M/s. Ganga Glazed Tiles Pvt. Ltd., V. The Assistant Commissioner of Income Tax, Centrasl Circle-I, RAJKOT-GUJARAT

ITA 100/RJT/2013

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 3689 (ITAT-RAJKOT)
• Duration Of Justice: 5 year(s) 3 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-08-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 17-03-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 12-04-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RANJEET SINGH
• Assessee Lawyers: MJ RANPURA
• Keywords: Reopening of assessment; Search and seizure; Question of law; Reason to believe
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL RAJKOT BENCH, RAJKOT [CONDUCTED THROUGH E-COURT AT AHMEDABAD] BEFORE SHRI WASEEM AHMED, ACCOUNTANT MEMBER & MS. MADHUMITA ROY, JUDICIAL MEMBER I.T.A. NO.100/RJT/2013 (ASSESSMENT YEAR : 2008-09) GANGA GLAZED TILES PVT. LTD., VS. A.C.I.T., 8-A, NATIONAL HIGHWAY, CENTRAL CIRCLE-1, RAJKOT. VILLAGE DHUVA, TAL. WANKANER, DISTT. RAJKOT. [PAN: AACCG 9422 H] I.T.A. NO.133/RJT/2013 (ASSESSMENT YEAR : 2008-09) A.C.I.T., VS. GANGA GLAZED TILES PVT. LTD., CENTRAL CIRCLE-1, RAJKOT. 8-A, NATIONAL HIGHWAY, VILLAGE DHUVA, TAL. WANKANER, DISTT. RAJKOT. [PAN: AACCG 9422 H] I.T.A. NO.105/RJT/2013 (ASSESSMENT YEAR : 2008-09) GANGOTRI GLAZED TILES PVT. LTD., VS. A.C.I.T., BHAGWATI CHAMBERS, CENTRAL CIRCLE-1, RAJKOT. 8-A, NATIONAL HIGHWAY, MORBI, DISTT. RAJKOT. [PAN: AACCG 9019 J] I.T.A. NO.138/RJT/2013 (ASSESSMENT YEAR : 2008-09) A.C.I.T., VS. GANGOTRI GLAZED TILES PVT. LTD., CENTRAL CIRCLE-1, RAJKOT. BHAGWATI CHAMBERS, 8-A, NATIONAL HIGHWAY, MORBI, DISTT. RAJKOT. [PAN: AACCG 9019 J] I.T.A. NO.109/RJT/2013 (ASSESSMENT YEAR : 2008-09) GOKUL CERAMICS PVT. LTD., VS. A.C.I.T., 8-A, NATIONAL HIGHWAY, CENTRAL CIRCLE-1, RAJKOT. VILLAGE DHUVA, TAL. WANKANER, DISTT. RAJKOT. [PAN: AACCG 0532 E] - 2 - ITA NOS.100, 133, 105, 138, 109, 146, 113, 150, 117, 142, 125 & 169/RJT/2013 ASSESSMENT YEAR: 2008-09 I.T.A. NO.146/RJT/2013 (ASSESSMENT YEAR : 2008-09) A.C.I.T., VS. GOKUL CERAMICS PVT. LTD., CENTRAL CIRCLE-1, RAJKOT. 8-A, NATIONAL HIGHWAY, VILLAGE DHUVA, TAL. WANKANER, DISTT. RAJKOT. [PAN: AACCG 0532 E] I.T.A. NO.113/RJT/2013 (ASSESSMENT YEAR : 2008-09) VARMORA GRANITO PVT. LTD., VS. A.C.I.T., 8-A, NATIONAL HIGHWAY, CENTRAL CIRCLE-1, RAJKOT. VILLAGE DHUVA, TAL. WANKANER, DISTT. RAJKOT. [PAN: AABCV 7523 M] I.T.A. NO.150/RJT/2013 (ASSESSMENT YEAR : 2008-09) A.C.I.T., VS. VARMORA GRANITO PVT. LTD., CENTRAL CIRCLE-1, RAJKOT. 8-A, NATIONAL HIGHWAY, VILLAGE DHUVA, TAL. WANKANER, DISTT. RAJKOT. [PAN: AABCV 7523 M] I.T.A. NO.117/RJT/2013 (ASSESSMENT YEAR : 2008-09) VRUNDAVAN CERAMICS PVT. LTD., VS. A.C.I.T., SURVEY NO.143/2, CENTRAL CIRCLE-1, RAJKOT. 8-A, NATIONAL HIGHWAY, VILLAGE DHUVA, TAL. WANKANER, DISTT. RAJKOT. [PAN: AAEFM 8240 N] I.T.A. NO.142/RJT/2013 (ASSESSMENT YEAR : 2008-09) A.C.I.T., VS. VRUNDAVAN CERAMICS PVT. LTD., CENTRAL CIRCLE-1, RAJKOT. 8-A, NATIONAL HIGHWAY, VILLAGE DHUVA, TAL. WANKANER, DISTT. RAJKOT. [PAN: AAEFM 8240 N] - 3 - ITA NOS.100, 133, 105, 138, 109, 146, 113, 150, 117, 142, 125 & 169/RJT/2013 ASSESSMENT YEAR: 2008-09 I.T.A. NO.125/RJT/2013 (ASSESSMENT YEAR : 2008-09) ITALICA FLOOR TILES PVT. LTD., VS. A.C.I.T., SURVEY NO.111/112, CENTRAL CIRCLE-1, RAJKOT. BANDHUNAGAR, AT MAKANSAR, 8-A, NATIONAL HIGHWAY, MORBI, DISTT. RAJKOT. [PAN: AABCI 2816 C] I.T.A. NO.169/RJT/2013 (ASSESSMENT YEAR : 2008-09) A.C.I.T., VS. ITALICA FLOOR TILES PVT. LTD., CENTRAL CIRCLE-1, RAJKOT. SURVEY NO.111/112, BANDHUNAGAR, AT MAKANSAR, 8-A, NATIONAL HIGHWAY, MORBI, DISTT. RAJKOT. [PAN: AABCI 2816 C] (APPELLANTS) (RESPONDENTS) ASSESSEE BY : M.J. RANPURA, A.R. REVENUE BY : RANJEET SINGH, CIT (D.R.) DATE OF HEARING : 04.07.2018 DATE OF PRONOUNCEMENT : 10.08.2018 O R D E R PER BENCH: THIS BUNCH OF 6 CROSS APPEALS HAVE BEEN FILED BEFOR E US BY THE ASSESSEE AND REVENUE AGAINST THE 6 SEPARATE ORDERS, ALL DATED 06 .02.2013, PASSED BY THE COMMISSIONER OF INCOME TAX (APPEALS)-IV, AHMEDABAD [LD. CIT(A) IN SHORT] FOR ASSESSMENT YEAR (A.Y.) 2008-09 ARISING OUT OF 6 SEP ARATE ORDERS DATED 15.12.2011 AND 29.12.2010 PASSED BY THE ACIT, CENTRAL CIRCLE-1, RA JKOT. 2. THE GROUP OF APPEALS INVOLVED IDENTICAL QUESTION OF LAW AND ARISE IN SUBSTANTIALLY SIMILAR BACKGROUND AND THE SAME ARE HEARD ANALOGOUS LY AND ARE BEING DISPOSED OF BY A COMMON JUDGMENT. - 4 - ITA NOS.100, 133, 105, 138, 109, 146, 113, 150, 117, 142, 125 & 169/RJT/2013 ASSESSMENT YEAR: 2008-09 3. THESE MATTERS ARE HAVING CHEQUERED HISTORY SPANN ING NEARLY 10 YEARS. THE ASSESSEE IS ENGAGED IN THE BUSINESS OF MANUFACTURIN G OF CERAMIC TILES OF VARIOUS SIZES AND MEASUREMENTS. THE ASSESSEE IS A PART OF VRUNDA VAN GROUP OF COMPANIES HAD FILED THE RETURN OF INCOME FOR THE AY 2004-05 AND THE ASS ESSMENT OF SUCH RETURN WAS COMPLETED AT THE RELEVANT TIME. LATER ON, THE DIRE CTOR GENERAL OF CENTRAL INTELLIGENCE (DGCEI IN SHORT) CONDUCTED A SEARCH IN THE ASSESSEE S PREMISES ON 17.01.2008, SEVERAL INCRIMINATING DOCUMENTS WERE RECOVERED IN THE SAID SEARCH PROCEEDING. THE INVESTIGATION LED TO A PRIMA-FACIE REVELATION THAT THE ASSESSEE WAS ENGAGED IN LARGE SCALE OF FINANCIAL IRREGULARITIES WHICH WAS UNEARTHED BY THE DGCEI. THERE WAS A SUPPRESSION OF SALE OF RS.590 CRORES (ROUND OFF) BY THE ASSESSE E, AS WAS THE FINDING OF THE SAID AUTHORITY. THE SHOW-CAUSE NOTICE WAS ISSUED BY THE EXCISE DEPARTMENT ON THE BASIS OF SUCH MATERIALS COLLECTED BY THE DGCEI, WHICH ALONG WITH RELEVANT MATERIALS WERE FORWARDED TO THE INCOME TAX DEPARTMENT BY THE EXCIS E DEPARTMENT. THE ASSESSING OFFICER (AO) ON THE BASIS OF SUCH MATERIALS REOPENE D THE ASSESSMENT OF THE ASSESSEE FOR THE ASSESSMENT YEAR 2004-05 BY ISSUING NOTICE U/S.1 48 OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS 'THE ACT') ON 22.03.201 1. IN FACT THE ASSESSMENT PROCEEDING WAS REOPENED BY THE ASSESSING OFFICER FOR THE FOLLO WING YEAR FOR THE RESPECTIVE PARTIES MENTIONED IN THE FOLLOWING TABLE: - GANGA GLAZED TIES AY 04-05 TO 07-08 - GANGOTRI GLAZED TILES AY 04-05 TO 07-08 - GOKUL CERA PVT. LTD. AY 04-05 TO 06-07 - VRUNDAVAN CERA P. LTD. AY 04-05 TO 06-07 - VARMORA GRANTIO P. LTD. AY 05-06 TO 07-08 - ITALICA TILES P. LTD. AY 05-06 TO 07-08 4. SIMULTANEOUSLY, REGULAR ASSESSMENT PROCEEDINGS U NDER SECTION 143(3) OF THE ACT WAS ALSO INITIATED IN THE FOLLOWING CASES: - GANGA GLAZED TIES AY 08-09 - GANGA GLAZED TIES P.L. AY 08-09 - GANGOTRI GLAZED TILES AY 08-09 - GOKUL CERA PVT. LTD. AY 08-09 - VRUNDAVAN CERA P. LTD. AY 08-09 - VARMORA GRANTIO P. LTD. AY 08-09 - ITALICA TILES P. LTD. AY 08-09 - 5 - ITA NOS.100, 133, 105, 138, 109, 146, 113, 150, 117, 142, 125 & 169/RJT/2013 ASSESSMENT YEAR: 2008-09 5. THOUGH THE VALIDITY OF THE NOTICE OF RE-OPENING AND THE QUANTUM ADDITIONS PROPOSED BY THE ASSESSING OFFICER WAS CHALLENGED BY THE ASSESSEES, IGNORING SUCH OBJECTION THE ASSESSMENT ORDER WAS PASSED ON 15.12. 2011 HOLDING THAT THE ASSESSEE HAS SUPPRESSED SALE OF RS.98.18 LAKHS (THE AMOUNT OF AD DITION IS DIFFERENT IN EACH CASE). APPLYING THE GROSS PROFIT RATE OF 25%, THE AO MADE ADDITION OF RS.24.54 LAKHS (THE AMOUNT OF ADDITION IS DIFFERENT IN EACH CASE) IN TH E ASSESSEES TOTAL INCOME IN TOTAL 27 CASES (THE AMOUNT OF ADDITION IS DIFFERENT IN EACH CASE). 6. AGAINST THE SAID ORDERS THE ASSESSEE PREFERRED A N APPEAL BEFORE THE LEARNED CIT (APPEALS) ON THE GROUND OF REOPENING OF ASSESSMENT AND THE ADDITIONS MADE BY THE ASSESSING OFFICER. THE LEARNED CIT(A) GRANTED PARTI AL RELIEF BY RESTRICTING ADDITION ADOPTING GROSS PROFIT RATE OF 9% ON THE SUPPRESSED SALE INST EAD OF 25% AS WAS DETERMINED BY THE ASSESSING OFFICER REJECTING THE GROUND OF REOPENING OF ASSESSMENT AS AGITATED BY THE ASSESSEE. 