2022 (4) TMI 1117 - AT - Income Tax

Reopening of assessment u/s 147 - Addition of sales involved in clandestine removal of finished goods - addition made by the Assessing Officer on account of profit element involved in the alleged suppressed sales in the year under consideration has been deleted by the Ld.CIT(A) - HELD THAT - As the issue involved in the year under consideration as well as all the material facts relevant thereto are similar to that of AYs 2007-08 2008- 09 2017 (11) TMI 1852 - ITAT AHMEDABAD we respectfully follow the decision of the Co-ordinate Bench of this Tribunal and uphold the impugned order of Ld.CIT(A) deleting the addition made by the Assessing Officer on account of the profit element @ 15.18% involved in the alleged suppressed sales - Decided against revenue.

Summary

Issues:
Deletion of addition made by Assessing Officer on account of sales involved in clandestine removal of finished goods.

Analysis:
The case involved an appeal by the Revenue against the Ld. Commissioner of Income-tax (Appeals)-Gandhinagar, Ahmedabad's order for Assessment Year 2009-10, focusing on the deletion of an addition made by the Assessing Officer regarding sales from clandestine removal of finished goods. The Assessing Officer reopened the assessment based on information from the Directorate General of Central Excise Intelligence (DGCEI) regarding alleged tax evasion by the assessee. The DGCEI's investigation revealed undervaluation of goods and clandestine removal of goods by the assessee. The Assessing Officer added ?1,45,83,848 to the total income of the assessee, considering a profit element of 15.18% in the suppressed sales of ?9,72,25,651.

The Ld. CIT(A) deleted the entire addition based on the quashing of the show-cause notice by the Hon'ble CESTATE and the dismissal of the excise department's appeal by the Hon'ble Apex Court. The Ld. CIT(A) noted that similar additions made in the appellant's case for previous years were deleted by the Hon'ble ITAT, Ahmedabad. The Tribunal upheld the Ld. CIT(A)'s decision, citing the precedent set in the appellant's case for the preceding years.

The Tribunal referred to the decision of a Coordinate Bench of the Tribunal in the appellant's case for the previous years, where similar additions were deleted. The Tribunal emphasized the lack of independent application of mind by the Revenue, as the additions were solely based on the show-cause notice. The Tribunal also highlighted the decisions of the CESTAT and the Hon'ble Apex Court in favor of the assessee, leading to the finality of the matter against the revenue. Consequently, the Tribunal dismissed the Revenue's appeal, upholding the Ld. CIT(A)'s deletion of the addition made by the Assessing Officer.

In conclusion, the Tribunal dismissed the Revenue's appeal, affirming the Ld. CIT(A)'s decision to delete the addition made by the Assessing Officer regarding sales from clandestine removal of finished goods.