ICCONOL PETROLEUMS PVT LTD, MUMBAI V. I.T.O. WARD 8(2)(1), MUMBAI

ITA 1931/MUM/2011

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 55197 (ITAT-MUMBAI)
• Duration Of Justice: 6 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-09-2011
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: I
• Next Hearing Date: 25-08-2011
• Assessment Year: 2006-2007
• Appeal Filed On: 08-03-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SANJIV DUTT
• Assessee Lawyers: NITESH S JOSH I
• Keywords: Document seized; Opportunity of being heard; Principle of natural justice; Opportunity of cross examination; Wrong claim; Reason to believe; Documents seized; Reassessment proceedings; Set aside
• Section: 143(1); 147; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH I BEFORE SHRI N.V. VASUDEVAN, JUDICIAL MEMBER AND SHRI T.R. SOOD, ACCOUNTANT MEMBER. ITA NO.1931/MUM/11 (ASSESSMENT YEAR : 2006-07) M/S.ICCONOL PETROLEUMS PVT. LTD., E-9, NAND DHAM INDL. ESTATE, MAROL, MAROSHI ROAD, ANDHERI (E), MUMBAI-400 059 PAN AAAC19199K VS. INCOME TAX OFFICER, WARD 8(2)(1), AAYAKAR BHAVAN, MUMBAI-400 020. APPELLANT. RESPONDENT. ASSESSEE BY : SHRI NITESH S. JOSHI. REVENUE BY : SHRI SANJIV DUTT. DATE OF HEARING : 25.08.2011. DATE OF PRONOUNCEMENT : O R D E R PER SHRI N.V. VASUDEVAN : THIS IS AN APPEAL BY THE ASSESSEE AGAINST THE ORDER D T.15.12.2010 OF COMMISSIONER OF INCOME TAX (APPEALS)-17, MUMBAI RELATING TO ASSESSMENT YEAR 2006-07. 02. THE REVISED GROUNDS OF APPEAL FILED BY THE ASSESSEE READS AS FO LLOWS : 1. IN NOT HOLDING THAT THE REASSESSMENT PROCEEDINGS WER E BAD IN LAW. 2. IN FACTS AND IN LAW IN CONFIRMING AN ADDITION OF SUP PRESSED SALES OF RS.3 CRORES. 3. IN NOT APPRECIATING THAT THE ADDITION WAS MADE MERELY BASED ON AN ENQUIRY BY THE EXCISE DEPARTMENT WHICH HAD ALREADY BEEN SET ASIDE BY THE CESTAT VIDE ITS ORDER DATED 11.08.2009. 4. IN BASING THE ADDITION ON STATEMENTS MADE BY SOME PA RTIES NOTWITHSTANDING THAT MOST OF THESE STATEMENTS HAD SU BSEQUENTLY BEEN RETRACTED. ITA NOS.3801, 3802, 7420 & 7421/MUM//04 - 2 - 5. IN NOT CONSIDERING THAT THE ONUS OF PROOF WAS ON TH E PERSON MAKING AN ALLEGATION AND NOT ON THE APPELLANT AND THAT THIS ONUS HAD NOT BEEN DISCHARGED IN THE PRESENT CASE. 6. IN NOT APPRECIATING THAT THE APPELLANT WAS NOT PROVID ED WITH COPIES OF THE EVIDENCE AVAILABLE WITH THE A.O. BASED ON WHICH THE SAID ASSESSMENT WAS DONE ALTHOUGH THE SAME WAS ASKE D FOR AND THIS AMOUNTED TO A COMPLETE DENIAL OF NATURAL JUSTICE. 7. IN NOT PROVIDING THE APPELLANT AN ADEQUATE OPPORTUNIT Y FOR CROSS EXAMINATION OF WITNESSES. 8. IN NOT GIVING THE APPELLANT THE BASIS FOR THE ESTIMAT ION OF A SUPPRESSED SALE OF RS.3 CRORES. 9. IN NOT APPRECIATING THAT THE OBJECTIONS FILED WITH THE ASSESSING OFFICER ON BEING GIVEN THE REASONS FOR REOPENING WER E NOT SPECIFICALLY DEALT WITH AND HENCE THE PROCEEDINGS ITSE LF WERE BAD IN LAW. 03. FIRST WE TAKE UP GROUND NO.1 & 9 RAISED BY THE ASS ESSEE IN THE REVISED GROUNDS OF APPEAL. THESE GROUNDS OF APPEAL RELAT E TO THE VALIDITY OF INITIATION OF REASSESSMENT PROCEEDINGS UNDER SECTION 147 O F THE ACT. THE ASSESSEE IS A COMPANY ENGAGED IN THE BUSINESS OF MANUFAC TURING AND DEALING IN LUBRICATING OILS FOR THE ASSESSMENT YEAR 2006-07. THE ASSESSEE FILED RETURN OF INCOME ON 28.11.2006 DECLARING TOTAL INCOME OF RE.1. THE SAME WAS PROCESSED UNDER SECTION 143(1) OF THE ACT ON 6.12.2007. 04. ON 3.12.2005 & 6.12.2005, THE FACTORY PREMISES OF THE A SSESSEE WAS SEARCHED BY THE CENTRAL EXCISE OFFICERS (PREVENTIVE). THE O FFICE PREMISE OF THE ASSESSEE WAS ALSO SEARCHED BY THE CENTRAL EXCISE OFFICERS (PREVENTIVE) ON 6.12.2005. THE PREMISES OF M/S. JAY ENTERPRISES AND M/S. K RISHNA MARKETING WERE ALSO SEARCHED BY THE CENTRAL EXCISE OFFICER S (PREVENTIVE) ON 14.12.2005. STATEMENTS OF VARIOUS PERSONS WERE RECORDED AND ULTIMATELY IT WAS HELD BY THE CENTRAL EXCISE AUTHORITIES THAT THE ASSE SSEE WAS CLANDESTINELY REMOVING GOODS FROM THE PLACE OF MANUFACTURE R WITHOUT PAYMENT OF EXCISE DUTY. THE ADDITIONAL COMMISSIONER OF CEN TRAL EXCISE RAISED A DEMAND OF RS.48,49,843 AND CENTRAL EXCISE DUTY PA YABLE BY THE ITA NOS.3801, 3802, 7420 & 7421/MUM//04 - 3 - ASSESSEE ON CLANDESTINE REMOVAL OF GOODS. THIS ORDER WAS PASSED ON 31.3.2008. 