COMMISSIONER OF INCOME TAX Vs. JACKSON HOUSE

JUDGEMENT

(1.) The present two appeals have been filed under Section 260A of Income-tax Act, 1961 (for brevity "Act, 1961") challenging the orders dated 8-5-2009 passed by the Income-tax Appellate Tribunal (in short TTAT") in ITA Nos. 3246/Delhi/2007 and 4807/Delhi/2007, for the assessment year 2004-05. Since both the appeals pertain to the same Respondent-Assessee for the same assessment year, they are being disposed of by a common order. It is pertinent to mention that while ITA No. 103/2009 is the quantum appeal, ITA No. 544/2009 is the penalty appeal.

(2.) Briefly stated the relevant facts are that the Respondent-Assessee is a partnership firm engaged in the business of manufacture and export of readymade garments. On 11-3-2004, a survey operation under Section 133A was conducted at the business premises of the Respondent-Assessee and excess stock worth Rs. 68,69,090 was found on physical verification which was accepted by the Respondent-Assessee. For the assessment year under consideration, the Respondent-Assessee filed a return of Income-tax of Rs. 55,75,930. However, the case of Respondent-Assessee was selected for scrutiny and the Assessing Officer (in short "AO") determined the Respondent-Assessee's taxable income at Rs. 1,26,75,040 by making various additions/disallowances. Upon the matter being carried forward in appeals, the controversy ultimately reached the ITAT which, by way of impugned order, partly allowed the Respondent-Assessee's appeal by deleting the followings:

(3.) Ms. Sonia Mathur, learned Counsel for the revenue submitted that ITAT was not justified in deleting the addition made by the Assessing Officer and CIT(A) on account of unexplained investment in excess stock and suppression of gross profit. She further submitted that ITAT had deleted the addition purely on the basis of surmises and the Assessee's contention were totally unsupported by any material on record.