosed income on sales made 2,66,423/- to M/s. Hari Iron India Ltd.

Assessment Addition made by the Ld. AO Amount Years (in Rs.) 2009-10 Undisclosed income on sales 3,63,801/- made to M/s. Hari Iron India Ltd. 2010-11 Undisclosed income on sales 8,83,084/- made to M/s. Hari Iron India Ltd. 2011-12 Undisclosed income on sales 3,13,433/- made to M/s Hari Iron India Ltd. 2012-13 Undisclosed income on sales 3,20,727/- made to M/s. Hari Iron India Ltd. 2013-14 Undisclosed income on sales 4,64,264/- made to M/s. Hari Iron India Ltd. 2014-15 Undisclosed income on sales 2,01,310/- made to M/s. Hari Iron India Ltd. 2015-16 Undisclosed income on sales 23,735/- made to M/s. Hari Iron India Ltd.

“5. Findings I have considered the above pleadings and submissions made by the Ld. Counsel of the appellant and the order of the A.O passed u/s 153A/143(3) of the Act for the instant Assessment Year and the facts available on record for the year under consideration. The grounds are disposed off issue wise as below. The findings are as below- Action u/s 132 was undertaken in respect of the appellant assessee on the assessee & its associates, on 2010112015. It has been contended on behalf of the appellant that-

"Because no incriminatory materials/documents/ information's were found and the assessment u/s 153A were made without any seized material and documents found during search, the addition made were outside the search materials as fresh assessment or reassessment are against the -provision of section 153A of the Act itself as such the assessment passed making additions outside search materials changing his opinion from the earlier orders passed by the Department is illegal and bad in law."

The issue of existence of incriminating material has to be considered in totality. The assessee cannot hide behind seizure or non seizure of documents. The same has to be construed with the trade practices and the expected action on part of an independent entity in normal circumstances. The AO and this appellate forum too have to construe the 13 1252 to 1256 & 1327 /Del./2018 ITA Nos.1163, 1258 to 1262/Del./2018 incriminating material in a harmonious fashion. Hon'ble Delhi High Court has also reiterated in many rulings that action u/s 153A is bound to be initiated in such situations. Therefore, this action of the AO is in tune with judgment of Hon'ble Delhi High Court in CIT (C)-III v. Kabul Chawla (Delhi) [2015] 380 ITR 573. The same is further strengthened by the judgment of Hon'ble Delhi High Court in the case of Dayawanti Gupta v. CIT in ITA Nos.357, 358, 359/2015 and other dated 27.10.2016. Having considered the detailed and be laboured submissions of the ld. AR and the material on record, I am drawn to the conclusion that the action of the AO does not go at variance with the provisions of law and the available concerned. The AO was well within his powers to invoke section 153A of the Act on prima facie finding about information that surfaced during the search. Certain documents were found and which lead the AO to conclude that the assessee has made sales out of books. Further, there was a survey on the premise of M/s Hari Iron India Limited a dealer of the assessee company. Statement of Mr. Amit Gupta, the Chief Operating Officer of M/s Hari Iron India Ltd., was recorded whereby he admitted on behalf of his company that they used to make 30% of the sales outside books of accounts on products acquired from parties including the appellant Rathi Bars Ltd. A statement of Mr. Anurag Rathi, Director of M/s Rathi Bars Ltd. was also recorded. The appellant has refuted the above referred statement of Sh Amit Gupta same. The appellant has contended that there was no incriminating material to prove the admission made by the COO of Hari Iron. The contention of the appellant lacks force. For in cases of unaccounted sales, the likely hood of specific documentary evidence being kept is too absurd a possibility. The tax evasion exercises are so structured so as not to leave any verifiable trail. It has been contended on behalf of the appellant as under-

