2002 (8) TMI 404 - AT - Income Tax

Summary

Issues:
1. Addition of Rs. 1,65,822 on alleged sale of tooth powder produced from excess Dolomite powder.
2. Double addition by Assessing Officer in respect of suppressed sales and excess stocks.
3. Charging of interest under section 234B without a speaking order.

Analysis:

Issue 1: Addition of Rs. 1,65,822 on alleged sale of tooth powder produced from excess Dolomite powder:
The Assessing Officer made an addition of Rs. 1,65,822 based on discrepancies in the stock statements furnished to the bank and the actual stocks available with the assessee firm. The CIT(A) held that the assessee's bank statements were estimated and not meticulously recorded, justifying the application of section 145. The Assessing Officer's double addition on suppressed sales and excess stocks was deemed unjustified, leading to the restriction of the addition to Rs. 1,65,822 by the CIT(A). The Tribunal upheld this decision, dismissing the appeal.

Issue 2: Double addition by Assessing Officer in respect of suppressed sales and excess stocks:
The Assessing Officer made double additions totaling Rs. 4,77,765 for suppressed sales and excess stocks. However, the CIT(A) found this to be a duplication and restricted the addition to Rs. 1,65,822, as per the assessee's own calculations. The Tribunal upheld this decision based on precedents and rejected the revenue's appeal, partly allowing the assessee's appeal.

Issue 3: Charging of interest under section 234B without a speaking order:
The revenue challenged the CIT(A)'s decision to restrict the addition to Rs. 1,65,822, arguing that the discrepancies in stock items and production of finished goods justified the original additions. However, this issue was already addressed in the assessee's appeal and decided in the preceding analysis. The Tribunal partly allowed the revenue's appeal based on the same reasoning applied to the assessee's appeal.

In conclusion, the Tribunal upheld the addition of Rs. 1,65,822 while rejecting the double addition made by the Assessing Officer. Additionally, the Tribunal directed not to charge any interest under section 234B, as the Assessing Officer failed to mention it in the assessment order. Both the assessee's and revenue's appeals were partly allowed based on the detailed analysis and legal precedents cited.