PRICIPAL COMMISSIONER OF INCOME TAX, GANDHINAGAR vs. ZIRCONIA CERA TECH GLAZES

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TAXAP/605/2018HC GujaratGJHC24029116201818 June 2018Author: HONOURABLE MR. JUSTICE M.R. SHAH,HONOURABLE MR. JUSTICE A.Y. KOGJE4 pages

AI SummaryDismissed

What did the High Court hold?

The High Court dismissed the appeals filed by the Revenue. The Court noted that similar additions made by the Assessing Officer for different assessment years had been deleted by the learned Tribunal. The Court further observed that a Division Bench of the High Court, in a common judgment dated 12/06/2018 in Tax Appeal Nos.599/2018 to 601/2018, had already confirmed the ITAT's decision. The reasoning for that confirmation was that the ITAT had deleted the additions primarily because the CESTAT had adjudicated the excise show-cause notice in favour of the assessee and deleted the additions on the excise side. Therefore, the High Court found that the learned Tribunal was justified in deleting the additions made by the Assessing Officer. Consequently, the present appeals also deserved to be dismissed as no substantial question of law arose. The operative direction was the dismissal of both appeals.

What were the facts?

The appeals were filed by the Principal Commissioner of Income Tax, Gandhinagar (Revenue) against the common judgment and order of the Income Tax Appellate Tribunal (ITAT), Ahmedabad. The ITAT had deleted additions made by the Assessing Officer (AO) for Assessment Years 2007-08 and 2008-09. The additions were on grounds of undervaluation of sales, estimated Gross Profit (GP), and clandestine removal of goods. The Revenue challenged these deletions, arguing that the ITAT erred in law and facts. The High Court noted that similar additions for different assessment years were already upheld by a Division Bench based on a CESTAT judgment that deleted additions on the excise side in favour of the assessee.

What were the issues?

1. Whether the Appellate Tribunal has erred in law and on facts of the case in deleting the addition of Rs.88,03,348/- made on the ground of undervaluation of sales and Rs.2,08,00,924/- on the ground of estimated GP on account of clandestine removal of goods for Assessment Year 2007-08? (Mixed question of law and fact, concerning the interpretation and application of relevant income tax provisions related to sales, GP, and clandestine removal). 2. Whether the Appellate Tribunal has erred in law and on facts of the case in deleting the addition of Rs.92,30,925/- made on the ground of undervaluation of sales and Rs.2,53,46,163/- on the ground of estimated GP on account of clandestine removal of goods for Assessment Year 2008-09? (Mixed question of law and fact, concerning the interpretation and application of relevant income tax provisions related to sales, GP, and clandestine removal). Assessee's Contention: The judgment does not record any specific contentions made by the assessee. However, the ITAT's decision to delete the additions implies that the assessee likely argued against the AO's findings on undervaluation, estimated GP, and clandestine removal, possibly relying on the CESTAT decision. Revenue's Contention: The Revenue contended that the ITAT erred in law and facts by deleting the additions made by the AO on the grounds of undervaluation of sales, estimated GP, and clandestine removal of goods.

AI-generated summary — verify with the full judgment below

Cause title — parties, addresses and appearances

C/TAXAP/604/2018 JUDGMENT IN THE HIGH COURT OF GUJARAT AT AHMEDABAD R/TAX APPEAL NO. 604 of 2018 With R/TAX APPEAL NO. 605 of 2018 FOR APPROVAL AND SIGNATURE: HONOURABLE MR.JUSTICE M.R. SHAH and HONOURABLE MR.JUSTICE A.Y. KOGJE ====================================== 1 Whether Reporters of Local Papers may be allowed to see the judgment ? 2 To be referred to the Reporter or not ? 3 Whether their Lordships wish to see the fair copy of the judgment ? 4 Whether this case involves a substantial question of law as to the interpretation of the Constitution of India or any order made thereunder ? ====================================== PRINCIPAL COMMISSIONER OF INCOME TAX, GANDHINAGAR Versus ZIRCONIA CERA TECH GLAZES ====================================== Appearance: MRS MAUNA M BHATT(174) for the PETITIONER(s) No. 1 for the RESPONDENT(s) No. 1 ====================================== CORAM: HONOURABLE MR.JUSTICE M.R. SHAH and HONOURABLE MR.JUSTICE A.Y. KOGJE Date : 18/06/2018

ORAL JUDGMENT C/TAXAP/604/2018 JUDGMENT (PER : HONOURABLE MR.JUSTICE M.R. SHAH) [1.0] As common question of law and facts arise and as such arise out of the impugned common judgment and order passed by the learned Income Tax Appellate Tribunal, “D” Bench, Ahmedabad but with respect to different Assessment Years, both these Appeals are decided and disposed of by this common order. [2.0] Feeling aggrieved and dissatisfied with the impugned common judgment and order passed by the learned Income Tax Appellate Tribunal, “D” Bench, Ahmedabad (hereinafter referred to as “the learned tribunal”) in ITA No.376/Ahd/2016 for the Assessment Year 2007-08 and ITA No.377/Ahd/2016 for the Assessment Year 2008-09 by which the learned Tribunal has deleted the additions made by the Assessing Officer on the ground of undervaluation of the sales, on the ground of estimated GP and on the ground of clandestine removal of goods, Department has preferred the present Tax Appeals. [2.2] In Tax Appeal No.604/2018, arising out of ITA No.376/Ahd/2016 for the Assessment Year 2007-08, the following question of law is proposed; “Whether the Appellate Tribunal has erred in law and on facts of the case in deleting the addition of Rs.88,03,348/- made on ground of undervaluation of sales and Rs.2,08,00,924/- on ground of estimated GP on ground of clandestine removal of goods?” C/TAXAP/604/2018 JUDGMENT [2.3] In Tax Appeal No.605/2018, arising out of ITA No.377/Ahd/2016 for the Assessment Year 2007-08, the following question of law is proposed; “Whether the Appellate Tribunal has erred in law and on facts of the case in deleting the addition of Rs.92,30,925/- made on ground of undervaluation of sales and Rs.2,53,46,163/- on ground of estimated GP on ground of clandestine removal of goods?” [3.0] Heard Ms. Mauna Bhatt, learned advocate appearing on behalf of the appellant. At the outset, it is required to be noted that similar additions were made by the Assessing Officer on the very ground with respect to different Assessment Years, which came to be deleted by the learned Tribunal and against the very common judgment and order but with respect to different Assessment Years by which the learned Tribunal deleted the additions made on the ground of undervaluation of the sales, on the ground of estimated GP and on the ground of clandestine removal of goods, Department preferred Tax Appeal Nos.599/2018 to 601/2018 and by the common judgment and order dated 12/06/2018, Division Bench of this Court having noted and considering the fact that the learned Tribunal ultimately deleted the additions primarily on the ground that by virtue of the judgment of the CESTAT, the excise show-cause notice was adjudicated in favour of the assessee and the CESTAT deleted the additions on excise side, and therefore, the learned Tribunal was justified in deleting the additions made by the Assessing Officer, Division Bench has C/TAXAP/604/2018 JUDGMENT confirmed the very common judgment and order but with respect to different Assessment years. [4.0]

In view of the above and for the reasons stated in the order dated 12/06/2017 in Tax Appeal Nos.599/2018 to 601/2018, present Appeals also deserve to be dismissed as no question of law arises. Hence, both these Appeals are dismissed. (M.R. SHAH, J.) (A.Y. KOGJE, J.) siji

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