DCIT, New Delhi v. M/s Midi Extrusion Ltd.,, New Delhi

ITA 2287/DEL/2009 | 2005-2006
Pronouncement Date: 13-01-2010 | Result: Allowed

Appeal Details

RSA Number 228720114 RSA 2009
Bench Delhi
Appeal Number ITA 2287/DEL/2009
Duration Of Justice 7 month(s) 17 day(s)
Appellant DCIT, New Delhi
Respondent M/s Midi Extrusion Ltd.,, New Delhi
Appeal Type Income Tax Appeal
Pronouncement Date 13-01-2010
Appeal Filed By Department
Order Result Allowed
Bench Allotted E
Tribunal Order Date 13-01-2010
Date Of Final Hearing 13-01-2010
Next Hearing Date 13-01-2010
Assessment Year 2005-2006
Appeal Filed On 27-05-2009
Judgment Text
I.T.A. NO.2287 /DEL/09 1/4 IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH E NEW DELHI) BEFORE SHRI I.P. BANSAL JUDICIAL MEMBER AND SHRI A.K. GARODIA ACCOUNTANT MEMBER I.T.A. NO.2287 /DEL/2009 ASSESSMENT YEAR : 2005-06 DCIT M/S MIDI EXTRUSION LTD. CIRCLE-6(1) 9009-9010 DB GUPTA ROAD NEW DELHI. V. PAHARGANJ NEW DELHI. (APPELLANT) (RESPONDENT) PAN /GIR/NO.AAACM-1225-E APPELLANT BY : SHRI GS SAHOTA SR. DR. RESPONDENT BY : SHRI AK KHANNA CA. ORDER PER A.K. GARODIA AM: THIS IS REVENUE'S APPEAL DIRECTED AGAINST THE ORDER OF LD CIT(A)-IX NEW DELHI DATED 9.3.2009 FOR ASSESSMENT YEAR 2005-06. 2. THE GROUNDS RAISED BY THE REVENUE READ AS UNDER; - 1. THE ORDER OF LD CIT(A) IS ERRONEOUS AND CONTRARY TO FACTS AND LAW. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E THE LD CIT(A) HAS ERRED IN DELETING ADDITION OF RS.34 46 .673/- ON ACCOUNT OF EXCESS BURNING LOSS IGNORING THAT THE BURNING LOSS ON JOB WORK IS MUCH LESS THAN THAT ON ACTUAL PRODUCTION. 3. BRIEF FACTS OF THE CASE ARE THAT IT IS NOTED BY THE ASSESSING OFFICER IN THE ASSESSMENT ORDER THAT THE ASSESSEE HAS SHOWN PRODUC TION OF FINISHED PRODUCTS . I.T.A. NO.2287/DEL/09 2/4 AT 2447790 KG. IT IS FURTHER NOTED BY THE ASSESSIN G OFFICER THAT THE ASSESSEE HAS CLAIMED BURNING LOSS OF 1.47% IN THIS YEAR ON ITS O WN PRODUCTION AS WELL AS JOB WORK WHEREAS IN THE PRECEDING YEAR BURNING LOSSES WERE CLAIMED BY THE ASSESSEE AT THE RATE OF 1.85 % ON ITS OWN PRODUCTIO N AND ONLY 0.75% ON JOB WORK. THE ASSESSING OFFICER WAS OF THE VIEW THAT BU RNING LOSS CAN BE ALLOWED ONLY TO THE EXTENT OF 0.75% AS WAS ALLOWED IN THE P RECEDING YEAR. ON THIS BASIS HE MADE ADDITION OF RS.34 46 673/- BEING AGGRIEVED THE ASSESEE CARRIED THE MATTER IN APPEAL BEFORE LD CIT(A) WHO HAS DELETED THIS ADDITION