ASSAM WOOD AND ALLIED PRODUCTS,JAGADHRI, YAMUNA NAGAR vs. INCOME TAX OFFICE, WARD-1, YAMUNA NAGAR, YAMUNA NAGAR
What did the Tribunal hold?
The Tribunal held that the issue concerning manufacturing/quantitative analysis requires fresh adjudication. While the assessee's declaration during the survey and the AO's analysis constitute material, the assessee's alternative quantitative working and calculation errors pointed out by the assessee cannot be ignored. Given the technical nature involving manufacturing processes, raw material consumption, veneer requirements, labour, and man-hours, an objective determination with the assistance of a technical expert is necessary. Therefore, the matter is restored 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, AO's assumptions, assessee's objections, and alternative working. The AO shall obtain expert assistance from the Institute of Wood Science and Technology (IWST) for technical aspects. The CIT(A) will then adjudicate the appeal afresh based on the remand report, expert opinion, assessee's objections, and other material, considering the diary entries and statements cumulatively with the expert findings. The issue of diary fabrication is considered final and not to be reopened. 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 conducted on the assessee's business premises on 29th and 30th August, 2013. During the survey, excess cash of Rs. 9,78,600/- and excess stock valued at Rs. 14,90,000/- were found. A diary containing names and amounts was also seized. The partner, Shri Satish Kumar Goel, initially admitted to business 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. Subsequently, he retracted this surrender, alleging it was obtained under pressure and coercion, and that the diary was prepared by departmental officers.
What were the issues?
1. Whether the additions aggregating to Rs. 8,00,33,272/- made by the AO under various sections of the Act, and upheld by the CIT(A), are erroneous and liable to be quashed, considering the alleged non-speaking nature of the CIT(A)'s order and failure to appreciate material on record. 2. Whether uncorroborated rough jottings in a diary can be used against the assessee in the absence of independent witnesses, relying on CBI v. V.C. Shukla and Nishant Construction Pvt. Ltd. v. ACIT. 3. Whether the AO failed to conduct independent inquiry under sections 131(1) and 133A of the Act, despite requests, as argued by the assessee, citing Nathuram Weljibhai Vyas v. Mrs. Laxmibai Lunkaranji Chandak. 4. Whether the AO arbitrarily made additions based solely on the statement of Shri Satish Goel, made under duress and later retracted, citing Commissioner of Income Tax v. Harjeev Aggarwal. 5. Whether the AO failed to follow CBDT instructions regarding obtaining confessions during survey operations, as per CBDT letter F. No. 286/2/2003-IT (Inv.) dated 10th March, 2003 and 18th December, 2014. 6. Whether there were inherent contradictions and irregularities in the statements of the survey party members during cross-examination, as contended by the assessee. 7. Whether rejecting the assessee's books of accounts under section 145(3) for AY 2014-15 was erroneous when the untenable balances originated from AY 2013-14, which was accepted in prior assessment proceedings, citing Union of India and others v. N. Murugesan and others. 8. Whether the addition of Rs. 25,796/- on account of alleged under-reporting of closing stock of 18 mm ply is justified. 9. Whether the addition of Rs. 7,476/- on account of alleged under-reporting of closing stock of 6 mm ply is justified. 10. Whether 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 made without satisfying statutory ingredients, citing Ushakant N. Patel v. CIT. 12. Whether the CIT(A)'s order is a non-speaking order merely affirming the AO's order, citing Rajkumar Anandchand Jain v. Dy. Commissioner of Income Tax. 13. Whether the impugned orders failed to appreciate the assessee's submissions and documentary evidence, citing Aphv India Investco. Private Limited v. ACIT. Assessee's Contentions: The assessee argued that the CIT(A)'s order was non-speaking and erroneous. They contended that rough jottings in a diary are inadmissible without corroboration. The AO allegedly failed to conduct independent inquiries and relied on a retracted statement obtained under duress, violating CBDT instructions. The assessee also pointed to contradictions in survey team statements and argued that rejecting books of accounts was contradictory. Specific additions for closing stock, under sections 69, 69A, and 69C were challenged as lacking legal basis and relying on retracted statements. The CIT(A)'s order was characterized as a mere affirmation of the AO's order, failing to consider evidence. Revenue's Contentions: The judgment does not explicitly record the revenue's contentions on each ground.
Which sections of the Income-tax Act were involved?
Section 133A,Section 144,Section 145(3),Section 131(1),Section 69,Section 69A,Section 69C,Section 250,Section 148,Section 143(3)
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Cause title — parties, addresses and appearances
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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