Rajuri Steel Pvt. Ltd., Jalna V. Principal Commissioner of Income-tax : 1, Jalna

ITA 1026/PUN/2016

• Counselvise Citation: [2017] 126 COUNSELVISE.COM (IT) 7451 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 4 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-09-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 11-09-2017
• Assessment Year: 2011-2012
• Appeal Filed On: 16-05-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Revision of order; Difference of opinion; Change of opinion
• Section: 263

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A, PUNE . . . . , , BEFORE SHRI D.KARUNAKARA RAO, AM AND SHRI VIKAS AWASTHY, JM . / ITA NO. 1026/PUN/2016 / ASSESSMENT YEAR : 2011-12 M/S. RAJURI STEEL PVT. LTD., F-12, PHASE-II, ADDL.MIDC, JALNA 431 203 PAN : AABCR5546A . /APPELLANT V/S PR.CIT - 1, AURANGABAD . /RESPONDENT . / ITA NO. 1027/PUN/2016 / ASSESSMENT YEAR : 2011-12 META ROLLS & COMMODITIES PVT. LTD., GUT NO.48, ADDL.MIDC, PHASE-II, DAREGAON, JALNA 431 203 PAN : AADCM3473C . /APPELLANT V/S PR.CIT - 1, A URANGABAD . /RESPONDENT ASSESSEE BY : SHRI J.P. BAIRAGRA REVENUE BY : SHRI RAJEEV KUMAR, CIT / ORDER PER D. KARUNAKARA RAO, AM : THESE ARE TWO APPEALS FILED BY THE DIFFERENT ASSES SEES AGAINST TWO DIFFERENT REVISION ORDERS OF THE PR.CIT-1, AURANGAB AD, COMMONLY DATED 31-03-2016 FOR THE COMMON ASSESSMENT YEAR 2011-12. / DATE OF HEARING : 11.09.2017 / DATE OF PRONOUNCEMENT: 20.09.2017 2 ITA NOS.1026 & 1027/PUN/2016 M/S.RAJURI STEEL PVT. LTD. & M/S.META ROLLS & COMMODITIES PVT. LTD., 2. IN THE SAID ORDERS, WHILE SETTING ASIDE THE AOS ORDERS FOR BOTH YEARS, PR.CIT-1, AURANGABAD DIRECTED THE AO TO REFRAME THE ASSESSMENT ORDER AFTER VERIFICATION OF FACTS/SUBMISSIONS RELATING TO HIS O BSERVATIONS. THIS ISSUE RAISED IN BOTH THE APPEALS ARE IDENTICAL. THEREFOR E, FOR THE SAKE OF CONVENIENCE, THESE APPEALS ARE TAKEN UP FOR ADJUDIC ATION IN THIS COMPOSITE ORDER. WE SHALL NOW TAKE UP THE APPEAL FILED BY M/ S. RAJURI STEEL PVT. LTD. ITA NO. 1026/PUN/2016 M/S. RAJURI STEEL PVT. LTD. , (RAJURI) : 3. BRIEFLY MENTIONING THE FACTS OF THE CASE, LD. CO UNSEL FOR THE ASSESSEE SUBMITTED THAT THE ASSESSEE IS ENGAGED IN MANUFACTU RING OF M.S. TMT BARS, JOB WORK, TRADING IN SCRAP, STRUCTURAL STEEL ETC. THERE WAS DISCOVERY OF CONCEALMENT OF EXCISE DUTY BY THE EXCISE DEPARTMENT BY VIRTUE OF AN ACTION OF DGCEI AND ASSESSEE IS FOUND REMOVING THE GOODS F ROM THE PREMISES CLANDESTINELY AND CAUSING EXCISE DUTY AND INCOME TA X LOSS FOR THE GOVERNMENT. ADMITTEDLY, IT IS THE CASE THAT RAJURI COMPANY REMOVED GOODS CLANDESTINELY WORTH OF 6987.37 METRIC TONNES AND SO LD THE SAME TO VARIOUS PARTIES OUTSIDE THE BOOKS AND CAUSED LOSS OF INCOME TAX ON SUCH SALES. REGARDING LOSS OF EXCISE DUTY, ASSESSEE FILED AN AP PLICATION BEFORE THE SETTLEMENT COMMISSION AND THE ASSESSEE ADMITTED TO PAY THE EVADED EXCISE DUTY. THESE FACTS WERE AVAILABLE TO THE AO AT THE T IME OF THE PROCEEDINGS OF THE REGULAR ASSESSMENT. DURING THE REGULAR ASSESSM ENT PROCEEDINGS U/S.143(3) OF THE ACT, BASED ON THE DATA SUBMITTED BY THE ASSESSEE, AO CALCULATED THE TAXABLE INCOME RELATABLE TO THE SAID CONCEALED SALES WORTH 6987.37 MT OF TMT BARS. ACCORDINGLY, AO MADE ASSES SMENT BY MAKING ADDITION OF RS.19,33,180/-. THE