DCIT Vs Mahamaya Steel Industries Ltd (Chhattisgarh High Court)
Chhattisgarh High Court held that addition on account of unaccounted sales based on estimated production yield in complete absence of any adverse material is rightly deleted. Accordingly, substantial question is answered in favour of assessee.
Facts- The respondent (assessee) is engaged in the manufacturing of re-rolled products such as heavy steel structural, joist and girder. Post search operations, AO has made an addition on account of unaccounted sales based on an estimated production yield of 89% in the assessee’s SMS Division. CIT (Appeals) by order dated 17-7-2014 allowed the appeal and set-aside the addition of unaccounted sales made by AO. Being aggrieved, revenue has preferred the present appeal.
Conclusion- Held that 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. In the result, the appeal stands dismissed leaving the parties to bear their own cost(s).
