M/s. Ramdev Food Products Pvt.Ltd.,, Ahmedabad v. The ACIT., Circle-5,, Ahmedabad

ITA 2927/AHD/2013 | 1993-1994
Pronouncement Date: 20-10-2016 | Result: Allowed

Appeal Details

RSA Number 292720514 RSA 2013
Assessee PAN AABCR2887G
Bench Ahmedabad
Appeal Number ITA 2927/AHD/2013
Duration Of Justice 2 year(s) 10 month(s) 9 day(s)
Appellant M/s. Ramdev Food Products Pvt.Ltd.,, Ahmedabad
Respondent The ACIT., Circle-5,, Ahmedabad
Appeal Type Income Tax Appeal
Pronouncement Date 20-10-2016
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted SMC
Tribunal Order Date 20-10-2016
Date Of Final Hearing 17-10-2016
Next Hearing Date 17-10-2016
Assessment Year 1993-1994
Appeal Filed On 11-12-2013
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD SMC BENC H (BEFORE SHRI N.K. BILLAIYA ACCOUNTANT MEMBER & SHRI S. S. GODARA JUDICIAL MEMBER) ITA. NO: 2927/AHD/2013 (ASSESSMENT YEAR: 1993-94) M/S. RAMDEV FOOD PRODUCTS PVT. LTD. SPICE WORLD SARKHEJ BAWLA HIGHWAY CHANGODAR AHMEDABAD V/S ASSTT. CIT CIRCLE-5 AHMEDABAD (APPELLANT) (RESPONDENT) PAN: AABCR2887G APPELLANT BY : MS. URVASHI SHODHAN AR RESPONDENT BY : SHRI PRADIP KUMARMAJUMDAR SR. D.R . ( )/ ORDER DATE OF HEARING : 17-10-2016 DATE OF PRONOUNCEMENT : 20 -10-2016 PER N.K. BILLAIYA ACCOUNTANT MEMBER: 1. THIS APPEAL BY THE ASSESSEE IS PREFERRED AGAINST TH E ORDER OF LD. CIT(A)-XI AHMEDABAD DATED 14.10.2013 PERTAINING TO A.Y. 1993- 94. ITA NO2927/A HD/2013 . A.Y.1993-94 2 2. THE SOLE GRIEVANCE OF THE ASSESSEE RELATES TO THE L EVY OF PENALTY U/S. 271(1)(C) OF THE ACT AMOUNTING TO RS. 4 07 780/-. 3. THE ROOTS FOR THE LEVY OF PENALTY LIE IN THE ASSESS MENT ORDER DATED 29.03.1996 MADE U/S. 143(3) OF THE ACT. THE BUSINES S LOSS OF RS. 1 70 900/- WAS ASSESSED AT A TOTAL INCOME OF RS. 58 28 470/-. THE QUANTUM ADDITIONS TRAVELLED UP TO THE TRIBUNAL AND THE TRIBUNAL IN IT A NOS. 1603 1547 1637 1688 1780/AHD/2001 AND 226/AHD/2002 HELD AS UNDER: - 24.4 THE SECOND ADDITION ON THE BASIS OF LESSER PRO DUCTION SHOWN IN THE BOOKS OF ACCOUNTS THE ASSESSING OFFICER TAKEN ACTUAL PRODUC TION AS PER SEIZED NOTE BOOK. AFTER COMPARING THE PRODUCTION AS PER SEIZED NOTE B OOK AND PRODUCTION RECORDED IN BOOKS OF ACCOUNT THE ASSESSING OFFICER FOUND TH AT ONLY 60% OF THE PRODUCTION WAS RECORDED IN THE BOOKS OF ACCOUNT. THE ASSESSING OFFICER AFTER CONSIDERING THE MISTAKES POINTED OUT BY THE ASSESSEE AND AFTER CONS IDERING OTHER ASPECTS INCLUDING UNACCOUNTED PURCHASES AND OTHERS CALCULATED G.P. O F RS. 59 44 970/- FOR BOTH THE CONCERN OF THE ASSESSEE AS WELL AS RAMDEV MASALA. T HE ASSESSING OFFICER BIFURCATED PROPORTIONATELY AND MADE ADDITION OF RS. 46 12 109/- IN THE HANDS OF THE ASSESSEE AFTER ALLOWING 10% BENEFIT OF REPROCES SING OF GRINDING OF GOODS. THE LD. CIT(A) CONFIRMED THE ACTION OF THE ASSESSING OF FICER IN RESPECT OF THE ADDITION ON ACCOUNT OF EXCESS SHORTAGE RS. 39 90 835/-. HOWE VER HE REDUCED THE ADDITION FROM RS. 39 90 835/- TO RS. 36 82 723/- AFTER ALLOW ING RELIEF ON ACCOUNT OF CALCULATION OF REGRINDING PROCESS. THE LD. CIT(A) W HILE DEALING WITH THE ISSUE IN RESPECT OF ADDITION OF RS. 46 12 109/- SUSTAINED TH E ADDITION TO THE EXTENT OF RS. 7 09 183/- APPLYING THE G.P. RATE OF 19.28% CONSIDE RING SUPPRESSED PRODUCTION OF RS. 36 78 336/-. 