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TMI Blog2015 (10) TMI 2556X X X X Extracts X X X X X X X X Extracts X X X X ..... in the proceedings initiated by the Excise Department. In our view, the ld. Counsel for the assessee is not right in his contention that whenever an assessment is made on the basis of flat rate of profit on estimation basis, no inference can be made that the assessee has concealed the income. In the present case, the AO has estimated the income on the basis of the material seized during the search conducted by the Excise authorities and admission made by the assessee. Therefore it is not a case of mere estimation but was a case of deriving income based on undisclosed investment/purchases and undisclosed sales of the product. In our view, assessee has concealed the particulars of income and, therefore, the assessee is liable for imposition ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n unrecorded sales : The facts of the case are that the assessee is engaged in the business of manufacturing of MS Ingots. In this case, a search action was conducted by the Central Excise Department on 03.10.2005 at the factory/business premises and found that the assessee had clandestinely removed goods weighting 2027.32 MT. Although, before Hon'ble Excise Settlement Commission, the assessee filed a settlement petition and the commission accepted that the above said quantity was only 1783.94 MT in stead of 2027.32 MT. During the course of assessment the AO had noted that the assessee admitted the same before the Settlement Commission and had agreed to pay the additional excise duty of ₹ 50,50,575/- which was 16.32% of the unaccounte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee in the following manner :- " Investment in unrecorded purchases/sales : On the basis of search conducted by Excise Department, it was established that the assessee was found to have made unaccounted production/sale of ₹ 3,06,71,415/- as discussed supra. Thus, during the course of assessment proceedings, the assessee was asked to furnished the details of each purchase that could be attributed to the aforesaid unrecorded sale. The assessee vide his reply dated 29.12.2008 stated that as the purchase and sales were unrecorded it was difficult to ascertain the peak purchases. After considering the fact of case and circumstances, the then AO had come to the conclusion that 5% of total unrecorded sales, was the unaccounted inv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the assessee itself before the Settlement Commission of Excise Department, therefore, the concealment already stands established. Thus it is an offence for which penal provision of section 271(1)(c) are clearly applicable in this case." 3. After recording the submissions, the AO has concluded that the assessee has deliberately and willfully concealed the income and filed the inaccurate particulars of income and, therefore, he has imposed the penalty. 4. The assessee aggrieved with the order of the AO, has filed appeal before ld. CIT (A), who has confirmed the order passed by the AO. 5. Now the assessee is before us. 6. The primary argument before us by the ld. A/R of the assessee is that the additions were made and sustained by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... based on the admission made by the assessee before the Excise Settlement Commission. Therefore, to say that the entire exercise has been done merely on the estimation is incorrect. The assessment order, in our opinion is based on the material found and admission made by the assessee before Excise Settlement Commission. The procedure adopted by AO and the ld. CIT (A) is logically the correct way of determination and estimation of profit on the unaccounted sales and on account of investment made in unaccounted purchases and sales. Moreover, in the order passed by the Tribunal in the quantum appeal bearing ITA No. 72/JP/2010, both the additions were sustained. The additions confirmed by the Tribunal were not merely on the basis of estimation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r an assessment is made on the basis of flat rate of profit on estimation basis, no inference can be made that the assessee has concealed the income. In the present case, the AO has estimated the income on the basis of the material seized during the search conducted by the Excise authorities and admission made by the assessee. Therefore it is not a case of mere estimation but was a case of deriving income based on undisclosed investment/purchases and undisclosed sales of the product. In our view, assessee has concealed the particulars of income and, therefore, the assessee is liable for imposition of penalty on account of concealed income. Therefore, we find no infirmity in the order of ld. CIT (A) which is confirmed. 11. In the result, th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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