ACIT, Sonepat v. M/s Haryana Steel & Alloys Ltd., Sonepat

ITA 496/DEL/2016 | 2004-2005
Pronouncement Date: 14-11-2017 | Result: Dismissed

Appeal Details

RSA Number 49620114 RSA 2016
Assessee PAN AAACH4481R
Bench Delhi
Appeal Number ITA 496/DEL/2016
Duration Of Justice 1 year(s) 9 month(s) 12 day(s)
Appellant ACIT, Sonepat
Respondent M/s Haryana Steel & Alloys Ltd., Sonepat
Appeal Type Income Tax Appeal
Pronouncement Date 14-11-2017
Appeal Filed By Department
Tags No record found
Order Result Dismissed
Bench Allotted C
Tribunal Order Date 14-11-2017
Last Hearing Date 06-11-2017
First Hearing Date 06-11-2017
Assessment Year 2004-2005
Appeal Filed On 01-02-2016
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH C NEW DELHI BEFORE SHRI H.S. SIDHU JUDICIAL MEMBER AND SHRI L.P. SAHU ACCOUNTANT MEMBER I.T.A. NO. 496 TO 498 /DEL/201 6 A.YRS. : 2004-05 TO 2006-07 ACIT SONEPAT CIRCLE SONEPAT VS. HARYANA STEEL & ALLOYS LTD. GT ROAD MURTHAL SONEPAT (PAN: AAACH4481R) (ASSESSEE) (RESPONDENT) REVENUE BY : SH. ARUN KUMAR YADAV SR. DR ASSESSEE BY : NONE ORDER PER H.S. SIDHU : JM THE REVENUE HAS FILED THESE APPEALS AGAINST THE COM MON IMPUGNED ORDER DATED 30.11.2015 OF THE LD. CIT(A) ROHTAK RELEVANT TO ASSESSMENT YEARS 2004-05 TO 2006-07. SIN CE THE ISSUES INVOLVED IN THESE APPEALS ARE COMMON AND IDENTICAL EXCEPT THE DIFFERENCE IN FIGURE HENCE THE SAME WERE HEARD TO GETHER AND ARE BEING DISPOSED OF BY THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE BY DEALING WITH ITA NO. 496/DEL/2016 (A Y 2004-05). 2. THE FOLLOWING ARE THE COMMON GROUNDS:- 2 1. THE CIT(A) HAS ERRED IN LAW AND FACTS IN DELETING THE ADDITION OF RS. 2 34 58 802/- FOR THE AY 2004-05 WITHOUT ANY VERIFICATION AND REASON FOR ACCEPTING THE PLEA TAKEN BY THE ASSESSEE. THE ABOVE SAID ADDITION WAS MADE ON THE BASIS OF SHOW CAUSE NOTICE ISSUED BY CENTRAL EXCISE DEPARTMENT ALLEGING REMOVAL OF GOODS WITHOUT PAYMENT OF DUTY UNDER THE COVER OF TRADING INVOICES OF VARIOUS DUMMY NON-EXISTENT PARTIES. G.P. RATE OF 5.77% HAS RIGHTLY BEEN APPLIED BEING THE PEAK RATE SHOWN BY THE ASSESSEE. 2. THAT THE APPELLANT CRAVES FOR PERMISSION TO ADD DELETE OR AMEND THE GROUND OF APPEAL BEFORE OR AT THE TIME OF HEARING OF APPEAL. 