Anand Omprakash Pahade,, Jalna v. Income-tax Officer,,

ITA 1887/PUN/2014 | 2010-2011
Pronouncement Date: 18-10-2016 | Result: Allowed

Appeal Details

RSA Number 188724514 RSA 2014
Assessee PAN ALSPP4628A
Bench Pune
Appeal Number ITA 1887/PUN/2014
Duration Of Justice 2 year(s) 1 day(s)
Appellant Anand Omprakash Pahade,, Jalna
Respondent Income-tax Officer,,
Appeal Type Income Tax Appeal
Pronouncement Date 18-10-2016
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted A
Tribunal Order Date 18-10-2016
Assessment Year 2010-2011
Appeal Filed On 17-10-2014
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A PUNE BEFORE MS. SUSHMA CHOWLA JM AND SHRI ANIL CHATURVEDI AM . / ITA NO. 1887 /PN/20 1 4 / ASSESSMENT YEAR: 20 1 0 - 1 1 SHRI ANAND OMPRAKASH PAHADE M/S. ADINATH STEEL RE - ROLLING MILLS PLOT NO.A - 28/05 ADDL. MIDC AURANGABAD ROAD JALNA - 431203 . / APPELLANT PAN: A LSPP4628A VS. THE INCOME TAX OFFICER WARD 1 ( 3 ) JALNA . / RESPONDENT WARD 1 ( 3 ) JALNA . / RESPONDENT / APPELLANT BY : NONE (ADJOURNMENT REFUSED) / RESPOND ENT BY : SHRI ANIL KUMAR CHAWARE / DATE OF HEARING : 18 . 1 0 .201 6 / DATE OF PRONOUNCEMENT: 18 .1 0 .201 6 / ORDER / ORDER PER SUSHMA CHOWLA JM: THIS APPEAL FILED BY THE ASSESSEE IS AGAINST ORDER OF CIT (A) AURANGABAD DATED 25 . 0 8 .201 4 RELATING TO ASSESSMENT YEAR 20 1 0 - 1 1 AGAINST ORDER PASSED UNDER SECT ION 143(3) OF THE INCOME TAX ACT 1961 (IN SHORT THE ACT) . 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL : - 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL : - 1. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED ON FACTS AND IN LAW IN CONFIRMING THE ALLEGED SUPPRESSION OF SALES TO THE TUNE OF RS.12 17 11 260/ - AND CONFIRMING THE ADDITION TO THE EXTENT OF RS.48 68 460/ - . ITA NO . 1887 /PN/201 4 SHRI ANAND OMPRAKASH PAHADE 2 2. THE LEARNE D CIT(A) FURTHER ERRED IN CONFIRMING THE ALLEGED SUPPRESSION OF SALES MERELY ON PRESUMPTION AND ASSUMPTION BASIS AND WITHOUT EVIDENCE OF PURCHASE OF RA W MATERIAL OR SALES OF FINISHED GOODS OUT OF BOOKS . 3. THE LEARNED CIT (A) FURTHER ERRED IN CONFIRMING THE ALLEGED SUPPRESSION OF PRODUCTS ON THE GROUNDS OF MONTHLY VARIATION IN CONSUMPTION OF ELECTRICITY VIS - A - VIS PRODUCTION. 4. THE LEARNED CIT (A) FURT HER ERRED IN CONFIRMING THE ACTION OF THE ASSESSING OFFICER IN HOLDING THAT THE BOOKS OF ACCOUNTS OF THE APPELLANT COMPANY ARE CORRECTLY REJECTED U/S 145 OF THE INCOME TAX ACT WITHOUT ANY EVIDENCE OR FINDINGS AS HOW THE PROVISION OF SEC.145(3) ARE SATISFI ED . 