7. CROSS APPEALS AROSE BEFORE THE LEARNED TRIBUNAL OUT OF THE SAID ORDERS PASSED BY THE LEARNED CIT(A) REJECTING THE GROUND OF REOPENIN G OF ASSESSMENT; ONE BY THE ASSESSEE QUESTIONING THE VALIDITY OF RE-ASSESSMENT AND THE C ONFIRMATION OF ADMISSION MADE BY THE LEARNED CIT(A), THE OTHER PREFERRED BY THE DEPARTME NT AGAINST THE PARTIAL RELIEF GRANTED BY THE FIRST APPELLATE AUTHORITY. THE LEARNED TRIBUNAL WAS PLEASED TO QUASH THE REASSESSMENT ORDERS FOR ALL THE YEARS BY AND UNDER AN ORDER DATED 27.02.2015 WITH THE FOLLOWING OBSERVATIONS : 18. WE FIND THAT THE AO, IN THE ABOVE RECORDED REA SONS, HAS CONCLUDED THAT THE SHOW CAUSE NOTICE ISSUED BY THE EXCISE DEPARTMENT I S FOOLPROOF AND SUBSTANTIAL MATERIAL EVIDENCE OF SUPPRESSION OF SALES. 19. IN OUR CONSIDERED VIEW, THE ABOVE CONCLUSION OF THE AO IS CONTRARY TO THE DECISION OF THE HONBLE JURISDICTIONAL HIGH COURT I N THE CASE OF FUTURA CERAMICS PVT. LTD. VS. STATE OF GUJARAT, SCA NO.6500 OF 2012 ORDER DATED 20.12.2012, WHEREIN THE HONBLE HIGH COURT WHILE DECIDING THE I SSUE UNDER VAT ACT ON A SIMILAR SHOW CAUSE NOTICE ISSUED BY THE CENTRAL EXC ISE AUTHORITY HAS HELD AS UNDER :- . MERELY BECAUSE THE EXCISE DEPARTMENT ISSUED A SH OW CAUSE NOTICE, THAT CANNOT BE A GROUND TO PRESUME AND CONC LUDE THAT THERE WAS - 6 - ITA NOS.100, 133, 105, 138, 109, 146, 113, 150, 117, 142, 125 & 169/RJT/2013 ASSESSMENT YEAR: 2008-09 EVASION OF EXCISE DUTY IMPLYING THEREBY THAT THERE WAS ALSO EVASION OF TAX UNDER THE VAT ACT. IT IS NOT EVEN THE CASE OF THE DEPARTMENT THAT SUCH SHOW CAUSE NOTICE PROCEEDINGS HAS CULMINATED INTO A NY FINAL ORDER AGAINST THE PETITIONER. WE WONDER WHAT WOULD HAPPEN TO THE ORDER OF REASSESSMENT, IF ULTIMATELY THE EXCISE DEPARTMENT W ERE TO DROP THE PROCEEDINGS WITHOUT LEVYING ANY DUTY OR PENALTY FRO M THE PETITIONER. 20. FURTHER THE SHOW CAUSE NOTICE ISSUED BY THE EX CISE DEPARTMENT CONTAINS THE ALLEGATION OF THE EXCISE DEPARTMENT THAT THE AS SESSEE HAS SUPPRESSED SALES FOR THE PURPOSE OF MAKING PAYMENT OF EXCISE DUTY. A PERUSAL OF RECORDED REASONS DOES NOT SHOW THAT THE AO VERIFIED THE PARTICULARS DECLARED BY THE ASSESSEE IN ITS INCOME TAX RETURN. NOWHERE IN THERE RECORDED REASO NS, THE SALE DECLARED BY THE ASSESSEE IN ITS INCOME TAX RETURN, HAS BEEN BROUGHT ON RECORD. THE AO, AS PER THE RECORDED REASONS, HAS NOT VERIFIED THE INCOME T AX RETURN OF THE ASSESSEE VIS A VIS THE ALLEGED ESCAPEMENT OF INCOME TO ARRIVE AT T HE SATISFACTION TO THE EFFECT THAT THE ASSESSEE HAS NOT DISCLOSED SUCH INCOME IN THE R ETURN OF INCOME AND HAS CONCLUDED THAT THE ALLEGED SALES, ON WHICH THE EXCI SE DUTY WAS ALLEGEDLY NOT PAID BY THE ASSESSEE, WAS INCOME CHARGEABLE TO INCOME TA X AND HAS ESCAPED THE ASSESSMENT UNDER THE INCOME TAX ACT. 21. IN OUR CONSIDERED VIEW THE INFORMATION CONTAINE D IN THE SHOW CAUSE NOTICE OF THE EXCISE DEPARTMENT CAN BE REASON TO SUSPECT B Y THE AO BUT WITHOUT VERIFYING THE RELEVANT PARTICULARS DECLARED IN THE INCOME TAX RETURN, IT CANNOT BE REASON TO BELIEVE ABOUT THE ESCAPEMENT OF TAXABLE INCOME UNDE R THE INCOME TAX ACT. 22. IN VIEW OF THIS, IN OUR CONSIDERED VIEW, THE REOPENING OF THE ASSESSMENT BASED ON THE ABOVE RECORDED REASONS, IS BAD IN LAW AND CANNOT BE SUSTAINED. WE, THEREFORE, HOLD ACCORDINGLY, AND CONSEQUENTLY, CANCEL THE IMPUGNED REASSESSMENT ORDERS FOR ALL THE YEARS. SIMILAR APPEALS AGAINST THE IMPUGNED ORDERS OF LD. CIT(A) IN RESPECT OF REGULAR ASSESSMENT OF A.Y. 2008-09 WERE DISPOSED OF BY THE LEARNED ITAT BY AND UNDER COMMON ORDER DATED 25.05.2015 WITH THE FOLLOWING OB SERVATIONS SETTING ASIDE THE ORDERS PASSED BY THE LD. CIT(A) :- WE FIND THAT ITAT, RAJKOT BENCH IN ITA NO. 141/RJ T/2011 FOR A.Y. 2007- 08 IN CASE OF VRUNDAVAN CERAMICS PVT. LTD. IN SIMIL AR SET OF FACTS HAS RESTRICTED THE NET PROFIT TO 9% BY OBSERVING AS UNDER: 19. NOW THE QUESTION REMAINS TO BE SEE THAT UNDER THE FACTS AND CIRCUMSTANCES WHAT SHOULD BE THE FAIR AND REASONABL E PROFIT ON SUPPRESSED TURNOVER. THE NET PROFIT RATE IN THE CAS E OF ASSESSEES AND COMPARABLE CASES ARE 13.20%, 10.68% AND 7.38%, 3.65 % IN CASE OF VRUNDAVAN CERAMICS PVT. LTD., GOKUL CERAMICS PVT. L TD.. RAMCO - 7 - ITA NOS.100, 133, 105, 138, 109, 146, 113, 150, 117, 142, 125 & 169/RJT/2013 ASSESSMENT YEAR: 2008-09 CERAMICS PVT. LTD. AND FERRO GLAZED TILES PVT. LTD. RESPECTIVELY. AS DISCUSSED AND STATED ABOVE THAT THE ABOVE NET PROFI T RATE OF ASSESSEES INCLUDES SOME PORTION OF PROFIT OF SUPPRESSED TURNO VER. THEREFORE, TO GIVE EFFECT OF THAT AND ON ACCOUNT OF FAIR AND REASONABL E ESTIMATION, WE ARE OF THE VIEW THAT THE AVERAGE NET PROFIT RATE OF ALL 4 UNITS WILL BE A GOOD BASIS FOR FAIR AND REASONABLE ESTIMATION OF PROFIT ON SUP PRESSED TURNOVER. IT IS SETTLED POSITION THAT IN ESTIMATION, SOME GUESS WOR K CANNOT BE RULED OUT. THE AVERAGE NET PROFIT RATE OF ALL 4 UNITS COMES TO 8.72%. IN THAT RATE, IF WE INCLUDE 0.28% TO COVER MISCELLANEOUS BENEFIT OF THE TURNOVER OUT OF THE BOOKS OF ACCOUNT, THAT WILL BE A FAIR AND REASONABL E RATE OF PROFIT WHICH COMES TO 9%. THIS RATE OF 9% NET PROFIT WILL BE FAI R AND REASONABLE ON THIS COUNT ALSO THAT THE ASSESSEE WILL NOT GET MAJOR BEN EFIT OF PROFIT OF EVASION OF EXCISE DUTY AS EXCISE DEPARTMENT HAS ALREADY TAK EN ACTION IN THIS REGARD. ON APPLICATION OF 9% RATE OF PROFIT, THE RE LEVANT CALCULATIONS ARE AS UNDER:- PARTICULARS VRUNDAVAN GOKUL SUPPRESSED SALE 21,52,03,905 8,00,77,050 9% NET PROFIT RATE FOR 1,93,68,35 1 72,06,934 ESTIMATION ADDITION SUSTAINED BY 2,84,06,905 85,52,229 CIT(A) 9% PROFIT ADDITION 1,93,68,351 72,06,934 SUSTAINABLE BALANCE EXCESS 90,38, 554 13,45,295 20. IN ACCORDANCE WITH ABOVE CALCULATION, WE CONFIR M THE ADDITION TO THE EXTENT OF RS.1,93,68,351/- IN THE HANDS OF VRUNDAVA N AND RS.72,06,934/- IN THE HANDS OF THE GOKUL AND BALANCE ADDITION RS.9 0,38,554/- IN CASE OF VRUNDAVAN AND RS.13,45,295/- IN THE CASE OF GOKUL O UT OF THE TOTAL ADDITION SUSTAINED BY CIT(A) ARE DELETED. 21. THE LEARNED REPRESENTATIVES OF THE PARTIES SUBM ITTED THAT FACTS OF THE CASE IN GOKUL CERAMICS PVT. LTD. ARE SIMILAR. THERE FORE, THE CROSS APPEAL OF THAT CASE IS ALSO DECIDED IN ACCORDANCE WITH ABO VE DISCUSSION. 22. IN THE RESULT, APPEALS OF ASSESSEE ARE PARTLY A LLOWED AND APPEALS BY REVENUE ARE DISMISSED. SUBSEQUENTLY HONBLE GUJARAT HIGH COURT IN SPECIAL CIVIL APPLICATION NO.6500 OF 2012 IN CASE OF FUTURA CERAMIC PVT. LTD. VS. STATE OF GUJARAT IN ITS DATED 20 TH DECEMBER, 2012, IN SIMILAR SITUATION OBSERVED AS UN DER: FROM THE ABOVE, IT CAN BE SEEN THAT THE ASSESSMENT WHICH WAS PREVIOUSLY CONCLUDED WAS REOPENED ON THE PREMISE TH AT DURING THE EXCISE - 8 - ITA NOS.100, 133, 105, 138, 109, 146, 113, 150, 117, 142, 125 & 169/RJT/2013 ASSESSMENT YEAR: 2008-09 RAID, IT WAS REVEALED THAT THE PETITIONER HAD CLAND ESTINELY REMOVED GOODS WITHOUT PAYMENT OF EXCISE DUTY. THE SALES TAX DEPAR TMENT, THEREFORE, FORMED A BELIEF THAT THE VALUE OF GOODS PLUS EXCISE DUTY EVADED SHOULD FORM PART OF THE TURNOVER OF THE ASSESSEE FOR THE P URPOSE OF TAX UNDER THE VALUE ADDED TAX ACT. IT MAY BE THAT THE RAID CARRIED OUT BY THE EXCISE D EPARTMENT AND THE MATERIAL COLLECTED DURING SUCH PROCEEDINGS CULM INATING INTO ISSUANCE OF A SHOW-CAUSE NOTICE FOR RECOVERY OF UNPAID EXCIS E DUTY AND PENALTY IN A GIVEN CASE SUFFICIENT TO RE-OPEN PREVIOUSLY CLOSED ASSESSMENT. IN THIS CASE, HOWEVER, WE ARE NOT CALLED UPON TO JUDGE THIS ISSUE AND WOULD THEREFORE NOT GIVE ANY DEFINITE OPINION. THE QUESTI ON, HOWEVER, IS WHETHER ON A MERE SHOW CAUSE ISSUED BY THE EXCISE DEPARTMEN T, THE SALES TAX DEPARTMENT CAN MAKE ADDITIONS FOR THE PURPOSE OF CO LLECTING TAX UNDER THE GUJARAT VALUE ADDED TAX ACT WITHOUT ANY FURTHER INQ UIRY. IF THE ASSISTANT COMMISSIONER OF COMMERCIAL TAX HAS UTILIZED THE MAT ERIAL COLLECTED BY THE EXCISE DEPARTMENT; INCLUDING THE STATEMENTS OF THE PETITIONER AND OTHER RELEVANT WITNESSES AND HAD COME TO AN INDEPEN DENT OPINION THAT THERE WAS IN FACT EVASION OF EXCISE DUTY BY CLANDES TINE REMOVAL OF GOODS, HE WOULD HAVE BEEN JUSTIFIED IN MAKING ADDITIONS FO R THE PURPOSE OF VAT ACT. IN THE PRESENT CASE, HOWEVER, NO SUCH EXERCISE WAS UNDERTAKEN. ALL THAT THE ASSESSING OFFICER DID WAS TO RELY ON THE S HOW-CAUSE NOTICE ISSUED BY THE EXCISE DEPARTMENT. NOWHERE DID HE CONCLUDE T HAT THERE WAS A CASE OF CLANDESTINE REMOVAL OF GOODS WITHOUT PAYMEN T OF TAX UNDER THE VAT ACT. MERELY BECAUSE THE EXCISE DEPARTMENT ISSUE D A SHOW-CAUSE NOTICE, THAT CANNOT BE A GROUND TO PRESUME AND CONC LUDE THAT THERE WAS EVASION OF EXCISE DUTY IMPLYING THEREBY THAT THERE WAS ALSO EVASION OF TAX UNDER THE VAT ACT. IT IS NOT EVEN THE CASE OF THE D EPARTMENT THAT SUCH SHOW-CAUSE NOTICE PROCEEDINGS HAS CULMINATED INTO A NY FINAL ORDER AGAINST THE PETITIONER. WE WONDER WHAT WOULD HAPPEN TO THE ORDER OF REASSESSMENT, IF ULTIMATELY THE EXCISE DEPARTMENT W ERE TO DROP THE PROCEEDINGS WITHOUT LEVYING ANY DUTY OR PENALTY FRO M THE PETITIONER. ALL IN ALL, THE ASSISTANT COMMISSIONER HAS ACTED IN A MECHANICAL MANNER AND PASSED FINAL ORDER OF ASSESSMENT MERELY ON THE PREMISE THAT THE EXCISE DEPARTMENT HAS ISSUED A SHOW-CAUSE NOTIC E ALLEGING CLANDESTINE REMOVAL OF THE GOODS. SUCH ORDER, THERE FORE, CANNOT BE SUSTAINED AND IS ACCORDINGLY QUASHED. WHEN THE ORDE R IS EX FACIE ILLEGAL AND WHOLLY UNTENABLE IN LAW, MERE AVAILABILITY OF A LTERNATIVE REMEDY WOULD NOT PRECLUDE US FROM INTERFERING AT THIS STAGE IN A WRIT PETITION. THUS, HONBLE JURISDICTIONAL HIGH COURT HELD THAT C ONCERN ASSISTANT COMMISSIONER, SALES TAX WAS NOT JUSTIFIED IN INITIA TING ACTION AND PASSING FINAL ASSESSMENT ORDER MERELY ON THE PREMISES THAT EXCISE DEPARTMENT HAS ISSUED A SHOW CAUSE NOTICE ALLEGING CLANDESTINE REMOVAL OF G OODS. SUCH ORDER WAS QUASHED. - 9 - ITA NOS.100, 133, 105, 138, 109, 146, 113, 150, 117, 142, 125 & 169/RJT/2013 ASSESSMENT YEAR: 2008-09 10.1 SIMILAR VIEW HAS BEEN TAKEN BY HONBLE GUJARAT HIGH COURT IN SPECIAL CIVIL APPLICATION NO. 1038 OF 2013 IN CASE OF FUTURA CERA MIC PVT. LTD. VS. STATE OF GUJARAT IN ITS ORDER DATED 13.11.2013 BY OBSERVING AS UNDER: [6.0] IN VIEW OF THE ABOVE DECISION OF DIVISION BE NCH OF THIS COURT, THE IMPUGNED REASSESSMENT ORDER DESERVES TO BE QUASHED AND SET ASIDE. HOWEVER LIBERTY CAN BE RESERVED IN FAVOUR OF THE DE PARTMENT TO PASS AN ORDER AFRESH IN ACCORDANCE WITH LAW AND ON MERITS A FTER GIVING AN OPPORTUNITY TO THE PETITIONER AND IF PERMISSIBLE UN DER THE LAW NOW. [6.1] IN VIEW OF THE ABOVE AND FOR THE REASONS STAT ED ABOVE, PETITION SUCCEEDS. IMPUGNED ORDER PASSED BY THE ASSISTANT CO MMERCIAL COMMISSIONER TAX (2), NADIAD [ANNEXUREF TO THE PETI TION] DATED 31.03.2012 IS HEREBY QUASHED AND SET ASIDE. HOWEVER , IT IS OBSERVED THAT THE SAME SHALL NOT AFFECT THE PROCEEDINGS UNDER THE CENTRAL EXCISE ACT FOR WHICH THE SHOWCAUSE NOTICE HAS BEEN ISSUED. A LIBER TY IS ALSO RESERVED IN FAVOUR OF THE DEPARTMENT TO PASS REASSESSMENT ORDER AFRESH IN ACCORDANCE WITH LAW AND ON MERITS AND AFTER GIVING FULLEST OPPORTUNITY TO THE PETITIONER AND IF PERMISSIBLE UNDER THE LAW NOW . RULE IS MADE ABSOLUTE TO THE AFORESAID EXTENT. IN THE FACTS AND CIRCUMSTA NCES OF THE CASE, THERE SHALL BE NO ORDER AS TO COSTS. AGAIN IN THIS CASE REASSESSMENT WAS SET ASIDE ON TH E GROUND THAT SAME WAS MECHANICALLY PASSED. 10.2 NOTHING CONTRARY WAS BROUGHT TO OUR KNOWLEDGE. FACTS BEING SIMILAR, SO FOLLOWING SAME REASONING, WE FIND THAT IT IS UNDISP UTED THAT INCOME TAX PROCEEDINGS ARE ARISING FROM THE RATE OF EXCISE DEP ARTMENT AND MATERIAL COLLECTED DURING SEARCH PROCEEDINGS CULMINATED INTO ISSUANCE OF SHOW CAUSE NOTICE FOR RECOVERY OF UNPAID EXCISE DEPARTMENT AND PENALTY IN GIVEN CASES. WITHOUT PREJUDICE TO THE FINDING OF CUSTOM, EXCISE DEPARTMENT, QUESTION BEFORE US IS WHETHER ON MERE SHOW CAUSE NOTICE ISSUED BY E XCISE DEPARTMENT CAN BE MADE BASIS OF ADDITION FOR THE PURPOSE OF INCOME TA X ACT. INCOME TAX OFFICER HAS UTILIZED THE MATERIAL COLLECTED BY EXCISE DEPAR TMENT INCLUDING STATEMENT OF PETITIONER AND OTHER RELEVANT PERSONS AS DISCUSSED ABOVE AND ON THE BASIS OF SAME. HE WOULD HAVE BEEN JUSTIFIED IN MAKING ADDITI ON FOR THE PURPOSE OF INCOME TAX DEPARTMENT IN PRESENT CASE BY INDEPENDENT ENQUI RIES BY CONCERN INCOME TAX AUTHORITIES. NO SUCH EXERCISE WAS UNDERTAKEN B Y INCOME TAX DEPARTMENT AT ALL. ASSESSING OFFICER HAS SIMPLY RELIED ON SHOW C AUSE NOTICE ISSUED BY EXCISE DEPARTMENT. NOWHERE DID HE CONCLUDE THAT THERE WAS A LARGE SCALE REMOVAL OF GOODS WITHOUT PAYMENT OF TAX UNDER INCOME TAX ACT. MERELY BECAUSE EXCISE DEPARTMENT ISSUED SHOW CAUSE NOTICE, THAT ALONE CAN NOT BE A GROUND TO ASSUME AND CONCLUDE THAT THERE WAS EVASION OF INCOME TAX A CT AS WELL. IT IS NOT EVEN THE CASE OF DEPARTMENT THAT SUCH SHOW CAUSE NOTICE PROCEEDING HAS CULMINATED INTO ANY FINAL ORDER AGAINST PETITIONER. THIS MAKE S IT CLEAR THAT CONCERN INCOME - 10 - ITA NOS.100, 133, 105, 138, 109, 146, 113, 150, 117, 142, 125 & 169/RJT/2013 ASSESSMENT YEAR: 2008-09 TAX OFFICER HAS ACTED UPON IN MECHANICAL MANNER AND PASSED ORDER OF ASSESSMENT MERELY ON PREMISES OF EXCISE DEPARTMENT ISSUED SHOW CAUSE NOTICE ALLEGING LARGE SCALE REMOVAL OF GOODS. THIS VIEW I S FORTIFIED BY DECISION OF HONBLE GUJARAT HIGH COURT IN CASE OF FUTURA CERAMI C PVT. LTD. (SUPRA). ITAT, RAJKOT BECNH IN ITA NO. 141/RJT/2011 FOR A.Y. 2007- 08 WAS NOT HAVING ADVANTAGE OF ABOVE LEGAL DISCUSSION ON THIS ISSUE O F MAINTAINABILITY. UNDER FACTS AND CIRCUMSTANCES, ORDER OF CIT(A) CANNOT BE SUSTAI NED. ACCORDINGLY, ORDER OF ASSESSING OFFICER ON THIS ISSUE IS QUASHED. IN VIE W OF ABOVE, ISSUE RAISED IN REVENUES APPEAL GOES ACADEMIC. SAME MAY BE RAISED AS AND WHEN SITUATION ARISES FOR THIS. 10.3 SIMILAR ISSUE AROSE IN OTHER ASSESSEES CASE. FACTS BEING SIMILAR, SO FOLLOWING SAME REASONING, WE HOLD THAT ORDERS PASSE D BY INCOME TAX OFFICER CANNOT BE SUSTAINED AND SAME ARE UPHELD. 11. IN RESULT, APPEALS OF REVENUE ARE DISMISSED AND THAT OF ASSESSEES ARE ALLOWED. 8. BEING AGGRIEVED BY AND/OR DISSATISFIED WITH THE ORDERS PASSED BY THE HONBLE INCOME TAX APPELLATE TRIBUNAL THE DEPARTMENT PREFER RED APPEAL BEFORE THE HONBLE HIGH COURT AT GUJARAT. ON 29.06.2016 THE HONBLE HIGH CO URT IN RESPECT OF 52 APPEALS (OUT OF 54) PLEASED TO PASS ORDERS INTER ALIA SETTING ASIDE THE ORDER PASSED BY THE LEARNED TRIBUNAL UPHOLDING THE RE-ASSESSMENT AND REMANDED T HE MATTERS TO THE LEARNED TRIBUNAL FOR DECIDING THE SAME ON MERITS OF THE ADDITIONS MA DE BY THE AUTHORITIES BELOW. HOWEVER, NO OBSERVATION WAS MADE IN 12 APPEALS IN RESPECT OF THE REGULAR ASSESSMENT FOR THE ASSESSMENT YEAR 2008-2009 OF THE ASSESSEE. THE FOLL OWING TWO SETS OF APPEALS WERE KEPT PENDING BEFORE THE HONBLE HIGH COURT AT GUJAR AT - M/S GANGA GLAZED TILES (A.Y. 2008-09) TAX APPEAL NO.92/2016 CONSEQUENT TO I TA NO.99/RJT/2013 - M/S GANGA GLAZED TILES PVT. LTD. (A.Y. 2008-09) TAX APPEAL NO.97/2016 CONSEQUENT TO I TA NO.133/RJT/2013 9. HOWEVER, THE ASSESSEE GROUP FILED APPLICATIONS FOR REVIEW BEFORE THE HONBLE HIGH COURT AT GUJARAT AGAINST THE ORDER DATED 29.06.2016 IN RESPECT OF 8 FOLLOWING MATTERS RELATING TO THE ASSESSMENT YEAR 2008-09 OUT OF THE SAID 12 APPEALS DISPOSED OF BY THE HONBLE HIGH COURT AT GUJARAT. - 11 - ITA NOS.100, 133, 105, 138, 109, 146, 113, 150, 117, 142, 125 & 169/RJT/2013 ASSESSMENT YEAR: 2008-09 - GANGOTRI GLAZED TILES AY 2008-09 - VRUNDAVAN CERA P. LTD. AY 2008-09 - VARMORA GRANTIO P. LTD. AY 2008-09 - ITALICA TILES P. LTD. AY 2008-09 10. AS A RESULT WHEREOF THE 4 FOLLOWING CASES WERE KEPT PENDING ADJUDICATION BEFORE THE LEARNED INCOME TAX APPELLATE TRIBUNAL IN TERMS OF THE ORDER PASSED BY THE HONBLE HIGH COURT AT GUJARAT. - GOKUL CERAMICS PVT. LTD. AY 2008-09 2 TAX APPEAL NOS.80 & 81/2016 CONSEQUENT TO ITA N O146 & 109/RJT/2013 - GANGA GLAZED TILES AY 2008-09 1 TAX APPEAL NO.93/2016 CONSEQUENT TO ITA NO.132/ RJT/2013 - GANGA GLAZED TILES PVT. LTD. AY 2008-09 1 TAX APPEAL NO.96/2016 CONSEQUENT TO ITA NO.100/ RJT/2013. 