3. THE BRIEF FACTS OF THE CASE ARE THAT RETURN OF INCOM E IN THIS CASE WAS FILED ON 29-09-2004 DECLARING NIL INCOME A FTER ADJUSTMENT OF B/F LOSS OF RS. 26 53 333/- WHICH WAS PROCESS ED UNDER SECTION 143(1) OF THE I.T. ACT ON 10.5.2005. NOTICE U/S 148 O F THE I.T. ACT WAS ISSUED TO THE ASSESSEE ON 29.03.2011 AFTER RECORDI NG REASONS WITHIN THE MEANING OF SECTION 147 OF THE I.T. ACT O N THE BASIS OF THE 3 INFORMATION RECEIVED FROM CENTRAL ECONOMICS INTELLIG ENCE BUREAU DELHI. THE NOTICE WAS DULY SERVED UPON THE ASSESSEE ON 30.03.2011. IN RESPONSE TO THIS NOTICE LETTER DATED 03.05.2011 AND 23.5.2011 WERE RECEIVED IN THIS OFFICE SEEKING ADJOURNMENT OF T HE CASE AND THE CASE WAS ADJOURNED ACCORDINGLY. FURTHER ON 13.06.20 11 THE AUTHORIZED REPRESENTATIVE ATTENDED AND REQUESTED FOR SUPPLYING OF THE REASONS RECORDED U/S 147 OF THE I.T. ACT. THE CO PY OF REASONS RECORDED WAS PROVIDED TO THE AR OF THE ASSESSEE. TH E AR OF THE ASSESSEE STATED THAT RETURN FILED ORIGINALLY BE TREAT ED AS RETURN FILED IN RESPONSE TO NOTICE U/S 148 OF THE I.T. ACT. NOTICES UNDER SECTION 143(2) AND 142(1) OF THE INCOME ACT 1961 WERE ISSU ED AND SERVED UPON THE ASSESSEE WITHIN THE STIPULATED TIME IN RESPO NSE TO WHICH THE AR OF THE ASSESSEE ATTENDED THE PROCEEDINGS AND SUB MITTED THE REQUISITE DETAILS/INFORMATION/ DOCUMENTS FROM TIME TO TIME. DURING THE ASSESSMENT PROCEEDINGS THE ASSESSEE INFORMED THAT THE WINDING UP ORDER OF THE COMPANY HAD BEEN PASSED AND STAY APP LICATION HAD ALSO BEEN DISMISSED BY THE COURT. DURING THE ASSESSME NT PROCEEDINGS THE ASSESSEE FILED A COPY OF THE SHOW CA USE NOTICE ISSUED BY THE CENTRAL EXCISE DEPARTMENT ALLEGING REMO VAL OF GOODS WITHOUT PAYMENT OF DUTY UNDER THE COVER OF TRADING INVO ICES OF VARIOUS DUMMY / NON-EXISTENT PARTIES AS PER ANNEXUR E-H OF THE SHOW CAUSE NOTICE AND THE SAME WAS ACCEPTED BY THE CUSTOM AND 4 CENTRAL EXCISE SETTLEMENT COMMISSION IN ITS ORDER. A FTER THAT ASSESSEE FILED A CIVIL WRIT PETITION NO. 11052 OF 200 9 WITH THE HONBLE DELHI HIGH COURT WHICH IS STILL PENDING FOR DECISION AGAINST THE ORDER OF THE SETTLEMENT COMMISSION. THE ASSESSEE COMPANY IS ENGAGED IN MANUFACTURING AND TRADING OF STAINLESS STE EL AND OTHER ALLOY STEEL BILLETS ROLLED PRODUCTS ETC. AND HAS SHO WN THE GP RATE @4.57 FOR YEAR ENDING 2002; @0.76 YEAR ENDING 2003; @5.77 FOR YEAR ENDING 2004 AND @5.35 FOR YEAR ENDING 2005. T HEREFORE THE AO GP RATE OF @5.77% BEING THE HIGHEST RATE HAS BEE N APPLIED TO THE ASSESSEE ON TOTAL UNACCOUNTED SALES AND ACCORDING LY ADDITION OF RS. 2 34 58 802/- HAS BEEN MADE TO THE DECLARED INCOM E OF THE ASSESSEE VIDE ORDER DATED 22.12.2011 PASSED U/S. 14 3(3)/147 OF THE I.T. ACT 1961. AGAINST THE AFORESAID ASSESSMENT ORDER ASSESSEE APPEALED BEFORE THE LD. CIT(A) ROHTAK WHO VIDE HIS COMMON IMPUGNED ORDER DATED 30.11.2015 HAS PARTLY ALL OWED THE APPEAL OF THE ASSESSEE. AGGRIEVED WITH THE ORDER OF THE LD. CIT(A) THE REVENUE IS IN APPEAL BEFORE THE TRIBUNAL. 