24.5. ON CONSIDERATION OF NATURE OF BOTH THE ADDITI ONS WE FIND THAT BOTH THE ADDITIONS ARE OF SAME NATURE. WHEN IT IS FOUND THAT THE ASSESSEE HAS RECORDED LESSER PRODUCTION BY ADOPTING LESSER YIELD OF PRODU CTION FOR EXAMPLE IN CASE OF MIRCHI IN ASSESSEE'S CASE AT PAGE NO.44 THE ASSESS ING OFFICER GIVEN TABLE WHERE IT ITA NO2927/A HD/2013 . A.Y.1993-94 3 IS STATED THAT ON THE BASIS OF SEIZED RECORD THE P RODUCTION YIELD OUGHT TO BE 89.64% WHEREAS THE ASSESSEE HAS SHOWN YIELD 84.10. ON THE OTHER HAND THE ASSESSING OFFICER CALCULATED ADDITION OF RS. 46 12 109/- IN CASE OF MIRCHI BY COMPARING TOTAL PRODUCTION RECORDED IN THE BOOKS OF ACCOUNTS AND PRODUCTION AS PER SEIZED RECORD. THUS IT IS ADMITTED POSITION OF THE FACT THAT WHEN THE ASSESSEE RECORDED PRODUCTION BY SHOWING LESSER YIELD IN BOOK S OF ACCOUNTS CONSEQUENTLY THE PRODUCTION SHOWN IN SEIZED NOTE BOOK ON THE BAS IS OF ACTUAL PRODUCTION MUST HAVE BEEN IN EXCESS THAN THE PRODUCTION RECORDED IN THE BOOKS OF ACCOUNTS. IN OTHER WORDS IT CAN BE SAID THAT THE ASSESSING OFFI CER HAS MADE THE ADDITION TWO VICE ON SAME SET OF FACTS. THE LD.CIT(A) WHILE DEAL ING ADDITION OF RS. 46 12 109/- ON ACCOUNT OF EXCESS PRODUCTION RIGHTLY APPRECIATED THE FACTS AND FOUND THAT THE ADDITION TO THE EXTENT OF G.P. ON SALE WHICH WAS NO T ACCOUNTED FOR IN BOOKS OF ACCOUNTS THE ADDITION TO THAT EXTENT IS ONLY WARRA NTED. THE CIT(A) ACCORDINGLY CONFIRMED THE ADDITION OF RS. 7 09 1 83/- THE SUP PRESSED PRODUCTION ON WHICH THE CIT(A) CONFIRMED THE ADDITION OF RS. 7 09 183/- ALS O COVERS THE UNRECORDED TURNOVER ON ACCOUNT OF LOW YIELD. THE CIT(A) WHILE CONFIRMING THE ADDITION TO THE EXTENT OF RS. 3 6 82 723/- FAILED TO APPRECIATE T HIS FACT. THEREFORE THE ORDER OF CIT(A) IN SUSTAINING ADDITION OF RS. 36 82 723/- C ANNOT BE UPHELD. THE CALCULATION OF ASSESSING OFFICER ON TWO GROUNDS NAM ELY SHOWING LOW YIELD IN THE BOOKS OF ACCOUNTS AND EXCESS PRODUCTION FOUND IN TH E SEIZED RECORD ONLY SUPPORT TO THE FACT THAT THERE WAS ONLY ONE TYPE OF SUPPRES SED PRODUCTION WHICH HAS BEEN SOLD OUT OF BOOKS OF ACCOUNT. UNDER THE CIRCUMSTANC ES THE ADDITION ON BOTH THE GROUNDS CANNOT BE SUSTAINED AS BOTH THE CALCULATION SUPPORTS AS STATED ABOVE ONLY ONE TYPE OF SUPPRESSED PRODUCTION AND SALE. AT THIS STAGE WE ARE AWARE THAT IN SUCH TYPE OF CASES FOR CALCULATION OF SUPPRESSED P RODUCTION AND SALES SOME GUESS WORK IS BOUND TO BE THERE HOWEVER THE ASSESSING O FFICER HAS TRIED TO SUPPORT THIS GUESS WORK BY SEIZED RECORD. TO PUT THE END OF LITI GATION WE ARE OF THE CONSIDERED VIEW THAT THE ADDITION TO THE EXTENT OF INCOME I.E. PROFIT ON ACCOUNT OF SUPPRESSED PRODUCTION AND SALES