Ravi Aircolls Ltd. vs Commissioner of Income Tax

The present income tax appeal filed u/s 260A of the income tax Act, 1961 has been admitted on the following three substantial questions of law:-- (i) Whether on a true and correct interpretation of the provisions contained in chapter IV-D read with the provisions contained in section 145 of the Act and due application of the same in the case of the appellant, the Tribunal was legally correct in holding that the sales as shown by the assessee should be substituted by the sale figure as might be worked out by the excise authorities, on the basis of excise/assessable value of goods as determined under the Excise Laws, so as to add the resultant figure to the taxable income of the appellant?

(ii) Whether the ITAT was legally correct in holding that the order passed by the Customs & Excise Gold (Control) Appellate Tribunal has a binding effect on the Assessing Officer under the income tax Act, 1961, for the purpose of computation of taxable income, there- under, even though such an order had be passed in an altogether different context and for an altogether different purpose?

(iii) Whether the excisable value (unit wise) as determined under the Excise Laws, for the purpose of collection of excise duty, should necessarily be treated as the sales value for working out the sale of the assessee particularly when the assessee had maintained books of account under regular course and no discrepancy whatsoever was found in such books of account?

We have heard Shri S.K. Garg, learned counsel for the appellant and Shri A.N. Mahajan, learned standing counsel for the revenue.

It appears that for the assessment year 1989-90, the Assessing Officer enhanced the sales on the basis of the information received from the central excise department that the appellant has indulged in large scale evasion of the excise duty. The addition on this score was about Rs. 66,76,000. In the appeal filed by the appellant before the Commissioner, income tax (Appeals) the addition was deleted. However, in the appeal filed by the revenue before the Tribunal, vide order dated 29-8-2003 it has set aside the appellate order as also the assessment order and has remanded the matter to the Assessing Officer with the following directions:--

After going through the decision of the Hon''ble CEGAT, there is no alternative but to set aside the issue relating to the evasion of the central excise duty if any, to the file of the Assessing Officer. The Assessing Officer can make enquiry and the matter can be investigated by him to find out if the assessee has suppressed the sales for the purpose of concealing or evading the excise duty. He should make independent enquiry in the matter and he should not merely rely on facts found as a result of any enquiry which might have been conveyed to him or might be conveyed to him by the central excise authority. The Assessing Officer may consider the observation of the hon''ble CEGAT in para 7 of the Tribunal''s order dated 27-3-1997 of the hon''ble CEGAT, wherein it is mentioned that the ld. Counsel for the assessee before the CEGAT has submitted that the manufacturer in this case is agreeable to the assessable value being based on the price charged by RMPL to PDV in respect of the period after August, 1987. The Assessing Officer should therefore, record clear finding of facts after making enquiry in the light of the observations of the hon''ble CEGAT and then determine whether the assessee has suppressed any sale. As the issue has been remanded to the file of the Assessing Officer, the appeal is treated as allowed for statistical purposes.

It appears that in the Central Excise matter the Customs & Gold (Control) Appellate Tribunal has remanded the matter to the adjudicating authority to decide the question regarding evasion of excise duty afresh. In the present case we find that the Tribunal has simply remanded the matter to the Assessing Officer to re-determine the income and record a positive finding as to whether the appellant has indulged in suppression of sales or it is not evading the sales either. The apprehension of the appellant is that the Tribunal has directed the Assessing Officer to consider the observations of CEGAT in paragraph 27 of the order dated 27-3-1997, wherein it is mentioned that the learned counsel for the assessee has submitted that the manufacturer in this case is agreeable to the assessable value being based on the prices charged by RMPL to PDV in respect of the period after August, 1987 is misplaced, inasmuch as the Tribunal has further directed the Assessing Officer to record a clear finding of fact after making enquiry in the light of the aforesaid observations of CEGAT and then determine whether the assessee has suppressed any sale or not? As the Tribunal has not decided any issue on merit, the alleged substantial questions of law do not arise for our consideration.

The appeal is dismissed with the aforesaid observations.