ACIT, Circle - 3, Asansol, Asansol v. M/s. Bhagwanji Ispat (P) Ltd., Burdwan

ITA 1625/KOL/2011 | 2008-2009
Pronouncement Date: 29-04-2014

Appeal Details

RSA Number 162523514 RSA 2011
Assessee PAN AACCB4771C
Bench Kolkata
Appeal Number ITA 1625/KOL/2011
Duration Of Justice 2 year(s) 5 month(s)
Appellant ACIT, Circle - 3, Asansol, Asansol
Respondent M/s. Bhagwanji Ispat (P) Ltd., Burdwan
Appeal Type Income Tax Appeal
Pronouncement Date 29-04-2014
Appeal Filed By Department
Bench Allotted C
Tribunal Order Date 29-04-2014
Assessment Year 2008-2009
Appeal Filed On 28-11-2011
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH: KO LKATA ( ) 1 BEFORE HONBLE SRI SHAMIM YAHYA AM & HONBLE SRI GEORGE MATHAN JM $ I.T.A NO. 1625/KOL/2011 / ASSESSMENT YEAR :2008-09 A.C.I.T CIRCLE-3 ASANSOL VS. M/S. BHA GWANJI ISPAT (P) LTD PAN: AACCB4771C ( ( /APPELLANT ) ( )*( / RESPONDENT ) ( / FOR THE APPELLANT/ DEPARTMENT : / SHRI A.P. ROY .JCIT LD.DR )*( / FOR THE RESPONDENT/ ASSESSEE: / SHRI S.M SURANA ADVOCATE LD.AR . / /DATE OF HEARING: 29-04-2014 . / /DATE OF PRONOUNCEMENT: 29-04--2014 / ORDER 1 SHRI GEORGE MATHAN JUDICIAL MEMBER: THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) ASANSOL IN A PPEAL NO. 190/CIT(A)/ASL/CIR-3/ASL/10-11 DATED 26-09-2011 FO R THE ASSESSMENT YEAR 2008- 09. 2. SHRI A.P ROY LEARNED JCIT/SR.DR REPRESENTED ON BEHALF OF THE REVENUE AND SHRI S. M SURANA ADVOCATE LEARNED AR REPRESE NTED ON BEHALF OF THE ASSESSEE. 3. IN THE REVENUES APPEAL IN ITA NO.1625/KOL/2011 FOR THE ASSESSMENT YEAR 2008-09 THE REVENUE HAS RAISED THE FOLLOWING GROUN DS OF APPEAL:- (I) THAT THE LD. CIT(A) HAS ERRED IN ALLOWING RELIE F TO THE ASSESSEE UNDER THE HEAD UNDERVALUATION OF CLOSING S TOCK OF RS.16 66 540/- IN SPITE OF CIRCUMSTANTIAL EVIDENCE AND FACTS OF THE CASE. (II) THAT THE LD.CIT(A) HAS ERRED IN DELETING THE A DDITION UNDER THE HEAD SUPPRESSION OF SALE VALUE OF RS.1 65 33 29 4/- IGNORING THE CIRCUMSTANTIAL FACTS AND MATERIAL EVIDENCES B ROUGHT ON RECORDS BY THE AO. 4.. IN RESPECT OF GROUND NO.(I) IT WAS THE SUBMISS ION BY THE LEARNED JCIT/SR.DR THAT THE ISSUE IN THIS APPEAL WAS AG AINST THE ACTION OF THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) IN ALLOWING R ELIEF TO THE ASSESSEE IN ITA NO.1625/KOL/2011 M/S. BHAGWANJI ISPAT (P) LTD. 2 RESPECT OF ADDITION MADE BY THE AO UNDER THE HEAD UNDERVALUATION OF CLOSING STOCK. IT WAS THE SUBMISSION THAT THE AO HAD M ADE THE ADDITION ON THE GROUND THAT THE ASSESSEE HAD NOT INCLUDED THE CENVAT E.CES S AND VAT IN RESPECT OF THE CLOSING STOCK AS PER PROVISION OF SECTION.145A OF THE ACT. IT WAS THE SUBMISSION THAT THE LEARNED COMMISSIONER OF INCO ME-TAX (APPEALS) HAS ERRED IN GIVING RELIEF TO THE ASSESSEE. HE HAS VEHEMENTL Y SUPPORTED THE ORDER OF THE AO. 5. IN REPLY THE LEARNED AR FOR THE ASSESSEE HAS SU BMITTED THAT THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) HAS NOT GIVEN RELIEF TO THE ASSESSEE U/S. 145A OF THE ACT BUT ONLY DIRECTED THAT IF THESE T AXES CESS AND DUTIES HAVE BEEN PAID WITHIN THE TIME PROVIDED FOR IN SECTION 43B OF THE ACT THE AO WAS TO VERIFY THE SAME AND ALLOW CONSEQUENTIAL RELIEF TO THE ASS ESSEE. HE HAS VEHEMENTLY SUPPORTED THE ORDER OF THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS). 