Assistant Commissioner of Income-tax,, v. M/s. Rishi Steel & Alloys Pvt. Ltd.,, Jalna

ITA 401/PUN/2016 | 2011-2012
Pronouncement Date: 30-11-2017 | Result: Dismissed

Appeal Details

RSA Number 40124514 RSA 2016
Assessee PAN AABCR3131P
Bench Pune
Appeal Number ITA 401/PUN/2016
Duration Of Justice 1 year(s) 8 month(s) 20 day(s)
Appellant Assistant Commissioner of Income-tax,,
Respondent M/s. Rishi Steel & Alloys Pvt. Ltd.,, Jalna
Appeal Type Income Tax Appeal
Pronouncement Date 30-11-2017
Appeal Filed By Department
Tags No record found
Order Result Dismissed
Bench Allotted B
Tribunal Order Date 30-11-2017
Date Of Final Hearing 30-11-2017
Next Hearing Date 30-11-2017
Assessment Year 2011-2012
Appeal Filed On 10-03-2016
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B PUNE BEFORE MS. SUSHMA CHOWLA JM AND SHRI ANIL CHATURVEDI AM . / ITA NO S . 400 & 401 /P U N/201 6 / ASSESSMENT YEAR S : 2010 - 11 & 20 11 - 1 2 THE ASST. COMMISSIONER OF INCOME TAX JALNA CIRCLE JALNE . / APPELLANT VS. M/S. RISHI STEEL & ALLOYS PVT. LTD. D - 56/7 ADDL.MIDC AREA JALNA 4 31203 . / RESPONDENT PAN: AABCR3131P / APPELLANT BY : NONE / RESPONDENT BY : SHRI MUKESH JHA / DATE OF HEARING : 3 0 . 11 . 2017 / DATE OF PRONOUNCEMENT: 30 . 11 . 201 7 / ORDER PER SUSHMA CHOWLA J M : BOTH T H E APPEAL S FILED BY THE REVENUE ARE AGAINST SEPARATE ORDER S OF CIT (A) - 1 AURANGABAD BOTH DATED 1 4 . 12 .201 5 RELATING TO ASSESSMENT YEAR S 2010 - 11 AND 20 11 - 12 AGAINST RESPECTIVE ORDER S PASSED UNDER SECTION 143(3) OF THE INCOME - TAX ACT 1961 (IN SHORT THE ACT) . ITA NO S . 400 & 401 /P U N/20 1 6 RISHI STEEL & ALLOYS PVT. LTD. 2 2 . BOTH THE APPEALS RELATING TO THE SAME ASSESSEE WERE HEARD TOGETHER AND ARE BEING DISPOSED OF BY THIS CONSOLIDATED ORDER. HOWEVER REFERENCE IS BEING MADE TO THE FACTS AND ISSUES IN ITA NO.400/PU N/2016 RELATING TO ASSESSMENT YEAR 2010 - 11 TO ADJUDICATE THE ISSUES. 3. THE REVENUE IN ITA NO.400/PUN/2016 RELATING TO ASSESSMENT YEAR 2010 - 11 HAS RAISED THE FOLLOWING GROUND S OF APPEAL : - I) ON THE FACTS & IN THE CIRCUMSTANCES OF THE CASE THE LD. CIT( A) AURANGABAD HAS ERRED IN DELETING THE ADDITION OF RS.80 84 670/ - MADE ON ACCOUNT OF SUPPRESSED PRODUCTION. II) ON THE FACTS & IN THE CIRCUMSTANCES OF THE CASE THE LD. CIT(A) AURANGABAD HAS ERRED IN NOT FOLLOWING HIS OWN ORDERS IN THE OTHER CASES OF S TEEL MANUFACTURERS FROM JALNA PASSED EARLIER WHEREIN HE HAD ESTIMATED THE PROFIT @ 4% OF THE E STIMATED SALE VALUE OF SUPPRESSED PRODUCTION. III) THE CIT(A) HAS ERRED IN DELETING THE ADDITIONS AS THE DEPARTMENT HAS FILED THE APPEAL BEFORE THE HONBLE HIGH COURT ON THE ISSUES ON WHICH THE CIT(A) HAS GRANTED THE RELIEF. THE SAME IS TO BE DECIDED BY THE HONBLE HIGH COURT. IV) ON THE FACTS & IN THE CIRCUMSTANCES OF THE CASE THE ORDER OF THE LD. CIT(A) AURANGABAD BE QUASHED AND THAT THE ORDER OF THE AO BE R ESTORED. 4. NONE APPEARED ON BEHALF OF THE ASSESSEE NOR ANY APPLICATION WAS MOVED FOR ADJOURNMENT. HOWEVER WE PROCEED TO DECIDE THE PRESENT APPEALS AFTER HEARING THE LEARNED DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE AS THE ISSUE INVOLVED IS SQUARELY C OVERED BY VARIOUS ORDERS OF TRIBUNAL INCLUDING IN ASSESSEES OWN CASE. 5. THE LEARNED DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE PLACED RELIANCE ON THE ORDER OF ASSESSING OFFICER. ITA NO S . 