11. PRECISELY THE FOLLOWING 44 MATTERS WERE PENDING BEFORE THE LEARNED INCOME TAX APPELLATE TRIBUNAL FOR ADJUDICATION: - GANGA GLAZED TILES AY 04-05 TO 07-08 8 (A+D) - GANGOTRI GLAZED TILES AY 04-05 TO 07-08 8 ( A+D) - GOKUL CERA PVT. LTD. AY 04-05 TO 06-07 6 (A+D ) - VRUNDAVAN CERA P. LTD. AY 04-05 TO 06-07 6 (A +D) - VARMORA GRANTIO P. LTD. AY 05-06 TO 07-08 6 ( A+D) - ITALICA TILES P. LTD. AY 05-06 TO 07-08 6 ( A+D) - GOKUL CERA. PVT. LTD. AY 2008-09 2 (A+D ) - GANGA GLAZED TILES AY 2008-09 1 (D) - GANGA GLAZED TILES P. LTD. AY 2008-09 1 (A) 12. ULTIMATELY BY AND UNDER A COMMON ORDER DATED 16 .01.2018 THE LEARNED ITAT WAS PLEASED TO DISPOSE OF THE 40 CASES OUT OF THE SAID 44 MATTERS ON MERIT. THE REMAINING 4 MATTERS ARE STILL PENDING CONSIDERATION BEFORE THE LEARNED ITAT. 13. ON THE OTHER HAND, THE HONBLE HIGH COURT HAVE BEEN PLEASED TO DISPOSE OF THE APPEALS ON REVIEW PREFERRED BY THE ASSESSEE IN THEI R FAVOUR IN RESPECT OF THE 8 MATTERS FOR THE ASSESSMENT YEARS 2008-09 BY AND UNDER A COMMON JUDGMENT AND ORDER DATED 25.04.2018 WITH THE FOLLOWING OBSERVATION: - 12 - ITA NOS.100, 133, 105, 138, 109, 146, 113, 150, 117, 142, 125 & 169/RJT/2013 ASSESSMENT YEAR: 2008-09 10. HAVING THUS CLEARED THE PERIPHERAL ISSUES, WE MAY EXAMINE THE CENTRAL QUESTION VIZ. DID THE ASSESSING OFFICER HAVE SUFFIC IENT MATERIAL AT HIS COMMAND TO BELIEVE EVASION OF TAX? WE HAVE NOTICED THE BROAD MODUS OPERANDI STATED TO HAVE BEEN ADOPTED BY THE ASSESSEES AS PER THE EXCIS E SHOW-CAUSE NOTICES. ADMITTEDLY, THESE SHOW-CAUSE NOTICES ARE ONLY AT SU CH STAGE WITHOUT IN ANY OF THESE CASES THE FINAL ORDERS OF ADJUDICATION HAVE B EEN PASSED BY THE EXCISE AUTHORITIES. THESE SHOW-CAUSE NOTICES THUS MERELY P RESENT THE MATERIAL COLLECTED BY THE EXCISE DEPARTMENT SUGGESTING THE VIEW OF THE DEPARTMENT THAT THIS IS A CASE OF LARGE SCALE EXCISE EVASION. BEFORE FINAL OR DER LEVYING EXCISE DUTY WITH INTEREST AND PENALTY CAN BE PASSED, THESE FACTS HAV E TO BE ESTABLISHED THROUGH BY PARTE PROCEEDINGS. TILL THEN, IT ONLY REMAINS IN THE REALM OF THE STAND OF THE DEPARTMENT WHICH IS YET TO BE TESTED. 11. IN ADDITION TO CONFRONTING THE ASSESSEE WITH TH E CONTENTS OF THE SHOW- CAUSE NOTICE ISSUED BY THE EXCISE DEPARTMENT, THE A SSESSING OFFICER HAS DONE LITTLE ELSE. HE OF COURSE CALLED UPON THE ASSESSEE TO RESPOND TO THE ALLEGATIONS CONTAINED IN THE SHOW-CAUSE NOTICE, TO THE STATEMEN TS AND MATERIALS ACCOMPANYING SUCH SHOW CAUSE NOTICE. AS NOTED, THE ASSESSEE GAVE A BRIEF REPLY DENYING THE ALLEGATIONS AND POINTING OUT THAT THE CHARGES ARE YET TO BE PROVED. IF THE ASSESSING OFFICER THEREAFTER WANTED TO MAKE ADDITIONS ON THE BASIS OF SUCH MATERIALS, THE SAME HAD TO BE BROUGHT ON RECORD. BY MERELY PRODUCING THE COPIES OF THE STATEMENTS OF THE WITNE SSES ACCOMPANYING THE SHOW- CAUSE NOTICES, SUCH STATEMENTS AND THE VERACITY THE REOF DOES NOT GET AUTOMATICALLY ESTABLISHED. THE ASSESSING OFFICER ME RELY COSMETICALLY GAVE AN OPPORTUNITY TO THE ASSESSEE TO MEET WITH SUCH ALLEG ATIONS, VIRTUALLY, SHIFTING THE BURDEN OF PROVING THE EVASION OF DUTY THAT HAD TAKE N PLACE ON THE ASSESSEE. WE HAVE PERUSED THE ENTIRE ORDER OF ASSESSMENT. THERE IS NO INDEPENDENT MATERIAL BROUGHT ON RECORD BY THE ASSESSING OFFICER OTHER TH AN THOSE WHICH WERE ALREADY COLLECTED BY THE EXCISE DEPARTMENT AND WHICH, AS NO TED EARLIER, ARE YET TO BE VERIFIED. 12. COUNSEL FOR THE ASSESSEES DREW OUR ATTENTION TO A JUDGEMENT OF CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL IN WHICH, THE ORDER OF ADJUDICATION PASSED IN CASE OF ONE OF THE CERAMIC UNITS (NOT AN ASSESSEE BEFORE US) BY THE ADJUDICATING AUTHORITY CAME TO BE SET ASIDE. HOWEVE R, FOR THE FOLLOWING REASONS WE DO NOT WISH TO PLACE ANY RELIANCE ON THIS JUDGEM ENT: FIRSTLY, THE EXCISE SHOW-CAUSE NOTICES IN CASE OF T HE PRESENT ASSESSEES ARE YET TO BE ADJUDICATED. WHAT WOULD BE THE MATERIAL ON RE CORD DURING SUCH PROCEEDINGS IS NOT POSSIBLE FOR US TO FORESEE. SECONDLY, THE TRIBUNAL HAS MAINLY PROCEEDED ON THE BASIS OF ABSENCE OF SECTION 4A OF THE CENTRAL EXCISE ACT AT THE RELEVANT TIME W HICH, IN THE OPINION OF THE - 13 - ITA NOS.100, 133, 105, 138, 109, 146, 113, 150, 117, 142, 125 & 169/RJT/2013 ASSESSMENT YEAR: 2008-09 TRIBUNAL, ALONE COULD HAVE PERMITTED THE DEPARTMENT TO SUBSTITUTE THE SALE PRICE BY THE TRANSACTION VALUE OF THE GOODS. SUCH IS NOT THE CASE IN THE PRESENT GROUP OF CASES. WE WOULD, THEREFORE, BE WELL ADVISED TO CLEAR SUCH CONTROVERSY. 13. WHEN WE FIND THAT THE ASSESSING OFFICER DID NOT HAV E THE BASIS FOR MAKING ADDITIONS, THE QUESTION OF PERCENTAGE OF THE SALES AT WHICH STAGE ADDITIONS SHOULD BE MADE WOULD BECOME REDUNDANT. 14. IN THE RESULT, QUESTION IS DECIDED AGAINST THE REVENUE. ALL TAX APPEALS ARE DISMISSED. 14. CONSEQUENTLY THE DECISION PASSED BY THE LEARNED ITAT DATED 25.05.2015 WAS AFFIRMED BY THE SAID JUDGMENT AND ORDER DATED 25.04 .2018 PASSED BY THE HONBLE HIGH COURT AT GUJARAT. 15. CONSIDERING THE SAID JUDGMENT AND ORDER DATED 2 5.04.2018 AS MENTIONED HEREINABOVE THE ASSESSEE PRAYED BEFORE US FOR RECON FIRMING THE EARLIER ORDER PASSED BY THE LEARNED ITAT IN RESPECT OF THE INSTANT APPEALS FOR ASSESSMENT YEAR 2008-09. 16. WE MAKE IT CLEAR THAT THE 6 SET OF CROSS APPEAL S FOR THE ASSESSMENT YEARS 2008- 09 ARE THE SAME GROUP OF APPEALS WHICH WERE INITIAL LY REMANDED TO THE LD. ITAT BY AND UNDER THE ORDER DATED 29.06.2016 PASSED BY HONBLE GUJARAT HIGH COURT. OUT OF WHICH REVIEW APPLICATIONS WERE PREFERRED BEFORE THE HONB LE GUJARAT HIGH COURT BY THE ASSESSEE IN RESPECT OF 8 APPEALS WHICH ULTIMATELY W ERE DISPOSED OF BY AND UNDER THE JUDGEMENT AND ORDER DATED 25.04.2018 BY THE JURISDI CTIONAL HIGH COURT. HONBLE HIGH COURT BY THE SAID JUDGEMENT WAS PLEASED TO DISMISS THE APPEALS PREFERRED BY THE REVENUE VIRTUALLY DISMISSING THE QUANTUM ORDER PASS ED BY THE ASSESSING OFFICER IN THE ABSENCE OF INDEPENDENT MATERIAL BROUGHT ON RECORD E XCEPT THOSE WERE ALREADY COLLECTED BY THE EXCISE DEPARTMENT WHICH ARE YET TO BE VERIFI ED. THE HONBLE HIGH COURT WAS FURTHER PLEASED TO OBSERVE, SINCE THE ADDITION MADE BY THE ASSESSING OFFICER HAD NO BASIS, THE QUESTION OF PERCENTAGE OF THE SALES AT W HICH STAGE ADDITIONS SHOULD BE MADE WOULD BECOME REDUNDANT. THE APPEALS BEFORE US SINC E IDENTICAL IN NATURE HAVING SAME SET OF FACTS ARE COVERED BY THE RATIO OF THE SAID O RDER DATED 25.04.2018 PASSED BY THE - 14 - ITA NOS.100, 133, 105, 138, 109, 146, 113, 150, 117, 142, 125 & 169/RJT/2013 ASSESSMENT YEAR: 2008-09 HONBLE HIGH COURT AT GUJARAT. WE, THEREFORE, RESP ECTFULLY FOLLOWING THE JUDGEMENT AND ORDER DATED 25.04.2018 PASSED BY THE HONBLE HIGH C OURT AT GUJARAT, DELETE THE QUANTUM ORDER PASSED BY THE AUTHORITIES BELOW AND T HEREBY ALLOW THE APPEALS PREFERRED BY THE ASSESSEE. CONSEQUENTLY, THE APPEALS PREFERR ED BY THE REVENUE BECOME INFRUCTUOUS. THIS ORDER PRONOUNCED IN OPEN COURT ON 10 / 08 /2018 SD/- SD/- (WASEEM AHMED) (MS. MADHUMITA ROY) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD; DATED 10/ 08 /2018 . . , . . ./ T.C. NAIR, SR. PS/PBN/* / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. / CONCERNED CIT 4. ( ) / THE CIT(A) 5. , , /DR,ITAT, RAJKOT 6. !' / GUARD FILE. / BY ORDER, //TRUE COPY// / (DY./ASSTT. REGISTRAR) , / ITAT, RAJKOT 1. DATE OF DICTATION .. 13.7.18 (DICTATION-PAD 7 -PAGES ATTACHED AT THE END OF THIS APPEAL-FILE) 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 3. OTHER MEMBER 4. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S.. 5. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 6. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.P .S./P.S.10.8.18 7. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 10.8.18 8. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK ... 9. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER..RDER IN THE INCOME TAX APPELLATE TRIBUNAL RAJKOT BENCH, RAJKOT [CONDUCTED THROUGH E-COURT AT AHMEDABAD] BEFORE SHRI WASEEM AHMED, ACCOUNTANT MEMBER & MS. MADHUMITA ROY, JUDICIAL MEMBER I.T.A. NO.100/RJT/2013 (ASSESSMENT YEAR : 2008-09) GANGA GLAZED TILES PVT. LTD., VS. A.C.I.T., 8-A, NATIONAL HIGHWAY, CENTRAL CIRCLE-1, RAJKOT. VILLAGE DHUVA, TAL. WANKANER, DISTT. RAJKOT. [PAN: AACCG 9422 H] I.T.A. NO.133/RJT/2013 (ASSESSMENT YEAR : 2008-09) A.C.I.T., VS. GANGA GLAZED TILES PVT. LTD., CENTRAL CIRCLE-1, RAJKOT. 8-A, NATIONAL HIGHWAY, VILLAGE DHUVA, TAL. WANKANER, DISTT. RAJKOT. [PAN: AACCG 9422 H] I.T.A. NO.105/RJT/2013 (ASSESSMENT YEAR : 2008-09) GANGOTRI GLAZED TILES PVT. LTD., VS. A.C.I.T., BHAGWATI CHAMBERS, CENTRAL CIRCLE-1, RAJKOT. 8-A, NATIONAL HIGHWAY, MORBI, DISTT. RAJKOT. [PAN: AACCG 9019 J] I.T.A. NO.138/RJT/2013 (ASSESSMENT YEAR : 2008-09) A.C.I.T., VS. GANGOTRI GLAZED TILES PVT. LTD., CENTRAL CIRCLE-1, RAJKOT. BHAGWATI CHAMBERS, 8-A, NATIONAL HIGHWAY, MORBI, DISTT. RAJKOT. [PAN: AACCG 9019 J] I.T.A. NO.109/RJT/2013 (ASSESSMENT YEAR : 2008-09) GOKUL CERAMICS PVT. LTD., VS. A.C.I.T., 8-A, NATIONAL HIGHWAY, CENTRAL CIRCLE-1, RAJKOT. VILLAGE DHUVA, TAL. WANKANER, DISTT. RAJKOT. [PAN: AACCG 0532 E] - 2 - ITA NOS.100, 133, 105, 138, 109, 146, 113, 150, 117, 142, 125 & 169/RJT/2013 ASSESSMENT YEAR: 2008-09 I.T.A. NO.146/RJT/2013 (ASSESSMENT YEAR : 2008-09) A.C.I.T., VS. GOKUL CERAMICS PVT. LTD., CENTRAL CIRCLE-1, RAJKOT. 8-A, NATIONAL HIGHWAY, VILLAGE DHUVA, TAL. WANKANER, DISTT. RAJKOT. [PAN: AACCG 0532 E] I.T.A. NO.113/RJT/2013 (ASSESSMENT YEAR : 2008-09) VARMORA GRANITO PVT. LTD., VS. A.C.I.T., 8-A, NATIONAL HIGHWAY, CENTRAL CIRCLE-1, RAJKOT. VILLAGE DHUVA, TAL. WANKANER, DISTT. RAJKOT. [PAN: AABCV 7523 M] I.T.A. NO.150/RJT/2013 (ASSESSMENT YEAR : 2008-09) A.C.I.T., VS. VARMORA GRANITO PVT. LTD., CENTRAL CIRCLE-1, RAJKOT. 8-A, NATIONAL HIGHWAY, VILLAGE DHUVA, TAL. WANKANER, DISTT. RAJKOT. [PAN: AABCV 7523 M] I.T.A. NO.117/RJT/2013 (ASSESSMENT YEAR : 2008-09) VRUNDAVAN CERAMICS PVT. LTD., VS. A.C.I.T., SURVEY NO.143/2, CENTRAL CIRCLE-1, RAJKOT. 8-A, NATIONAL HIGHWAY, VILLAGE DHUVA, TAL. WANKANER, DISTT. RAJKOT. [PAN: AAEFM 8240 N] I.T.A. NO.142/RJT/2013 (ASSESSMENT YEAR : 2008-09) A.C.I.T., VS. VRUNDAVAN CERAMICS PVT. LTD., CENTRAL CIRCLE-1, RAJKOT. 8-A, NATIONAL HIGHWAY, VILLAGE DHUVA, TAL. WANKANER, DISTT. RAJKOT. [PAN: AAEFM 8240 N] - 3 - ITA NOS.100, 133, 105, 138, 109, 146, 113, 150, 117, 142, 125 & 169/RJT/2013 ASSESSMENT YEAR: 2008-09 I.T.A. NO.125/RJT/2013 (ASSESSMENT YEAR : 2008-09) ITALICA FLOOR TILES PVT. LTD., VS. A.C.I.T., SURVEY NO.111/112, CENTRAL CIRCLE-1, RAJKOT. BANDHUNAGAR, AT MAKANSAR, 8-A, NATIONAL HIGHWAY, MORBI, DISTT. RAJKOT. [PAN: AABCI 2816 C] I.T.A. NO.169/RJT/2013 (ASSESSMENT YEAR : 2008-09) A.C.I.T., VS. ITALICA FLOOR TILES PVT. LTD., CENTRAL CIRCLE-1, RAJKOT. SURVEY NO.111/112, BANDHUNAGAR, AT MAKANSAR, 8-A, NATIONAL HIGHWAY, MORBI, DISTT. RAJKOT. [PAN: AABCI 2816 C] (APPELLANTS) (RESPONDENTS) ASSESSEE BY : M.J. RANPURA, A.R. REVENUE BY : RANJEET SINGH, CIT (D.R.) DATE OF HEARING : 04.07.2018 DATE OF PRONOUNCEMENT : 10.08.2018 O R D E R PER BENCH: THIS BUNCH OF 6 CROSS APPEALS HAVE BEEN FILED BEFOR E US BY THE ASSESSEE AND REVENUE AGAINST THE 6 SEPARATE ORDERS, ALL DATED 06 .02.2013, PASSED BY THE COMMISSIONER OF INCOME TAX (APPEALS)-IV, AHMEDABAD [LD. CIT(A) IN SHORT] FOR ASSESSMENT YEAR (A.Y.) 2008-09 ARISING OUT OF 6 SEP ARATE ORDERS DATED 15.12.2011 AND 29.12.2010 PASSED BY THE ACIT, CENTRAL CIRCLE-1, RA JKOT. 2. THE GROUP OF APPEALS INVOLVED IDENTICAL QUESTION OF LAW AND ARISE IN SUBSTANTIALLY SIMILAR BACKGROUND AND THE SAME ARE HEARD ANALOGOUS LY AND ARE BEING DISPOSED OF BY A COMMON JUDGMENT. - 4 - ITA NOS.100, 133, 105, 138, 109, 146, 113, 150, 117, 142, 125 & 169/RJT/2013 ASSESSMENT YEAR: 2008-09 3. THESE MATTERS ARE HAVING CHEQUERED HISTORY SPANN ING NEARLY 10 YEARS. THE ASSESSEE IS ENGAGED IN THE BUSINESS OF MANUFACTURIN G OF CERAMIC TILES OF VARIOUS SIZES AND MEASUREMENTS. THE ASSESSEE IS A PART OF VRUNDA VAN GROUP OF COMPANIES HAD FILED THE RETURN OF INCOME FOR THE AY 2004-05 AND THE ASS ESSMENT OF SUCH RETURN WAS COMPLETED AT THE RELEVANT TIME. LATER ON, THE DIRE CTOR GENERAL OF CENTRAL INTELLIGENCE (DGCEI IN SHORT) CONDUCTED A SEARCH IN THE ASSESSEE S PREMISES ON 17.01.2008, SEVERAL INCRIMINATING DOCUMENTS WERE RECOVERED IN THE SAID SEARCH PROCEEDING. THE INVESTIGATION LED TO A PRIMA-FACIE REVELATION THAT THE ASSESSEE WAS ENGAGED IN LARGE SCALE OF FINANCIAL IRREGULARITIES WHICH WAS UNEARTHED BY THE DGCEI. THERE WAS A SUPPRESSION OF SALE OF RS.590 CRORES (ROUND OFF) BY THE ASSESSE E, AS WAS THE FINDING OF THE SAID AUTHORITY. THE SHOW-CAUSE NOTICE WAS ISSUED BY THE EXCISE DEPARTMENT ON THE BASIS OF SUCH MATERIALS COLLECTED BY THE DGCEI, WHICH ALONG WITH RELEVANT MATERIALS WERE FORWARDED TO THE INCOME TAX DEPARTMENT BY THE EXCIS E DEPARTMENT. THE ASSESSING OFFICER (AO) ON THE BASIS OF SUCH MATERIALS REOPENE D THE ASSESSMENT OF THE ASSESSEE FOR THE ASSESSMENT YEAR 2004-05 BY ISSUING NOTICE U/S.1 48 OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS 'THE ACT') ON 22.03.201 1. IN FACT THE ASSESSMENT PROCEEDING WAS REOPENED BY THE ASSESSING OFFICER FOR THE FOLLO WING YEAR FOR THE RESPECTIVE PARTIES MENTIONED IN THE FOLLOWING TABLE: - GANGA GLAZED TIES AY 04-05 TO 07-08 - GANGOTRI GLAZED TILES AY 04-05 TO 07-08 - GOKUL CERA PVT. LTD. AY 04-05 TO 06-07 - VRUNDAVAN CERA P. LTD. AY 04-05 TO 06-07 - VARMORA GRANTIO P. LTD. AY 05-06 TO 07-08 - ITALICA TILES P. LTD. AY 05-06 TO 07-08 4. SIMULTANEOUSLY, REGULAR ASSESSMENT PROCEEDINGS U NDER SECTION 143(3) OF THE ACT WAS ALSO INITIATED IN THE FOLLOWING CASES: - GANGA GLAZED TIES AY 08-09 - GANGA GLAZED TIES P.L. AY 08-09 - GANGOTRI GLAZED TILES AY 08-09 - GOKUL CERA PVT. LTD. AY 08-09 - VRUNDAVAN CERA P. LTD. AY 08-09 - VARMORA GRANTIO P. LTD. AY 08-09 - ITALICA TILES P. LTD. AY 08-09 - 5 - ITA NOS.100, 133, 105, 138, 109, 146, 113, 150, 117, 142, 125 & 169/RJT/2013 ASSESSMENT YEAR: 2008-09 5. THOUGH THE VALIDITY OF THE NOTICE OF RE-OPENING AND THE QUANTUM ADDITIONS PROPOSED BY THE ASSESSING OFFICER WAS CHALLENGED BY THE ASSESSEES, IGNORING SUCH OBJECTION THE ASSESSMENT ORDER WAS PASSED ON 15.12. 2011 HOLDING THAT THE ASSESSEE HAS SUPPRESSED SALE OF RS.98.18 LAKHS (THE AMOUNT OF AD DITION IS DIFFERENT IN EACH CASE). APPLYING THE GROSS PROFIT RATE OF 25%, THE AO MADE ADDITION OF RS.24.54 LAKHS (THE AMOUNT OF ADDITION IS DIFFERENT IN EACH CASE) IN TH E ASSESSEES TOTAL INCOME IN TOTAL 27 CASES (THE AMOUNT OF ADDITION IS DIFFERENT IN EACH CASE). 6. AGAINST THE SAID ORDERS THE ASSESSEE PREFERRED A N APPEAL BEFORE THE LEARNED CIT (APPEALS) ON THE GROUND OF REOPENING OF ASSESSMENT AND THE ADDITIONS MADE BY THE ASSESSING OFFICER. THE LEARNED CIT(A) GRANTED PARTI AL RELIEF BY RESTRICTING ADDITION ADOPTING GROSS PROFIT RATE OF 9% ON THE SUPPRESSED SALE INST EAD OF 25% AS WAS DETERMINED BY THE ASSESSING OFFICER REJECTING THE GROUND OF REOPENING OF ASSESSMENT AS AGITATED BY THE ASSESSEE. 7. CROSS APPEALS AROSE BEFORE THE LEARNED TRIBUNAL OUT OF THE SAID ORDERS PASSED BY THE LEARNED CIT(A) REJECTING THE GROUND OF REOPENIN G OF ASSESSMENT; ONE BY THE ASSESSEE QUESTIONING THE VALIDITY OF RE-ASSESSMENT AND THE C ONFIRMATION OF ADMISSION MADE BY THE LEARNED CIT(A), THE OTHER PREFERRED BY THE DEPARTME NT AGAINST THE PARTIAL RELIEF GRANTED BY THE FIRST APPELLATE AUTHORITY. THE LEARNED TRIBUNAL WAS PLEASED TO QUASH THE REASSESSMENT ORDERS FOR ALL THE YEARS BY AND UNDER AN ORDER DATED 27.02.2015 WITH THE FOLLOWING OBSERVATIONS : 18. WE FIND THAT THE AO, IN THE ABOVE RECORDED REA SONS, HAS CONCLUDED THAT THE SHOW CAUSE NOTICE ISSUED BY THE EXCISE DEPARTMENT I S FOOLPROOF AND SUBSTANTIAL MATERIAL EVIDENCE OF SUPPRESSION OF SALES. 