G.R. Corporation Vs ITO (ITAT Jaipur)
Jaipur ITAT Deletes Addition Based Solely on GST Allegation After GST Appellate Authority Finds No Suppression of Sales
The Jaipur ITAT allowed the assessee’s appeal by deleting an addition of ₹15.35 lakh, which had been made by estimating profit at 8.79% on alleged suppressed sales of ₹1.74 crore. The reassessment had been initiated solely on the basis of information received from the GST authorities alleging clandestine removal of tyres and tubes without payment of GST.
During the appellate proceedings before the Tribunal, the assessee produced the GST Appellate Authority’s order, which, after examining the seized documents and books of account, categorically held that there was no evidence of interstate movement of goods, clandestine removal, or suppression of sales. The GST authority further found that the Department had failed to establish essential corroborative evidence such as procurement of unaccounted raw materials, transportation, buyers’ statements, sale proceeds or any other material to support the allegation of clandestine sales, and accordingly set aside the IGST demand of ₹48.91 lakh.
The Tribunal noted that the Income-tax addition rested entirely on the GST information, and the Revenue fairly conceded that no independent material existed before the Assessing Officer to establish suppression of sales. Since the very foundation of the reassessment had ceased to exist following the GST appellate order, the Tribunal held that the estimated addition could not survive and accordingly deleted the entire addition of ₹15.35 lakh. The assessee’s appeal was allowed.