5. THE LEARNED CIT (A) FURTHER ERRED IN CONFIRMING THE ACTION OF THE ASSESSING OFF ICER IN MAKING AN ADDITION ON ACCOUNT OF ALLEGED SUPPRESSION OF SALES WITHOUT GIVING ANY SHOW CAUSE NOTICE TO THE APPELLANT TO EXPLAIN THE FACTS AGAINST THE PROPOSED HU GE ADDITION ON THIS ACCOUNT WHICH IS AGAINST THE RULES OF NATURAL JUSTICE . 6. THE LEARNED CIT (A) FURTHER ERRED IN NOT FOLLOWING THE ORDER OF THE HON . ITAT PUNE IN THE CASE OF ACIT VS. M/S SR J PEETY PVT LTD. (2011) 137 TT J (PUNE) 627 ITAT PUNE AS WELL AS DELHI EXCISE TRIBUNAL ORDER IN THE CASE OF R.A. CASTING PVT. LTD. WHEREIN THE ADDITION MADE ON THE ACCOUNT OF UNIT CONSUMPTION ON PRESUMPTION BASIS WAS DELETED . 3. THE APPEAL OF ASSESSEE WAS FIXED FOR HEARING AGAINST WHICH THE ASSESSEE 3. THE APPEAL OF ASSESSEE WAS FIXED FOR HEARING AGAINST WHICH THE ASSESSEE MOVED AN APPLIC ATION FOR ADJOURNMENT. HOWEVER NONE WAS PRESENT ON THE DATE OF HEARING. THE ADJOURNMENT MOVED BY THE ASSESSEE IS REFUSED SINCE THE ISSUE IS SQUARELY COVERED BY THE ORDERS OF TRIBUNAL IN ASSESSEES OWN CASE IN EARLIER YEARS. 4. BRIEFLY IN THE FACTS OF THE CASE THE ASSESSEE WAS ENGAGED IN MANUFACTURING OF TMT BARS. INTELLIGENCE INFORMATION WAS GATHERED BY DGCEI IN THE CASE OF CERTAIN CONCERNS ENGAGED IN THE MANUFACTURE OF TMT BARS THAT THEY WERE INVOLVED IN CLANDESTINE REMOVAL OF FINISHED GOODS WITHOU T PAYMENT OF EXCISE DUTY. SEARCH WAS CONDUCTED ON 18.12.2006 ON THE BASIS OF SAID INVESTIGATION AND INFORMATION RECEIVED. THE ASSESSING OFFICER CARRIED OUT THE PROCEEDINGS AGAINST THE ASSESSEE IN EARLIER YEARS. IN SOME OF THE CASES OF MANUFACTURE OF TMT BARS THE MANUFACTURING UNITS HAD DECLARED THAT THEY HAD CLANDESTINELY REMOVED THE GOODS WITHOUT PAYMENT OF EXCISE DUTY. THE ASSESSING OFFICER FURTHER CONSIDERED ITA NO . 1887 /PN/201 4 SHRI ANAND OMPRAKASH PAHADE 3 ELECTRICAL CONSUMPTION AND WAS OF THE VIEW THAT 188 ELECTRICITY UNITS WERE RE QUIRED FOR MANU FACTURING ONE MT OF TMT BARS. THE ASSESSING OFFICER IN VIEW THEREOF REJECTED THE BOOKS OF ACCOUNT AND WORKED OUT THE ADDITION ON ACCOUNT OF PROFIT ON SUPPRESSED SALES FROM YEAR TO YEAR. THE MATTER TRAVELLED TO THE TRIBUNAL IN THE YEARS IN WHICH THE INVE STIGATION WAS CARRIED OUT BY THE EXCISE AUTHORITY AND THE ISSUE WAS DECIDED IN BUNCH OF APPEALS. THE ASSESSEE HAD ALSO FILED AN APPEAL RELATING TO ASSESSMENT YEAR 2009 - 10 AND THE SAME WAS DECIDED BY THE TRIBUNAL VIDE CONSOLIDATED ORDER IN ITA NO .1292/PN/2 012 RELATING TO ASSESSMENT YEAR 2009 - 10 WITH LEAD ORDER IN BHAGYALAXMI STEEL ALLOYS PVT. LTD. VS. ACIT VIDE ORDER DATED 15.07.2015. 5. THE ASSESSEE IS AGGRIEVED BY THE ORDER OF CIT(A) IN CONFIRMING THE ALLEGED SUPPRESSION OF SALES TO THE TUNE OF RS.12 1 7 11 260/ - AND CONFIRMING THE ADDITION TO THE EXTENT OF RS.48 68 460/ - . THE ASSESSEE IS ALSO IN APPEAL AGAINST REJECTION TO THE EXTENT OF RS.48 68 460/ - . THE ASSESSEE IS ALSO IN APPEAL AGAINST REJECTION OF BOOKS OF ACCOUNT UNDER SECTION 145 OF THE ACT AND MAKING OF ADDITION ON ACCOUNT OF ALLEGED SUPPRESSION OF SALES. 6 . ON PERUSAL OF RECORD WE FIND THAT IN THE CASE OF ASSESSEE THERE WAS NO ENQUIRY OR SEARCH OR INVESTIGATION BY THE EXCISE DEPARTMENT UNDER WHICH ANY CASE OF SUPPRESSED PRODUCTION WAS DETECTED AND / OR CLANDESTINE REMOVAL OF GOODS WITHOUT PAYMENT OF EXCISE DUTY WAS MADE BY THE EXCISE DEPARTMENT. THE ASSESSEE HAD NOT MOVED ANY PETITION BEFORE ANY AUTHORITY OF EXCISE OR THE INCOME TAX AUTHORITY ADMITTING ANY CLANDESTINE REMOVAL OF GOODS WITHOUT PAYMENT OF EXCISE DUTY. THE SOLE BASIS FOR ADDITION IN THE HANDS OF ASSESSEE WAS ERRATIC CONSUMPTION OF ELECTRIC UNITS. THE ASSESSING OFFICER ON THE BASIS OF ADDITION MADE IN THE CASE OF VARIOUS OTHER UNITS HAD MADE THE ADDITION IN THE HANDS OF ASSESSEE ON ACCOUNT OF ESTIMATION OF PROFIT ON SUPPRESSED PRODUCTION WHICH IN TURN WA S BASED ON CONSUMPTION OF ELECTRICITY. ITA NO . 1887 /PN/201 4 SHRI ANAND OMPRAKASH PAHADE 4 7 . WE FIND THAT SIMILAR ISSUE OF ESTIMATION ON ACCOUNT OF ERRATIC CONSUMPTION OF ELECTRICITY AROSE BEFORE THE TRIBUNAL IN BUNCH OF APPEALS. THE TRIBUNAL IN SHREE OM ROLLING MILLS PVT. LTD. VS. ADDL. CIT IN ITA NOS. 125 & 127/PN/2012 AND CROSS APPEALS IN ITA NOS.430 & 431/PN/2012 RELATING TO ASSESSMENT YEARS 2007 - 08 & 2008 - 09 VIDE ORDER DATED 15.07.2015 HAD CONSIDERED THE ISSUE AT LENGTH VIDE PARAS 54 TO 87 AND VIDE PARAS 88 AND 89 THE TRIBUNAL HAD DELETED THE ADDIT ION ON BOTH COUNTS I.E. ADDITION MADE ON ACCOUNT OF SUPPRESSED PRODUCTION AND ALLEGED INVESTMENT IN PURCHASES WHICH READ AS UNDER: - 88. IN THE ENTIRETY OF THE ABOVE SAID FACTS AND CIRCUMSTANCES WE HOLD THAT NO EXTRAPOLATION OF SALES FOR 300 DAYS CAN BE MADE IN THE HANDS OF THE ASSESSEE ON THE BASIS OF THE EVIDENCE FOUND FOR CLANDESTINE REMOVAL OF MATERIAL WITHOUT PAYMENT OF EXCISE DUTY FOR FEW DAYS WHICH IN TURN HAS BEEN ADMITTED BY THE ASSESSEE BY WAY OF FILING PETITION BEFORE THE SETTLEMENT COMMISSI ON WHICH IN TURN HAS ALSO BEEN ACCEPTED BY THE SETTLEMENT COMMISSION. MERELY BECAUSE THE SETTLEMENT COMMISSION ACCEPTED THE CLAIM OF THE ASSESSEE OF ADDITIONAL EXCISE DUTY PAYABLE ON THE SAID CLANDESTINE REMOVAL OF MATERIAL WITHOUT PAYMENT OF EXCISE DUT Y DOES NOT ESTABLISH THE CASE OF THE REVENUE THAT THE SAID FIGURES OF ADDITIONAL PRODUCTION SHOULD BE UTILIZED FOR EXTRAPOLATING THE SALES IN THE HANDS OF THE ASSESSEE FOR THE ENTIRE YEAR. ADMITTEDLY THE ASSESSEE HAD OFFERED ADDITIONAL INCOME ON THE SAID CLANDESTINE REMOVAL OF MATERIAL WITHOUT PAYMENT OF EXCISE INCOME ON THE SAID CLANDESTINE REMOVAL OF MATERIAL WITHOUT PAYMENT OF EXCISE DUTY WHICH IS TO BE ADDED AS INCOME IN THE HANDS OF THE ASSESSEE. THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE FAIRLY ADMITTED THAT IN CASE THE SAID ADDITIONAL INCOME HAS NOT BEEN ADDED WHILE COMPUTING THE INCOME IN THE HANDS OF THE ASSESSEE FOR THE RESPECTIVE YEARS THE SAME MAY BE DIRECTED TO BE ADDED IN THE HANDS OF THE RESPECTIVE ASSESSEE IN RESPECTIVE YEARS. ACCORDINGLY WE DIRECT THE ASSESSING OFFICER TO VERIFY FROM THE RECORDS FO R THE RESPECTIVE YEARS AND INCLUDE THE ADDITIONAL INCOME ON ACCOUNT OF SUCH ADMITTED CLANDESTINE REMOVAL OF MATERIAL WITHOUT PAYMENT OF EXCISE DUTY BY THE ASSESSEE EITHER BEFORE THE SETTLEMENT COMMISSION OR BEFORE THE EXCISE AUTHORITIES IN THE HANDS OF T HE ASSESSEE. WE HAVE HEARD BUNCH OF APPEALS AND IN SOME YEARS THERE IS NO ADMISSION OF CLANDESTINE REMOVAL OF MATERIAL WITHOUT PAYMENT OF EXCISE DUTY AND IN THOSE YEARS IN THE ABSENCE OF ANY EVIDENCE AND / OR ANY INVESTIGATION OR INQUIRY MADE BY THE ASSE SSING OFFICER AND WHERE THE ASSESSING OFFICER HAS FAILED TO COLLECT ADDITIONAL EVIDENCE NO ADDITION CAN BE MADE IN THE HANDS OF THE ASSESSEE BY WAY OF EXTRAPOLATION OF SALES FOR 300 DAYS ON ACCOUNT OF ANY EVIDENCE FOUND IN ANY PRECEDING OR SUCCEEDING YEA RS. FURTHER NO ADDITION CAN BE MADE IN THE HANDS OF THE ASSESSEE WHERE NO PETITION HAS BEEN FILED BY THE ASSESSEE BEFORE THE SETTLEMENT COMMISSION IN ANY OF THE RESPECTIVE YEARS OR BEFORE THE EXCISE AUTHORITIES. 89. SINCE WE HAVE DELETED THE ADDITION I N THE HANDS OF ASSESSEE ON BOTH ACCOUNTS I.E. ADDITION MADE ON ACCOUNT OF ERRATIC CONSUMPTION OF ELECTRICITY AND ADDITION PROPOSED ON THE BASIS OF EVIDENCE FOUND FOR THE PART OF THE YEAR OF CLANDESTINE REMOVAL OF MATERIAL WITHOUT PAYMENT OF EXCISE DUTY NE XT ADDITION MADE IN THE HANDS OF THE ASSESSEE I.E. ALLEGED INVESTMENT IN THE PURCHASES FOR EFFECTING SUCH SALES WHICH GOODS HAVE BEEN CLANDESTINELY REMOVED IS NOT SUSTAINABLE. ACCORDINGLY WE HOLD THAT NO ADDITION CAN BE MADE IN THE HANDS OF THE ASSESSEE ON ACCOUNT OF ALLEGED INVESTMENT IN PURCHASES UNDER SECTION 69C OF THE ACT. ITA NO . 1887 /PN/201 4 SHRI ANAND OMPRAKASH PAHADE 5 8 . THEREAFTER CORRIGENDUM ORDER WAS PASSED BY THE TRIBUNAL SUBSTITUTING PARA 88 OF THE TRIBUNAL VIDE ORDER DATED 17.02.2016 AND IT WAS HELD AS UNDER: - 3. ON PERUSAL OF THE R ECORD WE FIND THAT BY AN ERROR THE FINDINGS OF THE TRIBUNAL IN PARA 88 WITH SPECIAL REFERENCE TO FROM LINE 17 TO 22 NEEDS CORRECTION TO THE EXTENT THAT THE ADDITIONAL INCOME TO BE ADDED IN THE HANDS OF THE ASSESSEE IS EQUIVALENT TO PROFITS ON SUPPRESSED PRODUCTION @ 4% OR ACTUAL GP RATE DECLARED BY THE ASSESSEE WHICHEVER WAS HIGHER. IN VIEW THEREOF WE PASS THIS CORRIGENDUM ORDER AND THE PARA 88 I.E. FROM LINE 17 TO 22 WOULD NOW BE SUBSTITUTED BY FOLLOWING PARA. 88. ADMITTEDLY THE ASSESSEE HAD OFF ERED ADDITIONAL INCOME ON THE SAID CLANDESTINE REMOVAL OF MATERIAL WITHOUT PAYMENT OF EXCISE DUTY WHICH IS TO BE ADDED AS INCOME IN THE HANDS OF THE ASSESSEE. THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE FAIRLY ADMITTED THAT IN CASE THE SAID AD DITIONAL INCOME HAS NOT BEEN ADDED WHILE COMPUTING THE INCOME IN THE HANDS OF THE ASSESSEE FOR THE RESPECTIVE YEARS THE SAME MAY BE DIRECTED TO BE ADDED IN THE HANDS OF THE RESPECTIVE ASSESSEE IN RESPECTIVE YEARS. ACCORDINGLY WE DIRECT THE ASSESSING OFF ICER TO VERIFY FROM THE RECORDS FOR THE RESPECTIVE YEARS AND INCLUDE THE ADDITIONAL INCOME ON ACCOUNT OF SUCH ADMITTED CLANDESTINE REMOVAL OF MATERIAL WITHOUT PAYMENT OF EXCISE DUTY BY THE ASSESSEE EITHER BEFORE THE SETTLEMENT COMMISSION OR BEFORE THE EXC ISE AUTHORITIES IN THE HANDS OF THE ASSESSEE. ACCORDINGLY WE DIRECT THE ASSESSING OFFICER TO VERIFY FROM THE RECORDS FOR THE RESPECTIVE YEARS AND INCLUDE IN THE HANDS OF ASSESSEE THE ADDITIONAL INCOME @ 4% OR ACTUAL G.P. RATE DECLARED BY THE ASSESSEE F OR THAT YEAR WHICHEVER IS HIGHER ON VALUE OF SUCH THE ASSESSEE F OR THAT YEAR WHICHEVER IS HIGHER ON VALUE OF SUCH ADMITTED CLANDESTINE REMOVAL OF MATERIAL WITHOUT PAYMENT OF EXCISE DUTY BY THE ASSESSEE BEFORE THE EXCISE AUTHORITIES. THUS THE ASSESSEE IS DIRECTED TO FILE THE REQUISITE DETAILS OF PROCEEDINGS BEFORE THE EXCISE AUTHORITIES BEFORE THE ASSESSING OFFICER IN ORDER TO COMPUTE THE ADDITIONAL INCOME IN THE HANDS OF ASSESSEE IN THE RESPECTIVE YEARS. 9 . THE ISSUE ARISING BEFORE US IDENTICAL TO THE ISSUE BEFORE THE TRIBUNAL IN SHREE OM ROLLING MILLS PVT. LTD. VS. ADDL. CIT (SUPRA). FURTHER DURING THE YEAR UNDER CONSIDERATION NEITHER INVESTIGATION BY THE DGCEI NOR ANY SUPPRESSED PRODUCTION HAS BEEN DETECTED AND ADMITTED BY THE ASSESSEE. FURTHER THE ASSESSEE HAS NOT MOVED ANY PETITION BEFORE THE SETTLEMENT COMMISSION OR ANY OTHER EXCISE AUTHORITIES. IN THE TOTALITY OF THE ABOVE SAID FACTS AND CIRCUMSTANCES AND IN THE ABSENCE OF ANY EVIDENCE COLLECTED BY THE ASSESSING OFFICER OF ALLEGED REMOVAL OF GOODS WITHOUT PAYMENT OF EXCISE DUTY MERELY ON THE BASIS OF ESTIMATION OF ALLEGED SUPPRESSED PRODUCTION IN CASE OF OTHER CONCERNS OF JALNA THERE IS NO MERIT IN MAKING ANY ADDITION IN THE HANDS OF ASSESSEE. FURTHER THE TRIBUNAL IN SERIES OF CASES WITH LEAD ORDER IN SHREE OM ROLLING MILLS PVT. LTD. VS. ITA NO . 1887 /PN/201 4 SHRI ANAND OMPRAKASH PAHADE 6 ADDL. CIT ( SUPRA) IN ASSESSMENT YEARS 2006 - 07 AND 2007 - 08 VIDE ORDER DATED 15.07.2015 HAS DELETED THE ADDITION MADE IN THE HANDS OF ASSESSEE ON ACCOUNT OF ALLEGED SUPPRESSION OF PRODUCTION. ACCORDINGLY GROUND OF APPEAL RAISED BY THE ASSESSEE AGAINST REJECTION OF BO OKS OF ACCOUNT AND CONFIRMING THE ADDITION MADE ON ACCOUNT OF SUPPRESSION OF PRODUCTION BY APPLYING GP RATE OF 4% ON THE ALLEGED PRODUCTION OF SALE ARE ALLOWED. IN VIEW THEREOF THE APPEAL OF ASSESSEE IS ALLOWED. 1 0 . IN THE RESULT APPEAL OF ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 18 TH DAY OF OCTO BER 201 6 . SD/ - SD/ - ( ANIL CHATURVEDI ) ( SUSHMA CHOWLA ) / ACCOUNTANT MEMBER / JUDICIAL MEMBER / PUNE ; D ATED : 18 TH OCTO BER 201 6 . / PUNE ; D ATED : 18 TH OCTO BER 201 6 . GCVSR / COPY OF THE ORDER IS FORWARDED TO : 1. / THE APPELLANT ; 2. / THE RESPONDENT ; 3 . ( ) / THE CIT(A) AURANGABAD ; 4. / THE CIT AURANGABAD ; 5. / DR A ITAT PUNE ; 6. / GUARD FILE . / BY ORDER // TRUE COPY // / SR. PRIVATE SECRETARY / ITAT PUNE