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TMI Blog2016 (7) TMI 921X X X X Extracts X X X X X X X X Extracts X X X X ..... accept the contention now raised by the learned counsel for the assessee and hold the assessments to be illegal. During the course of hearing, the learned for the appellant produced before us order No.TRL-08/06-07 dated 08.08.2007, whereby the penalty proceedings under Section 67 of the Act were compounded by the assessee on payment of ₹ 28000/- as compounding fee which shows that the total suppression detected was only ₹ 2,10,595/-. This means that the penalty proceedings were initiated on the basis that there was excess stock of ₹ 14,38,785. In the final order that was passed, the said amount is now reduced to ₹ 2,10,595. Since the assessment under the Income Tax Act has been completed quantifying the suppressio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee were dismissed. 2. Briefly stated the facts of the case are as follows: The appellant assessee is a partnership firm, engaged in the business of furniture. Survey under Section 133A of the Income Tax Act was conducted in the premises of the appellant on 12.09.2007 in connection with the search under Section 132 of the Act in the concern, viz, M/s.Classy the Antique Designed Furniture. This resulted in an assessment under Section 153C for the assessment years 2002-2003 and 2007-2008 and an assessment under Section 143 for the assessment year 2008-2009. 3. The assessee filed appeals before the Commissioner (Appeals), which were partly allowed. Further appeals that were filed before the Tribunal were dismissed by the impugned com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the KVAT Act on the allegation of suppression of stock. He also invited our attention to the assessment order where reliance has been placed on letter dated 18.09.2007 issued by Sri. V. Ahamed, a salesman of the appellant. Therefore, according to him, the principle laid down in the judgments of this Court and Madras High Court cannot be applied to the facts of this case. In fact, the learned counsel invited our attention to the judgment of the Bombay High Court in Dr. Dinesh Jain v. ITO (Bom) [2014] 363 ITR 210 (Bom) where the Bombay High Court has distinguished the judgment in S. Khader Khan Son (supra). 6. We have considered the submissions made. It is a fact that the statement under Section 133A of Sri. V. Ahammed, the salesman of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sly for the reason that the officer is not authorised to administer oath and to take any sworn statement which alone has evidentiary value as contemplated under law. Therefore, there is much force in the argument of learned counsel for the appellant that the statement elicited during the survey operation has not evidentiary value and the Income-tax Officer was well aware of this. The judgment in Paul Mathews (supra) was relied on by the Madras High Court in S. Khader Khan Son. The judgment of the Madras High Court was confirmed by the Apex Court by dismissing the appeal filed by the Revenue. 7. However, insofar as this case is concerned, we find force in the submission of the learned Senior Counsel for the Revenue that the assessment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is not accepted. Assessee is asister concern of Classy group which is a family concern of Adattil Mohammed. The modus operandi regarding the suppression of sale by understating the sale is common in all the firms as it is evident from the statement of Sri. Adattil Jabir and Sri. V. Ahammed as mentioned above. There was an inspection by the intelligence officer of Commercial Taxes of Tirur in the case of Kottakkal Wood Complex on 17.08.2006 and excess stock of 14,38,785/- was found and the Department of Commercial Taxes has issued a show cause notice bearing No. TRL-08/06-07 dated 16.10.2007 for imposing penalty u/s.67(6) of the KVAT Act. In response to the said show cause notice assessee vide letter dated 10.04.2007 replied that the stock d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment under the Income Tax Act also. Therefore, though we confirm the orders impugned before us, we are of the view that the assessee is entitled to get the benefit of the reduced excess stock as determined by the authorities of the KVAT Act in their order No.TRL- 08/06-07 dated 08.08.2007. For that matter, we remit the proceedings to the Assessing Officer, who will issue revised orders taking into account the order dated 08.08.2007 passed by the Intelligence Officer, Squad No.II, Tirur. The appeals are accordingly disposed of remitting the matter to the Assessing Officer to pass fresh orders as directed above. This shall be done within a period of six months from the date of receipt of a copy of this judgment. - - TaxTMI - TMITax - ..... X X X X Extracts X X X X X X X X Extracts X X X X
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