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Income Tax Appellate Tribunal, ‘B’ BENCH : CHENNAI
Before: SHRI GEORGE MATHAN & SHRI INTURI RAMA RAO
आदेश / O R D E R
PER INTURI RAMA RAO, ACCOUNTANT MEMBER:
These are appeals filed by the assessee directed against different orders of the learned Commissioner of Income Tax (Appeals)- 1, Trichy (hereinafter called as ‘CIT(A)) for the assessment years 2009-2010, 2010-11 and 2011-2012.
ITA Nos.539 to 541/2019 :- 2 -:
Since, the identical facts and issues are involved in these 2. appeals, we proceed to dispose the same vide this common order.
For the sake of convenience and clarity the facts relevant to the 3. appeal in 2009-10 are stated herein.
The Assessee raised the following grounds of appeal: 4.
‘’1. The order of the Assessing Officer is against facts Since considered Rs.2,46,45,151/- as Suppressed Sales based on the Show Cause Notice issued by Central Excise Department.
Similarly, the Order of Commissioner of Income Tax (Appeal) is also not Correct based on the Order issued by Central Excise Department. Since no independent material was brought on record by the Assessing Officer.
The Assessing Officer has not made any Verification of Records or Conducted any enquiry before passing an Order U/s 143(3). He has simply adopted the figure furnished by the Central Excise Department in the Show Cause Notice. The decision rendered by High Court in the following Cases is in support of our view.
a) CIT Vs Amman Steel and Allied Industries (2015) 377 ITR 0568 — Chennai High Court. b) Principal CIT, Rajkat Vs Vrundavan Ceramics (P) Ltd (2018) 95 Taxmannl3 (Gujarat)
There was no independent material brought on record by Assessing Officer other than those Collected by the Central Excise Department.
The provision under the two laws, Viz Central Excise Act and Income — Tax Act, operate in two different fields. Without these being an independent enquiry by the Concerned taxing authorities,
ITA Nos.539 to 541/2019 :- 3 -: the demand made under the Provisions of Central Excise Act could not be incorporated as such.
In the absence of any Independent enquiry by the Assessing Officer, the addition made by the Assessing Officer, On the basis of Show Cause Notice, issued under the Central Excise Act cannot be sustained
We therefore request the Honourable Members to direct the Assessing Officer to delete the entire additions’’.
The brief facts of the case are as under: 5.
The assessee namely M/s. Maruthi Poly Bags (P) Ltd is a company incorporated under the provisions of the Companies Act, 1956. It is engaged in the business of manufacturing poly bags with printing. The return of income for the AY 2009-10 was filed on 24.09.2009 disclosing total income of �16,04,020/-. Subsequently based on the information received from the Assistant Commissioner (AE) Central Excise & Service Tax stated that search operations were carried out on 14.06.2012 in assessee’s factory premises during which certain incriminating documents/ records from the factory were found and seized. It is stated that seized documents indicated that assessee had manufactured poly bags both accounted and unaccounted, accordingly total value of account and unaccounted sales of poly bags were determined at �3,74,32,990/- and �2,46,45,151/- respectively.
Since the profit of unaccounted sales was not offered to tax, the ITA Nos.539 to 541/2019 :- 4 -:
Assessing Officer issued notice u/s.148 of the Act on 31.03.2016. In response to notice, assessee has submitted that return of income originally filed should be treated as return of income in response to notice issued u/s.148 of the Act. Against the said return of income, the assessment was completed by the Assistant Commissioner of Income Tax, Circle 3 (1) Trichy (hereinafter called “AO”) by making addition of 8% on unaccounted sales.
Being aggrieved, an appeal was preferred before the 6. ld.CIT(A) who vide impugned order partly allowed the appeal by directing the Assessing Officer to make addition on suppressed sales of only Rs.85,63,547/- as the balance amount represents job work done to Rajarajan Industries of 1,69,66,017/-.
Being aggrieved, by the order of the ld. CIT(A), assessee is 7. before us in the present appeal. It is contended before us that the Assessing Officer made addition without conducting any independent enquiry and merely relying upon the information received from Central Excise Department and also placing reliance on the decision of Hon’ble Jurisdictional High Court in the case of CIT vs.Vignesh Kumar Jewellary (2011) 330 ITR 209.
On the other hand, the ld. Sr. Departmental Representative 8. placed reliance on the orders of lower authorities.
ITA Nos.539 to 541/2019 :- 5 -:
We heard the rival submissions and perused the material on 9. record. In the present case, the Assessing Officer had received information from Central Excise Department stating that assessee is indulging in manufacturing of polymer bags outside the books of accounts. This information had been put to the assessee company during the course of assessment proceedings. Assessee had stated that out of the unaccounted suppressed sales of �2,46,45,151/- stated by the Central Excise Department it also includes procurement of raw materials of �28,45,845/- and the job work done to Rajarajan Industries to the tune of �1,69,66,017/- and the balance amount represents unaccounted sales which in fact has been admitted by the assessee during the course of assessment proceedings. The Assessing Officer had not accepted the explanation that he had done job work for Rajarajan Industries. The ld. CIT(A) accepted the explanation, the Department is not in appeal before us. Thus, on the balance amount, the assessee had not rendered any explanation and no explanation was forthcoming from the assessee as to why profit should not be estimated at 8% in respect of balance unaccounted turnover.
Therefore, we confirm the action of the ld. CIT(A). Hence, we uphold the application of 8% of gross profit on unaccounted sales and dismiss the appeal filed by the assessee.
ITA Nos.539 to 541/2019 :- 6 -:
ITA Nos.540 & 541/CHNY/ 2019 for assessment years 2010-2011 and 2011-2012 Since, the facts in the present appeals are identical to the facts 10. in 2009-10, for the reasons mentioned therein, we dismiss the appeals in the same lines indicated in appeal supra. Hence, the above captioned appeals filed by the assessee stand dismissed.
To summarize the result, the appeals filed by the assessee in 11. 540 & 541/CHNY/2019 for assessment years 2009-10, 2010-11 and 2011-12 stand dismissed.
Order pronounced on 9th day of October, 2019, at Chennai.