The Commissioner Of Income Tax v. M/S Sambhav Textiles Ltd

IN THE HIGH COURT OF PUNJAB AND HARYANA ATCHANDIGARH. I.T.A. No.61 of 2010 Date of decision: 13.10.2010 The Commissioner of Income Tax. Vs. M/s Sambhav Textiles Ltd. -----Appellant. -----Respondent CORAM:- HON'BLE MR. JUSTICE ADARSH KUMAR GOELHON'BLE MR. JUSTICE AJAY KUMAR MITTAL Present:-Mr. Denesh Goyal, Advocatefor the appellant. for the appellant. --- ADARSH KUMAR GOEL, J. 1. This appeal has been preferred by the assesseeunder Section 260-A of the Income Tax Act, 1961 (for short, “theAct”) against the order dated 29.4.2009 of the Income TaxAppellate Tribunal, Chandigarh in I.T.A. No.1113/Chd/2008 forthe assessment year 2005-06 proposing to raise followingsubstantial questions of law:- “1.Whether on the facts and circumstances of the case,the Hon’ble ITAT erred in law in agreeing with thedecision of CIT(A) holding that sale ofRs.45,19,63,026/- shown in the return filed with ROCincludes the sale of Rs.3,66,70,962/- on which CentralExcise Duty was not paid. the Hon’ble ITAT erred in law in agreeing with thedecision of CIT(A) holding that sale ofRs.45,19,63,026/- shown in the return filed with ROCincludes the sale of Rs.3,66,70,962/- on which CentralExcise Duty was not paid. 2.Whether on the facts and circumstances of the case,the Hon’ble ITAT erred in law in not upholding thethe Hon’ble ITAT erred in law in not upholding the decision of Assessing Officer relating to calculation ofthe proportionate profit on sale of Rs.3,66,70,962/- onwhich Central Excise Duty was not paid” 2. In the course of assessment, the Assessing Officermade addition on the basis of alleged unaccounted sales. Onappeal, CIT(A) deleted the addition with the followingobservations:- “As already mentioned, the Assessing Officer has alsomade addition of Rs.52,58,618/- by applying rate of14.25% to the estimated unaccounted sales ofRs.3,66,70,962/-. Here again the facts that theappellant carried out unaccounted sales of knittedfabric is confirmed by the Central Excise Department.Therefore, the appellant carrying out such salesoutside the books of account is undisputed facts notcontroverted even during the appeal proceedings.However, for making the addition of Rs.52,58,618/-the Assessing Officer has estimated both the salesand profit rate. On the other hand, as is clear fromthe figures given above against sales ofRs.42,68,83,702/- shown in the audited accounts filedwith the return of income, the sales have been shownat Rs.45,19,63,026/- in the documents filed with theRegistrar of Companies. As the profit on the sales ofRs.45,19,63,026/-andwhichcametoRs.1,92,98,200/- has already been considered asincome of the appellant, the sales whatsoever, whichhave not been accounted for in the sales consideredin the audited accounts filed with return of income aretaken to be covered in the sales reflected in theBalance Sheet with the Registrar of Companies. Once income of the appellant had been held to beassessable at Rs.1,92,822,200/- as against that ofRs.9,984/- shown in the return of income, addition ofRs.53,58,618/- with all fairness should be taken tohave been covered in the above addition. As such,there is no need to make separate addition ofRs.52,58,618/- and this addition accordingly deleted.” 3. We have heard learned counsel for the appellant. 4. Learned counsel for the appellant is unable to disputethe correctness of concurrent finding recorded by the CIT(A) andthe Tribunal that the alleged unaccounted sales which were madethe basis for addition to the income of the assessee, were alreadycovered by income declared by the assessee. 5. Thus, no substantial question of law arises. 6. The appeal is dismissed. (ADARSH KUMAR GOEL) JUDGE October 13, 2010ashwani ( AJAY KUMAR MITTAL ) JUDGE