DCIT Vs Mahamaya Steel Industries Ltd (Supreme Court of India)
SC Upholds Deletion of Unaccounted Sales Addition Due to Lack of Corroborative Evidence; SC Rejects Revenue Appeal Because Estimated Steel Yield Could Not Justify Tax Addition; SC Rules Income Tax Additions Cannot Be Based on Guesswork or Hypothetical Production Estimates; SC Affirms That Low Yield and Power Consumption Variations Alone Do Not Establish Suppressed Sales; SC Dismisses Revenue SLP Because No Evidence Supported Alleged Unaccounted Production; SC Upholds ITAT Order Deleting Addition Made on Estimated Yield and Consumption Disparities; SC Confirms Suspicion Cannot Replace Evidence in Section 153A Assessment Proceedings.
Read HC Judgment in this case: HC Deletes ₹16.61 Crore Addition as Estimated Yield Alone Could Not Prove Suppressed Sales
The Supreme Court dismissed the Special Leave Petition filed by the Revenue against the judgment of the Chhattisgarh High Court in the case concerning addition of ₹16.61 crore towards alleged unaccounted production and sales. The Supreme Court condoned the delay but held that there was no ground to interfere with the impugned judgment in exercise of powers under Article 136 of the Constitution of India. Accordingly, the SLP was dismissed and pending applications were disposed of.
The dispute originated from assessment proceedings for AY 2010-11 following a search and seizure operation conducted on 21.06.2011 at the premises of the assessee engaged in manufacturing steel products such as heavy steel structural, joist and girder. The Assessing Officer completed assessment under Section 153A read with Section 143(3) and made an addition of ₹16,61,91,372/- alleging unaccounted sales based on estimated production yield of 89% in the SMS Division.
