COMMISSIONER OF INCOME TAX vs. VIMAL MOULDERS (INDIA) LTD.

Whether reporters of local papers may be allowed to see the judgment?

To be referred to the Reporter or not?

Whether the judgment should be reported in the Digest?

This appeal is directed against the order passed by the Income Tax Appellate Tribunal (ITAT) on 21st November, 2008 in ITA No. 349/Del/2005 pertaining to the block period from 1st April, 1996 to 3rd September, 2002. 2. The Assessing Officer had noticed discrepancy of stock and, therefore, held that this represented undisclosed income to the tune of Rs18,80,710/-. The discrepancy in the stock was on the basis of a visit by the anti-evasion Wing of the Central Excise Department of the respondent’s 2010:DHC:189-DB

The Commissioner of Income Tax (Appeals) confirmed the order of the Assessing Officer. However, the addition was set aside by the ITAT. The ITAT held as under: “10. After considering the totality of the facts and circumstances of the case and taking into account the decision of CESAT, we are of the considered view that no addition is as so upheld and enhanced by the ld. CIT(A), is called for. On perusal of the A.O.’s order as well as ld. CIT(A) order, there is no doubt in saying that these additions have been made purely on the basis of the facts stated in the show cause notice issued by the Excise Department. No independent enquiry or verification has been made either by the A.O. or by the ld. CIT(A). The basis for addition is only the proceedings initiated by Excise Department. When the CESAT finally decided the issue in favour of the assessee holding that there was no such discrepancy in the stock as so initially made out by the Excise Department, we find that there is no any justification to sustain this addition in the hands of the assessee. In this connection, a reference may be made to a decision of Hon’ble High Court of Madras in the case of Commissioner of Income-tax vs. Vignesh Kumar Jewellers reported in 2008, 12 DTR (Mad) 293, reliance upon which was placed by the ld. counsel for the assessee where the Hon’ble High Court has held and observed as under:-

On 8th January, 2010 when this matter first came up for admission before us, we passed the following order: “O R D E R 08.01.2010 In this appeal, the only question that arises is with regard to discrepancy of stocks of raw materials between the books of accounts and the physical verification. The said discrepancy was pointed out when the officers of the Anti-Evasion Wing of the Central Excise Department made a visit to the respondent’s factory premises. It is on the basis of that discrepancy that the additions have been made by the Assessing Officer and the same have been confirmed and enhanced by the Commissioner of Income- tax (Appeals). However, the additions have been deleted by the Income-tax Appellate Tribunal by virtue of the impugned order in view of the fact that the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has returned a finding that there was no discrepancy in the stocks. Apart from the evidence produced by the Central Excise Department with regard to the discrepancy in stocks, there is no evidence on record which has been placed by the Income-tax Department to establish any discrepancy in the stocks. The learned counsel for the appellant / revenue seeks time to examine the records and to place the material, if any, before this court to show that the Income-tax Department also had independent evidence with regard to the discrepancy in stocks. Renotify on 14.01.2010.” 5. The learned counsel for the appellant/Revenue has not been able to point out any independent evidence with regard to the discrepancy in stocks. 6 C tl t i t f ith th d d b 2010:DHC:189-DB