05. THE AO RECEIVED INFORMATION FROM THE CENTRAL EXCISE AU THORITIES ABOUT THE ABOVE FACTS. THE ASSESSING OFFICER ISSUED A NOTICE UND ER SECTIONS 148 OF THE ACT ON 27.10.2008. BEFORE ISSUING THE SAID NOTICE, THE ASSESSING OFFICER RECORDED THE FOLLOWING REASONS FOR INITIATING PROCEEDINGS UN DER SECTIONS 147 OF THE ACT. INFORMATION HAS BEEN RECEIVED FROM THE EXCISE AUTHORITIES THAT THE ASSESSEE COMPANY HAS BEEN SUPPRESSING ITS SALES BY ISS UING TWO PARALLEL INVOICES AND THE SALE CONSIDERATION IN RESPECT OF ON E INVIOICE IS RECEIVED IN CASH AND APPARENTLY KEPT OUTSIDE THE BOO KS OF ACCOUNTS. SOME INSTANCES OF ISSUE OF PARALLEL INVOICES HAVE BEEN COMMU NICATED BY THE EXCISE AUTHORITIES ALSO. THE EXCISE DEPARTMENT HAS WORKED OUT SUPPRESSION OF SA LES OF ABOUT 3 CRORES AND EVASION OF EXCISE DUTY OF ABOUT RS.40 LAKHS. HENCE I HAVE REASON TO BELIEVE THAT INCOME CHARGEABLE T O TAX HAS ESCAPED ASSESSMENT WITHIN THE MEANING OF CLAUSE (B) OF THE EXPLANATION 2 TO SECTION 147. 06. THE ASSESSEE VIDE LETTER DT.8.1.2009 ADDRESSED TO THE ASSESSING OFFICER SUBMITTED THAT IT WAS NOT INVOLVED IN ANY SUPPRESSIO N OF SALES AND THAT ALL SALES WERE DULY RECORDED IN THE BOOKS OF ACCOUN TS MAINTAINED BY THE ASSESSEE. THE ASSESSEE ALSO SUBMITTED THAT THE ORDER PASSED BY THE CENTRAL EXCISE AUTHORITIES AGAINST THE ASSESSEE WAS CHALLENGED BE FORE THE CESTAT (CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL CESTA T). THE ASSESSEE ALSO SUBMITTED THAT THE DOCUMENTS SEIZED BY T HE CENTRAL EXCISE AUTHORITIES HAVE NOT BEEN PROVIDED TO THEM. THE ASSESS EE REQUESTED THE ASSESSING OFFICER TO PRODUCE DOCUMENTS RELEASED BY THE C ENTRAL EXCISE DEPARTMENT SO AS TO ENABLE THE ASSESSEE TO GIVE PROPE R EXPLANATION. THE ASSESSEE ALSO SUBMITTED THAT IT WANTED TO EXAMINE THE P ARTIES WHO HAD GIVEN STATEMENT BEFORE THE CENTRAL EXCISE AUTHORITIES. TH E ASSESSEE SUBMITTED THAT WHAT IS STATED ABOVE MAY BE TREATED AS OBJECTION TO THE ITA NOS.3801, 3802, 7420 & 7421/MUM//04 - 4 - REASONS RECORDED BY THE ASSESSING OFFICER. THE ASSESSE E ALSO SUBMITTED THAT UNLESS ALL THE DOCUMENTS AND STATEMENTS WERE GIVEN TO THE ASSESSEE THERE WILL BE VIOLATION OF PRINCIPLE OF NATURAL JUSTICE. THE AS SESSEE ALSO REQUESTED THE ASSESSING OFFICER TO KEEP REASSESSMENT PR OCEEDINGS IN ABEYANCE TILL THE OUTCOME OF THE ASSESSEES APPEAL BEFORE THE CESTA T. 07. THE ASSESSING OFFICER BY LETTER DT.22.7.2009 SUBMITTED T HAT THE DOCUMENTS AND DETAILS RECEIVED FROM CENTRAL EXCISE DEPART MENT CANNOT BE PROVIDED TO THE ASSESSEE AS THE ASSESSMENT PROCEEDING S ARE IN PROGRESS AND NOT FINALIZED. THE ASSESSING OFFICER HOWEVER, INFORMED THAT BE FORE COMPLETION OF THE ASSESSMENT SUFFICIENT AND PROPER OPPORTU NITY WILL BE PROVIDED FOR CROSS EXAMINATION AS WELL AS DOCUMENTS AND D ETAILS THAT MAY BE REQUIRED BY THE ASSESSEE, PROVIDED THE ASSESSING OFFICER RELIES ON A NY ONE OF THEM. THE ASSESSING OFFICER ALSO CALLED UPON THE ASSESSEE TO FURNISH THE DETAILS OF SALES FOR THE PERIOD FROM 1.4.2005 TO 31.3.2006 GIVIN G DETAILS OF INVOICE NUMBER, DATE OF INVOICE, INVOICE TO WHOM IT WAS ISSUED , VALUE AND TRUCK NUMBER IN WHICH THE GOODS WERE SENT. 08. IT CAN BE SEEN FROM THE ABOVE THAT THE ASSESSING O FFICER DID NOT GIVE ANY REASON JUSTIFYING THE VALIDITY OF REASSESSMENT PROCEE DINGS. BEFORE THE CIT(A), THE ASSESSEE RAISED GROUND NO.9 WHICH READS AS FOLLOWS : IN NOT SPECIFICALLY DEALING WITH THE OBJECTIONS OF THE APPELLANT TO THE REASSESSMENT PROCEEDINGS. 09. THE CIT(A) IN HIS ORDER HAS NOT DEALT WITH THIS GROUND OF APPEAL AT ALL. IT IS IN THIS BACKGROUND THAT WE HAVE TO NOW ADJUDICATE ON THE VALIDITY OF INITIATION OF REASSESSMENT PROCEEDINGS. 10. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE VALIDITY OF INITIATION OF REASSESSMENT PROCEEDINGS CAN BE ADJUDICATED ONLY BY LOOKING INTO THE RECORD WITH THE ASSESSING OFFICER RECEIVED FROM CE NTRAL EXCISE AUTHORITIES. SINCE THE ASSESSING OFFICER DID NOT GIVE ANY OF THE DOCUMENTS ITA NOS.3801, 3802, 7420 & 7421/MUM//04 - 5 - TO THE ASSESSEE, IT WOULD BE IN THE FITNESS OF THINGS THAT THE RECORDS ARE CALLED FOR BY THE TRIBUNAL TO JUDGE WHETHER THERE EXISTS REASON TO BELIEVE THAT INCOME OF ASSESSEE HAS ESCAPED ASSESSMENT WARRAN TING INITIATING PROCEEDINGS FOR REASSESSMENT. ALTERNATIVELY, HE SUBMITTED THAT THE ISSUE CAN BE SENT BACK TO THE ASSESSING OFFICER AND THE ASSE SSING OFFICER BE DIRECTED TO GIVE THE MATERIAL AND ALLOW THE ASSESSEE TO R AISE OBJECTION AND THEREAFTER AND DECIDE THE ISSUE OF VALIDITY OF INITIATION OF REASSESSMENT PROCEEDINGS. TO A QUERY FROM THE BENCH AS TO WHETHER THE ASSESSEE HAS A RIGHT TO DEMAND THE DOCUMENTS WHICH WERE RECEIVED BY T HE ASSESSING OFFICER AND BASED ON WHICH THE ASSESSING OFFICER RECORDED REASONS BEFORE ISSUING NOTICE UNDER SECTION 147 OF THE ACT, THE LEARNED C OUNSEL FOR THE ASSESSEE RELIED ON THE DECISION OF THE HON'BLE BOMBAY HIG H COURT IN THE CASE OF S.P. DIVEKAR AND A.P. DIVEKAR VS. CIT (CENTRAL) 157 ITR 629. WE HAVE PERUSED THE SAID DECISION AND WE FIND THAT IT WAS A CASE WHERE THE ASSESSING OFFICER REOPENED ASSESSMENT ON THE BASIS OF INFOR MATION RECEIVED THAT RS.3 LAKHS WORTH OF SECURITIES WERE PURCHASED BY TH E ASSESSEES FATHER- IN-LAW WHO HAD APPARENTLY NO SOURCE OF INCOME. THE SECU RITIES WERE PURCHASED ON 25.9.1946. THE FATHER-IN-LAW OF THE ASSESSEE HAD TWO DAUGHTERS. ON 28.9.1946, HE MADE A WILL BEQUEATHING THE SECURITY TO ONE OF HIS DAUGHTERS NAMELY THE ASSESSEES WIFE. THE FATHER-IN-LA W ALSO ENDORSED THE SECURITY IN FAVOUR OF THE ASSESSEE FOR COLLECTION OF INTE REST ON THE SECURITIES. IT WAS IN THOSE CIRCUMSTANCES, THE VALIDITY OF IN ITIATION OF REASSESSMENT PROCEEDINGS WERE CHALLENGED. THE REASON RECORDED BY THE AO WAS THAT THE ASSESSEE INVESTED RS.3 LACS WORTH OF GOVER NMENT SECURITIES IN THE NAME OF HIS FATHER-IN-LAW. 11. ON THE ABOVE REASONS RECORDED FOR REOPENING OF THE ASSESSMENT, TAKING A COLLECTIVE VIEW OF THE MATTER, THE TRIBUNAL UPHELD THE VALID ITY OF INITIATION OF REASSESSMENT PROCEEDINGS. ON A REFERENCE TO THE HON BLE BOMBAY HIGH COURT, THE HONBLE BOMBAY HIGH COURT FELT THAT THE VALIDITY OF INITIATION OF ITA NOS.3801, 3802, 7420 & 7421/MUM//04 - 6 - REASSESSMENT PROCEEDINGS CAN BE JUDGED ONLY IF THE MAT ERIAL BEFORE THE AO AT THE TIME OF TAKING ACTION U/S.147 OF THE ACT ARE PERU SED. THE HONBLE BOMBAY HIGH COURT ACCORDINGLY DIRECTED THE TRIBUNAL TO SUBMIT A SUPPLEMENTARY STATEMENT OF FACTS. THE HONBLE BOMBAY HIG H COURT DIRECTED THE TRIBUNAL TO EXAMINE THE MATERIAL BEFORE THE AO AND GI VE ITS OPINION ON THE VALIDITY OF INITIATION OF REASSESSMENT PROCEEDINGS. THE HO NBLE BOMBAY HIGH COURT HELD THAT THE TRIBUNAL WOULD CERTAINLY BE ENTIT LED TO AND MUST GO INTO THAT MATERIAL AND ON THE BASIS OF THAT MATERIAL GIVE ITS OPINION ON THE VALIDITY OF INITIATION OF REASSESSMENT PROCEEDINGS. THUS ACCO RDING TO THE LEARNED COUNSEL FOR THE ASSESSEE, THE TRIBUNAL WOULD BE E NTITLED TO CALL FOR THE MATERIAL BASED ON WHICH REASONS WERE RECORDED AND THEN GIVE ITS OPINION ON VALIDITY OF INITIATION OF REASSESSMENT PROCEEDINGS, AFTER CONFRONTING SUCH MATERIAL TO THE ASSESSEE AND GIVING THE ASSESSEE AN OPPORTUNITY OF BEING HEARD. 12. FURTHER RELIANCE WAS PLACED BY HIM ON THE DECISION OF T HE HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. SFIL STOCK BROKING LTD . 325 ITR 285 (DEL). THE FACTS BEFORE THE HONBLE COURT WERE THAT THE ASSES SEE IN HIS ORIGINAL RETURN OF INCOME HAD SHOWN A LONG-TERM CAPITAL GAIN OF RS. 40,953. THE RETURN WAS PROCESSED UNDER SECTION 143(1) OF THE INCOME -TAX ACT, 1961. SUBSEQUENTLY, ON THE BASIS OF THE INFORMATION GIVEN BY THE DEPUTY DIRECTOR OF INCOME-TAX (INVESTIGATION) THAT THE ASSESSEE WAS ALLEGE DLY THE BENEFICIARY OF A BOGUS CLAIM OF LONG-TERM CAPITAL GAIN SHOWN ON SALE/ PURCHASE OF SHARES A NOTICE UNDER SECTION 148 OF THE ACT WAS ISSUED BY THE ASSESSING OFFICER TO THE ASSESSEE. THE TRIBUNAL QUASHED THE ENTIRE REASSESSM ENT PROCEEDING. ON APPEAL THE HONBLE