2015 (9) TMI 537 - AT - Income Tax

Suppression of sales - CIT(A) deleted the addition - Held that - This Tribunal is of the considered opinion that Commissioner of Income-tax(A) is not justified in deleting the addition for the assessment years 2002-03 to 2007-08. However, the statement recorded from the cashier and other persons and the material collected by the Commercial Tax Department needs to be examined after giving an opportunity to the taxpayer. The taxpayer had no occasion to respond to the material collected by the sales-tax department during their inspection on 24-02-2006. It is also pertinent to note that the impugned assessment proceeding was initiated u/s 153A of the Act. In proceedings u/s 153A, the assessing officer can take into account all the evidences / materials including materials found during the course of search operation. Therefore, in all fairness, this Tribunal is of the considered opinion that one more opportunity shall be given to the taxpayer to present his case before the assessing officer. - Decided in favour of revenue for statistical purpose. Suppression of sales - For assessment year 2008-09 the Commissioner of Income-tax(A) confirmed the addition - Held that - The decision that may be taken for the assessment years 2002-03 to 2007-08 may have its impact for the assessment year 2008-09 also. Therefore, for the sake of consistency and to have comprehensive adjudication, this Tribunal is of the considered opinion that the issue for the assessment year 2008-09 also needs to be considered. Accordingly, the orders of the lower authorities for assessment year 2008-09 are also set aside and the issue of suppressed sales turnover and profit is remitted back to the file of the assessing officer. The assessing officer shall decide the issue afresh in line with the direction issued for the assessment years 2002-03 to 2007-08 after providing opportunity of hearing to the taxpayer.- Decided in favour of assessee for statistical purpose. Addition with regard to the credit received from George Joseph - Held that - This Tribunal finds that giving one more opportunity to the taxpayer to prove the identity of the creditor, genuineness of the credit and capacity of the creditor may not prejudice the interest of the revenue. In respect of suppression of sales for all the assessment years the matter was remitted back to the file of the assessing officer. Therefore, for the sake of consistency, this addition also needs to be reconsidered after giving reasonable opportunity to the taxpayer,The assessing officer shall examine the issue afresh and thereafter decide the issue in accordance with law after giving reasonable opportunity to the taxpayer. - Decided in favour of assessee for statistical purpose.

Issues Involved:
1. Deletion of addition made by the assessing officer on account of suppression of sales.
2. Confirmation of addition for the assessment year 2008-09.
3. Confirmation of addition regarding the credit received from George Joseph for the assessment year 2001-02.

Issue-Wise Detailed Analysis:

1. Deletion of Addition on Account of Suppression of Sales:

The primary issue revolves around whether the taxpayer suppressed sales by issuing estimate slips instead of sale bills. The revenue argued that during a search operation, it was discovered that the taxpayer was not issuing sale bills for the sale of jewelry, relying instead on estimate slips. Evidence included a pre-search enquiry where a gold ornament was purchased, and only an estimate slip was issued. Statements from employees like the cashier, who confirmed that only part of the sales were recorded through sale bills, supported this claim. The Commercial Tax Department's inspection on 24-02-2006 also found similar practices. The Commissioner of Income-tax(A) deleted the additions for assessment years 2002-03 to 2007-08 due to a lack of material evidence but confirmed the addition for 2008-09.

The Tribunal noted that the taxpayer's practice of issuing estimate slips was usual in the jewelry business. However, concrete evidence showed that sales were made without issuing sale bills. The Tribunal found that the Commissioner of Income-tax(A) ignored the cashier's statement and materials from the Commercial Tax Department, which indicated suppression of sales. Therefore, the Tribunal set aside the orders for the assessment years 2002-03 to 2007-08 and remitted the issue back to the assessing officer for reconsideration, directing a fresh examination of all statements and materials, including those from the Commercial Tax Department.

2. Confirmation of Addition for Assessment Year 2008-09:

For the assessment year 2008-09, the Commissioner of Income-tax(A) confirmed the addition based on evidence of suppressed sales. The Tribunal acknowledged that the decision for the assessment years 2002-03 to 2007-08 might impact the 2008-09 assessment. Therefore, for consistency and comprehensive adjudication, the Tribunal also set aside the orders for 2008-09 and remitted the issue back to the assessing officer for a fresh decision in line with the directions for the earlier years.

3. Confirmation of Addition Regarding Credit Received from George Joseph for Assessment Year 2001-02:

The taxpayer claimed to have received a gift of Rs. 3,47,580 from George Joseph through banking channels. The revenue argued that the taxpayer failed to prove the donor's capacity, identity, and the genuineness of the transaction, relying on the Supreme Court judgment in Commissioner of Income-tax vs P Mohanakala. The Tribunal noted that the taxpayer did not produce sufficient material to prove the creditworthiness and genuineness of the gift, only providing a bank entry. The Tribunal decided that giving the taxpayer another opportunity to prove the identity, creditworthiness, and genuineness of the gift would not prejudice the revenue's interest. Hence, the Tribunal set aside the orders of the lower authorities and remitted the issue back to the assessing officer for a fresh examination after providing a reasonable opportunity to the taxpayer.

Conclusion:

In conclusion, the Tribunal allowed all the appeals of the taxpayers and the revenue for statistical purposes, remitting the issues back to the assessing officer for a fresh decision after a comprehensive review of all relevant materials and providing reasonable opportunities for the taxpayer to present their case.

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