"On behalf of the above captioned assessee we acknowledge the receipt of the above notice and in this regard, we hereby submit that the assessee company has made sales to M/s Hari Iron India Ltd During these years under consideration; however J all the sales made by the assessee company has been properly booked in 14 1252 to 1256 & 1327 /Del./2018 ITA Nos.1163, 1258 to 1262/Del./2018 the regular books of accounts and no any sales have been made by assessee company to the said party or any other party that has not been recorded in its books of accounts. Further, in this regard we hereby submit that assessee is required to prepare various record as per the sales tax law as well as excise laws prevailing and all the details such as sales tax returns as well as excise returns have already been submitted before your goods self, further each and every sales entry has to be entered in the excise records and the documents are in possession of your good self being part of the seized records whereby gram by gram quantity of sales made by the assessee company has been recorded and by perusal of the same your goodself will find that no any sales has been made by assessee company without bills and not booked in the books of accounts of the assessee company. In this regard we hereby further submit that search action u/s 132 of the act was made by the income tax department t the office premises of assessee company and not a single iota of document was found during the course of search which can indicate that assessee company has made sales out of books of accounts I.e. without bills to the said party, further with regards to the statement of Amit Gupta we hereby submit that the statement in the absence of any incriminating material found during the search may be based on the dictates of search officials in absence if of any incriminating material such statement could not be treated as genuine and could not be uses against the assessee company .Further coming to the statement of Amit Gupta he has stated that word 'w' has been written where sales have been made without bills but during the course of search .not a single entry/sales have found which states the word 'w' and it is seems that the same is only the story scripted during the course of search and without corroborating the same with any documentary evidence found during the course of search from the premises assessee as well as Hari Iron India Ltd. Further, we hereby submit that the third party statement could not used against the assessee without confronting the same with the assessee and without not based on any corroborative evidence found

15 1252 to 1256 & 1327 /Del./2018 ITA Nos.1163, 1258 to 1262/Del./2018 during the course of search further, various high courts in the judicial pronouncements has held that third party statement could not be uses against the assessee without confronting the same with the assessee and without any documentary evidence in this regard Further, your good self has states that the statement of Amit Gupta was confronted with the assessee company, in this regard it is hereby submitted that the statement of Amit Gupta was never confronted with any of the directors of the assessee company except of the following questions asked during the course of search from Sh. Anurag Rathi stated as under. Q. Do you know Mr. Amit Gupta? How is he related to your business? Ans. He is a distributor of M/s Rathi Bars Ltd and M/s. Rathi Special Steel Ltd in north India. Q. how do you deal with Mr. Amit Gupta in business and non- business activities? Ans: Mr. Amit Gupta is a distributor of my companies. From the perusal of the above your good self will find that directors of assessee company were never confronted with the statement given by Amit Gupta during the search proceedings as well as post search investigation and it clearly proves that even search team does not found the statement of Amit Gupta reliable and realistic. In view of the above we again submit before your good self that all the sales made the assessee company has been duly recorded in the books of accounts and the assessee company has not made any sales without bills i.e. outside books of accounts and therefore no any adverse inference should be taken against the assessee company in this regard. However as required by your good self ledger, accounts of M/s. Hari Iron India Ltd. In the books of assessee company for each of the assessment year have been enclosed herewith for your kind perusal. Further, it is evident from the perusal show cause notice that your good self intends to make estimated additions to the income of assessee company by relying on the statement of Amit

16 1252 to 1256 & 1327 /Del./2018 ITA Nos.1163, 1258 to 1262/Del./2018 Gupta without corroborating the same with any incriminating material found during the course of search relating to these transactions without prejudice to the submission made above. We hereby submit that no any addition could be made in case of the assessee has not entered into any such transactions during the years under consideration and even otherwise no any purchases in this regards .has been entered into the books of accounts of the assessee company .no any expenses relating to such have been entered into the books of accounts of assessee company; then in such circumstances any addition to the income of assessee company, without confronting the statement of Amit Gupta with the assessee company. The learned AO while rejecting the above submission has made the follow observations and has cited the case laws in support of his contention. Your honour, the case laws cited by the ld AD are not applicable to the facts & legality of the case." The third party has made admission on this count and it is unlikely that the assessee appellant would concede this pint. The AO has also dealt with stock variations in other assessment orders. The unaccounted sales have rarely any paper or material trail, but a bonafide statement of a key functionary lends sufficient credence to the imputation about such action of the assessee appellant and it gets further reinforced when we see the differences in stock as we shall see in case of the assessee group entities. In view of the accounting principles, the addition of Rs.3,63,801/- on account of profit arising out unrecorded Sales and Rs.73,90,875/- on account of undisclosed capital deployed for such unrecorded sales to MIs Hari Iron is, therefore, confirmed.” Similar findings have been given in all the years, therefore same not to be discussed.

