2014 (8) TMI 721 - AT - Income Tax

Various additions made - Appeals consolidated by CESTAT Held that - The assessee rightly submitted that all the additions made by the AO and confirmed in appeal by the CIT(A) are based on the basis of investigation and additions made by the Central Excise Department - the assessee has filed appeal before CESTAT - The appeal has been heard in July 2013 - There are a batch of appeals and they are being heard turn by turn and the CESTAT Members have stated that they will pass a consolidated order in all the appeals together - assessee rightly contended that the matter requires to be restored back to the file of the CIT(A) for adjudication afresh in the light of the order of CESTAT revenue also agreed to the above submissions of the assessee - thus, the matter is to be remitted back to the CIT(A) for fresh adjudication Decided in favour of Assessee.

Summary

Issues:
- Undervaluation of sales and addition of Gross Profit
- Suppressed manufactured quantity and addition of Gross Profit
- Issuance of parallel invoices and addition of Gross Profit
- Estimation of shortage and addition of Gross Profit
- Appreciation of submissions and evidences
- Legality of the order passed by the Commissioner of Income Tax (Appeals)

Undervaluation of sales and addition of Gross Profit:
The appellant challenged the addition made by the Assessing Officer and confirmed by the Commissioner of Income Tax (Appeals) regarding the alleged undervaluation of sales and the subsequent addition of Gross Profit. The appellant argued that the addition was based solely on inquiries by Central Excise Officers without other supporting evidence. The appellant contended that the estimation of undervaluation and Gross Profit addition lacked a basis and should be deleted.

Suppressed manufactured quantity and addition of Gross Profit:
The issue of suppressed manufactured quantity and the consequent addition of Gross Profit was raised by the Assessing Officer. The appellant disputed the estimation made by the Assessing Officer, claiming it to be baseless, illegal, and unjustified. The appellant argued that the addition was made without concrete evidence and should be deleted.

Issuance of parallel invoices and addition of Gross Profit:
The Commissioner of Income Tax (Appeals) confirmed the addition related to the issuance of parallel invoices and the subsequent addition of Gross Profit. The appellant contested this addition, stating that the alleged parallel sales were not accounted for in the books of accounts. The appellant argued that the estimations were illegal and lacked a factual basis.

Estimation of shortage and addition of Gross Profit:
Another issue involved the estimation of shortage, resulting in unaccounted sales and the addition of Gross Profit. The appellant challenged the estimation made by the Assessing Officer, claiming it to be excessive and without a proper basis. The appellant argued that the addition of Gross Profit on alleged unaccounted sales should be deleted.

Appreciation of submissions and evidences:
The appellant contended that the Commissioner of Income Tax (Appeals) failed to properly appreciate the submissions, evidences, and decisions presented during the hearing. The appellant argued that various facts and laws were not considered in the right perspective, leading to an erroneous confirmation of the additions.

Legality of the order passed by the Commissioner of Income Tax (Appeals):
The legality of the order passed by the Commissioner of Income Tax (Appeals) was questioned by the appellant. It was argued that the order was contrary to the provisions of the law and the facts of the case. The appellant requested the order to be declared as bad in law.

In the judgment, the Appellate Tribunal set aside the orders of the lower authorities and remanded the matter back to the Commissioner of Income Tax (Appeals) for fresh adjudication in light of the pending appeal before the Customs Excise & Service Tax Tribunal (CESTAT). The Tribunal directed the Commissioner to provide a reasonable opportunity for the appellant to present their case. The appeal of the appellant was allowed for statistical purposes, indicating a favorable outcome for the appellant in terms of the remand for further review.