HIGH COURT FOUND THAT THE FIRST SENTEN CE OF THE REASONS RECORDED BY THE ASSESSING OFFICER WAS MERE INFORMATION REC EIVED FROM THE DEPUTY DIRECTOR OF INCOME-TAX (INVESTIGATION). THE SECOND SENTENCE WAS A DIRECTION GIVEN BY THE SAME DEPUTY DIRECTOR OF INCOME-TA X (INVESTIGATION) TO ISSUE A NOTICE UNDER SECTION 148 AND THE THIRD SENTENCE AGAIN COMPRISED A ITA NOS.3801, 3802, 7420 & 7421/MUM//04 - 7 - DIRECTION GIVEN BY THE ADDITIONAL COMMISSIONER OF INCOME-TAX TO INITIATE PROCEEDINGS UNDER SECTION 148 IN RESPECT OF CASES PERTA INING TO THE RELEVANT WARD. THE ASSESSING OFFICER REFERRED TO THE INFORMATION AND THE TWO DIRECTIONS AS REASONS ON THE BASIS OF WHICH HE WAS PROCE EDING TO ISSUE NOTICE UNDER SECTION 148. IT WAS HELD BY THE HONBLE HIGH COURT THAT THESE COULD NOT BE THE REASONS FOR PROCEEDING UNDER SECTION 1 47/148 OF THE ACT. AS THE FIRST PART WAS ONLY AN INFORMATION AND THE SECOND AND THE THIRD PARTS OF THE REASONS WERE MERE DIRECTIONS, IT WAS NOT AT ALL DIS CERNIBLE AS TO WHETHER THE ASSESSING OFFICER HAD APPLIED HIS MIND TO THE IN FORMATION AND INDEPENDENTLY ARRIVED AT A BELIEF THAT, ON THE BASIS OF THE MATERIAL WHICH HE HAD BEFORE HIM, INCOME HAD ESCAPED ASSESSMENT. THE LEARNE D COUNSEL FOR THE ASSESSEE SUBMITTED THAT IN THE CASE OF THE ASSESSE E, THE AO HAS NOT APPLIED HIS MIND TO THE INFORMATION THAT HE RECEIVED INDEPEN DENTLY AND SUCH APPLICATION OF MIND IS NOT DISCERNABLE FROM THE REASONS RECORDED BY THE AO. IT WAS ALSO SUBMITTED THAT SATISFACTION OF THE C ENTRAL EXCISE AUTHORITIES THAT THERE WAS UNAUTHORISED REMOVAL OF GOOD S BY THE ASSESSEE CANNOT LEAD TO THE CONCLUSION THAT THERE WAS SUPPRESSIO N OF SALES BY THE ASSESSEE IN INCOME TAX PROCEEDINGS. THE SATISFACTION CON TEMPLATED U/S.147 OF THE ACT IS THAT OF THE AO AND NOT THAT OF THE CENTRAL EXCISE AUTHORIT IES. 13. IT WAS FURTHER SUBMITTED THAT THE AO DID NOT FURNISH THE DOCUMENTS WHICH CAME INTO HIS POSSESSION FROM THE CENTRA L EXCISE AUTHORITIES. IN THIS REGARD HE ALSO POINTED THAT EVEN T HE CENTRAL EXCISE AUTHORITIES DID NOT FURNISH ANY DOCUMENTS OR INFORMATION T HAT THEY FOUND IN THEIR SEARCH. OUR ATTENTION WAS DRAWN TO THE ORDER OF THE CESTAT IN WHICH THEY HAVE GIVEN A FINDING THAT PROOF OF FURNISHING THE DOC UMENTS TO THE ASSESSEE COULD NOT BE PRODUCED BY THE CENTRAL EXCISE AUTHORITIES A ND IN THE CIRCUMSTANCES THE ORDERS OF THE LOWER AUTHORITIES WERE S ET ASIDE AND THE AO WAS DIRECTED TO MAKE A FRESH ADJUDICATION AFTER GIVING THE COPIES OF ALL DOCUMENTS THAT THE REVENUE RELIES UPON TO MAKE ASSESS MENT AND AFTER ITA NOS.3801, 3802, 7420 & 7421/MUM//04 - 8 - AFFORDING OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. IT WAS POINTED OUT THAT IN THE INCOME TAX PROCEEDINGS, THE STATEMENTS REC ORDED WERE SHOWN TO THE ASSESSEE DURING THE EXAMINATION OF THE MD OF THE AS SESSEE MR.TUSHAR H. SHAH AND THAT CANNOT BE SAID TO BE AN EFFECTIVE OPPO RTUNITY. IN THIS REGARD IT WAS POINTED OUT THAT MR.TUSHAR H SHAH WAS E XAMINED AT 3.30 P.M. AT 14.12.2009 AT CONCLUDED AT 5.30 P.M. IT WAS THUS C ONTENDED THAT THERE WAS FAILURE TO OBSERVE THE PRINCIPLES OF NATURAL JUST ICE AND EVEN ON THIS GROUND THE ASSESSMENT SHOULD BE HELD TO BE BAD. 14. IT WAS ALSO SUBMITTED THAT THE BASIS ON WHICH THE AO ESTIMA TED UNRECORDED SALES OF RS.3 CRORES HAS NOT BEEN SPELT OUT IN THE ORDER OF ASSESSMENT. IN THIS REGARD HE POINTED OUT THAT THE DU PLICATE BILLS REFERRED TO IN PARA-4 OF THE ORDER OF ASSESSMENT EVIDENCES ONLY SALES OF RS.2.5 LACS APPROX., BUT THE AO HAS ESTIMATED SUPPRESSED SALES OF RS .3 CRORES WITHOUT ANY BASIS. IT WAS ARGUED THAT THERE WAS THEREFORE VIOLAT ION OF PRINCIPLES OF NATURAL JUSTICE IN AS MUCH AS THE ASSESSEE WAS NOT CON FRONTED ABOUT THE PROPOSED ADDITION OF RS.3 CRORES OR THE BASIS ON WHICH TH E SAID SUM WAS ARRIVED AT. 15. THE LEARNED D.R. MADE THE FOLLOWING SU BMISSIONS ON GR.NO.1 AND 9. THE LR.D.R. PRODUCED BEFORE US THE ASSESSMENT REC ORDS. PERUSAL OF THE SAME SHOWS THAT ADDL.DIRECTOR OF INCOME-TAX (INV), UNIT -V, MUMBAI BY HIS LETTER DATED 26.5.2006 ADDRESSED TO THE