ASSAM WOOD AND ALLIED PRODUCTS,JAGADHRI, YAMUNA NAGAR vs. INCOME TAX OFFICE, WARD-1, YAMUNA NAGAR, YAMUNA NAGAR

ITA 1031/CHANDI/2025Status: DisposedITAT Chandigarh28 September 2026AY 2014-1597 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal held that the issue concerning manufacturing/quantitative analysis requires fresh adjudication. The assessee's alternative quantitative working and the errors pointed out in the AO's calculations cannot be disregarded. Given the technical nature involving manufacturing processes, raw material consumption, and labour, an objective determination with expert assistance is necessary. The Tribunal restored the issue to the file of the CIT(A) for fresh adjudication. The CIT(A) is directed to call for a comprehensive remand report from the AO, covering manufacturing analysis, quantitative calculations, labour/man-hours, assumptions, assessee's objections, and alternative working. The AO is to obtain expert assistance from the Institute of Wood Science and Technology (IWST) for technical aspects and incorporate this in the remand report. The CIT(A) will then adjudicate the appeal afresh after considering the remand report, expert opinion, assessee's objections, and alternative calculations. The Tribunal clarified that it was not expressing any final opinion on the merits of additions based on diary entries or partner statements, which will be examined afresh by the CIT(A). The Tribunal also clarified that the allegation of the diary being fabricated is not to be reopened as it has attained finality. The matter is restored solely for examining the manufacturing/quantitative analysis and its consequential evidentiary effect. The CIT(A) shall decide the appeal afresh without being influenced by any observations in this order. The appeal is allowed for statistical purposes.

What were the facts?

The appeal by Assam Wood And Allied Products (assessee) is against the order of the CIT(A) dated 01/08/2025, which upheld the assessment order dated 05/08/2017 passed by the Assessing Officer (AO) under section 144 of the Income-tax Act, 1961. The assessment followed a survey under section 133A on August 29-30, 2013. During the survey, excess cash of Rs. 9,78,600 and excess stock valued at Rs. 14,90,000 were found. A diary (No. 216) with names and amounts was also seized. The working partner, Shri Satish Kumar Goel, provided statements regarding diary entries, admitted to cash advances of Rs. 4,25,30,000 and imprest money of Rs. 3,50,00,000, and surrendered Rs. 8 crore as undisclosed income for AY 2014-15. A surrender letter was submitted by partners. Subsequently, Shri Goel retracted his statement, alleging it was obtained under pressure and coercion, and that the diary was prepared by survey officers. The AO made aggregate additions of Rs. 8,00,33,272.

What were the issues?

1. Whether the CIT(A) erred in upholding the assessment order under section 144, making aggregate additions of Rs. 8,00,33,272, by failing to appreciate material on record and settled provisions of law, thereby rendering the order liable to be quashed (under section 250)? 2. Whether uncorroborated rough jottings in a diary/notebook can be used against the assessee in the absence of any independent witness, citing CBI v. V.C. Shukla and Nishant Construction Pvt. Ltd. v. ACIT? 3. Whether the AO erred in making additions without conducting independent inquiry or resorting to provisions of section 131(1) and 133A, despite requests, citing Nathuram Weljibhai Vyas v. Mrs. Laxmibai Lunkaranji Chandak? 4. Whether the AO arbitrarily made additions relying solely on the statement of Shri Satish Goel, made under duress/coercion and later retracted, citing CIT v. Harjeev Aggarwal? 5. Whether the AO failed to follow CBDT instructions dated March 10, 2003, and December 18, 2014, regarding obtaining confessions during survey operations? 6. Whether the AO and CIT(A) erred in not considering contradictions in the statements of survey party members during cross-examination? 7. Whether rejecting the books of accounts under section 145(3) was erroneous when untenable balances for AY 2014-15 originated from AY 2013-14, which was accepted, citing Union of India and others v. N. Murugesan and others? 8. Whether the addition of Rs. 25,796 on account of alleged underreporting of 18 mm ply closing stock was erroneous? 9. Whether the addition of Rs. 7,476 on account of alleged underreporting of 6 mm ply closing stock was erroneous? 10. Whether the additions of Rs. 3,64,90,000 under section 69A and Rs. 4,25,30,000 under section 69 were made without application of mind and satisfying legal requirements, relying solely on a retracted statement and surrender letter, citing CIT vs. Sunil Aggarwal? 11. Whether the addition of Rs. 14,90,000 under section 69C was erroneous, based on Shri Satish Goel's statement, rejecting the assessee's explanation, citing Ushakant N. Patel v. CIT? 12. Whether the CIT(A)'s order was a non-speaking order merely affirming the AO's order, making it liable to be quashed, citing Rajkumar Anandchand Jain v. Dy. Commissioner of Income Tax? 13. Whether the impugned orders failed to appreciate submissions and documentary evidence, making them liable to be set aside, citing Aphv India Investco. Private Limited v. ACIT? Assessee's Contentions: The assessee argued that rough jottings in a diary are inadmissible without corroboration. Additions were made without independent inquiry under sections 131(1) and 133A. The statement of Shri Satish Goel was made under duress and was retracted. CBDT instructions were not followed. Contradictions in survey party statements were ignored. Rejection of books of accounts was contradictory to prior acceptance. Specific additions for closing stock, under sections 69, 69A, and 69C, were based on retracted statements and lacked legal satisfaction. The CIT(A)'s order was non-speaking and failed to appreciate evidence. Revenue's Contentions: Not recorded in the judgment.

Which sections of the Income-tax Act were involved?

Section 133A,Section 144,Section 250,Section 131(1),Section 145(3),Section 69A,Section 69,Section 69C

AI-generated summary — verify with the full judgment below

Cause title — parties, addresses and appearances
आयकर अपीलीय अिधकरण,च"ीगढ़ "ायपीठ “ए” , च"ीगढ़ IN THE INCOME TAX APPELLATE TRIBUNAL, CHANDIGARH BENCH “A”, CHANDIGARH HEARING THROUGH: VIRTUAL MODE "ी लिलत कुमार, "ाियक सद" एवं "ी िवजय वमा" , लेखा सद" BEFORE: SHRI. LALIET KUMAR, JM & SHRI. VIJAY VARMA, AM आयकर अपील सं./ ITA No. 1031 /Chd/ 2025 िनधा"रण वष" / Assessment Year : 2014-15 Assam Wood And Allied Products बनाम The ITO Village Mukarabpur, Chhachhrauli Ward-1, Road, Yamunanagar, Haryana- Yamuna Nagar, Haryana 135003 "ायी लेखा सं./PAN NO: AACFA3679H अपीलाथ"/Appellant ""थ"/Respondent िनधा"रती की ओर से/Assessee by : Ms. Meenal Goyal & Sh. Kunal Gupta, C.A’s राज" की ओर से/ Revenue by : Smt. Jaishree Sharma, CIT, DR सुनवाई की तारीख/Date of Hearing : 25/08/2026 उदघोषणा की तारीख/Date of Pronouncement : 28/09/2026

आदेश/Order

PER VIJAY VARMA, A.M: The present appeal arises out of the appellate order of Ld. CIT(A), dt. 01/08/2025 against assessment order dt. 05/08/2017 pursuant to a survey under section 133A of the Income-tax Act, 1961 (hereinafter referred to as "the Act"), which was carried out at the business premises of the assessee on 29th and 30th August, 2013. The assessment was subsequently completed under section 144 of the

The order continues below.

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