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TMI Blog2019 (8) TMI 98X X X X Extracts X X X X X X X X Extracts X X X X ..... As the initiation of reassessment proceedings is held to be invalid, the sequitur is that the proceedings flowing there from should automatically stand cancelled including the additions so made by the AO. - Decided in favour of assessee. - ITA Nos.1579 & 1580/PUN/2012 - - - Dated:- 16-7-2019 - Shri R.S. Syal, Vice President And Shri Partha Sarathi Chaudhury, Judicial Member For the Appellant : Ms. Kesang Y. Sherpa, CIT For the Respondent : Shri Sunil Ganoo And Shri D.P. Lunawat ORDER PER R.S.SYAL, VP : These two appeals by the Revenue relate to the Assessment years 2003-04 2004-05. Since common issues have been raised in these appeals, we are, therefore, proceedings to dispose them off by this consolidated order for the sake of convenience. A.Y. 2003-04 : 2. The first grievance of the Revenue is against the ld. CIT(A) quashing the initiation of reassessment proceedings u/s.147 of the Income-tax Act, 1961 (hereinafter called the Act ) and consequently declaring the assessment order null and void. 3. Briefly stated, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt revealed that the differential amount of salestax @16% has been evaded by the assessee and the same constitutes the undisclosed income in his hand, which works out to ₹ 79,58,760/-. It is also recorded by the Sales Tax Department that Naphtha is used for adulteration of Petrol and superior Kerosene Oil. After aggregation of paraffin is sold in the black market in cash. Therefore the differentials amount in the rates of Naphtha and petrol also constitutes undisclosed income of the assessee for the relevant period. Thus, I have reason to believe that the income of the assessee amounting to ₹ 79,58,760/- has escaped assessment for A.Y. 2003-04 in the meaning of sec.147 of the Income Tax Act, 1961. 5. On going through the above reasons, it can be seen that the AO got information from the Joint Commissioner of Sales-tax, Economic Intelligence, Mumbai, which revealed that the assessee company had claimed to have made sales to parties outside Maharashtra whereas, in fact, the sales were made within Maharashtra. The AO took up the amount of total sales made by the assessee at ₹ 4.97 crore. He opined that by declaring the sales in such ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essee for the year under consideration giving figure of total sales at ₹ 4.97 crore. At the end of the requisite Form No.18-C, there is a mention of Opening balance of ceiling on the beginning of the period for which the return is filed at ₹ 46,11,179/-. Then there is reduction by the amount of incentive @4% on sales for the current year to the tune of ₹ 19,89,690/-, thereby leaving closing balance of ceiling at ₹ 26,21,489/-. Sales-tax authorities passed an order, a copy of which is available at page 37 onwards of the paper book. In this order, it has been recorded that though the assessee stated to have sold Petroleum products outside Maharashtra but the inquiries conducted revealed that the sales were made within Maharashtra. This has led to determination of amount of tax and interest under the Sales-tax Act liable to be paid by the assessee at ₹ 1.38 crore. It is further a matter of record that the first appeal of the assessee against such assessment order passed under the Sales-tax Act, got dismissed. The overall effect of the proceedings under the Sales-tax is that the assessee s version of having made sales outside Maharashtra has been repelle ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al of 11.5% (15.5% - 4%). The ld. AR contended that under the Scheme, the assessee was not entitled to recover any amount of Sales-tax but was authorized to sell its goods without charging any Sales-tax so as to give a competitive edge over others. While considering the eligibility Certificate issued to the assessee it has been noted therefrom that this sale is exempt from tax under the relevant entry. We have also examined the Profit and Loss account and Balance sheet of the assessee. No figure of sales tax appears in the Annual accounts. On a specific query, the ld. DR also could not point out that the assessee collected 15.5% sales tax and pocketed 11.5%. In view of the fact that the assessee was simply entitled to sell goods without charging sales-tax, it is clearly established that the assessee did not charge Sales-tax and as such, there could have been no question of showing the same at a lower level. The situation would have been different if the assessee had collected sales tax @16% and showed only 4% to the Income-tax authorities, which would have validly led to initiation of reassessment proceedings. Here, we are confronted with a situation in which t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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