M/s NJCR Drilling Equipments, Bangalore v. ITO, Bangalore

ITA 14/BANG/2010 | 2002-2003
Pronouncement Date: 25-02-2011 | Result: Dismissed

Appeal Details

RSA Number 1421114 RSA 2010
Bench Bangalore
Appeal Number ITA 14/BANG/2010
Duration Of Justice 1 year(s) 1 month(s) 19 day(s)
Appellant M/s NJCR Drilling Equipments, Bangalore
Respondent ITO, Bangalore
Appeal Type Income Tax Appeal
Pronouncement Date 25-02-2011
Appeal Filed By Assessee
Order Result Dismissed
Bench Allotted B
Tribunal Order Date 25-02-2011
Date Of Final Hearing 14-02-2011
Next Hearing Date 14-02-2011
Assessment Year 2002-2003
Appeal Filed On 06-01-2010
Judgment Text
PAGE 1 OF 6 ITA NO.14/BANG/2010 1 IN THE INCOME TAX APPELLATE TRIBUNAL BANGALORE BENCH B BEFORE SHRI GEORGE GEORGE K J.M. AND SHRI A MOHAN ALANKAMONY A.M ITA NO.14/BANG/2010 (ASSESSMENT YEAR 2002-03) M/S NJCR DRILLING EQUIPMENTS NO.1324 7 TH MAIN 13 TH CROSS MAHALAKSHMIPURAM BANGALORE-86. - APPELLANT VS THE INCOME TAX OFFICER WARD-8(3) BANGALORE. - RESPONDENT APPELLANT BY : SMT. SHEETAL BORKAR ADVOCA TE RESPONDENT BY : SMT. AMRITA RANJAN ADDL. CIT ORD ER PER GEORGE GEORGE K : THIS APPEAL INSTITUTED BY THE ASSESSEE IS DIRECTE D AGAINST THE ORDER OF LEARNED CIT(A)-II BANGALORE D ATED 24/9/2009. THE ASST. YEAR CONCERNED IS 2002-03. 2. THE ASSESSEE HAS RAISED SIX GROUNDS OF APPEAL. ALL THE GROUNDS RELATE TO THE ISSUE OF ADDITION MADE ON ACC OUNT OF ALLEGED CONCEALMENT OF INCOME DUE TO UNDER VALUATION OF THE GOOD SOLD. 3. THE ASSESSEE IS A FIRM. IT IS ENGAGED IN THE B USINESS OF MANUFACTURING AND SERVICING OF BOREWELL DRILLING RIGS. FOR THE RELEVANT YEAR RETURN OF INCOME WAS FILED ON 31.10.2 002 DECLARING AN PAGE 2 OF 6 ITA NO.14/BANG/2010 2 INCOME OF RS.2 15 954/-. THE RETURN OF INCOME WAS PROCESSED U/S 143(1) ON 20.12.2002 ACCEPTING THE RETURN OF INCOME . ON THE BASIS OF INFORMATION OF THE CENTRAL EXCISE INTELLIGENCE ZONAL UNIT BANGALORE THE ASSESSMENT WAS REOPENED BY ISSUE OF N OTICE U/S 148 ON 14.9.2004. LATER ASSESSMENT WAS COMPLETED U/S 143(3) RWS 147 VIDE ORDER DATED 31.3.2006. IN THE REASSESSMENT CO MPLETED THE AO HAD MADE AN ADDITION OF RS.9 57 269/-. THE FACT UAL BACKGROUND WITH REFERENCE TO THE ADDITION OF RS.9 57 269/- IS AS FOLLOWS:- THERE WAS A SEARCH IN THE ASSESSEES PREMISES ON 17.1.2002 CARRIED OUT BY THE CENTRAL EXCISE DEPARTME NT. IT WAS NOTICED BY THE CENTRAL EXCISE DEPARTMENT THAT THE AS SESSEE WAS UNDER-INVOICING THE SALES INVOICE AND THE DIFFERENC E WAS COLLECTED IN CASH. IT WAS FOUND BY THE CENTRAL EXCISE DEPARTMENT THAT THE ASSESSEE HAD SOLD 45 RIGS DURING THE RELEVANT YEAR. THE CENTRAL EXCISE OFFICER HAD DETERMINED THE TURNOVER ON THE S ALE OF 45 BOREWELL RIGS AT RS.3 96 00 000/- ON THE BASIS OF C OST OF EACH RIG AT RS.9 LAKHS. TAKING CLUE FROM THE TURNOVER ADOPTED BY THE CENTRAL EXCISE AUTHORITIES THE AO WAS OF THE VIEW THAT THE RE WAS CONCEALMENT OF INCOME DUE TO UNDER VALUATION OF THE BOREWELL RIGS SOLD. THE SALES DECLARED BY THE ASSESSEE IN THE RET URN OF INCOME FILED BEFORE THE INCOME TAX AUTHORITIES WERE TO THE TUNE OF RS.2 12 38 439/-. THE AO ADOPTED THE DIFFERENCE BET WEEN THE SALE AS QUANTIFIED BY THE CENTRAL EXCISE AUTHORITIES AT R S.3 96 00 000/- AND THE SALES DECLARED BY THE ASSESSEE AT RS.2 12 38 439/- AND CONCLUDED THAT RS.1 09 65 278 (RS.3 96 00 000 RS. 2 12 38 439) PAGE 3 OF 6 ITA NO.14/BANG/2010 3 CONSTITUTED SUPPRESSION OF SALES. ADOPTING THE GRO SS PROFIT AT RS.8.73% ON THE TURNOVER DISCLOSED BY THE ASSESSEE HE CONCLUDED THAT THE PROFIT ON THE SUPPRESSED SALE OF RS.1 09 6 5 278/- AT 8.73% WAS RS.9 57 269/- AND BROUGHT THE SAME TO TAX . 4. THE ASSESSEE BEING AGGRIEVED CARRIED THE MATT ER IN APPEAL BEFORE THE FIRST APPELLATE AUTHORITY. 5. IT WAS SUBMITTED BY THE ASSESSEE FIRM THAT THERE WAS NO INDEPENDENT EVIDENCE OR ANY PROOF OF UNDER VALUAT ION AGAINST THE ASSESSEE TO ESTIMATE THE TURNOVER AT RS.3 96 00 000 /- AS AGAINST RS.2 12 38 439/- DECLARED BY THE ASSESSEE FIRM. THE CIT(A) DISPOSED OF THE APPEAL VIDE HIS ORDER DATED 24/9/20 09. THE CIT(A) REDUCED THE ADDITION TO RS.8 84 922/- INSTEA D OF RS.9 57 269/- MADE BY THE AO. 6. THE ASSESSEE BEING AGGRIEVED IS IN SECOND APP EAL BEFORE US. 7. THE LEARNED AR REITERATED THE SUBMISSIONS MADE BEFORE THE AUTHORITIES BELOW. 8. THE LEARNED DR ON THE OTHER HAND STRONGLY RELI ED ON THE FINDINGS OF THE CIT(A). 9. WE HAVE HEARD THE RIVAL SUBMISSION AND PERUSED THE MATERIAL ON RECORD. THE CENTRAL EXCISE AUTHORITIES HAD CONDUCTED THE SEARCH IN THE ASSESSEES BUSINESS PREMISES ON 1 7/1/2002. PAGE 4 OF 6 ITA NO.14/BANG/2010 4 DURING THE INVESTIGATION IT WAS FOUND THAT THE BOR EWELL DRILLING RIGS MANUFACTURED BY THE ASSESSEE FIRM WAS UNDER VALUED BY SHOWING LESSER AMOUNT THAN THE ACTUAL SELLING PRICE OF THE RIGS IN THE INVOICE AND COLLECTED THE REMAINING AMOUNTS IN CASH FROM TH E CUSTOMERS. THE CENTRAL EXCISE AUTHORITIES ALSO RECOVERED EVIDE NCE WITH REGARD TO MANUFACTURING COST PER RIG THE QUOTATIONS AND S OME INVOICES. THE RECORDS WERE VERIFIED AND IT WAS FOUND THAT THE ASSESSEE HAD SOLD 45 RIGS DURING THE YEAR RELEVANT TO ASST. YEAR 2 002-03. OUT OF 45 RIGS SOLD 28 ARE OF MODEL 500 AND THE BALANCE 1 7 ARE OF MODEL 750. THE CENTRAL EXCISE HAS FIXED THE COST OF EAC H RIG AT RS.9 LAKHS AND TOTAL SALES OF 45 