AO HAS INFOR MED THE AO THAT CENTRAL EXCISE DEPARTMENT HAD CONDUCTED A SEARCH. INV ESTIGATION BY THE SAID AUTHORITY SHOWED THAT THE ASSESSEE WAS ISSUING TWO PARALLEL BILLS FOR SALE OF ITS PRODUCTS. THE GOODS WERE SENT TO AHMEDABA D AND RAJKOT BY THE ASSESSEES AGENT M/S. KRISHNA MARKETING AND M/S.JAY E NTERPRISES UNDER THE SECOND BILL AND THOSE BILLS WERE DESTROYED THE MOMEN T GOODS REPRESENTED BY THE SECOND BILL WERE SOLD. THE SALE PROCE EDS WERE DEPOSITED BACK TO THE ASSESSEE BY CASH. THE SEIZED DOCUMENTS A S WELL AS THE STATEMENTS RECORDED BY THE CENTRAL EXCISE AUTHORITIES HAVE ALSO BEEN ITA NOS.3801, 3802, 7420 & 7421/MUM//04 - 9 - FORWARDED TO THE AO ALONG WITH THE SAID LETTER. THE LAST PARA OF THE LETTER SAYS THAT THE AO IS REQUIRED TO TAKE FURTHER NECESSARY ACTION AS THE AO MAY DEEM FIT. 16. IT WAS SUBMITTED BY HIM THAT THE ABO VE INFORMATION OBTAINED BY THE AO WAS GOOD ENOUGH FOR THE AO TO FORM BELIEF THAT INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT. IN THIS REGARD OUT AT TENTION WAS DRAWN TO THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF ITO VS. PURUSHOTTAM DAS BANGUR & ANOTHER 224 ITR 362 (SC), WHE REIN LOSS CLAIMED BY AN ASSESSEE ON SALE OF SHARES ON THE BASIS OF PRICE Q UOTED IN CALCUTTA STOCK EXCHANGE HAD BEEN ALLOWED BY THE AO. LATER ON T HE AO RECEIVED LETTER BY THE AO FROM THE DDIT (INV.) REGARDING PRICE QUOT ED AT CALCUTTA STOCK EXCHANGE BEING MANIPULATED AND THAT PRICE QUOTED AT BOMBAY STOCK EXCHANGE WAS MUCH HIGHER. THIS INFORMATION WAS HELD BY T HE HONBLE SUPREME COURT TO BE ENOUGH TO FORM BELIEF REGARDING ESC APEMENT OF INCOME. FURTHER REFERENCE WAS ALSO MADE TO THE DECISION OF THE H ONBLE MADRAS HIGH COURT IN THE CASE OF STERLITE INDUSTRIES (I) LTD. VS. ACIT 302 ITR 275(MAD) WHEREIN IT WAS HELD THAT INFORMATION FROM ENFORCEMENT DIRECTORATE RE GARDING INFLATION OF PURCHASES BY AN ASSESSSEE WAS HELD TO BE ENO UGH TO FORM BELIEF REGARDING ESCAPEMENT OF INCOME AND INITIATION OF REASSESSMENT PROCE EDINGS. 17. ON THE VIOLATION OF PRINCIPLES OF NATUR AL JUSTICE, IT WAS ALSO POINTED OUT THAT JITENDRA T. MEHTA AND MR.OJHA OF JAY ENTERPRISES AND KRISHNA ENTERPRISES, WERE EXAMINED BY THE CENTRAL EXCISE AUTHORITIES AND THEIR STATEMENTS HAVE BEEN ANNEXED AS ANNEXURE A AND B TO THE ORDER OF ASSESSMENT. IT WAS HIGHLIGHTED THAT IN THEIR STATEMENTS THEY HAD EXPLAINED THE MODUS OPERANDI ADOPTED BY THE ASSESSEE FOR CLANDES TINE REMOVAL OF MANUFACTURED GOODS WITHOUT PAYMENT OF EXCISE DUTY. IT WAS ALSO SUBMITTED THAT THERE IS NO LEGAL REQUIREMENT TO FURNISH THE DOCUMEN TS ON THE BASIS OF WHICH THE AO RECORDED REASONS BEFORE ISSUING NOTICE U/S.1 48 OF THE ACT. IT WAS ALSO SUBMITTED THAT THERE WAS NO DIRECTION FROM AN Y SUPERIOR AUTHORITY ITA NOS.3801, 3802, 7420 & 7421/MUM//04 - 10 - TO REOPEN ASSESSMENT AND THE AO WAS ONLY DIRECTED TO ACT IN ACCORDANCE WITH LAW AS HE MAY DEEM FIT. IT WAS ALSO POINTED OUT THAT THE SUM OF RS.3 CRORES WAS ARRIVED AT ON THE BASIS OF THE FACT THAT WHE N DOCUMENTS SHOW SUPPRESSION OF SALES FOR A PART OF THE YEAR IT CAN BE PRE SUMED THAT THE ASSESSEE WOULD HAVE INDULGED IN SUCH SALE FOR THE REMAININ G PART OF THE YEAR ALSO. IN THIS REGARD THE LEARNED D.R. POINTED OUT TH AT SUCH EXTRAPOLATION CAN BE MADE ON THE BASIS OF THE RATIO LAID D OWN BY THE HONBLE SUPREME COURT IN THE CASE OF H.M.YUSUALI 90 ITR 271 (SC). I T WAS ALSO SUBMITTED THAT THE EXCISE AUTHORITIES HAVE WORKED OUT C LANDESTINE REMOVAL OF GOODS AND THAT WAS ALSO THE BASIS OF THE AO TO WORK SUPPRESSED SALES BY THE ASSESSEE. 18. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. IN THE PRE SENT CASE, IT IS SEEN FROM THE REASONS RECORDED BY THE ASSESSING OFFICER THAT HE HAS RECORDED REASONS FOR ESCAPEMENT OF INCOME ON THE BASIS OF INFORMATION RECEIVED FROM THE EXCISE AUTHORITIES. IN THIS REGARD, THE FACT THAT THE RE WAS A SEARCH BY THE EXCISE AUTHORITIES ON 3.12.2005 AND 6.12.20 05 IN THE PREMISES OF FACTORY AND OFFICE OF THE ASSESSEE ARE NOT IN DISPUTE. THE ASSESSEE WAS WELL AWARE OF THESE PROCEEDINGS. THE PREM ISES OF JAY ENTERPRISES AND KRISHNA MARKETING WERE SEARCHED BY TH E EXCISE AUTHORITIES ON 14.12.2005. STATEMENTS OF MR. JITENDRA T. MEHTA OF JA Y ENTERPRISES AND MR. MANOJBHAI GIRISHBHAI OJHA OF KRISHNA MARKETING WERE EXAMINED ON 14.12.2005 BY THE CENTRAL EXCISE AUTHORITIES. 