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

ITA 4287/DEL/2009 | 2006-2007
Pronouncement Date: 08-01-2010 | Result: Allowed

Appeal Details

RSA Number 428720114 RSA 2009
Bench Delhi
Appeal Number ITA 4287/DEL/2009
Duration Of Justice 2 month(s) 2 day(s)
Appellant DCIT, New Delhi
Respondent M/s Midi Extrusion Ltd.,, New Delhi
Appeal Type Income Tax Appeal
Pronouncement Date 08-01-2010
Appeal Filed By Department
Order Result Allowed
Bench Allotted E
Tribunal Order Date 08-01-2010
Assessment Year 2006-2007
Appeal Filed On 05-11-2009
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH E DELHI BEFORE SHRI C.L. SETHI AND SHRI K.G. BANSAL ITA NO. 4287(DEL)/2009 ASSESSMENT YEAR: 2006-07 DEPUTY COMMISSIONER OF INCOME MID I EXTRUSION LTD. TAX CIRCLE 6(1) NEW DELHI. VS. 9009 D.B. GUPTA ROAD PAHAR GANJ NEW DELHI. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI G.S. SAHOTA SR. DR RESPONDENT BY: SHRI A.K. KHANNA CA ORDER PER K.G. BANSAL ; AM THE APPEAL OF THE REVENUE EMANATES FROM THE ORD ER OF THE CIT(APPEALS)-IX NEW DELHI PASSED ON 26.8.2009 IN APPEAL NO. 125/08-09 AND IT PERTAINS TO ASSESSMENT YEAR 2006-07. THE CORRESPONDING ASSESSMENT ORDER WAS FRAMED BY T HE DEPUTY COMMISSIONER OF INCOME-TAX CIRCLE 6(1) NEW DELH I ON 19.12.2008 UNDER THE PROVISIONS OF SECTION 143(3) OF THE IN COME-TAX ACT 1961. THE ONLY GROUND TAKEN BY THE REVENUE IS THAT ON T HE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT(APPEALS) ERRED IN DELETING THE ADDITION OF RS. 33 19 201/- MADE B Y THE AO BY RESTRICTING THE BURNING LOSS TO 0.75% AGAINST THE CLAIM OF SUCH LOSS AT 1.37%. IT IS ITA NO.4287(DEL)/09 2 MENTIONED THAT THE LD. CIT(APPEALS) FAILED TO TAKE INTO ACCOUNT THE FACT THAT THE ASSESSEE HAD ITSELF OFFERED IN THE C OURSE OF ASSESSMENT PROCEEDINGS THAT THE BURNING LOSS MAY BE RESTR ICTED TO 1%. 2. FROM THE IMPUGNED ORDER IT IS SEEN THAT TH E LD. CIT(APPEALS) TOOK INTO ACCOUNT THE CONCESSION GRANTED BY THE ASSESSEE IN THE COURSE OF ASSESSMENT PROCEEDINGS AS MENTIONED IN PARAGRA PH 5 OF HER ORDER. HOWEVER SHE RELIED ON THE APPELLATE ORDER FOR ASSESSMENT YEAR 2004- 05 PASSED BY HER PREDECESSOR IN WHICH THE LOSS AS CLAIMED WAS ALLOWED ON THE GROUNDS THAT -(I) THE ASSESSEE HAS TO MAINTAIN FULL RECORDS REGARDING RAW-MATERIALS AND FINISHED GOODS FOR T HE PURPOSE OF PAYMENT OF EXCISE DUTY. IF THE BURNING LOSSES WERE LOWER THE CENTRAL EXCISE DEPARTMENT WOULD HAVE NOTICED THE SAME; AND ( II) THERE IS A SUBSTANTIAL DIFFERENT IN BURNING LOSS IN THE MAT ERIAL RECEIVED ON JOB WORK FROM HINDALCO AS THEY SUPPLIED BILLETS WHICH AR E CONVERTED INTO EXTRUDED MATERIALS. THE BURNING LOSS WOULD B E MUCH HIGHER WHERE SCRAP IS USED AS RAW-MATERIAL AND CONVERTED INT O INGOTS AND BILLETS BEFORE CONVERTING THESE INTO EXTRUDED MATERIALS. ITA NO.4287(DEL)/09 3 3. THE CASE OF THE LD. DR WAS THAT THE RELI ANCE OF THE CIT(APPEALS) ON THE ORDER OF HER PREDECESSOR WAS MISPLACED WHEN THE ASSESSEE ITSELF STATED BEFORE THE AO THAT BUR NING LOSS MAY BE RESTRICTED TO 1%. THEREAFTER HE REFERRED TO THE ORDER O F THE AO WHERE IT WAS MENTIONED THAT SUCH A STATEMENT WAS MADE ON THE BASIS OF NORMS FIXED BY THE MINISTRY OF COMMERCE GOVERNMENT OF INDIA. THEREAFTER HE REFERRED TO THE FINDINGS OF THE LD. CIT(APPEALS) I N WHICH THE ADDITION OF RS. 33 19 201/- MADE BY THE AO ON THIS GROUND W AS DELETED. IT WAS HIS CASE THAT THE LD. CIT(APPEALS) COULD NOT HAVE MECHANICALLY FOLLOWED THE ORDER OF HER PREDECESSOR ESPECIALLY IN VIEW OF THE CONCESSION MADE BY THE ASSESSEE IN THE COURSE OF ASSESSMENT PROCEE DINGS. 