18 1252 to 1256 & 1327 /Del./2018 ITA Nos.1163, 1258 to 1262/Del./2018 Gupta. In absence of any rejection of books of account, neither the sales can be estimated nor can any profit rate be applied. Once the trading account has been accepted including the figures of debit and credit side, there is no scope for estimating any GP or NP rate.

“Observation and Conclusion : Submission of the assessee is considered In the light of information available on record. While reconciling the sales figures. the assessee is claiming that the figures have been taken multiple times while calculating the amount of Rs.4,20,85,846/- due to the fact that the pages 09 to 11 and,14 to 17 consists of the details of sales made and page 12 and 13 consists of the summary of the figures as mentioned on other set of pages whereas the amount of Rs.4,20,85,846/- cumulatively consists figures of all the details stated in pages ranging from page 09 to 11 and 14 to 17 of Annexure A-22. On final reconciliation, the assessee claimed that the sate figure as appearing these papers aggregates to Rs.1,84,65,175/- instead of Rs.4,20,85.846/-. It is further claimed on the basis of copies of sales bills, transporter copies and sales ledger that out of sales of Rs.1,84,65,175/-, the assessee has already recorded Rs.1,42,69,681/- in the regular books of account and balance sales of Rs.41,95,493/- remained out of books. The contention of the assessee that the sales amounting to Rs.41,95,493/- has not been entered by the assessee company as the material has not been delivered to the parties could not found any favour as the details stated on these papers clearly mentioning the name of party, name of brokers alongwith the details of vehicles through which the material must have been delivered to these parties In view of the above, it can be safely concluded that sales of Rs.41,95.493/- has been made and not accounted for in the books of accounts. The assessee has also held as suppressed its capital which was used for affecting such unaccounted sales. Income arising out of such sales as well as capital deployment is being calculated as under:

Asst. Sales Profit earned Total sales Capital Undisclosed Year remained (taking made Employed Capital (e) out of manufacturing GP during the (including [A/C x D] books (A) i.e. 5.86% as year (C) share disclosed in premium) (D) regular books for relevant previous year) (B)

2015-16 41,95,493 2,45,856 2,64,49,254 34,18,74,995 5,41,963 Thus, total profit on undisclosed sales comes to Rs.2,45,856/- and total undisclosed capital required to affect the sales calculated at Rs.5,41,963/- but as an addition has already been made during the last years on account of 20 1252 to 1256 & 1327 /Del./2018 ITA Nos.1163, 1258 to 1262/Del./2018 undisclosed sales and capital to the extent of Rs.99,37,494, no further addition lie on account of capital. So, addition on account of income arising out of sales comes to the extent of Rs.2,45,856/- is added to the total income of the assessee.”

21 1252 to 1256 & 1327 /Del./2018 ITA Nos.1163, 1258 to 1262/Del./2018 relied upon various judgments of Hon’ble High Courts that no addition can be made in the absence of any incriminating material in the case of unabated assessments. His primarily reliance was on the judgements of CIT vs. Kabul Chawla - 380 ITR 173 (Del.), CIT vs. Best Infrastructure (India) Pvt. Ltd. in ITA No.13/2017 dated 01.08.2017, Pr.CIT, Central -3 vs. Dharampal Premchand Ltd. 2017 (8) TMI 958 Delhi High Court and Pr. CIT, Central 2, New Delhi vs. Meeta Gutgutia Prop. M/s. Ferns ‘N’ Petals 2017 (5) TMI 1224 – Delhi High Court. He also relied upon the judgement of Hon’ble Delhi High Court in case of PCIT (Central) -3 vs. Anand Kumar Jain(HUF) 2021 (3) TMI 8 – Delhi High Court for the proposition that statement recorded in search against the third person cannot be used for making the additions in the hands of the assessee on the assessment made u/s 153A.