19. IN OUR CONSIDERED VIEW, THE ABOVE CONCLUSION OF THE AO IS CONTRARY TO THE DECISION OF THE HONBLE JURISDICTIONAL HIGH COURT I N THE CASE OF FUTURA CERAMICS PVT. LTD. VS. STATE OF GUJARAT, SCA NO.6500 OF 2012 ORDER DATED 20.12.2012, WHEREIN THE HONBLE HIGH COURT WHILE DECIDING THE I SSUE UNDER VAT ACT ON A SIMILAR SHOW CAUSE NOTICE ISSUED BY THE CENTRAL EXC ISE AUTHORITY HAS HELD AS UNDER :- . MERELY BECAUSE THE EXCISE DEPARTMENT ISSUED A SH OW CAUSE NOTICE, THAT CANNOT BE A GROUND TO PRESUME AND CONC LUDE THAT THERE WAS - 6 - ITA NOS.100, 133, 105, 138, 109, 146, 113, 150, 117, 142, 125 & 169/RJT/2013 ASSESSMENT YEAR: 2008-09 EVASION OF EXCISE DUTY IMPLYING THEREBY THAT THERE WAS ALSO EVASION OF TAX UNDER THE VAT ACT. IT IS NOT EVEN THE CASE OF THE DEPARTMENT THAT SUCH SHOW CAUSE NOTICE PROCEEDINGS HAS CULMINATED INTO A NY FINAL ORDER AGAINST THE PETITIONER. WE WONDER WHAT WOULD HAPPEN TO THE ORDER OF REASSESSMENT, IF ULTIMATELY THE EXCISE DEPARTMENT W ERE TO DROP THE PROCEEDINGS WITHOUT LEVYING ANY DUTY OR PENALTY FRO M THE PETITIONER. 20. FURTHER THE SHOW CAUSE NOTICE ISSUED BY THE EX CISE DEPARTMENT CONTAINS THE ALLEGATION OF THE EXCISE DEPARTMENT THAT THE AS SESSEE HAS SUPPRESSED SALES FOR THE PURPOSE OF MAKING PAYMENT OF EXCISE DUTY. A PERUSAL OF RECORDED REASONS DOES NOT SHOW THAT THE AO VERIFIED THE PARTICULARS DECLARED BY THE ASSESSEE IN ITS INCOME TAX RETURN. NOWHERE IN THERE RECORDED REASO NS, THE SALE DECLARED BY THE ASSESSEE IN ITS INCOME TAX RETURN, HAS BEEN BROUGHT ON RECORD. THE AO, AS PER THE RECORDED REASONS, HAS NOT VERIFIED THE INCOME T AX RETURN OF THE ASSESSEE VIS A VIS THE ALLEGED ESCAPEMENT OF INCOME TO ARRIVE AT T HE SATISFACTION TO THE EFFECT THAT THE ASSESSEE HAS NOT DISCLOSED SUCH INCOME IN THE R ETURN OF INCOME AND HAS CONCLUDED THAT THE ALLEGED SALES, ON WHICH THE EXCI SE DUTY WAS ALLEGEDLY NOT PAID BY THE ASSESSEE, WAS INCOME CHARGEABLE TO INCOME TA X AND HAS ESCAPED THE ASSESSMENT UNDER THE INCOME TAX ACT. 21. IN OUR CONSIDERED VIEW THE INFORMATION CONTAINE D IN THE SHOW CAUSE NOTICE OF THE EXCISE DEPARTMENT CAN BE REASON TO SUSPECT B Y THE AO BUT WITHOUT VERIFYING THE RELEVANT PARTICULARS DECLARED IN THE INCOME TAX RETURN, IT CANNOT BE REASON TO BELIEVE ABOUT THE ESCAPEMENT OF TAXABLE INCOME UNDE R THE INCOME TAX ACT. 22. IN VIEW OF THIS, IN OUR CONSIDERED VIEW, THE REOPENING OF THE ASSESSMENT BASED ON THE ABOVE RECORDED REASONS, IS BAD IN LAW AND CANNOT BE SUSTAINED. WE, THEREFORE, HOLD ACCORDINGLY, AND CONSEQUENTLY, CANCEL THE IMPUGNED REASSESSMENT ORDERS FOR ALL THE YEARS. SIMILAR APPEALS AGAINST THE IMPUGNED ORDERS OF LD. CIT(A) IN RESPECT OF REGULAR ASSESSMENT OF A.Y. 2008-09 WERE DISPOSED OF BY THE LEARNED ITAT BY AND UNDER COMMON ORDER DATED 25.05.2015 WITH THE FOLLOWING OB SERVATIONS SETTING ASIDE THE ORDERS PASSED BY THE LD. CIT(A) :- WE FIND THAT ITAT, RAJKOT BENCH IN ITA NO. 141/RJ T/2011 FOR A.Y. 2007- 08 IN CASE OF VRUNDAVAN CERAMICS PVT. LTD. IN SIMIL AR SET OF FACTS HAS RESTRICTED THE NET PROFIT TO 9% BY OBSERVING AS UNDER: 19. NOW THE QUESTION REMAINS TO BE SEE THAT UNDER THE FACTS AND CIRCUMSTANCES WHAT SHOULD BE THE FAIR AND REASONABL E PROFIT ON SUPPRESSED TURNOVER. THE NET PROFIT RATE IN THE CAS E OF ASSESSEES AND COMPARABLE CASES ARE 13.20%, 10.68% AND 7.38%, 3.65 % IN CASE OF VRUNDAVAN CERAMICS PVT. LTD., GOKUL CERAMICS PVT. L TD.. RAMCO - 7 - ITA NOS.100, 133, 105, 138, 109, 146, 113, 150, 117, 142, 125 & 169/RJT/2013 ASSESSMENT YEAR: 2008-09 CERAMICS PVT. LTD. AND FERRO GLAZED TILES PVT. LTD. RESPECTIVELY. AS DISCUSSED AND STATED ABOVE THAT THE ABOVE NET PROFI T RATE OF ASSESSEES INCLUDES SOME PORTION OF PROFIT OF SUPPRESSED TURNO VER. THEREFORE, TO GIVE EFFECT OF THAT AND ON ACCOUNT OF FAIR AND REASONABL E ESTIMATION, WE ARE OF THE VIEW THAT THE AVERAGE NET PROFIT RATE OF ALL 4 UNITS WILL BE A GOOD BASIS FOR FAIR AND REASONABLE ESTIMATION OF PROFIT ON SUP PRESSED TURNOVER. IT IS SETTLED POSITION THAT IN ESTIMATION, SOME GUESS WOR K CANNOT BE RULED OUT. THE AVERAGE NET PROFIT RATE OF ALL 4 UNITS COMES TO 8.72%. IN THAT RATE, IF WE INCLUDE 0.28% TO COVER MISCELLANEOUS BENEFIT OF THE TURNOVER OUT OF THE BOOKS OF ACCOUNT, THAT WILL BE A FAIR AND REASONABL E RATE OF PROFIT WHICH COMES TO 9%. THIS RATE OF 9% NET PROFIT WILL BE FAI R AND REASONABLE ON THIS COUNT ALSO THAT THE ASSESSEE WILL NOT GET MAJOR BEN EFIT OF PROFIT OF EVASION OF EXCISE DUTY AS EXCISE DEPARTMENT HAS ALREADY TAK EN ACTION IN THIS REGARD. ON APPLICATION OF 9% RATE OF PROFIT, THE RE LEVANT CALCULATIONS ARE AS UNDER:- PARTICULARS VRUNDAVAN GOKUL SUPPRESSED SALE 21,52,03,905 8,00,77,050 9% NET PROFIT RATE FOR 1,93,68,35 1 72,06,934 ESTIMATION ADDITION SUSTAINED BY 2,84,06,905 85,52,229 CIT(A) 9% PROFIT ADDITION 1,93,68,351 72,06,934 SUSTAINABLE BALANCE EXCESS 90,38, 554 13,45,295 20. IN ACCORDANCE WITH ABOVE CALCULATION, WE CONFIR M THE ADDITION TO THE EXTENT OF RS.1,93,68,351/- IN THE HANDS OF VRUNDAVA N AND RS.72,06,934/- IN THE HANDS OF THE GOKUL AND BALANCE ADDITION RS.9 0,38,554/- IN CASE OF VRUNDAVAN AND RS.13,45,295/- IN THE CASE OF GOKUL O UT OF THE TOTAL ADDITION SUSTAINED BY CIT(A) ARE DELETED. 21. THE LEARNED REPRESENTATIVES OF THE PARTIES SUBM ITTED THAT FACTS OF THE CASE IN GOKUL CERAMICS PVT. LTD. ARE SIMILAR. THERE FORE, THE CROSS APPEAL OF THAT CASE IS ALSO DECIDED IN ACCORDANCE WITH ABO VE DISCUSSION. 22. IN THE RESULT, APPEALS OF ASSESSEE ARE PARTLY A LLOWED AND APPEALS BY REVENUE ARE DISMISSED. SUBSEQUENTLY HONBLE GUJARAT HIGH COURT IN SPECIAL CIVIL APPLICATION NO.6500 OF 2012 IN CASE OF FUTURA CERAMIC PVT. LTD. VS. STATE OF GUJARAT IN ITS DATED 20 TH DECEMBER, 2012, IN SIMILAR SITUATION OBSERVED AS UN DER: FROM THE ABOVE, IT CAN BE SEEN THAT THE ASSESSMENT WHICH WAS PREVIOUSLY CONCLUDED WAS REOPENED ON THE PREMISE TH AT DURING THE EXCISE - 8 - ITA NOS.100, 133, 105, 138, 109, 146, 113, 150, 117, 142, 125 & 169/RJT/2013 ASSESSMENT YEAR: 2008-09 RAID, IT WAS REVEALED THAT THE PETITIONER HAD CLAND ESTINELY REMOVED GOODS WITHOUT PAYMENT OF EXCISE DUTY. THE SALES TAX DEPAR TMENT, THEREFORE, FORMED A BELIEF THAT THE VALUE OF GOODS PLUS EXCISE DUTY EVADED SHOULD FORM PART OF THE TURNOVER OF THE ASSESSEE FOR THE P URPOSE OF TAX UNDER THE VALUE ADDED TAX ACT. IT MAY BE THAT THE RAID CARRIED OUT BY THE EXCISE D EPARTMENT AND THE MATERIAL COLLECTED DURING SUCH PROCEEDINGS CULM INATING INTO ISSUANCE OF A SHOW-CAUSE NOTICE FOR RECOVERY OF UNPAID EXCIS E DUTY AND PENALTY IN A GIVEN CASE SUFFICIENT TO RE-OPEN PREVIOUSLY CLOSED ASSESSMENT. IN THIS CASE, HOWEVER, WE ARE NOT CALLED UPON TO JUDGE THIS ISSUE AND WOULD THEREFORE NOT GIVE ANY DEFINITE OPINION. THE QUESTI ON, HOWEVER, IS WHETHER ON A MERE SHOW CAUSE ISSUED BY THE EXCISE DEPARTMEN T, THE SALES TAX DEPARTMENT CAN MAKE ADDITIONS FOR THE PURPOSE OF CO LLECTING TAX UNDER THE GUJARAT VALUE ADDED TAX ACT WITHOUT ANY FURTHER INQ UIRY. IF THE ASSISTANT COMMISSIONER OF COMMERCIAL TAX HAS UTILIZED THE MAT ERIAL COLLECTED BY THE EXCISE DEPARTMENT; INCLUDING THE STATEMENTS OF THE PETITIONER AND OTHER RELEVANT WITNESSES AND HAD COME TO AN INDEPEN DENT OPINION THAT THERE WAS IN FACT EVASION OF EXCISE DUTY BY CLANDES TINE REMOVAL OF GOODS, HE WOULD HAVE BEEN JUSTIFIED IN MAKING ADDITIONS FO R THE PURPOSE OF VAT ACT. IN THE PRESENT CASE, HOWEVER, NO SUCH EXERCISE WAS UNDERTAKEN. ALL THAT THE ASSESSING