BY FOLLOWING HIS OWN ORDER IN ASSESSEES OWN CASE IN ASSESSMENT YEAR 2004-05. NOW THE REVENUE IS IN APPEAL BEFORE US. 4. LD DR OF THE REVENUE SUPPORTED THE ASSESSMENT OR DER WHEREAS IT IS SUBMITTED BY LD AR OF THE ASSESSEE THAT THIS ISSUE IS COVERED BY THE TRIBUNAL DECISION IN ASSESSEES OWN CASE FOR ASSESSMENT YEAR 2004-05 IN I.T.A. NO. 918/DEL/2009 DATED 18.8.2009. HE SUBMITTED THAT TH E COPY OF THIS TRIBUNAL DECISION IS AVAILABLE ON PAGES 5-8 OF THE PAPER BOO K. IT WAS ENQUIRED BY THE BENCH THAT AS PER THE TRIBUNAL DECISION IN ASSESSEE S OWN CASE FOR ASSESSMENT YEAR 2004-05 A FINDING IS GIVEN THAT THE ASSESSEE HAS CLAIMED BURNING LOSS AT THE RATE OF 1.85% ON ITS OWN PRODUCTION AND 0.75% O N JOB WORK PRODUCTION AND UNDER THESE FACTS IT WAS HELD BY THE TRIBUNAL IN T HAT YEAR THAT NO INTERFERENCE IS CALLED FOR IN THE ORDER OF THE LD CIT(A) IN THAT YE AR BECAUSE IT WAS HELD THAT THE BURNING LOSS IN ASSESSEES OWN PRODUCTION IS BOUND TO BE HIGHER BECAUSE FOR OWN PRODUCTION THE ASSESSEE CARRIES OUT TWO DIFFERENT ACTIVITIES I.E. FIRST MELTING OF ALUMINUM SCRAP AND PRODUCING ALUMINUM BILLETS AND T HEN ULTIMATE FINAL PRODUCTS FROM BILLETS. IT WAS ALSO POINTED OUT THAT IN THE P RESENT YEAR ALSO THE ASSESSEE HAS TO GIVE BIFURCATION REGARDING OWN PRODUCTION AN D JOB WORK PRODUCTION AND SEPARATE LOSSES IN BOTH THESE ACTIVITIES. IT WAS AL SO POINTED OUT THAT SINCE SUCH BIFURCATION WAS GIVEN IN THE PRECEDING YEAR THERE IS NO REASON AS TO WHY THIS BIFURCATION CANNOT BE GIVEN IN THE PRESENT YEAR. IN REPLY IT WAS THE SUBMISSION OF LD AR OF THE ASSESSEE THAT THIS BIFURCATION IS NOT READILY AVAILABLE. . I.T.A. NO.2287/DEL/09 3/4 5. WE HAVE HEARD THE RIVAL SUBMISSIONS AND HAVE GON E THROUGH THE MATERIAL AVAILABLE ON RECORD AND THE TRIBUNAL DECISION CITED BY LD AR OF THE ASSESSEE IN ASSESSEES OWN CASE FOR ASSESSMENT YEAR 2004-05. WE FIND THAT IN THE PRECEDING YEAR SEPARATE BURNING LOSS FIGURES WERE AVAILABLE BEFORE THE TRIBUNAL AS PER WHICH THE ASSESSEE HAD CLAIMED BURNING LOSS AT 1.85 % ON ITS OWN PRODUCTION AND 0.75% ON JOB WORK PRODUCTION. REGARDING HIGHER BUR NING LOSS ON ACCOUNT OF OWN PRODUCTION A FINDING IS GIVEN BY THE TRIBUNAL THAT FOR OWN PRODUCTION BURNING LOSS IS BOUND TO BE HIGHER BECAUSE FOR SUCH PRODUCTION THE ASSESSEE HAS TO CARRY OUT TWO DIFFERENT ACTIVITIES I.E. MELTING OF ALUMINUM S CRAP AND PRODUCING ALUMINUM BILLETS AND ULTIMATE FINAL PRODUCT