DCIT CEN CIR 4(4) CEN RG 4, MUMBAI vs. ESS DEE ALUMINIUM LTD, DAMAN

The captioned appeal by revenue for Assessment Year [AY] 2010- 11 assails the order of Ld. Commissioner of Income tax (Appeals)- Valsad, [CIT(A)], Mumbai dated 09/01/2015 qua deletion of addition made on account of under valuation of scrap sale to the tune of Rs.1,00,28,027/-.

Briefly stated, the assessee, being resident corporate assessee, was assessed for impugned AY u/s 143(3) at Rs.103,11,35,406/- after addition of undervaluation of scrap sale of Rs.1,00,28,027/- vide Assessing Officer [AO] order dated 31/01/2013 as against ‘Nil’ returned filed by assessee on 29/09/2010. Pursuant to information received from the Excise Department regarding search carried out by the said department on assessee company, it was noted that the assessee undervalued the sale invoices to the extent of Rs.1,00,28,027/- on sale of certain Aluminium Scrap. However, the assessee contested that no concrete / direct evidences were found by the excise department and the assessee has challenged the show cause notice issued to him by the said department and the same has not attained finality and therefore, the same is not conclusive. However, not convinced, AO after perusal of statement of various parties made during search and contentions of assessee added the same to the income of the assessee. Aggrieved, the assessee contested the addition without any success before Ld. CIT(A) vide impugned order dated 09/01/2015 wherein Ld. CIT(A) relying upon ITA No.1997/M/2015 Ess Dee Aluminium Limited Assessment Year 2010-11 the decision rendered by its predecessor in assessee’s own case for AY 2008-09 & 2009-10, confirmed the additions, against which the assessee is in appeal before us.

The Ld. Counsel for Assessee [AR] drew our attention to the fact that the assessee suffered similar additions under similar circumstances in AY 2008-09 and the matter was carried up-to the level of Tribunal vide & ITA 2327/Ahd/2011 dated 15/05/2015 and the Tribunal restored the issue back to the file of AO for adjudication in line with the outcome of order passed by Excise Department. The Ld. DR fairly conceded the same.

We have heard rival contentions and perused the relevant decision of Co-ordinate bench of the Tribunal where we find that the Tribunal relying upon the order of Tribunal in ACIT Vs. Santro Tiles Ltd. [ITA No. 1277 to 1280/Ahd/2012 order dated 23/01/2015] made the following directions:- “30.In the instant case also, Excise Department has not adjudicated the case. Therefore, following the order of the Co-ordinate Bench of Tribunal cited supra, we deem it proper to restore this issue to the file of the AO with direction to decide the issue afresh, after the adjudication order is passed by the Central Excise Department, thus, this ground of the revenue is allowed for statistical purposes.”