OFFICER DID WAS TO RELY ON THE S HOW-CAUSE NOTICE ISSUED BY THE EXCISE DEPARTMENT. NOWHERE DID HE CONCLUDE T HAT THERE WAS A CASE OF CLANDESTINE REMOVAL OF GOODS WITHOUT PAYMEN T OF TAX UNDER THE VAT ACT. MERELY BECAUSE THE EXCISE DEPARTMENT ISSUE D A SHOW-CAUSE NOTICE, THAT CANNOT BE A GROUND TO PRESUME AND CONC LUDE THAT THERE WAS EVASION OF EXCISE DUTY IMPLYING THEREBY THAT THERE WAS ALSO EVASION OF TAX UNDER THE VAT ACT. IT IS NOT EVEN THE CASE OF THE D EPARTMENT THAT SUCH SHOW-CAUSE NOTICE PROCEEDINGS HAS CULMINATED INTO A NY FINAL ORDER AGAINST THE PETITIONER. WE WONDER WHAT WOULD HAPPEN TO THE ORDER OF REASSESSMENT, IF ULTIMATELY THE EXCISE DEPARTMENT W ERE TO DROP THE PROCEEDINGS WITHOUT LEVYING ANY DUTY OR PENALTY FRO M THE PETITIONER. ALL IN ALL, THE ASSISTANT COMMISSIONER HAS ACTED IN A MECHANICAL MANNER AND PASSED FINAL ORDER OF ASSESSMENT MERELY ON THE PREMISE THAT THE EXCISE DEPARTMENT HAS ISSUED A SHOW-CAUSE NOTIC E ALLEGING CLANDESTINE REMOVAL OF THE GOODS. SUCH ORDER, THERE FORE, CANNOT BE SUSTAINED AND IS ACCORDINGLY QUASHED. WHEN THE ORDE R IS EX FACIE ILLEGAL AND WHOLLY UNTENABLE IN LAW, MERE AVAILABILITY OF A LTERNATIVE REMEDY WOULD NOT PRECLUDE US FROM INTERFERING AT THIS STAGE IN A WRIT PETITION. THUS, HONBLE JURISDICTIONAL HIGH COURT HELD THAT C ONCERN ASSISTANT COMMISSIONER, SALES TAX WAS NOT JUSTIFIED IN INITIA TING ACTION AND PASSING FINAL ASSESSMENT ORDER MERELY ON THE PREMISES THAT EXCISE DEPARTMENT HAS ISSUED A SHOW CAUSE NOTICE ALLEGING CLANDESTINE REMOVAL OF G OODS. SUCH ORDER WAS QUASHED. - 9 - ITA NOS.100, 133, 105, 138, 109, 146, 113, 150, 117, 142, 125 & 169/RJT/2013 ASSESSMENT YEAR: 2008-09 10.1 SIMILAR VIEW HAS BEEN TAKEN BY HONBLE GUJARAT HIGH COURT IN SPECIAL CIVIL APPLICATION NO. 1038 OF 2013 IN CASE OF FUTURA CERA MIC PVT. LTD. VS. STATE OF GUJARAT IN ITS ORDER DATED 13.11.2013 BY OBSERVING AS UNDER: [6.0] IN VIEW OF THE ABOVE DECISION OF DIVISION BE NCH OF THIS COURT, THE IMPUGNED REASSESSMENT ORDER DESERVES TO BE QUASHED AND SET ASIDE. HOWEVER LIBERTY CAN BE RESERVED IN FAVOUR OF THE DE PARTMENT TO PASS AN ORDER AFRESH IN ACCORDANCE WITH LAW AND ON MERITS A FTER GIVING AN OPPORTUNITY TO THE PETITIONER AND IF PERMISSIBLE UN DER THE LAW NOW. [6.1] IN VIEW OF THE ABOVE AND FOR THE REASONS STAT ED ABOVE, PETITION SUCCEEDS. IMPUGNED ORDER PASSED BY THE ASSISTANT CO MMERCIAL COMMISSIONER TAX (2), NADIAD [ANNEXUREF TO THE PETI TION] DATED 31.03.2012 IS HEREBY QUASHED AND SET ASIDE. HOWEVER , IT IS OBSERVED THAT THE SAME SHALL NOT AFFECT THE PROCEEDINGS UNDER THE CENTRAL EXCISE ACT FOR WHICH THE SHOWCAUSE NOTICE HAS BEEN ISSUED. A LIBER TY IS ALSO RESERVED IN FAVOUR OF THE DEPARTMENT TO PASS REASSESSMENT ORDER AFRESH IN ACCORDANCE WITH LAW AND ON MERITS AND AFTER GIVING FULLEST OPPORTUNITY TO THE PETITIONER AND IF PERMISSIBLE UNDER THE LAW NOW . RULE IS MADE ABSOLUTE TO THE AFORESAID EXTENT. IN THE FACTS AND CIRCUMSTA NCES OF THE CASE, THERE SHALL BE NO ORDER AS TO COSTS. AGAIN IN THIS CASE REASSESSMENT WAS SET ASIDE ON TH E GROUND THAT SAME WAS MECHANICALLY PASSED. 10.2 NOTHING CONTRARY WAS BROUGHT TO OUR KNOWLEDGE. FACTS BEING SIMILAR, SO FOLLOWING SAME REASONING, WE FIND THAT IT IS UNDISP UTED THAT INCOME TAX PROCEEDINGS ARE ARISING FROM THE RATE OF EXCISE DEP ARTMENT AND MATERIAL COLLECTED DURING SEARCH PROCEEDINGS CULMINATED INTO ISSUANCE OF SHOW CAUSE NOTICE FOR RECOVERY OF UNPAID EXCISE DEPARTMENT AND PENALTY IN GIVEN CASES. WITHOUT PREJUDICE TO THE FINDING OF CUSTOM, EXCISE DEPARTMENT, QUESTION BEFORE US IS WHETHER ON MERE SHOW CAUSE NOTICE ISSUED BY E XCISE DEPARTMENT CAN BE MADE BASIS OF ADDITION FOR THE PURPOSE OF INCOME TA X ACT. INCOME TAX OFFICER HAS UTILIZED THE MATERIAL COLLECTED BY EXCISE DEPAR TMENT INCLUDING STATEMENT OF PETITIONER AND OTHER RELEVANT PERSONS AS DISCUSSED ABOVE AND ON THE BASIS OF SAME. HE WOULD HAVE BEEN JUSTIFIED IN MAKING ADDITI ON FOR THE PURPOSE OF INCOME TAX DEPARTMENT IN PRESENT CASE BY INDEPENDENT ENQUI RIES BY CONCERN INCOME TAX AUTHORITIES. NO SUCH EXERCISE WAS UNDERTAKEN B Y INCOME TAX DEPARTMENT AT ALL. ASSESSING OFFICER HAS SIMPLY RELIED ON SHOW C AUSE NOTICE ISSUED BY EXCISE DEPARTMENT. NOWHERE DID HE CONCLUDE THAT THERE WAS A LARGE SCALE REMOVAL OF GOODS WITHOUT PAYMENT OF TAX UNDER INCOME TAX ACT. MERELY BECAUSE EXCISE DEPARTMENT ISSUED SHOW CAUSE NOTICE, THAT ALONE CAN NOT BE A GROUND TO ASSUME AND CONCLUDE THAT THERE WAS EVASION OF INCOME TAX A CT AS WELL. IT IS NOT EVEN THE CASE OF DEPARTMENT THAT SUCH SHOW CAUSE NOTICE PROCEEDING HAS CULMINATED INTO ANY FINAL ORDER AGAINST PETITIONER. THIS MAKE S IT CLEAR THAT CONCERN INCOME - 10 - ITA NOS.100, 133, 105, 138, 109, 146, 113, 150, 117, 142, 125 & 169/RJT/2013 ASSESSMENT YEAR: 2008-09 TAX OFFICER HAS ACTED UPON IN MECHANICAL MANNER AND PASSED ORDER OF ASSESSMENT MERELY ON PREMISES OF EXCISE DEPARTMENT ISSUED SHOW CAUSE NOTICE ALLEGING LARGE SCALE REMOVAL OF GOODS. THIS VIEW I S FORTIFIED BY DECISION OF HONBLE GUJARAT HIGH COURT IN CASE OF FUTURA CERAMI C PVT. LTD. (SUPRA). ITAT, RAJKOT BECNH IN ITA NO. 141/RJT/2011 FOR A.Y. 2007- 08 WAS NOT HAVING ADVANTAGE OF ABOVE LEGAL DISCUSSION ON THIS ISSUE O F MAINTAINABILITY. UNDER FACTS AND CIRCUMSTANCES, ORDER OF CIT(A) CANNOT BE SUSTAI NED. ACCORDINGLY, ORDER OF ASSESSING OFFICER ON THIS ISSUE IS QUASHED. IN VIE W OF ABOVE, ISSUE RAISED IN REVENUES APPEAL GOES ACADEMIC. SAME MAY BE RAISED AS AND WHEN SITUATION ARISES FOR THIS. 10.3 SIMILAR ISSUE AROSE IN OTHER ASSESSEES CASE. FACTS BEING SIMILAR, SO FOLLOWING SAME REASONING, WE HOLD THAT ORDERS PASSE D BY INCOME TAX OFFICER CANNOT BE SUSTAINED AND SAME ARE UPHELD. 11. IN RESULT, APPEALS OF REVENUE ARE DISMISSED AND THAT OF ASSESSEES ARE ALLOWED. 8. BEING AGGRIEVED BY AND/OR DISSATISFIED WITH THE ORDERS PASSED BY THE HONBLE INCOME TAX APPELLATE TRIBUNAL THE DEPARTMENT PREFER RED APPEAL BEFORE THE HONBLE HIGH COURT AT GUJARAT. ON 29.06.2016 THE HONBLE HIGH CO URT IN RESPECT OF 52 APPEALS (OUT OF 54) PLEASED TO PASS ORDERS INTER ALIA SETTING ASIDE THE ORDER PASSED BY THE LEARNED TRIBUNAL UPHOLDING THE RE-ASSESSMENT AND REMANDED T HE MATTERS TO THE LEARNED TRIBUNAL FOR DECIDING THE SAME ON MERITS OF THE ADDITIONS MA DE BY THE AUTHORITIES BELOW. HOWEVER, NO OBSERVATION WAS MADE IN 12 APPEALS IN RESPECT OF THE REGULAR ASSESSMENT FOR THE ASSESSMENT YEAR 2008-2009 OF THE ASSESSEE. THE FOLL OWING TWO SETS OF APPEALS WERE KEPT PENDING BEFORE THE HONBLE HIGH COURT AT GUJAR AT - M/S GANGA GLAZED TILES (A.Y. 2008-09) TAX APPEAL NO.92/2016 CONSEQUENT TO I TA NO.99/RJT/2013 - M/S GANGA GLAZED TILES PVT. LTD. (A.Y. 2008-09) TAX APPEAL NO.97/2016 CONSEQUENT TO I TA NO.133/RJT/2013 9. HOWEVER, THE ASSESSEE GROUP FILED APPLICATIONS FOR REVIEW BEFORE THE HONBLE HIGH COURT AT GUJARAT AGAINST THE ORDER DATED 29.06.2016 IN RESPECT OF 8 FOLLOWING MATTERS RELATING TO THE ASSESSMENT YEAR 2008-09 OUT OF THE SAID 12 APPEALS DISPOSED OF BY THE HONBLE HIGH COURT AT GUJARAT. - 11 - ITA NOS.100, 133, 105, 138, 109, 146, 113, 150, 117, 142, 125 & 169/RJT/2013 ASSESSMENT YEAR: 2008-09 - GANGOTRI GLAZED TILES AY 2008-09 - VRUNDAVAN CERA P. LTD. AY 2008-09 - VARMORA GRANTIO P. LTD. AY 2008-09 - ITALICA TILES P. LTD. AY 2008-09 10. AS A RESULT WHEREOF THE 4 FOLLOWING CASES WERE KEPT PENDING ADJUDICATION BEFORE THE LEARNED INCOME TAX APPELLATE TRIBUNAL IN TERMS OF THE ORDER PASSED BY THE HONBLE HIGH COURT AT GUJARAT. - GOKUL CERAMICS PVT. LTD. AY 2008-09 2 TAX APPEAL NOS.80 & 81/2016 CONSEQUENT TO ITA N O146 & 109/RJT/2013 - GANGA GLAZED TILES AY 2008-09 1 TAX APPEAL NO.93/2016 CONSEQUENT TO ITA NO.132/ RJT/2013 - GANGA GLAZED TILES PVT. LTD. AY 2008-09 1 TAX APPEAL NO.96/2016 CONSEQUENT TO ITA NO.100/ RJT/2013. 