Law: Income Tax Act, 1961

Section: 69

ORDER 1. The appellant-assessee is a registered firm engaged in the business of manufacture of PVC pipes of different varieties and sizes. Survey operations were conducted by the Income Tax authorities under Section 133A of the Income Tax Act, 1961 (hereinafter referred to as 'Act') at the factory premises of the assessee on 23.09.1993. During the course of survey operations, the stock at the premises was physically verified by the survey party and total stock of the value of 16,92,420/- was found. Statement of both the partners were recorded under section 131 of the Act. In the said statement, it was admitted that the stock as per books was around Rs. 3 lakhs and the excess stock of Rs. 13,92,000/- was, accordingly, admitted. On this basis, the addition was made and the assessment order was passed by the assessing authority in respect of the assessment Signature Not Verified Digitally signed by Meenakshi Kohli Date: 2015.03.27 years 1992-1993 and 1993-1994. 18:09:00 IST Reason: 2. Before the Commissioner (Appeals), the appellant assessee sought to explain this difference by alleging that up to 23.09.1993, sales of 32809 Kg. of finished products was made by one of the sister concern of the assessee, namely, M/s Ashish Agro Plast Private Limited, and the same was wrongly shown to be that of the assessee. On this plea taken by the assessee, in support of which some documents/materials were also filed, the Commissioner (Appeals) asked for remand report from the assessing authority. Before the assessing authority, the representatives of assessee were asked to produce the books of accounts of M/s Ashish Agro Plast Private Limited for the assessment years 1993-1994 and 1994-1995. It was found that the sales of the finished product of 32809 Kg. as shown in the sales register of the sister concern tallies with the impounded stock register. It was also found that the sales proceeds was received by the sister concern, namely M/s Ashish Agro Plast Private Limited through its bank account in Bank of Baroda, Dudheshwar Road Branch, Ahmedabad. The cheques received against those sales were cleared even prior to the date of survey. Notwithstanding the aforesaid finding which…

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