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. A PERU SAL OF ORDER OF THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) MORE SPECIFICALLY IN PAGE-2 GROUND NO.3 CLEARLY SHOWS THAT THE LEARNED COMMISSI ONER OF INCOME-TAX (APPEALS) HAS IN PRINCIPLE UPHELD THE ADDITION. THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) HAS DIRECTED THE AO ONLY TO VERIFY THE PA YMENT OF SAID CENVAT CESS & VAT AS PER PROVISIONS OF SECTION 43B OF THE ACT. IF THE SAME WAS FOUND TO HAVE BEEN PAID WITHIN THE DUE DATE CONSEQUENTIAL RELI EF WAS TO BE GRANTED. IN THE CIRCUMSTANCES IT IS NOTICED THAT THE LEARNED COM MISSIONER OF INCOME-TAX (APPEALS) HAS NOT GIVEN ANY RELIEF TO THE ASSESSEE AS HAS BEEN RAISED BY THE REVENUE IN ITS GROUND NO.(I). CONSEQUENTLY GROUND NO.(I) OF REVENUES APPEAL STANDS DISMISSED. 7. IN RESPECT OF GROUND NO.(II) IT WAS THE SUBMISS ION BY THE LEARNED JCIT/SR.DR THAT THE ISSUE WAS AGAINST THE ACTION OF THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) IN DELETING THE ADDITION MADE BY THE AO UNDER THE HEAD SUPPRESSION OF SALE VALUE. IT WAS THE SUBMISSION THAT THE AO HAD CATEGORICALLY FOUND THAT THE ASSESSEE WAS SELLING MS INGOT MANUF ACTURED BY IT AT A COST PRICE OF RS.17 296/- PMT [PER METRIC TON] AT RS.19 439/- WITHIN THE STATE AND AT A COST PRICE OF RS.16 842/- PMT IN OUTSIDE STATES. CONSE QUENTLY THE AO HAD HELD THAT ITA NO.1625/KOL/2011 M/S. BHAGWANJI ISPAT (P) LTD. 3 DIFFERENTIAL AMOUNT OF RS.2 596/- BETWEEN THE PMT PRICE IN RESPECT OF SALES MADE IN SIDE THE STATE AND SALES MADE OUTSIDE THE STATE WAS SUPPRESSION OF SALES AND MADE THE ADDITION. IT WAS THE SUBMISSION THAT THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) HAS DELETED TH E SAME BY HOLDING THAT NO ENQUIRY HAD BEEN MADE BY THE AO TO ESTABLISH THAT THE VALUATION OF SALES OUTSIDE THE STATE HAS BEEN SUPPRESSED. FURTHER THE LEARN ED COMMISSIONER OF INCOME- TAX (APPEALS) HAD HELD THAT THE AVERAGE PRICE OF RS .19 439/- PMT AS ARRIVED AT BY THE AO WAS ERRONEOUS AND CONSEQUENTLY HE DELETED THE ADDITION. IT WAS THE FURTHER SUBMISSION THAT THE GP DECLARED BY THE ASSE SSEE WAS LOWER THAN THE GP FOR SIMILAR BUSINESS IN THE SAME LOCALITY. IT WAS THE SUBMISSION THAT THE ORDER OF THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) O N THIS ISSUE WAS LIABLE TO BE REVERSED.. HE HAS VEHEMENTLY SUPPORTED THE ORDER OF THE AO. 8. IN REPLY THE LEARNED AR FOR THE ASSESSEE HAS SU BMITTED THAT PROPER BOOKS OF ACCOUNT WERE MAINTAINED AND ALL BOOKS WERE PRODU CED BEFORE THE AO AS HAS BEEN MENTIONED IN THE ASSESSMENT ORDER ITSELF. IT WAS THE FURTHER SUBMISSION THAT ALL PURCHASE AND SALES WERE FULLY VOUCHED AND TRANS ACTIONS WERE ALSO DONE ONLY BY CHEQUE. IT WAS THE SUBMISSION THAT CALCULATION OF THE AVERAGE MT PRICE AS DONE BY THE AO WAS ERRONEOUS IN