19. AS EARLY AS 8.1.2006, A SHOW CAUSE NOTICE WAS ISSUED TO THE ASSESSEE BY THE CENTRAL EXCISE AUTHORITIES DEMANDING CENTRAL EXCISE DUTY OF RS.48,49,843. THE ADDL. COMMISSIONER OF CENTRAL EXCISE VIDE OR DER DT.31.3.2008, ULTIMATELY PASSED AN ORDER CONFIRMING THE DEM AND RAISED IN THE SHOW CAUSE NOTICE. ON 27.10.2008, NOTICE UNDER SEC TION 148 HAS BEEN ISSUED TO THE ASSESSEE. BEFORE ISSUE OF SUCH NOTICE, THE ASSESSING OFFICER ITA NOS.3801, 3802, 7420 & 7421/MUM//04 - 11 - RECORDED REASONS FOR ISSUE OF NOTICE UNDER SECTION 148 O F THE ACT WHICH WE HAVE ALREADY REFERRED TO IN THE EARLIER PART OF THIS ORDER . ALL THE ABOVE FACTS WERE WELL WITHIN THE KNOWLEDGE OF THE ASSESSEE. ON THE AB OVE FACTS WHICH CAME TO THE KNOWLEDGE OF THE ASSESSING OFFICER, IT CANNOT BE SAID THAT HE COULD NOT HAVE ENTERTAINED BELIEF REGARDING ESCAPEMENT OF INCOME. WE ARE OF THE VIEW THAT ON THE FACTS AVAILABLE BEFORE THE ASSESSIN G OFFICER, HE WAS JUSTIFIED IN COMING TO THE CONCLUSION THAT INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT. 20. THE QUANTUM OF SUPPRESSION OF SALES REFERRED TO THE REASONS RECORDED IS AGAIN BASED ON THE FINDING ARRIVED AT BY THE CENTRAL EXCISE AUTHORIT Y IN THE PROCEEDINGS BEFORE THEM. IT HAS BEEN THE COMPLAINT BY TH E ASSESSEE THAT THE CENTRAL EXCISE DEPARTMENT HAS NOT PROVIDED ANY INFORMATIO N OR DETAILS TO THE ASSESSEE. IN THIS REGARD, THE ASSESSEE HAS ALSO POINTED OUT THAT THE HON'BLE CESTAT HAD GIVEN A FINDING THAT THE ASSESSEE HAS NOT BE EN PROVIDED WITH MATERIAL BASED ON WHICH THE ASSESSMENT WAS MADE IN THE PROCEEDINGS BEFORE THE CENTRAL EXCISE AUTHORITIES. ON THE ISSUE OF OPP ORTUNITY OF BEING HEARD AND VIOLATION OF PRINCIPLE OF NATURAL JUSTICE IN THE CON TEXT OF VALIDITY OF INITIATION OF REASSESSMENT PROCEEDINGS, WE ARE OF THE VIEW THAT THE CONTENTION PUT FORTH ON BEHALF OF THE ASSESSEE ON THE FAC TS AND CIRCUMSTANCES OF THE PRESENT CASE, CANNOT BE ACCEPTE D. AS WE HAVE ALREADY SEEN THAT THE REASONS RECORDED BY THE ASSESSING OFFICER AND THE FACTS WITH REFERENCE TO THE REASONS SO RECORDED WHICH WERE WITHIN THE KNOWLEDGE OF THE ASSESSEE WILL BE SUFFICIENT TO UPHOLD THE VALIDITY OF INITIATION OF REASSESSMENT PROCEEDINGS. 21. RELIANCE PLACED BY THE LEARNED COUNSEL FOR THE ASSESSE E ON THE DECISION OF BOMBAY HIGH COURT IN THE CASE OF S.P. DIVEKAR AN D A.P. DIVEKAR (SUPRA) WILL NOT BE OF ANY USE. AS WE HAVE ALREADY SEEN TH ERE WAS NO MATERIAL BEFORE THE ASSESSING OFFICER TO COME TO THE CONCLU SION THAT MONEY IS DEPOSITED BY PADMANABHAN GANESH PATHANKAR WWAS MON EY OF HIS SON IN ITA NOS.3801, 3802, 7420 & 7421/MUM//04 - 12 - LAW. ON THE FACTS OF THAT CASE, ONE HAD TO CLEARLY PROBE AS TO HOW THE ASSESSING OFFICER FORMED BELIEF THAT MONEY DEPOSITED FOR PU RCHASE OF SECURITIES IN THE NAME OF PADMANABHA GANESH PATHANKAR W ERE PROVIDED BY THE ASSESSEE. THE HON'BLE HIGH COURT, THEREFORE, FELT THA T THE TRIBUNAL WOULD BE CERTAINLY ENTITLED TO AND MUST GO INTO THE MATE RIAL AND DECIDE VALIDITY OF INITIATION OF REASSESSMENT PROCEEDINGS. ON THE FACTS OF THE PR ESENT CASE, WE ARE OF THE VIEW THAT THE DEMAND MADE ON BEHALF OF THE ASSESSEE FOR SCRUTINY OF THE MATERIAL WITH A VIEW TO CHALLENGE THE INITIATIO N OF REASSESSMENT PROCEEDINGS CANNOT BE ACCEPTED. AS WE HA VE ALREADY STATED ALL THE FACTS ARE WITHIN THE KNOWLEDGE OF THE ASSESSEE AND IT CANNOT PRETEND ABSENCE OF KNOWLEDGE ABOUT THE FACTS REFERRED TO IN THE REASONS RECORDED BY THE ASSESSING OFFICER FOR INITIATION OF REASSESSMENT PROCEEDINGS. 