4. LD. DR RELIED UPON THE ORDER OF THE AO AND REITE RATED THE CONTENTIONS RAISED IN THE GROUNDS OF APPEAL. 5. IN THIS CASE NOTICE OF HEARING TO THE ASSESSEE WA S SENT BY THE REGISTERED AD POST IN SPITE OF THE SAME ASSESSEE NOR ITS A UTHORIZED REPRESENTATIVE 5 APPEARED TO PROSECUTE THE MATTER IN DISPUTE NOR FI LED ANY APPLICATION FOR ADJOURNMENT. HOWEVER THE NOTICE WAS RECEIVED BACK WITH THE REMARKS THIS FACTORY HAS BEEN CLOSED AND NO NEW ADDRESS HAS BEE N FURNISHED BY THE ASSESSEE. KEEPING IN VIEW THE FACTS AND CIRCUMSTAN CES OF THE PRESENT CASE AND THE ISSUE INVOLVED IN THE PRESENT APPEAL WE ARE OF THE VIEW THAT NO USEFUL PURPOSE WOULD BE SERVED TO ISSUE NOTICE AGAIN AND A GAIN TO THE ASSESSEE THEREFORE WE ARE DECIDING THE PRESENT APPEAL EXPA RTE QUA ASSESSEE AFTER HEARING THE LD. DR AND PERUSING THE RECORDS. 6. WE HAVE HEARD THE LD. DR AND PERUSED THE RELEVANT RECORDS ESPECIALLY THE IMPUGNED ORDER. WE FIND THAT AO HAS FA ILED IN APPRECIATING THAT THE ASSESSEE IS INCURRING REGULAR LOSSES YEAR AFTER YEAR E.G. IN AY 2003-04 & 2005-06 2006-07 WHERE T HERE ARE NET LOSSES WHERE IN AY 2004-05 THE NET PROFIT IS MARGINA L BEING 0.01%. SO WITHOUT CONSIDERING ASSESSEES PAST HISTORY AND SU BSEQUENT HISTORY AND APPLYING GP RATE STRAIGHTWAY TO TURNOVER TO COMPUTE EXTRA PROFITS IS PURELY AN ADHOC AND HYPOTHETICAL E XERCISE AGAINST THE ECONOMIC CONDITIONS OF ASSESSEES BUSINESS. WE FURTHER FIND THAT NO INDEPENDENT ENQUIRY AND CORROBORATION MADE BY THE AO IN RESPECT OF THE FINDINGS OF THE EXCISE AUTHORITIES. TAKING A HOLISTIC VIEW OF THE ENTIRE CONSPECTUS OF THE MATTER WE ARE OF THE OPINION THAT THE AO HAS ERRED IN MAKING ADHOC AND ARBITRARY ADDITIONS TO 6 THE ASSESSEES TRADING RESULTS WHICH WAS RIGHTLY DELE TED BY THE LD. CIT(A) WHICH DOES NOT NEED ANY INTERFERENCE ON OUR PART HENCE WE UPHOLD THE ACTION OF THE LD. CIT(A) AND REJECT THE GROUND RAISED BY THE REVENUE. 6.1 FOLLOWING THE CONSISTENT VIEW AS TAKEN BY US IN ASS ESSMENT YEAR 2004-05 AS AFORESAID THE IDENTICAL GROUNDS RA ISED BY THE REVENUE IN RESPECT OF ASSESSMENT YEARS 2005-06 & 200 6-07 ARE ALSO REJECTED. 7. IN THE RESULT ALL THE 03 APPEALS FILED BY THE D EPARTMENT STAND DISMISSED. ORDER PRO NOUNCED IN THE OPEN COURT ON 14/11/2017. SD/- SD/- [L.P. SAHU] [H.S. SIDHU] ACCOUNTANT MEMBER JUDICIAL MEMBER DATE 14/11/2017 SRBHATNAGAR COPY FORWARDED TO: - 1. ASSESSEE - 2. RESPONDENT - 3. CIT 4. CIT (A) 5. DR ITAT TRUE COPY BY ORDER ASSISTANT REGISTRAR ITAT DELHI BENCHE S 7