11. PRECISELY THE FOLLOWING 44 MATTERS WERE PENDING BEFORE THE LEARNED INCOME TAX APPELLATE TRIBUNAL FOR ADJUDICATION: - GANGA GLAZED TILES AY 04-05 TO 07-08 8 (A+D) - GANGOTRI GLAZED TILES AY 04-05 TO 07-08 8 ( A+D) - GOKUL CERA PVT. LTD. AY 04-05 TO 06-07 6 (A+D ) - VRUNDAVAN CERA P. LTD. AY 04-05 TO 06-07 6 (A +D) - VARMORA GRANTIO P. LTD. AY 05-06 TO 07-08 6 ( A+D) - ITALICA TILES P. LTD. AY 05-06 TO 07-08 6 ( A+D) - GOKUL CERA. PVT. LTD. AY 2008-09 2 (A+D ) - GANGA GLAZED TILES AY 2008-09 1 (D) - GANGA GLAZED TILES P. LTD. AY 2008-09 1 (A) 12. ULTIMATELY BY AND UNDER A COMMON ORDER DATED 16 .01.2018 THE LEARNED ITAT WAS PLEASED TO DISPOSE OF THE 40 CASES OUT OF THE SAID 44 MATTERS ON MERIT. THE REMAINING 4 MATTERS ARE STILL PENDING CONSIDERATION BEFORE THE LEARNED ITAT. 13. ON THE OTHER HAND, THE HONBLE HIGH COURT HAVE BEEN PLEASED TO DISPOSE OF THE APPEALS ON REVIEW PREFERRED BY THE ASSESSEE IN THEI R FAVOUR IN RESPECT OF THE 8 MATTERS FOR THE ASSESSMENT YEARS 2008-09 BY AND UNDER A COMMON JUDGMENT AND ORDER DATED 25.04.2018 WITH THE FOLLOWING OBSERVATION: - 12 - ITA NOS.100, 133, 105, 138, 109, 146, 113, 150, 117, 142, 125 & 169/RJT/2013 ASSESSMENT YEAR: 2008-09 10. HAVING THUS CLEARED THE PERIPHERAL ISSUES, WE MAY EXAMINE THE CENTRAL QUESTION VIZ. DID THE ASSESSING OFFICER HAVE SUFFIC IENT MATERIAL AT HIS COMMAND TO BELIEVE EVASION OF TAX? WE HAVE NOTICED THE BROAD MODUS OPERANDI STATED TO HAVE BEEN ADOPTED BY THE ASSESSEES AS PER THE EXCIS E SHOW-CAUSE NOTICES. ADMITTEDLY, THESE SHOW-CAUSE NOTICES ARE ONLY AT SU CH STAGE WITHOUT IN ANY OF THESE CASES THE FINAL ORDERS OF ADJUDICATION HAVE B EEN PASSED BY THE EXCISE AUTHORITIES. THESE SHOW-CAUSE NOTICES THUS MERELY P RESENT THE MATERIAL COLLECTED BY THE EXCISE DEPARTMENT SUGGESTING THE VIEW OF THE DEPARTMENT THAT THIS IS A CASE OF LARGE SCALE EXCISE EVASION. BEFORE FINAL OR DER LEVYING EXCISE DUTY WITH INTEREST AND PENALTY CAN BE PASSED, THESE FACTS HAV E TO BE ESTABLISHED THROUGH BY PARTE PROCEEDINGS. TILL THEN, IT ONLY REMAINS IN THE REALM OF THE STAND OF THE DEPARTMENT WHICH IS YET TO BE TESTED. 11. IN ADDITION TO CONFRONTING THE ASSESSEE WITH TH E CONTENTS OF THE SHOW- CAUSE NOTICE ISSUED BY THE EXCISE DEPARTMENT, THE A SSESSING OFFICER HAS DONE LITTLE ELSE. HE OF COURSE CALLED UPON THE ASSESSEE TO RESPOND TO THE ALLEGATIONS CONTAINED IN THE SHOW-CAUSE NOTICE, TO THE STATEMEN TS AND MATERIALS ACCOMPANYING SUCH SHOW CAUSE NOTICE. AS NOTED, THE ASSESSEE GAVE A BRIEF REPLY DENYING THE ALLEGATIONS AND POINTING OUT THAT THE CHARGES ARE YET TO BE PROVED. IF THE ASSESSING OFFICER THEREAFTER WANTED TO MAKE ADDITIONS ON THE BASIS OF SUCH MATERIALS, THE SAME HAD TO BE BROUGHT ON RECORD. BY MERELY PRODUCING THE COPIES OF THE STATEMENTS OF THE WITNE SSES ACCOMPANYING THE SHOW- CAUSE NOTICES, SUCH STATEMENTS AND THE VERACITY THE REOF DOES NOT GET AUTOMATICALLY ESTABLISHED. THE ASSESSING OFFICER ME RELY COSMETICALLY GAVE AN OPPORTUNITY TO THE ASSESSEE TO MEET WITH SUCH ALLEG ATIONS, VIRTUALLY, SHIFTING THE BURDEN OF PROVING THE EVASION OF DUTY THAT HAD TAKE N PLACE ON THE ASSESSEE. WE HAVE PERUSED THE ENTIRE ORDER OF ASSESSMENT. THERE IS NO INDEPENDENT MATERIAL BROUGHT ON RECORD BY THE ASSESSING OFFICER OTHER TH AN THOSE WHICH WERE ALREADY COLLECTED BY THE EXCISE DEPARTMENT AND WHICH, AS NO TED EARLIER, ARE YET TO BE VERIFIED. 12. COUNSEL FOR THE ASSESSEES DREW OUR ATTENTION TO A JUDGEMENT OF CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL IN WHICH, THE ORDER OF ADJUDICATION PASSED IN CASE OF ONE OF THE CERAMIC UNITS (NOT AN ASSESSEE BEFORE US) BY THE ADJUDICATING AUTHORITY CAME TO BE SET ASIDE. HOWEVE R, FOR THE FOLLOWING REASONS WE DO NOT WISH TO PLACE ANY RELIANCE ON THIS JUDGEM ENT: FIRSTLY, THE EXCISE SHOW-CAUSE NOTICES IN CASE OF T HE PRESENT ASSESSEES ARE YET TO BE ADJUDICATED. WHAT WOULD BE THE MATERIAL ON RE CORD DURING SUCH PROCEEDINGS IS NOT POSSIBLE FOR US TO FORESEE. SECONDLY, THE TRIBUNAL HAS MAINLY PROCEEDED ON THE BASIS OF ABSENCE OF SECTION 4A OF THE CENTRAL EXCISE ACT AT THE RELEVANT TIME W HICH, IN THE OPINION OF THE - 13 - ITA NOS.100, 133, 105, 138, 109, 146, 113, 150, 117, 142, 125 & 169/RJT/2013 ASSESSMENT YEAR: 2008-09 TRIBUNAL, ALONE COULD HAVE PERMITTED THE DEPARTMENT TO SUBSTITUTE THE SALE PRICE BY THE TRANSACTION VALUE OF THE GOODS. SUCH IS NOT THE CASE IN THE PRESENT GROUP OF CASES. WE WOULD, THEREFORE, BE WELL ADVISED TO CLEAR SUCH CONTROVERSY. 13. WHEN WE FIND THAT THE ASSESSING OFFICER DID NOT HAV E THE BASIS FOR MAKING ADDITIONS, THE QUESTION OF PERCENTAGE OF THE SALES AT WHICH STAGE ADDITIONS SHOULD BE MADE WOULD BECOME REDUNDANT. 14. IN THE RESULT, QUESTION IS DECIDED AGAINST THE REVENUE. ALL TAX APPEALS ARE DISMISSED. 14. CONSEQUENTLY THE DECISION PASSED BY THE LEARNED ITAT DATED 25.05.2015 WAS AFFIRMED BY THE SAID JUDGMENT AND ORDER DATED 25.04 .2018 PASSED BY THE HONBLE HIGH COURT AT GUJARAT. 15. CONSIDERING THE SAID JUDGMENT AND ORDER DATED 2 5.04.2018 AS MENTIONED HEREINABOVE THE ASSESSEE PRAYED BEFORE US FOR RECON FIRMING THE EARLIER ORDER PASSED BY THE LEARNED ITAT IN RESPECT OF THE INSTANT APPEALS FOR ASSESSMENT YEAR 2008-09. 16. WE MAKE IT CLEAR THAT THE 6 SET OF CROSS APPEAL S FOR THE ASSESSMENT YEARS 2008- 09 ARE THE SAME GROUP OF APPEALS WHICH WERE INITIAL LY REMANDED TO THE LD. ITAT BY AND UNDER THE ORDER DATED 29.06.2016 PASSED BY HONBLE GUJARAT HIGH COURT. OUT OF WHICH REVIEW APPLICATIONS WERE PREFERRED BEFORE THE HONB LE GUJARAT HIGH COURT BY THE ASSESSEE IN RESPECT OF 8 APPEALS WHICH ULTIMATELY W ERE DISPOSED OF BY AND UNDER THE JUDGEMENT AND ORDER DATED 25.04.2018 BY THE JURISDI CTIONAL HIGH COURT. HONBLE HIGH COURT BY THE SAID JUDGEMENT WAS PLEASED TO DISMISS THE APPEALS PREFERRED BY THE REVENUE VIRTUALLY DISMISSING THE QUANTUM ORDER PASS ED BY THE ASSESSING OFFICER IN THE ABSENCE OF INDEPENDENT MATERIAL BROUGHT ON RECORD E XCEPT THOSE WERE ALREADY COLLECTED BY THE EXCISE DEPARTMENT WHICH ARE YET TO BE VERIFI ED. THE HONBLE HIGH COURT WAS FURTHER PLEASED TO OBSERVE, SINCE THE ADDITION MADE BY THE ASSESSING OFFICER HAD NO BASIS, THE QUESTION OF PERCENTAGE OF THE SALES AT W HICH STAGE ADDITIONS SHOULD BE MADE WOULD BECOME REDUNDANT. THE APPEALS BEFORE US SINC E IDENTICAL IN NATURE HAVING SAME SET OF FACTS ARE COVERED BY THE RATIO OF THE SAID O RDER DATED 25.04.2018 PASSED BY THE - 14 - ITA NOS.100, 133, 105, 138, 109, 146, 113, 150, 117, 142, 125 & 169/RJT/2013 ASSESSMENT YEAR: 2008-09 HONBLE HIGH COURT AT GUJARAT. WE, THEREFORE, RESP ECTFULLY FOLLOWING THE JUDGEMENT AND ORDER DATED 25.04.2018 PASSED BY THE HONBLE HIGH C OURT AT GUJARAT, DELETE THE QUANTUM ORDER PASSED BY THE AUTHORITIES BELOW AND T HEREBY ALLOW THE APPEALS PREFERRED BY THE ASSESSEE. CONSEQUENTLY, THE APPEALS PREFERR ED BY THE REVENUE BECOME INFRUCTUOUS. THIS ORDER PRONOUNCED IN OPEN COURT ON 10 / 08 /2018 SD/- SD/- (WASEEM AHMED) (MS. MADHUMITA ROY) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD; DATED 10/ 08 /2018 . . , . . ./ T.C. NAIR, SR. PS/PBN/* / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. / CONCERNED CIT 4. ( ) / THE CIT(A) 5. , , /DR,ITAT, RAJKOT 6. !' / GUARD FILE. / BY ORDER, //TRUE COPY// / (DY./ASSTT. REGISTRAR) , / ITAT, RAJKOT 1. DATE OF DICTATION .. 13.7.18 (DICTATION-PAD 7 -PAGES ATTACHED AT THE END OF THIS APPEAL-FILE) 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 3. OTHER MEMBER 4. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S.. 5. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 6. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.P .S./P.S.10.8.18 7. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 10.8.18 8. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK ... 9. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER..RDER