Shri Rathi Steel (Dakshin) Ltd., New Delhi V. ACIT, Central circle-16, New Delhi

ITA 7975/DEL/2018

• Counselvise Citation: [2021] 104 COUNSELVISE.COM (IT) 5416 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-12-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Assessment Year: 2012-2013
• Appeal Filed On: 13-12-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Tax effect; Retraction
• Section: 143(3); 153A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH ‘G’, NEW DELHI Before Sh. Kul Bharat, Judicial Member Dr. B. R. R. Kumar, Accountant Member (Through Video Conferencing) ITA No.7975/Del/2018 : Asstt. Year : 2012-13 ITA No.7976/Del/2018 : Asstt. Year : 2013-14 Sh. Rathi Steel (Dakshin) Ltd., J-1/202, DDA Flats, Kalkaji, New Delhi-110019 Vs ACIT, Central Circle-16, New Delhi-110055 (APPELLANT) (RESPONDENT) PAN No. AAACB1192M Assessee by : Sh. Ved Jain, Adv. Revenue by : Sh. H. K. Choudhary, CIT DR Date of Hearing: 30.12.2021 Date of Pronouncement: 31.12.2021 ORDER Per Dr. B. R. R. Kumar, Accountant Member: The present appeals have been filed by the assessee against the orders of the ld. CIT(A)-XXVI, New Delhi dated 04.10.2018. Assessment Year 2012-13: 2. Brief facts relevant to the adjudication are that the AO made two additions in the order passed u/s 153A, one on account of transactions with steel traders of Rs.18,03,380/- and an addition of Rs.18,49,549/- which has been repeated from the order passed u/s 143(3) of the Income Tax Act, 1961. ITA No. 7975 & 7976/Del/2018 Rathi Steel (Dakshin) Ltd. 2 3. The ld. CIT(A) deleted the addition made on account of seized material of Rs.18,03,380/-. The revenue has not preferred an appeal before the Tribunal owing to low tax effect. 4. With regard to the addition which has been repeated in the order passed u/s 153A pertaining to Rs.18,49,549/-, the ld. CIT(A) has adjudicated as under: “The facts related to this addition are as - The addition was made on account of clandestine removal of goods. The same was made on the basis of information received from Central Excise Authorities. A Central Excise search conducted at the premises of third party M/S Ramayana Ispat Limited (a manufacturer of MS/SS Ingots) on 31.07.2012. During the search carried out by an anti-evasion team of CE, the authorities alleged that they have found some loose papers which indicated the clandestine removal of goods to the appellant. In order to verify the sanctity of the above mentioned loose papers, the CE authorities visited the appellant’s premises where inquiries were made from the director of the company. Even after protest from the director, the CE authorities built undue pressure on the director and he was made to sign a wrong statement under the threat of prosecution and other penalty provisions. However, in this regard the appellant disagree with the same as no such purchases was made by them during the relevant assessment year. During that previous assessment proceedings, the appellant was asked to explain its conduct in the alleged transactions with the vendor M/s Ramayana Ispat Limited wherein the appellant had strongly denied from any clandestine removal of goods. The appellant had deposited the excise duty and the penalty. The AO added Rs. 18,49,549/- as unexplained expenditure towards clandestine removal of goods. The submissions and the related facts have been considered. The appellant is attempting to hide behind the dumb retraction and other technicalities. The appellant consented to the evasion detected by the CE authorities and paid due duties. The relevant impact on the recorded turnover of the appellant cannot be overlooked as the same has been detected consequent to search and verification exercise by the CE authorities. The appellant has not refuted the factual correctness of the CE findings nor has ITA No. 7975 & 7976/Del/2018 Rathi Steel (Dakshin) Ltd. 3 any evidence of any relief from the CE authorities been filed. The appellant is relying on the concept of third party evidence reliability and so forth. The appellant has, at no point, controverted the factual findings per the CE exercise. This clearly shows that the specific finding about stock variations etc was a factually correct and verified position. The same is bound to be considered in ascertaining the correct income as has been done in this case. The action of the AO cannot be faulted on the facts and in view of the extant jurisprudence. The same is upheld. The ground of appeal taken by the appellant is dismissed accordingly as without any cogent basis or rationale.” 5. During arguments before us, the ld. AR pleaded that the same issue is a subject matter of the appeal before the ld. CIT (A) for the A.Y. 2012-13 which has not been adjudicated. It was also submitted that the appeal in the case of Assessment Order passed u/s 143(3) is still pending with the ld. CIT(A). It was argued that the issue not pertaining to search may be dealt separately by the revenue notwithstanding the merger of the issue dealt in assessment u/s 143(3) in the present appeal. 6. The ld. DR has not opposed to the facts of the case. In view of these facts, the addition made of Rs.18,49,549/- which is a repeated addition of the order passed u/s 143(3) is hereby deleted with directions that the order passed by the ld. CIT(A) in the case of appeal against u/s 143(3) order for the A.Y. 2012-13 would hold good. Assessment Year 2013-14: 7. The AO made addition of Rs.14,18,106/- based on the information received from the Excise Department. An addition has been made based on the same information in the A.Y. 2012- 13. However, the revenue could not bring this information to assessment for the A.Y. 2013-14 in the regular course. It is an ITA No. 7975 & 7976/Del/2018 Rathi Steel (Dakshin) Ltd. 4 undisputed fact before us that the information from the Excise Department is not a material pertaining to the search & seizure action conducted on the assessee on 20.01.2015. Hence, in view of the jurisdictional pronouncements, no addition can be made devoid of any seized material in the Assessment Order passed u/s 153A. Hence, the addition is hereby directed to be obliterated. 8. In the result, both the appeals of the assessee are allowed. Order Pronounced in the Open Court on 31/12/2021. Sd/- Sd/- (Kul Bharat) (Dr. B. R. R. Kumar) Judicial Member Accountant Member Dated: 31/12/2021 *Subodh Kumar, Sr. PS* Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR