IN THE INCOME TAX APPELLATE TRIBUNAL, RAJKOT BENCH, RAJKOT BEFORE DR. ARJUN LAL SAINI, ACCOUNTANT MEMBER AND SHRI DINESH MOHAN SINHA, JUDICIAL MEMBER आयकरअपीलसं./ITA No.165/RJT/2024 Assessment Year: (2016-17)

(HybridHearing)

M/s. Sober Ceramics Vs. The ITO, 8 – A, National Highway, At. Ward – 4, Nava Jambudiya, Morbi - 363642 Morbi – 363641 Gujarat èथायीलेखासं./जीआइआरसं./PAN/GIR No.: AALFS3898R (Appellant) (Respondent)

Appellant by : Shri Mehul Ranpura, Ld. A.R.

Respondent by : Shri Abhimanyu Singh Yadav, Ld. Sr. DR Date of Hearing : 12/12/2024 Date of Pronouncement : 28/02//2025 आदेश / O R D E R PER DR. A. L. SAINI, AM:

Captionedappeal filed by the assessee, pertaining to Assessment Year (AY) 2016-17, is directed against the order passed by the Learned Commissioner of Income Tax(Appeals), vide order dated 18.01.2024,which in turn arises, out of an assessment order passed by Assessing Officer (in short ‘the AO”)under section143(3) of the Income Tax Act, 1961 ( herein after referred to as “the Act”), order dated 17.12.2018.

2. Grounds of appeal raised by the assessee, are as follows:

1. The grounds of appeal mentioned hereunder are without prejudice to one another.

2. The Id. Commissioner of Income-tax (Appeals), National Faceless Appeal Centre, Delhi (hereinafter referred to as the "CIT(A)"]in confirming rejection of book results and thereby confirming the estimated addition on account of suppressed sales and profit.

3. The Id. CIT(A) also erred in not following decision of the Hon'ble High Court of Gujarat in the case of PCIT vs. Ganga Glazed Tiles (P.) Ltd. which has been upheld by Hon'ble Supreme Court, wherein it is held that no addition can be made by the AO without bringing independent material on record.

4. The Id. CIT(A)erred on facts as also in law in retaining estimated gross profit at the rate 11.24% as against the same estimated by the AO at 16.24% on alleged suppressed sale and there by retaining addition of Rs.27,71,888/- out of total addition of Rs.40,04,933/- made by the AO. The addition confirmed is unjustified and uncalled for, which deserves to be deleted and may kindly be deleted.

5. Your Honour's appellant craves leave to add, to amend, alter, or withdraw any or more grounds of appeal on or before the hearing of appeal.

3. The assessee has also raised the following additional grounds of appeal.

1. Ld. AO erred in law and on facts of case in relying on the finding of Central Excise search and seizure action without considering the difference between the provisions of the Income Tax Act, 1961 and provision Central Excise Act, 1944 specifically concerning with respect to the lack of presumption applicable to entries in books of account and documents under the Central Excise Act, 1944."

2. Ld. AO erred in law and on facts of case in considering statements recorded by Central Excise Officer during the search and seizure, ignoring that the such officers lack the authority to record statement on oath under provision of section 14 of the Centralized Excise Act, 1991, unlike the provision of section 131 of the Income-tax Act, 1961."

4. When this appeal was called out for hearing, learned Counsel for the assessee invited our attention to the judgement of Hon’ble jurisdictional, High Court of Gujarat in the case of PCIT v. Ganga Glaze Tiles P. Ltd. in Tax Appeal No. 206 & 207 of 2019 [(2020) 117 taxmann.com 107 (Guj.)], and also invited our attention to the order dated 21.05.2023, of jurisdictional ITAT Rajkot, in ITA No.

42/Rjt/2023, wherein the reopening of assessment, on identical and similar facts, were quashed holding that the assessing officer (AO) must have 'reason to believe’ that income chargeable to tax has escaped assessment. Such reason to believe must be based on some material coming to the possession of the Assessing Officer which may trigger reason to suspect. It must be kept in mind that the “reason to believe” must have a rational connection with or relevant bearing on the formation of the belief, i.e, there must b