2010 (12) TMI 1253 - AT - Income Tax

Summary

Issues involved: Delay in filing appeal before Tribunal, Block assessment years 1990-91 to 2000-01, Unaccounted sales, Central Excise Department findings, Assessment under section 158BD, Appeal before CIT (A), Grounds raised by Assessee and Revenue, Calculation of undisclosed income, Telescoping of excess stock, Arithmetical errors in assessment.

Delay in filing appeal before Tribunal: Department filed a petition to condone the delay of 52 days in filing the appeal, which was found to have a sufficient and reasonable cause, leading to the admission of the appeal for disposal.

Unaccounted sales and Central Excise Department findings: During search operations, discrepancies in stock and sales outside books of accounts were found by Central Excise Department, leading to initiation of proceedings under section 158BD. Assessing officer brought out discrepancies and undisclosed income totaling &8377; 47,52,170, based on Central Excise Department's findings.

Appeal before CIT (A): CIT (A) considered the case and determined undisclosed income at &8377; 4,38,951 for the block period, allowing telescoping on excess stock. Assessee and Revenue both appealed against this decision.

Grounds raised by Assessee and Revenue: Assessee challenged the addition of &8377; 4,38,951, while Revenue argued for a higher undisclosed income. Arguments included discrepancies in stock statements, reliance on Central Excise Order, and acceptance of allegations under Kar Vivad scheme.

Calculation of undisclosed income: CIT (A) determined undisclosed income at &8377; 4,38,951, but after considering arguments and evidence, the undisclosed income was revised to &8377; 2,62,430, based on unaccounted sales and excess stock value.

Telescoping of excess stock: Value of excess stock outside books of accounts was considered in determining undisclosed income, leading to a revised figure of &8377; 2,62,430 instead of the initial &8377; 4,38,951.

Arithmetical errors in assessment: CIT (A) identified errors in stock statements and calculations, leading to a revised determination of undisclosed income. The appeal filed by the assessee was partly allowed, while the appeal of the revenue was dismissed.