ITO, WARD-1(1)(3), AHMEDABAD vs. M/S. CRYSTAL CERAMICS INDUSTRIES PVT. LTD. ( FORMERLY KNOWN AS CRYSTAL GLAZE), AHMEDABAD

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ITA 693/AHD/2018Status: DisposedITAT Ahmedabad16 December 2022AY 2007-083 pages

In favour of the assessee: the Revenue's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that since the CESTAT had set aside the demand for excise duty and penalty for a relevant period, the assessment on a protective basis for undisclosed income was not justified. Therefore, the CIT(A) was correct in deleting the additions.

What were the facts?

The Revenue appealed against the CIT(A)'s deletion of additions made on account of undisclosed income for AY 2007-08 and 2008-09. The additions were made on a protective basis after reopening the assessment based on information regarding excise duty evasion.

What were the issues?

Whether additions on a protective basis for undisclosed income are sustainable when the underlying excise duty demand was set aside by a higher authority.

Which sections of the Income-tax Act were involved?

Section 143(3),Section 147,Section 148

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, AHMEDABAD “B” BENCH, AHMEDABAD

Before: Ms. SUCHITRA KAMBLE & SHRI WASEEM AHMED

For Appellant: Shri Aseem L. Thakkar, AR
For Respondent: Shri Rakesh Jha, Sr. DR
Hearing: 30.11.2022Pronounced: 16.12.2022

PER SUCHITRA KAMBLE, JUDICIAL MEMBER :

1.

These two appeals are filed by the Revenue against two separate orders, both dated 12.12.2017, passed by the CIT(A), Ahmedabad for the Assessment Years 2007-08 & 2008-09.

2.

The Revenue has raised the following grounds of appeal :-

“1. That the Ld. CIT(A) erred in law and on facts in deleting the addition of Rs.1,34,14,921/- made on account of undisclosed income.”

ITA No.694/Ahd/2018 for A.Y. 2008-09

“1. That the Ld. CIT(A) erred in law and on facts in deleting the addition of Rs.97,74,031/- made on account of undisclosed income.”

& 694/Ahd/2018 Assessment Years: 2007-08 & 2008-09

Page 2 of 3 3. In Assessment Year 2007-08, the assessment was finalised under Section 143(3) of the Income Tax Act, 1961 vide order dated 30.03.2009 declaring total income at nil after allowing set off of carried forward depreciation. Thereafter, on the basis of tax received from the Directorate General of Central Excise (Intelligence), Ahmedabad it was found that assessee has indulged in evasion of Excise Duty by mis-declaration of maximum retail price of ceramic tiles manufactured by it. The assessment was reopened under Section 147 of the Act and notice under Section 148 of the Act was issued on 19.03.2013. The assessee submitted its reply and after considering the same, the Assessing Officer made addition of Rs.1,34,14,921/- on protective basis in respect of undisclosed income. The Assessing Officer also given a benefit of Rs.22,19,207/- in respect of unabsorbed depreciation of A.Y. 2005-06 as per order dated 25.03.2014.

4.

Being aggrieved by the assessment order, the assessee filed appeal before the CIT(A). The CIT(A) allowed the appeal of the assessee.

5.

Ld. DR submitted that the CIT(A) erred in deleting the addition of Rs.1,34,14,921/- made on account of undisclosed income as the assessee failed to furnish the details of goods claimed by it during the period of 01.04.2006 to 31.03.2007. The assessee concealed the income and worked out on GP percentage to turnover for the period for A.Y. 2006-07. The Assessing Officer has rightly made protective assessment in the hands of Crystal Ceramic as the assessee was a firm during the period of A.Y. 2007-08 and notice was issued in case of Crystal Blaze on the same issue.

6.

The Ld. DR relied upon the Assessment Order.

7.

The Ld. AR submitted that the Tribunal for A.Y. 2007-08 & 2008-09 has already decided these issues and dismissed the appeal of the assessee vide order dated 02.11.2022 in & 740/Ahd/2017.

8.

We have heard both the parties and perused all the relevant material available on record. It is pertinent to note that the facts in the present case are identical to the & 694/Ahd/2018 Assessment Years: 2007-08 & 2008-09

Page 3 of 3 facts in A.Ys. 2007-08 & 2008-09 which was decided by this Tribunal in assessee’s own case. In fact, the CIT(A) has related the issue in the earlier A.Y. wherein it was categorically observed that demand in respect of Excise Duty along with penalty was set aside by the CESTAT for the period from 23.07.2007 to 24.01.2008.Therefore, on the very same basis the assessment cannot be made on protective basis in the present A.Y. The CIT(A) has rightly deleted the addition. Hence, appeal filed by the Revenue in is dismissed.

9.

As regards the issue is identical and no distinguishing facts were pointed out by the Ld. DR. Hence, the same is also dismissed.

10.

In the result, both the appeals filed by the Revenue are dismissed.

Order pronounced in the open Court on this 16th day of December, 2022

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