RIGS WAS WORKED OUT TO RS.3 96 00 000/-. AGGRIEVED BY THE ORDER OF CENTRAL EXCISE AUTHORITY T HE ASSESSEE PREFERRED AN APPEAL BEFORE THE APPELLATE TRIBUNAL CUSTOMS CENTRAL EXCISE AND SERVICE TAX. THE APPELLATE TRIB UNAL REMANDED THE ISSUE TO THE AUTHORITY FOR RE-QUANTIFICATION OF DUTY LIABILITY. AS THE MATTER WAS PENDING DE NOVO ADJUDICATION THE AS SESSEE FILED AN APPLICATION U/S 32F(7) OF CENTRAL EXCISE ACT 1944 BEFORE THE HONBLE SETTLEMENT COMMISSION. 9.1 THE ISSUE BEFORE THE CENTRAL EXCISE WAS FINAL LY CONCLUDED BY THE HONBLE CUSTOMS AND CENTRAL EXCISE SETTLEMENT COMMISSION IN ITS ORDER NO.V/15/45/48/2007 DATED 9. 3.2007. THE HONBLE SETTLEMENT COMMISSION IN PARA 10 OF ITS ORD ER DATED 9.3.2007 HAD HELD THAT THE COST OF NJCR 500 AND NJC R 750 MODEL RIGS SHOULD BE ADOPTED AT RS.6 50 000/- AND RS.7 75 000/- AS PAGE 5 OF 6 ITA NO.14/BANG/2010 5 AGAINST THE VALUE OF RS.9 00 000/- ADOPTED BY CENTRA L EXCISE AUTHORITIES. 9.2 IN VIEW OF THE ABOVE FINDING OF THE HONBLE S ETTLEMENT COMMISSION THE TOTAL VALUE OF 45 RIGS SOLD WAS RE- WORKED BY THE FIRST APPELLATE AUTHORITY AS FOLLOWS:- 28 X RS.6 50 000 (NJCR 500) RS.1 82 00 000/- 17 X RS.7 75 000 (NJCR 750) RS.1 31 75 000/- TOTAL RS.3 13 75 000/- 9.3 THE CIT(A) AFTER DETERMINING THE SALE TURNOVE R AT RS.3 13 75 000/- FIXED RS.1 01 36 561/- AS THE SUP PRESSED TURNOVER (RS.3 13 75 000 RS.2 12 38 439/-). ADOPTING THE G ROSS PROFIT RATE AT 8.73% TO THE SUPPRESSED TURNOVER OF RS.1 01 36 5 61/- HE SUSTAINED AN ADDITION OF RS.8 84 922/-. THE ASSESS EE IN THE APPLICATION BEFORE THE SETTLEMENT COMMISSION HAS W ORKED OUT THE DUTY LIABILITY AFTER ADOPTING VALUE OF RS.6 50 00/- A ND RS.7 75 000/- FOR NJCR 500 AND NJCR 750 MODELS RESP ECTIVELY. THE SAME VALUE OF RS.6 50 000/- AND RS.7 50 000/- W AS TAKEN BY THE CIT(A) FOR DETERMINING THE SALES TURNOVER. THE GROSS PROFIT OF 8.73% ADOPTED BY THE CIT(A) IS THE SAME GROSS PROFIT DISCLOSED BY THE ASSESSEE IN HIS RETURN OF INCOME. SINCE THE V ALUE OF RIGS AND THE GROSS PROFITS ARE THE SAME AS DISCLOSED BY THE A SSESSEE WE SEE NO REASON TO INTERFERE WITH THE IMPUGNED ORDER OF T HE FIRST APPELLATE AUTHORITY. HENCE THE ORDER OF THE CIT(A) IS CORRECT AND IN ACCORDANCE WITH LAW. PAGE 6 OF 6 ITA NO.14/BANG/2010 6 10. IN THE RESULT THE APPEAL FILED BY THE ASSESSE E IS DISMISSED. THE ORDER PRONOUNCED ON FRIDAY THE 25 TH DAY OF FEBRUARY 2011 AT BANGALORE. SD/- SD/- (A MOHAN ALANKAMONY) (GEORGE GEORGE K) ACCOUNTANT MEMBER JUDICIAL MEMBER COPY TO : 1. THE REVENUE 2. THE ASSESSEE 3. THE CIT CONCERNED. 4. THE CIT(A) CONCERNED. 5. DR 6. GF MSP/18/2./21/2. BY ORDER ASST. REGISTRAR ITAT BANGALORE.