400 & 401 /P U N/20 1 6 RISHI STEEL & ALLOYS PVT. LTD. 3 6. BRIEFLY IN THE FACTS OF THE CASE THE ASSESSEE WAS ENGAGED IN THE BUS INESS OF MANUFACTURING OF M.S. STEEL INGOTS. THE ASSESSEE HA D FILED RETURN OF INCOME ON 06 . 1 0.201 0 DECLARING LOSS OF RS.67 36 593 / - . FURTHER THE ASSESSEE HAS SHOWN LOSS OF RS.71 13 240/ - UNDER THE HEAD BOOK PROFIT UNDER SECTION 115JB OF THE ACT. THE AS SESSING OFFICER HAD ASSESSED THE INCOME OF ASSESSEE ON ACCOUNT OF ALLEGED SUPPRESSION PRODUCTION AT RS. 80 84 670 / - AND ADDED THE SAME TO THE TOTAL INCOME OF ASSESSEE . THE CIT(A) IN TURN RELYING ON THE ORDER OF TRIBUNAL IN THE BUNCH OF APPEALS WITH LEAD O RDER IN BHAGYALAXMI STEEL ALLOYS PVT. LTD. VS. ACIT IN ITA NO.1292/PN/2012 RELATING TO ASSESSMENT YEAR 2009 - 10 ORDER DATED 15.07.2015 HAS DELETED THE ADDITION MADE BY THE ASSESSING OFFICER. THE REVENUE IS IN APPEAL AGAINST THE ORDER OF CIT(A). I N THE C ASE OF PRESENT ASSESSEE THERE WAS NO CASE OF ANY CLANDESTINE REMOVAL OF GOODS WITHOUT PAYMENT OF EXCISE DUTY BY THE EXCISE AUTHORITY OR EVEN BY THE INCOME TAX AUTHORITY DURING THE YEAR . FURTHER NO DEMAND HAD BEEN RAISED BY THE CCE FOR ALLEGED SUPPRESSIO N OF PRODUCTION OR ANY PETITION WAS MOVED BEFORE THE DGCEI OR THE SETTLEMENT COMMISSION. 7. 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 SUPPR ESSED 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 CLANDEST INE 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 ITA NO S . 400 & 401 /P U N/20 1 6 RISHI STEEL & ALLOYS PVT. LTD. 4 ADDITION MADE IN THE CASE OF VARIOUS OTHER UNITS AND EARLIER YEARS IN THE CASE OF ASSESSEE HAD MADE THE ADDITION IN THE HANDS OF ASSESSEE ON ACCOUNT OF ESTIMATION OF PROFIT ON SUPPRESSED PRODUCTION WHICH IN TURN WAS BASED ON CONSUMPTION OF ELECTRICITY. 8. 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 & 20 08 - 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 ADDITION ON BOTH COUNTS I.E. ADDITION MADE ON ACCOUNT OF SUPPRESSED PRODUCTION AND ALLEGED INVESTMENT IN PURCHA SES 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 COMMISSION WHICH IN TURN HAS ALSO BEEN ACCEPTED BY THE SETTLEMENT COMMISSION. MERELY BECAUSE THE SETTLEMENT COM MISSION ACCEPTED THE CLAIM OF THE ASSESSEE OF ADDITIONAL EXCISE DUTY PAYABLE ON THE SAID CLANDESTINE REMOVAL OF MATERIAL WITHOUT PAYMENT OF EXCISE DUTY DOES NOT ESTABLISH THE CASE OF THE REVENUE THAT THE SAID FIGURES OF ADDITIONAL PRODUCTION SHOULD BE UTIL IZED 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 DUTY WHICH IS TO BE ADDED AS INCOME IN THE HAN DS 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 DIRECTE D TO BE ADDED IN THE HANDS OF THE RESPECTIVE ASSESSEE IN RESPECTIVE YEARS. ACCORDINGLY WE DIRECT THE ASSESSING OFFICER TO VERIFY FROM THE RECORDS FOR THE RESPECTIVE YEARS AND INCLUDE THE ADDITIONAL INCOME ON ACCOUNT OF SUCH ADMITTED CLANDESTINE REMOVAL O F MATERIAL WITHOUT PAYMENT OF EXCISE DUTY BY THE ASSESSEE EITHER BEFORE THE SETTLEMENT COMMISSION OR BEFORE THE EXCISE AUTHORITIES IN THE HANDS OF THE ASSESSEE. WE HAVE HEARD BUNCH OF APPEALS AND IN SOME YEARS THERE IS NO ADMISSION OF CLANDESTINE REMOV AL OF MATERIAL WITHOUT PAYMENT OF EXCISE DUTY AND IN THOSE YEARS IN THE ABSENCE OF ANY EVIDENCE AND / OR ANY INVESTIGATION OR INQUIRY MADE ITA NO S . 400 & 401 /P U N/20 1 6 RISHI STEEL & ALLOYS PVT. LTD. 5 BY THE ASSESSING OFFICER AND WHERE THE ASSESSING OFFICER HAS FAILED TO COLLECT ADDITIONAL EVIDENCE NO ADDITION CAN B E 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 YEARS. FURTHER NO ADDITION CAN BE MADE IN THE HANDS OF THE ASSESSEE WHERE NO PETITION HAS BEEN FILED BY TH E ASSESSEE BEFORE THE SETTLEMENT COMMISSION IN ANY OF THE RESPECTIVE YEARS OR BEFORE THE EXCISE AUTHORITIES. 