DECISION

25 1252 to 1256 & 1327 /Del./2018 ITA Nos.1163, 1258 to 1262/Del./2018 have not been rejected or commented upon. Therefore, in these circumstances, the sales cannot be estimated and consequently any GP or NP rate. Accordingly, all the additions made by the AO on account of undisclosed income on sales to M/s. Hari Iron India Limited in case of both the assessee companies are directed to be deleted.

“Observation and Conclusion The submission of the assessee has been considered but found to be devoid of merits. The assessee has submitted that the survey team has not taken the inventory of stock on actual basis instead it has been argued that the stock has been inventorised on estimation basis only. This contention of the assessee could not be accepted as the survey team has inventorised the stock in the presence of the employees of the assessee company. Further, the assessee has submitted a detailed calculation of stock based in the ISI standards defined for a certain description of Steel Bars and bas submitted that difference between the inventory of Finished Stock of Steel Bars on the basis of such standards and the Inventory of Stock of Finished Goods as per the Stock register has been reduced, This contention of the assessee could not be accepted as no documentary evidence substantiated its claim could have been furnished by the assessee during the course of assessment proceedings. Moreover, it is also found that the assessee has neither raised the issue during the course of search/ survey proceedings nor this issue was raised at post search proceedings before the Directorate of Investigation. Hence, the excess slack of Raw Material found physically is being treated as unexplained investments as per the provisions of Section 69 of the LT. Act. 1961 and the value of Excess- Stock in respect of Raw Material has been calculated at Rs.40,73,065/- (138.07 MT x Rs.29,500). Further, with regard to the less stock found in respect of Finished Stock, Miss Roll and Scrap. It can be safely concluded that sales out of the books of accounts has been made by the assessee and due to the same, the stock found during the course of search/ survey has been less in comparison to the Inventory as per the Stock register. The amount of suppressed sales and Income arising out of such sales is being calculated as under: S.No. Item of Difference Rate per Amount of Income Stock in Stock MT as per Suppressed earned (taking (MT) purchase/ Sales manufacturing Sales bills G.P. I.E. for 5.86% as January disclosed in 2015 regular books) 1 MS Scrap 154.55 29,500 45,59,225 2,67,171 (Bi- product) 2 Steel Bars 305.953 34,600 1,05,85,974 6,20,338 3 Miss Roll 134.445 29,500 39,66,l27 2,32,415 4 Sponge 3,74,355 29,500 1,10,43,472 6,47,147 Iron & Scrap Total (Rs.) 3,01,54,798 17,67,071 Thus, the amount of Rs.40,73,065/- in respect of excess stock of Raw Material and amount of Rs.17,67,071/- as 27 1252 to 1256 & 1327 /Del./2018 ITA Nos.1163, 1258 to 1262/Del./2018 income earned on suppressed sales has been added to the income of the assessee. (Addition : Rs.58,40,136/-)”

29 1252 to 1256 & 1327 /Del./2018 ITA Nos.1163, 1258 to 1262/Del./2018 23. However, from the perusal of the assessment order, we find that AO has made addition of Rs.40,73,065/-on account to excess stock of raw material and Rs.17,67,071/- on account of different items of stock as incorporated above. The ld. CIT (A) has deleted the addition of Rs.40,73,065/- and regarding the amount of suppressed sales and income from such sales of Rs17,67,071/-, he has not given any separate finding albeit has held that unaccounted sales has already been confirmed by him. However, there is no clarity on this addition of Rs.17,67,071/-, therefore, we are of the opinion that ld. CIT (A) should decide this issue clearly and assessee may substantiate this issue before the ld. CIT (A). Accordingly, this ground relating to Rs.17,67,071/- is remanded back to the file of the ld. CIT (A).

Order was pronounced in open court on 28th day of February, 2022.