BANSIWALA IRON & STEEL ROLLING MILL, JAIPUR,JAIPUR vs. DCIT CIR.-3 JAIPUR, JAIPUR

The assessee in this appeal has taken following grounds of appeal:- 1. The very action taken u/s 147 r.w.s 148 by the ld. AO and confirmed by the CIT(A)/NFAC is bad in law, without jurisdiction and being void ab-initio, the same kindly be quashed. Consequently, the impugned assessment framed u/s 143(3)/148 dated 30.03.2016 also kindly be quashed. 2. The ld. CIT(A)/NFAC seriously erred in not directing the ld. AO to decide the objections filed by the appellant within a reasonable period of time and further seriously erred in proceeding to make the assessment through notices issued u/s 143(2) & 142 of the Act, which was in a direct contravention of the binding directions of the Honble Supreme Court given in the case of GKN Driveshafts (India) Ltd. vs. ITO & ORS 259 ITR 0019 (2002) and therefore, the impugned order so passed, deserves to be quashed. 3. The addition and disallowances made in the impugned order dated 30.03.2016 u/s 143(3) r.w.s 148 made by the Id. AO and confirmed by the CIT(A)/NFAC are bad in law, for want of jurisdiction and for various other reasons and hence the same may kindly be deleted. 4. Rs. 16,52,362/-: The Id. CIT(A)/NFAC-New Delhi erred in law as well as on the facts of the case in confirming the addition made by ld. AO by applying estimated GP rate of 13.48% on the alleged suppressed sale of Rs. 1,22,57,879/-, merely based on a search conducted by the Central Excise Department (even though the said Department itself has taken back their allegation) and merely on suspicion, surmises & conjectures, without arriving at an independent op inion/satisfaction over the impugned addition. The allegation of suppressed sale being completely contrary to the provisions of law and facts and the consequent addition of the suspected gross profit thereon so made, also being completely contrary to the provisions of law and facts and contrary to the submissions and evidences placed on record hence, the impugned addition kindly be deleted in full.

Rs.53,02,759/-: The Id. CIT(A)/NFAC- New Delhi further erred in law as well as on the facts of the case in confirming the estimated addition made by Id. AO on account of alleged the unexplained investment in the initial unaccounted capital involved @50% of the suppressed sale (less the estimated addition of the gross profit), u/s 69/69C of the Act. The addition so made being completely contrary to the provisions of law and facts and rather being the result of suspicion, surmises and conjectures, hence, the same kindly be deleted in full. 6. The ld. CIT(A)/NFAC- New Delhi further erred in law as well as on the facts of the case in confirming the charging interest u/s 234A, 234B & 234C of the Act. The appellant to tally denies its liability of charging of any such interest. The interest so charged, being contrary to the provisions of law and facts, kindly be deleted in full. 7. The appellant prays your honour indulgences to add, amend or alter of or any of the grounds of the appeal on or before the date of hearing. 3. The facts of the case, in brief, are that a search/verification was conducted in the factory premises of the assessee by the Department of

Learned counsel submits that the Adjudicating authority has accepted whatever was alleged in the SCN and brushed aside their entire submissions before him with respect to this part of the demand as an afterthought and held that no satisfactory explanation was given for the production on Sunday and to the statements of the Labour Contractor Shri Hussain Khan and part time accountant Shri Vasudev Bharwani. Learned Departmental Representative has prepared a detailed chart of the discrepancies found with respect to the 42 GRs. Learned Counsel explained the reasons for the discrepancies in respect of each of the invoices and took the bench through copies of the relevant documents. The summary of the submissions by the learned counsel are as follows: 46. Of the 42 GRs, there were five against which the goods were not supplied at all by them due to the fact that subsequent to the issue of the GRs, the orders were cancelled by the buyers. In respect of the remaining 37 GRs, goods were despatched and original copies of the GRs (which accompany the goods) were procured by either the department or by the assessee from the buyers. The question which arises is whether goods were supplied against the triplicate copies of the GRs without paying duty to the buyers. The 42 GRs pertain to 27 different buyers of which statements of were recorded by the department. They were cross examined during the adjudication during which they clarified that they have never received any non-duty paid consignments. Of the remaining 18, most have filed affidavits to the effect that they had not received any non-duty paid consignments. GR is a third party document prepared by the transporter over which the assessee has no control and if there are any discrepancies in them, it cannot be held against them. During cross examination before the adjudicating authority, Shri Moin Khan, the owner of New Vikas Transport Company clarified that it is their practice that the name of the consignor, truck number and date are entered in the GRs using carbon paper but details of the consignee and the actual weight are obtained at the time of loading and entered in the original and duplicate copy of the GRs which accompany the goods along with the invoice. These details are obtained by the transporter on phone and entered in the triplicate copy of the GR (the office copy). Therefore, these details are not entered using carbon copy. At times, in noting down the details on phone some errors may occur resulting in discrepancies between the original copy of the GRs (which reflect the correct details) and the triplicate copy of GRs (which are filled after ascertaining on phone and may result in some errors). Learned Counsel points out that in the chart provided by the learned Authorised Representative of the Department, there were no discrepancies between the invoice and the original GRs for this reason. He further submitted that GR is not a document under the Central Excise law and cannot be held against them. Learned Departmental Representative supports the impugned order and submits that the GR is the document which evidences that the goods were cleared from the factory and transported to the customer. There is no reason for two copies of the GR (original and triplicate) to have different details. This only supports the finding that the goods were removed twice-once with the invoice as reflected in the original copy of GR and again as per the details in the triplicate copy of the GR for which there is no corresponding invoice. This inference is further supported by the facts that the factory's electricity consumption on Sundays was the same as on any other day but no production was recorded on Sundays in the RG-1 register (Production register). It is further

Since the main allegation of clandestine sales was not sustained before the Hon’ble CESTAT as stated above, there was no reason for the Ld. CIT(A) to confirm the additions made by the AO on this ground. 7. We have considered the order of the Ld. CIT(A) dated 29.10.2025 for the Assessment Year 2013-14. We have also perused the order of the Hon’ble CESTAT (Supra) and we are of the view that since the allegation of clandestine sales was not sustained before the Hon’ble CESTAT, the additions, made by the AO and confirmed by the Ld. CIT(A) vide the impugned order, have no legs to stand and accordingly, the same deserve to be deleted. 8. In the result, the appeal is allowed. 9. In fact of the appeal of the assessee is allowed. Order pronounced in the open court on 23.03.2026