ONLY CAN BE TAXED. WE THEREFO RE FIND THAT THE LD. CIT(A) AFTER CONSIDERING THE FACTS OF THE CASE HAS RIGHTL Y SUSTAINED THE ADDITION OF RS. 7 09 183/-. HOWEVER THE LD. CIT(A) WRONGLY SUSTAIN ED THE ADDITION TO THE EXTENT ITA NO2927/A HD/2013 . A.Y.1993-94 4 OF RS. 36 82 723/- WHICH IS THE CALCULATION OF SUPP RESSED PRODUCTION ON SAME SET OF MATERIAL SUPPORTING THE FACT THAT THERE WAS EXCE SS PRODUCTION BUT THE SAME WAS LESSER RECORDED IN THE BOOKS OF ACCOUNT. THE ADDITI ON OF RS. 7 09 183/- SUSTAINED BY THE CIT(A) IS CONFIRMED AND THE ADDITION OF RS. 36 82 723/- SUSTAINED BY THE CIT(A) IS DELETED IN THE LIGHT OF ABOVE DISCUSSION. THUS GROUND NO.5 OF THE ASSESSEE'S APPEAL IS DISMISSED AND GROUND NO.4 OF T HE ASSESSEE'S APPEAL IS ALLOWED. 4. TAKING A LEAF OUT OF THIS THE A.O. PROCEEDED BY LE VYING PENALTY U/S. 271(1)(C) OF THE ACT AT RS. 4 07 780/-. 5. THE ASSESSEE CARRIED THE MATTER BEFORE THE LD. CIT( A) BUT WITHOUT ANY SUCCESS. 6. THE LD. CIT(A) WAS CONVINCED THAT THE FACT OF CONCE ALMENT OF PARTICULARS OF INCOME HAS BEEN PROVED BY THE ASSESSING OFFICER AND THE CONCEALMENT PENALTY HAVE BEEN RIGHTLY LEVIED. 7. AGGRIEVED BY THIS THE ASSESSEE IS BEFORE US. THE LD. COUNSEL FOR THE ASSESSEE VEHEMENTLY STATED THAT THE ENTIRE ASSESSME NT HAS BEEN MADE ON ESTIMATE BASIS AND THE TRIBUNAL ALSO HAD CONFIRMED THE ADDITION ON ESTIMATE BASIS. THEREFORE THIS IS NOT A FIT CASE F OR THE LEVY OF PENALTY. PER CONTRA THE LD. D.R. STRONGLY SUPPORTED THE FINDING S OF THE REVENUE AUTHORITIES. 8. WE HAVE CAREFULLY PERUSED THE ORDERS OF THE AUTHORI TIES BELOW AND HAVE GIVEN A THOUGHTFUL CONSIDERATION TO THE ASSESSMENT ORDER. WE FIND THAT THE ITA NO2927/A HD/2013 . A.Y.1993-94 5 ADDITIONS MADE BY THE A.O. AND PARTLY CONFIRMED BY THE TRIBUNAL WERE PURELY ON ESTIMATE BASIS. WE FIND THAT THE ASSESSME NT HAS BEEN MADE AFTER PROCESSING THE SEIZED MATERIAL WHEREFROM THE A.O. F URTHER ESTIMATED THE INCOME. IN OUR UNDERSTANDING OF THE LAW THE ADDITI ON MADE AND SUSTAINED ON THE BASIS OF SUCH ESTIMATE COULD NOT BE SAID TO RESULT IN A SITUATION WHERE IT WOULD BE POSSIBLE TO ASCRIBE THE FAILURE T O RETURN CORRECT INCOME TO ASSESSEE ON ACCOUNT OF FRAUD OR ANY GROSS OR WIL LFUL NEGLECT. OUR VIEW IS FORTIFIED BY THE DECISION OF THE HONBLE JURISDICTI ONAL HIGH COURT OF GUJARAT IN THE CASE OF NAVJIVAN OIL MILLS 252 ITR 417. 9. CONSIDERING THE FACTS IN TOTALITY IN THE LIGHT OF THE AFOREMENTIONED JUDGMENT OF THE HONBLE JURISDICTIONAL HIGH COURT THE LEVY OF PENALTY IS NOT JUSTIFIED. WE THEREFORE SET ASIDE THE FINDINGS OF THE LD. CIT(A) AND DIRECT THE A.O. TO DELETE THE PENALTY OF RS. 4 07 780/-. 10. IN THE RESULT THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON 20 - 10- 2 016. SD/- SD/- (S. S. GODARA) (N. K. BILLAIYA) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD: TRUE COPY RAJESH COPY OF THE ORDER FORWARDED TO: - 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT (APPEALS) 4. THE CIT CONCERNED.