Taxability of unaccounted sale of scrap under the Income Tax Act

Last updated: 13 September 2021

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This Income Tax Appellate Tribunal ruling addresses the taxability of unaccounted sales of scrap. The Tribunal dismissed appeals by the revenue concerning assessment years 2002-03 and 2003-04. The decision clarifies that assessments in these cases were completed, not abated, meaning any additions by the revenue must be based on evidence found during search actions.

Court :
ITAT Delhi

Brief :
The present appeals have been fi led by the revenue against the orders of ld. CIT(A)-III, Delhi dated 15.09.2011 and 05.10.2011.

Citation :
ITA No. 5866/Del/2011 : Asstt. Year : 2002-03

IN THE INCOME TAX APPELLATE TRIBUNAL
DELHI BENCH ‘A’, NEW DELHI
Before Sh. Amit Shukla, Judicial Member
Dr. B. R. R. Kumar, Accountant Member
(Through Video Conferencing)
ITA No. 5866/Del/2011 : Asstt. Year : 2002-03
ITA No. 5312/Del/2011 : Asstt. Year : 2003-04

DCIT,
Central Circle-22,
New Delhi

M/s Accurate Meters Ltd.,
8, Local Shopping Centre, 2nd &
3rd Floor, Vardhman Sidharth
Plaza, Savita Vihar,
Delhi-110092

Assessee by : None
Revenue by : Sh. Satpal Gulati, CIT DR
Date of Hearing: 01.07.2021 Date of Pronouncement: 02.09.2021

The present appeals have been fi led by the revenue against the orders of ld. CIT(A)-III, Delhi dated 15.09.2011 and 05.10.2011.

2. On the facts and in the circumstances of the case, the CIT(A) has erred in law and on facts in deleting the addition of Rs.1,03,12,050/- made by the Assessing Officer on account of disallowance of commission.

3. The issues before us pertain to assessment years 2002-03 and 2003-04 wherein the assessee filed original return of income on 31.10.2002 and 02.12.2003. Hence it is hereby held that the assessments before us are to be treated as completed assessments but not abated assessments which create an obligation on the revenue to make any addition only based on the material and documents found and seized during the search action.

4. In the result, both the appeals of the revenue are dismissed.
Order Pronounced in the Open Court on 02/09/2021.

Please find attached the enclosed file for the full judgement