FROM THE BILLETS . IN THE PRESENT YEAR THE ASSESSEE HAS NOT FURNISHED SEPARATE FIGURES OF OWN PRODUCTION AND PRODUCTION ON ACCOUNT OF JOB WORK. IN THE PRESENT YEAR THE BU RNING LOSS CLAIMED BY THE ASSESSEE IS 1.47% FOR OWN PRODUCTION AND JOB WORK T AKEN TO GETHER. SINCE IT IS ADMITTED POSITION THAT BURNING LOSS IS HIGHER FOR O WN PRODUCTION AND LOWER FOR JOB WORK PRODUCTION BECAUSE FOR JOB WORK THE ASSESSEE RECEIVES BILLETS FROM THE PARTIES AND ONLY ONE ACTIVITY HAS TO BE CARRIED OUT BY THE ASSESSEE I.E. PRODUCING FINAL PRODUCT FROM THE BILLETS AND HENCE THIS HAS T O BE BROUGHT ON RECORD AS TO HOW MUCH WAS THE QUANTITY OF OWN PRODUCTION AND LOS S WITH REGARD TO OWN PRODUCTION AND HOW MUCH THE QUANTITY OF JOB WORK PR ODUCTION AND SEPARATE LOSS ON ACCOUNT OF JOB WORK PRODUCTION AND THEN ONLY IT CAN BE DECIDED AS TO WHETHER THE BURNING LOSS CLAIMED BY THE ASSESSEE IS ALLOWAB LE IN FULL OR NOT. SINCE THIS BIFURCATION IS NOT AVAILABLE ON RECORD WE FEEL IT FIT AND PROPER TO RESTORE THIS MATTER BACK TO THE FILE OF THE ASSESSING OFFICER FO R A DECISION AFRESH AFTER OBTAINING SEPARATE DETAILS REGARDING BURNING LOSS O N ACCOUNT OF OWN PRODUCTION AND BURNING LOSS ON ACCOUNT OF JOB WORK PRODUCTION AND THEREAFTER THE ASSESSING OFFICER SHOULD PASS NECESSARY ORDER AS PER LAW. IF IT IS FOUND THAT BURNING LOSS ON ACCOUNT OF OWN PRODUCTION AND ON ACCOUNT OF JOB WOR K PRODUCTION IS LESS THEN THE BURNING LOSS OF THE PRECEDING YEAR I.E. 1.85% O N ACCOUNT OF OWN PRODUCTION AND 0. 75% ON JOB WORK PRODUCTION THEN NO DISALLOWA NCE OR ADDITION IS CALLED FOR ON ACCOUNT OF BURNING LOSS AND IF THE BURNING LOSS IN THE PRESENT YEAR IS HIGHER AS COMPARED TO THE PRECEDING YEAR THEN TO THAT EXTENT ONLY ADDITION MAY BE MADE . I.T.A. NO.2287/DEL/09 4/4 BY THE ASSESSING OFFICER. THE ASSESSING OFFICER SHO ULD PASS NECESSARY ORDER AS PER LAW AS PER ABOVE DISCUSSION AFTER PROVIDING ADE QUATE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 6. IN THE RESULT THE APPEAL OF THE REVENUE STANDS ALLOWED FOR STATISTICAL PURPOSES. 7. ORDER PRONOUNCED IN THE OPEN COURT ON THE DATE O F HEARING I.E. 13TH JANUARY 2010. SD/- SD/- (I.P. BANSAL) (A.K. GARODIA) JUDICIAL MEMBER ACCOUNTANT MEMBER DT. 13.1.2010. HMS COPY FORWARDED TO:- 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT (A)- NEW DELHI. 5. THE DR ITAT LOKNAYAK BHAWAN KHAN MARKET NEW DELHI. TRUE COPY. BY ORDER (ITAT NEW DELHI).