89. SINCE WE HAVE DELETED THE ADDITION IN THE HANDS OF ASSESSEE ON BOTH ACCOUNTS I.E. ADDITION MADE ON ACCOUNT OF ERRATIC CONSUMPTION OF ELECTRICI TY 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 NEXT 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. 9. 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 RECORD WE FIND THAT BY AN ERROR THE FINDINGS OF THE TRIBUNAL IN PARA 88 WITH SPECIAL REFERENCE TO FROM LI NE 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 PAS S 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 OFFERED ADDITIONAL INCOME ON THE SAID CLANDESTINE REMOVAL OF MATERIAL WITHOUT PAYMENT OF EXCISE DUTY WHICH I S 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 RESPECT IVE 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 FOR THE RESPECTIVE YEARS AND INCLUDE THE ADDITIONAL INCOME ON ACCOUNT OF S UCH 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 THE ASSESSEE. ACCORDINGLY WE DIRECT THE ASSESSING OFFICER TO VERIFY FRO M 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 FOR THAT YEAR WHICHEVER IS HIGHER ON VALUE OF SUCH ADMITTED CLANDESTINE REMOVAL OF MATERIAL WITHOUT PAYME NT 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 HAND S OF ASSESSEE IN THE RESPECTIVE YEARS. ITA NO S . 400 & 401 /P U N/20 1 6 RISHI STEEL & ALLOYS PVT. LTD. 6 1 0 . THE ISSUE ARISING BEFORE US IS IDENTICAL TO THE ISSUE BEFORE THE TRIBUNAL IN THE SHREE OM ROLLING MILLS PVT. LTD. VS. ADDL. CIT (SUPRA). FURTHER DURING THE YEAR UNDER CONSIDERATION NEITHER INVESTIGATION BY T HE DGCEI NOR ANY SUPPRESSED PRODUCTION HA D BEEN DETECTED AND ADMITTED BY THE ASSESSEE. FURTHER THE ASSESSEE HA D NOT MOVED ANY PETITION BEFORE THE SETTLEMENT COMMISSION OR ANY OTHER EXCISE AUTHORITIES. IN THE TOTALITY OF THE ABOVE SAID FACTS AND CIRCUMST ANCES 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. ADDL. CIT (SUPRA) IN ASSESSMENT YEARS 2006 - 07 AND 2007 - 08 VIDE ORDER DATED 15.07.2015 HAS DELETED THE ADDITI ON MADE IN THE HANDS OF ASSESSEE ITSELF ON ACCOUNT OF ALLEGED SUPPRESSION OF PRODUCTION. 11. FURTHER THE TRIBUNAL IN ASSESSEES OWN CASE IN ITA NOS.1467/PN/2012 AND 1524/PN/2012 RELATING TO ASSESSMENT YEAR 2009 - 10 VIDE CONSOLIDATED ORDER WITH LEAD ORDE R IN BHAGYALAXMI STEEL ALLOYS PVT. LTD. VS. ACIT (SUPRA) HAD DELETED THE ADDITION MADE ON ACCOUNT OF SUPPRESSED PRODUCTION. FOLLOWING THE SAME PARITY OF REASONING WE DISMISS THE GROUNDS OF APPEAL RAISED BY THE REVENUE . ITA NO S . 400 & 401 /P U N/20 1 6 RISHI STEEL & ALLOYS PVT. LTD. 7 1 2 . THE FACTS AND ISSUE S IN ITA NO . 401 /PUN/201 6 ARE IDENTICAL TO THE FACTS AND ISSUE S IN ITA NO. 400 /PUN/201 6 AND OUR DECISION IN ITA NO. 400 /PUN/201 6 SHALL APPLY MUTATIS MUTANDIS TO ITA NO. 401 /PUN/201 6 . 1 3 . IN THE RESULT BOTH THE APPEALS OF REVENUE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 30 TH DAY OF NOVEMBER 201 7 . SD/ - SD/ - (ANIL CHATURVEDI ) (SUSHMA CHOWLA ) / ACCOUNTANT MEMBER / JUDICIAL MEMBER / PUNE ; DATED : 30 TH NOVEMBER 201 7 . GCVSR / COPY OF THE ORDER IS FORWARDED TO : 1. / THE APPELLANT ; 2. / THE RESPONDENT; 3. ( ) / THE CIT (A) - 1 A URANGABAD ; 4. THE PR. CIT - 1 AURANGABAD ; 5. / DR B ITAT PUNE; 6. / GUARD FILE . / BY ORDER // TRUE COPY // / SR. PRIVATE SEC RETARY / ITAT PUNE