DCIT Vs Abhishek Steel Industries Ltd. (Chhattisgarh High Court)
Chhattisgarh High Court held that addition towards unaccounted sales based on estimated production yield is baseless and without any evidence/ material and accordingly is not sustainable in law. Accordingly, appeal of revenue dismissed.
Facts- The respondent herein/assessee is engaged in the manufacturing of re-rolled products such as heavy steel structural, joist and girder. Search and seizure on the premises of the assessee was conducted on 21-6-2011, assessment was completed on 27-3-2014 and order was passed u/s. 153A r.w.s. 143(3) of the IT Act for the assessment year 2010-11. AO has made an addition on account of unaccounted sales based on an estimated production yield of 89% in the assessee’s SMS Division. AO adopted an estimated yield ratio and proceeded to calculate alleged unaccounted production and consequential sales, resulting in substantial additions over multiple years. AO has made addition of ₹ 11,68,88,700/-.
CIT (Appeals) by order dated 21-7-2014 allowed the appeal and set-aside the addition of unaccounted sales. ITAT dismissed the appeal of the revenue. Being aggrieved, the present writ is filed.
Conclusion- Held that the CIT(Appeals) and the ITAT, both, after objectively analysing the factual situation, found complete absence of any adverse material against the assessee which can support the allegation of the AO towards unaccounted production presumed on the basis of alleged low yield declared by the assessee. Thus, in complete absence of any adverse material, both the authorities have concurrently reached to the conclusion that the addition made by the AO is baseless and without any evidence, therefore, the rejection of books of accounts is invalid and addition made by the AO on account of alleged suppression of yield is based upon mere guess work. It was further held by the two authorities that the yield declared by the assessee is neither low nor the books maintained by the assessee could be impeached by some tangible evidence/material on record and therefore the ITAT has rightly confirmed the order of the CIT (Appeals) and proceeded to dismiss the appeal filed by the Revenue. In our considered opinion, the concurrent finding recorded by the two authorities holding that the addition made by the Assessing Officer for the assessment year 2010-11 is baseless and without any evidence/material, is a pure and simple finding of fact based on the evidence available on record, which is neither perverse nor contrary to the record. Accordingly, we proceed to dismiss the appeal and the substantial question of law is answered in favour of the assessee and against the Revenue.