22. THE PLEA OF THE ASSESSEE BY PLACING RELIANCE ON THE HO N'BLE DELHI HIGH COURT IN THE CASE OF SSI STOCK BROKING LIMITED COMPANY B E ACCEPTED BECAUSE ON THE FACTS OF THAT CASE IT WAS FOUND THAT THE ASSESSING OFFICER HAD INIT IATED REASSESSMENT PROCEEDINGS ON DIRECTION FROM HIS SUPERIOR A UTHORITY. IN THE PRESENT CASE, HOWEVER, WE FIND THAT THERE IS NO SUCH DIRE CTION. THE REASONS RECORDED BY THE ASSESSING OFFICER CLEARLY SPELL OUT HIS BE LIEF REGARDING ESCAPEMENT OF INCOME. FOR THE REASONS GIVEN ABOVE, WE A RE OF THE VIEW THAT THE REASSESSMENT PROCEEDINGS HAVE BEEN VALIDLY INITIATED. THE GRIEVANCE OF THE ASSESSEE REGARDING NOT AFFORDING AN OPPORTUNITY, IN TH E CONTEXT OF VALIDITY OF INITIATION OF REASSESSMENT PROCEEDINGS IS ALSO HELD TO BE NOT SUSTAINABLE. THUS GROUND NOS.1 & 9 RAISED BY THE ASSESSEE ARE DISMIS SED. 23. GROUND NOS.2 TO 8 CAN BE CONVENIENTLY DECIDED TOGET HER. ON THESE GROUNDS OF APPEAL, THE LEARNED COUNSEL FOR THE ASSESSEE P RIMARILY SUBMITTED THAT IN VIEW OF THE ORDER OF THE CESTAT SETTING ASIDE TH E ASSESSMENT BY THE LOWER AUTHORITIES AND THE FACT THAT THE BASIS ON WHICH TH E ASSESSING OFFICER MADE THE ASSESSMENT IN THE INCOME TAX PROCEEDINGS WAS THE ORDER OF THE CENTRAL EXCISE AUTHORITIES, THE ADDITION SO MADE CANNOT B E SUSTAINED. ITA NOS.3801, 3802, 7420 & 7421/MUM//04 - 13 - FURTHER, IT WAS ALSO BROUGHT TO OUR NOTICE THAT THE CES TAT, WHILE DECIDING THE APPEAL OF THE ASSESSEE HAS CATEGORICALLY FOUND THAT THE ASSESSEE WAS NOT GIVEN THE MATERIAL BASED ON WHICH THE ASSESSMENTS WERE MADE. IT WAS ALSO SUBMITTED BY THE LEARNED COUNSEL FOR THE ASSESSEE THAT THE ASSESSING OFFICER IN PARAGRAPH 4 OF THE ORDER OF THE ASSESSMENT REFERRED TO THE DUPLICATE BILLS ISSUED BY THE ASSESSEE AND HAD WITHOUT ANY BASIS COME TO A CONCLUSION THAT THE ASSESSEE HAD SUPPRESSED SALES AMOUNTING TO RS.3 CRORES. IN T HIS REGARD, THE LEARNED COUNSEL FOR THE ASSESSEE ALSO POINTED OUT THAT THE STATEMENTS GIVEN IN THE COURSE OF SEARCH BY THE CENTRAL EXCISE AUTH ORITIES HAVE BEEN WITHDRAWN BY PROPRIETOR OF JAY ENTERPRISES MR. JITENDRA T. MEHTA AS WELL AS MR. OJHA. IT WAS ALSO POINTED OUT THAT THE STATEMENT OF MR. JITENDRA T. MEHTA AND MR. OJHA RECORDED BY THE CENTRAL EXCISE AUTH ORITIES WERE NOT GIVEN TO THE ASSESSEE AND THE ASSESSEE WAS NOT GIVEN OPPORTUNITY OF CROSS EXAMINATION. IN THE INCOME TAX PROCEEDINGS, THE ASSESSING OFFICER SUMMONED MR. JITENDRA MEHTA AND THE STATEMENT WAS REC ORDED ON 14.12.2009. IN THE ORDER OF ASSESSMENT, THERE IS NO REFER ENCE TO THE ASSESSEE HAVING BEEN GIVEN AN OPPORTUNITY OF CROSS EXAM INATION OF THESE PERSONS. THE STATEMENT OF MANAGING DIRECTOR OF THE ASSE SSEE-COMPANY WAS ALSO RECORDED IN WHICH HE HAS CATEGORICALLY DENIED ANY U NRECORDED SALES. THE LEARNED COUNSEL FOR THE ASSESSEE POINTING OUT TO THE ABOVE CIRCUMSTANCES SUBMITTED THAT THE ASSESSING OFFICER WAS NO T JUSTIFIED IN MAKING THE IMPUGNED ADDITION. 24. LEARNED DEPARTMENTAL REPRESENTATIVE, HOWEVER, SUBMITT ED THAT THE ASSESSING OFFICER HAS DONE INDEPENDENT ENQUIRY AND EXAMINE D PARTIES AND THEREFORE IT CANNOT BE SAID THAT THE ASSESSING OFFICERS O RDER IS BASED ON ONLY THE OUTCOME OF PROCEEDINGS BEFORE CENTRAL EXCISE A UTHORITIES. THE LEARNED DEPARTMENTAL REPRESENTATIVE ALSO HIGHLIGHTED THAT IN THE REASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER CALLED UPON THE ASSESSEE TO FURNISH TRANSPORT BILLS CORRESPONDING TO INVOICES/SALES RECO RDED IN THE ITA NOS.3801, 3802, 7420 & 7421/MUM//04 - 14 - BOOKS OF ACCOUNT, BUT THE ASSESSEE DID NOT FURNISH DESP ITE REPEATED REQUESTS. IT WAS SUBMITTED BY HIM THAT THE ASSESSING O FFICER WAS JUSTIFIED IN HIS CONCLUSIONS ARRIVED AT IN THE REASSESSMENT PROCEED INGS. IT WAS ALSO SUBMITTED BY HIM THAT THE DUPLICATE BILLS REFERRED TO IN TH E CENTRAL EXCISE PROCEEDINGS EVIDENCED SALES OF ONLY RS.2.5 LAKHS. IT WAS S UBMITTED THAT THE ASSESSING OFFICER WAS JUSTIFIED IN DRAWING AN INFERENCE THAT T HE ASSESSEE WOULD HAVE INDULGED IN SUCH SALES THROUGH OUT THE YEAR A ND THEREFORE THE ESTIMATE OF RS.3 CRORES OF SUPPRESSED SALES CANNOT BE SA ID TO BE UNJUSTIFIED. THE LEARNED DEPARTMENTAL REPRESENTATIVE THUS SUBMITTED THAT THE ORDER OF THE CIT(A) HAS TO BE UPHELD. 25. