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Income Tax Appellate Tribunal, “I” BENCH, MUMBAI
Before: SHRI D. KARUNAKARA RAO & SHRI RAM LAL NEGI
सुनवाई की तायीख / Date of Hearing : 15.12.2016 घोषणा की तायीख /Date of Pronouncement : 11.01.2017 आदेश / O R D E R
PER D. KARUNAKARA RAO, AM:
This appeal filed by the assessee on 15.12.2016 is against the order of the CIT (A)-17, Mumbai dated 19.8.2014 for the assessment year 2006-07. In this appeal, assessee raised the following grounds which read as under:- “Ld CIT (A) has erred in 1. In facts and in law in confirming an addition of suppressed sales of Rs. 3 Crs.
2. In not appreciating that the addition was made merely based on an enquiry by the Excise Department and where the addition itself was under appeal before CESTAT.
3. In not appreciating that the basis of the addition on statements made by some parties notwithstanding that most of these statements had subsequently been retracted.
4. In not appreciating that onus of proof was on the person making an allegation and not the appellant and that this onus had not been discharges in the present case.
5. In correctly holding that the appellant was provided with copies of the evidence available with the AO based on which the said assessment was done and thereby not holding that there was denial of natural justice.
6. In holding that the appellant was given an adequate opportunity for cross examination of witnesses whereas no such opportunity was given by the income tax authorities.
7. Without prejudice, in not adjusting that the addition to the income earned from estimated sales and in making an addition to income of the entire suppressed sales.”
Briefly stated relevant facts of the case are that assessee is engaged in the business of „manufacturing of lubricating oils and trading in pharmaceuticals‟. Assessee filed the return of income declaring the total income of Rs. 1/-. Assessment was completed u/s 143(3) read with section 254 of the Act and the assessed income was determined at Rs. 3 Crs. In the assessment, AO made addition of Rs. 3 Crs on account of „suppression of sales‟. Aggrieved, assessee carried the matter in appeal before the first appellate authority.
During the proceedings before the first appellate authority, after considering the submissions of the assessee, CIT (A) confirmed the addition made by the AO. Again aggrieved with the said decision of the CIT (A), assessee is in further appeal before the Tribunal by raising the above mentioned grounds. 4. Before us, Ld AR for the assessee submitted that the case needs to be restored to the file of the AO / CIT (A). Explaining the same, Ld AR submitted that this is the 2nd round of the proceedings and in the first round, on finding that it was the case of addition involving the Excise Department investigation, AO made ad-hoc addition, which was eventually remanded by the ITAT to the file of the AO. In the 2nd round, the AO repeated the same additions and the CIT (A) confirmed the same by his order dated 19.8.2014. Stating that there were certain new developments in Excise Department / CESTAT, Ld AR for the assessee filed a copy of the order of the CESTAT (pages 1-20 of the paper are relevant) and read out the last paragraphs of the said order dated 16.10.2015. Explaining the same, Ld AR mentioned that the CESTAT partly allowed the appeal of the assessee and the same is relevant to the addition, which are under adjudication by us. 5. On hearing both the parties and on perusal of the said order of the CESTAT dated 16.10.2015 (supra), which is subsequent to the order of the CIT (A) dated 19.8.2014, we find that the finding of the CESTAT is relevant and it has the effect on the conclusions of the addition, if any. Accordingly, we remand the grounds in toto to the file of the AO for fresh adjudication on the merits of the addition. AO shall consider the said order of the CESTAT / other evidences binding judicial law, if any,, during the remand proceedings. AO shall grant a reasonable opportunity of being heard to the assessee as per the set principles of natural justice. Accordingly, all the grounds raised by the assessee are allowed for statistical purposes.