3.1 IN REPLY THE LD. COUNSEL FOR THE ASSESSE E RELIED ON THE ORDER OF E BENCH OF DELHI TRIBUNAL IN THE CASE OF THE ASSESSEE IN ITA NO. 918(DEL)/2009 FOR ASSESSMENT YEAR 2004-05 DATE D 18.08.2009 A COPY OF WHICH WAS PLACED BEFORE US. IN PARAGRAPH 5 OF THE ORDER IT WAS MENTIONED THAT THE AO HAD NOT ASSIGNED EVEN A SINGLE REASON AS TO WHY THE MELTING LOSS SHOULD BE ALLOWED AT 0 .75% ONLY. IT WAS FURTHER MENTIONED THAT THE ASSESSEE HAD ALSO CARRIED OUT THE JOB WORK FOR HINDALCO IN WHICH THE MELTING LOSS WAS LOWER. IN ITS OWN PRODUCTS THE ITA NO.4287(DEL)/09 4 ASSESSEE CARRIED OUT A TWO-STAGE ACTIVITY I. E. -(I) CONVERSION OF ALLUMINIUM SCRAP INTO BILLETS AND (II) FINAL PRODUCTION FROM THE BILLETS. THE LOSS IN SUCH A CASE IS BOUND TO BE MORE. IN VIEW THEREOF THE APPEAL OF THE REVENUE WAS DISMISSED. IT WAS FURTH ER SUBMITTED THAT THE ASSESSEE HAD NOT STATED BEFORE THE AO THAT THE BURNING LOSS MAY BE RESTRICTED TO 1%. 4. WE HAVE CONSIDERED THE FACTS OF THE CASE A ND SUBMISSIONS MADE BEFORE US. THE AO HAS CLEARLY MENTIONED IN PARA GRAPH 2 OF HIS ORDER THAT THE ASSESSEE STATED THAT THE BURNING LOSS MAY BE RESTRICTED TO 1% AS IT IS ALLOWED BY THE NORMS FIXED BY THE MINISTRY OF C OMMERCE GOVERNMENT OF INDIA. THE ASSESSEE HAS NOT TAKEN UP ANY OBJ ECTION TO THIS FINDING IN THE APPEAL FILED BEFORE THE LD. CIT(APPEALS) NOR ANY ERROR IN THE STATEMENT WAS POINTED OUT TO THE AO AFTER RECEIPT OF T HE ASSESSMENT ORDER. THE ASSESSEE ALSO DID NOT FILE ANY CROSS OBJECTION ALTHOUGH THE LD. CIT(APPEALS) HAD MENTIONED ABOUT THE AFORESAID MATTER IN PARAGRAPH 5 OF HER ORDER. NO SUCH CONCESSION OR STATEMENT WAS MADE IN THE ORDER FOR ASSESSMENT YEAR 2004-05. ON THIS GROUND ALONE THE FACTS OF THE CASE FOR THAT YEAR AND THIS YEAR ARE DISTINGUISHAB LE. HOWEVER WE ARE OF THE VIEW THAT THE INTEREST OF JUSTICE WILL BE SE RVED IF THE MATTER IS RESTORED ITA NO.4287(DEL)/09 5 TO THE FILE OF THE AO SO THAT THE ISSUE IS DECI DED ON MERITS AFTER EXAMINING THE BOOKS OF ACCOUNT OF THE ASSESSEE AND THE NORMS FIXED BY MINISTRY OF COMMERCE GOVERNMENT OF INDIA. IT IS ORDERED ACCORDINGLY. BOTH THE PARTIES WILL BE FREE TO BRING EVIDENCE ON RECORD AS THOUGHT FIT AND THE AO SHALL THEREAFTER MAKE DE-NOVO ASS ESSMENT AFTER HEARING THE ASSESSEE. 5. IN THE RESULT THE APPEAL IS TREATED AS ALL OWED FOR STATISTICAL PURPOSES. THE ORDER WAS PRONOUNCED IN THE OPEN COURT ON 8 JANUARY 2010. SD/- SD/- (C.L. SETHI) (K.G.BANSAL) JUDICIAL MEMBER ACCOUNTANT MEMBER DATE OF ORDER: 8TH JANUARY 2010. SP SATIA COPY OF THE ORDER FORWARDED TO:- 1. MIDI EXTRUSIONS LTD. NEW DELHI. 2. DY. CIT CIRCLE 6(1) NEW DELHI. 3. CIT 4. CIT(A) NEW DELHI. 5. THE DR ITAT NEW DELHI. ASSISTANT REGISTRAR. ITA NO.4287(DEL)/09 6