SO FAR AS THERE WAS SUBSTANTIAL VARIATION BETWEEN THE PRICE BEFORE DEC07 AND AFTER JAN08. C ONSEQUENTLY THE VALUATION BY AVERAGE METHOD WAS NOT A CORRECT METHOD. IT WAS T HE FURTHER SUBMISSION THAT NO SALES MADE BY THE ASSESSEE HAVE BEEN FOUND TO BE B OGUS OR SUPPRESSED. IT WAS THE SUBMISSION THAT THE LEARNED COMMISSIONER OF I NCOME-TAX (APPEALS) HAS TAKEN INTO CONSIDERATION THE VARIATION ON THE SALES PRICE AS IS EVIDENT FROM PAGE- 4 OF HIS ORDER AND DELETED THE ADDITION MADE BY THE AO. HE HAS VEHEMENTLY SUPPORTED THE ORDER OF THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS). 9. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. A PERU SAL OF PAGE-5 OF THE ORDER OF THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS ) CLEARLY SHOWS THAT THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) HAS TAKEN INTO CONSIDERATION THE FACT THAT THE ADDITION AS HAS BEEN MADE BY THE AO UNDER THE HEAD SUPPRESSION ON SALES WAS ONLY BY ARITHMETIC CALCULATION OF THE AVERAGE PRICE OF PMT[PER METRIC TON]. THIS CALCULATION ADMITTEDLY IS ERRONEO US AS IS EVIDENT FROM THE ITA NO.1625/KOL/2011 M/S. BHAGWANJI ISPAT (P) LTD. 4 CALCULATION FOUND IN PAGE PAGE-4 OF THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS)S ORDER. THIS CALCULATION AS FOUND IN PAG E-4 OF THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS)S ORDER HAS NO T BEEN DISPROVED OR DISLODGED BY THE REVENUE. A PERUSAL OF THE ORDER OF THE AO CLEARLY SHOWS THAT OTHER THAN ARITHMETICAL JUGGLERY TO ARRIVE AT AN AV ERAGE PRICE OF PER MT NO OTHER ENQUIRY HAS BEEN CONDUCTED BY HIM TO ESTABLISH THAT THERE IS SUPPRESSION OF SALES. A COMPARISON OF THE GP OF OTHER CONCERN THOUGH HAS BEEN MADE BY THE AO IN THE ASSESSMENT ORDER NOTHING HAS BEEN SHOWN TO BE GIVE N TO THE ASSESSEE FOR ITS REBUTTAL NOR HAS BEEN SHOWN AS TO HOW TWO CASES ARE COMPARABLE. EVEN FOR APPLYING FOR COMPARATIVE METHOD THERE SHOULD BE REJ ECTION OF THE ASSESSEES BOOKS OF ACCOUNT. THIS HAS ALSO NOT BEEN DONE. IN THE CIRCUMSTANCES WE ARE OF THE OF THE VIEW THAT FINDING OF THE LEARNED COMMIS SIONER OF INCOME-TAX (APPEALS) IN DELETING THE ADDITION MADE BY THE AO IS ON A RIG HT FOOTING AND DOES NOT CALL FOR ANY INTERFERENCE. WE UPHOLD THE SAME. THIS GROUND O F REVENUES APPEAL STANDS DISMISSED. 10. IN THE RESULT THE REVENUES APPEAL IN ITA NO .1625/KOL/2011 FOR THE ASSESSMENT YEAR 2008-09 STANDS DISMISSED AS STATED ABOVE. 1 THIS ORDER IS PRONOUNCED IN OPEN COURT ON DT 29/0 4/2014 SD/- SD/- ** PRADIP SPS . )4 54 / COPY OF THE ORDER FORWARDED TO: 1. . ( / THE APPELLANT : ACIT CIR-3 ASANSOL 54 PARMAR BUILDING 54 G.T ROAD(W) ASANSOL - 713304. 2 )*( / THE RESPONDENT- M/S. BHAGWANJI ISPAT (P) LTD 2 DR. M.N GHOSH RD RANIGANJ DIST:BURDWAN (WB) PIN 713347. / THE CIT ( ) (SHAMIM YAHYA ACCOUNTANT MEMBER) ( 1 ) (GEORGE MATHAN JUDICIAL MEMBER) ( (( ( / / / / ) )) ) DATE 29/04 /2014 ITA NO.1625/KOL/2011 M/S. BHAGWANJI ISPAT (P) LTD. 5 3 4. . ( )/ THE CIT(A) 5 . ) / DR KOLKATA BENCH 6 . GUARD FILE . *4 )/ TRUE COPY / BY ORDER /ASSTT REGISTRAR