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. AT THE OUTS ET, WE NOTICE THAT WHILE CONCLUDING THE REASSESSMENT PROCEEDINGS, THE A SSESSEE WAS NOT GIVEN COPIES OF THE DOCUMENTS AS WELL AS THE STATEMENTS RECORDED BY THE CENTRAL EXCISE AUTHORITIES. A COPY OF THE STATEMENT OF MR . JITENDRA T. MEHTA AND MR. OJHA HAVE BEEN ANNEXED AS ANNEXURE A & ANNEXU RE B PASSED IN THE INCOME TAX PROCEEDINGS. COPIES OF THESE STATEMENTS HAVE NOT BEEN FURNISHED TO THE ASSESSEE. MOREOVER, THESE PERSONS HAVE RETRACTED THE STATEMENTS GIVEN BY THEM IN THE COURSE OF SEARCH BY CE NTRAL EXCISE AUTHORITIES. IN THE COURSE OF EXAMINATION OF TUSHAR H SH AH, THESE STATEMENTS WERE SHOWN. IN OUR OPINION, IT CANNOT BE SAID THAT THE ASSESSEE HAD PROPER OPPORTUNITY TO PUT FORTH HIS GRIEVANCES IN T HE REASSESSMENT PROCEEDINGS BEFORE THE ASSESSING OFFICER. IN FACT IT WAS PR ECISELY FOR THE SAME REASON THAT THE CESTAT SET ASIDE THE ORDERS OF CENTRAL EXCISE AUTHORITIES AND DIRECTED THEM TO MAKE FRESH ASSESSMENT AFTER PROVIDING ALL THE MATERIAL BASED ON WHICH ASSESSMENTS WERE MADE TO T HE ASSESSEE. THERE WAS NO RIGHT OF CROSS EXAMINATION OF THE PERSONS WHO GAV E STATEMENT IN THE INCOME TAX PROCEEDINGS. WE ARE OF THE VIEW THAT THE AS SESSMENT MADE IN THE INCOME TAX PROCEEDINGS SHOULD ALSO BE SET ASIDE AND THE ASSESSING OFFICER SHOULD BE DIRECTED TO MAKE ASSESSMENT AFRESH IN T HE LIGHT OF THE ITA NOS.3801, 3802, 7420 & 7421/MUM//04 - 15 - ASSESSMENT THAT MAY BE MADE BY THE CENTRAL EXCISE AUT HORITY ON REMAND BY THE CESTAT. WE ARE ALSO OF THE VIEW THAT THERE IS NO BASIS FOR A SUM OF RS .3 CRORES ARRIVED AT BY THE ASSESSING OFFICER AS SUPPRESSED SALES EFFECTED BY THE ASSESSEE. EVEN ACCEPTING FOR THE SAKE OF ARGUMENT, THE CONTENTION OF THE LEARNED DEPARTMENTAL REPRESENTATIVE THAT THE ASSES SING OFFICER WOULD BE ENTITLED TO DRAW AN INFERENCE ON SUPPRESSED SALES THR OUGH OUT THE YEAR, YET THE BASIS ON WHICH THE FIGURE OF RS.3 CRORES WORKED OUT BY THE ASSESSING OFFICER HAS ALSO NOT BEEN SPELT OUT. ON THE STATEMENTS O F D.A. MODI AND JITENDRA T. MEHTA RECORDED BY THE ASSESSING OFFICER, THE ASSESSEE HAS NOT BEEN GIVEN OPPORTUNITY FOR CROSS EXAMINATION. WE ARE OF T HE VIEW THAT IN THE CIRCUMSTANCES, IT WOULD BE PROPER TO SET ASIDE THE ORDER OF THE CIT(A) AND REMAND THE CASE TO ASSESSING OFFICER FOR FRESH CONSIDERATIO N. THE ASSESSING OFFICER SHALL AFFORD AN OPPORTUNITY OF BEING HEARD TO THE ASS ESSEE. THE ASSESSING OFFICER WILL ALSO FURNISH ALL THE DOCUMENTS THAT HE MAY RELY ON WHILE COMPLETING THE SET ASIDE PROCEEDINGS. THE ASSESSING OFFICER WILL ALSO AFFORD OPPORTUNITY OF CROSS EXAMINATION, IF THE ASSESSEE CHO SES TO EXERCISE SUCH RIGHT OF CROSS EXAMINATION. THE ASSESSING OFFICER WILL A LSO TAKE INTO CONSIDERATION THE ORDERS PASSED IN THE SET ASIDE PROCEE DINGS BEFORE THE CENTRAL EXCISE AUTHORITIES AND THEREAFTER DECIDE THE ISSUE IN ACCORDANCE WITH LAW. 26. WITH REGARD TO GROUND NO.10, THE ISSUE IS WHETHER TH E ENTIRE SALES CAN BE TREATED AS INCOME OR ONLY THE PROFIT ELEMENT EMB EDDED IN THE SALES COULD BE TREATED AS INCOME. IN OUR VIEW THIS ISSUE SHOULD ALSO BE CONSIDERED BY THE ASSESSING OFFICER IN THE SET ASIDE PROCEEDINGS AND IF HE CHOSES TO MAKE ANY ADDITION ON ACCOUNT OF SUPPRESSED SALES, HE WILL D ECIDE THIS ISSUE ALSO IN ACCORDANCE WITH LAW. ITA NOS.3801, 3802, 7420 & 7421/MUM//04 - 16 - 27. FOR STATISTICAL PURPOSES, THE APPEAL OF THE ASSESS EE IS TREATED AS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 9 TH 2011. SD/- SD/- (T.R. SOOD) (N.V. VASUDEVAN) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DT. 09/09/2011. *GPR TRUE COPY COPY TO : 1. THE ASSESSEE. 2. THE ASSESSING OFFICER. 3. CIT(APPEALS) 4. CIT 5. DEPARTMENTAL REPRESENTATIVE, ITAT, MUMBAI. 6. GUARD FILE. BY ORDER DY./ASST.REGISTRAR, ITAT, MUMBAI ITA NOS.3801, 3802, 7420 & 7421/MUM//04 - 17 - DATE INITIAL OF SR.P.S. 1. DRAFT DICTATED ON 26.08.2011 2. DRAFT PLACED BEFORE AUTHOR 3. DRAFT PROPOSED & PLACED BEFORE SECOND MEMBER 4. DRAFT DISCUSSED & APPROVED BY SECOND MEMBER 5. APPROVED DRAFT COMES TO SR.PS/PS 6. KEPT FOR PRONOUNCEMENT ON 7. FILE SENT TO BENCH CLERK 8. DATE ON WHICH FILE GOES TO THE HEAD CLERK 9. DATE ON WHICH FILE GOES TO A.R. 10. DATE OF DISPATCH OF ORDER.