MATTER ATTAINED FI NALITY TILL THE TIME THE PR.CIT INVOKED THE PROVISIONS OF SECTION 263 OF THE ACT AND SET ASIDE THE ASSESSMENT ORDER OF THE AO WITH THE DIRECTION TO RE-FRAME THE ASSESSMENT AS 3 ITA NOS.1026 & 1027/PUN/2016 M/S.RAJURI STEEL PVT. LTD. & M/S.META ROLLS & COMMODITIES PVT. LTD., PER THE LAW AFTER CONSIDERING PROPER FACTS AND SUBM ISSIONS OF THE ASSESSEE AND ALSO AFTER VERIFYING HIS OBSERVATIONS (PARA 4 OF THE REVISION ORDER). BRIEFLY, IT IS THE CASE OF THE PR.CIT THAT THE AO C OMPLETED THE ASSESSMENT WITHOUT PROPER VERIFICATION OF DETAILS, WITHOUT OBT AINING THE DETAILS REGARDING THE RAW MATERIAL, COST OF MANUFACTURING THE GOODS O F 6987.37 METRIC TONNES OF TMT BARS PROPER DETERMINATION OF CONCLUDED INCOM E RELATABLE TO THE SAID CLANDESTINELY REMOVED GOODS. PR.CIT IS CRITICAL OF THE WAY AO ACCEPTED THE CALCULATIONS AS SUBMITTED BY THE ASSESSEE. IN THE REVISION ORDER, PR.CIT DISCUSSED THE FACTS ON THE WAY THAT THE ASSESSEE CL ANDESTINELY REMOVED THE GOODS IN THE EARLIER YEARS TOO. IN FACT, THE SAID ISSUE WAS SUBJECT MATTER OF ADJUDICATION BEFORE THE PUNE BENCH OF THE TRIBUNAL IN THE EARLIER YEARS I.E. 2006-07, 2007-08 AND 2008-09 TOO. ON COMPARABLE FA CTS, IN THE SAID ASSESSMENT YEARS, THE TRIBUNAL HELD THAT CALCULATIN G THE ADDITIONAL INCOME RELATABLE TO THE SAID CLANDESTINELY REMOVED GOODS S HOULD BE CALCULATED APPLYING THE FLAT RATE OF 4% OF THE SALES OF SAID R EMOVED GOODS. IN EFFECT, IT IS THE ALLEGATION OF THE PR.CIT THAT THE AO DID NOT CONDUCT NECESSARY VERIFICATION BEFORE COMPLETING THE ASSESSMENT AND T HEREFORE, THE SAID ASSESSMENT ORDER NEEDS TO BE SET ASIDE FOR VERIFICA TION AND REFRAMING THE ASSESSMENT ORDER. REFERENCE TO THE SAID ORDERS OF THE TRIBUNAL FOR EARLIER YEARS IS NOTICEABLE IN THE PARA NO.III(B)-PAGE 5 OF THE REVISION ORDER OF THE PR.CIT. 4. AGGRIEVED WITH THE ABOVE REVISION ORDER OF THE P R.CIT-1, AURANGABAD THE ASSESSEE FILED AN APPEAL BEFORE THE TRIBUNAL AN D RAISED VARIOUS ARGUMENTATIVE GROUNDS WHICH INCLUDE THE ONE RAISED WITHOUT PREJUDICE RELATING TO THE CIT(A)S FAILURE IN NOT IMPLEMENTIN G THE TRIBUNALS ORDER OF THE PAST ASSESSMENT YEARS AND THE DIRECTIONS THEREIN. IT IS THE CASE OF THE 4 ITA NOS.1026 & 1027/PUN/2016 M/S.RAJURI STEEL PVT. LTD. & M/S.META ROLLS & COMMODITIES PVT. LTD., ASSESSEE THAT THE DIRECTIONS OF THE PR.CIT RELATING TO VERIFICATION OF THE RAW MATERIAL CONSUMED FOR PRODUCTION OF REMOVED STOCK O F 6987.37 MTS OF TMT BARS AND OTHER COST RELATED DETAILS ARE NOT EASY TO OBTAIN FOR AOS VERIFICATION. IN THIS REGARD, ONE HAS TO GO FOR ES TIMATIONS AS DONE BY THE ASSESSEE ALREADY BEFORE THE AO DURING ASSESSMENT PR OCESSING US.143(3) OF THE ACT. AFTER THE SAID CALCULATIONS ONLY, THE ASS ESSEE DETERMINED THE ESCAPED INCOME OF RS.19,33,180/- AO ACCEPTED THE SA ME AND COMPLETED THE ASSESSMENT. THEREFORE, TO THAT EXTENT, IT IS THE C ASE OF EXISTENCE OF AN OPINION OF THE AO AT THE TIME OF MAKING OF ASSESSME NT. 5. FURTHER, BRINGING OUR ATTENTION TO THE GROUNDS O F THE APPEAL, LD. COUNSEL FOR THE ASSESSEE DREW OUR ATTENTION TO GROU ND NO.8 AND SUBMITTED THAT THE PR.CIT-1, AURANGABAD ERRED IN NOT FOLLOWIN G THE ORDER OF THE TRIBUNAL SO FAR AS UNACCOUNTED GOODS WHICH ARE CLAN DESTINELY REMOVED FOR UNACCOUNTED SALES AT THE BACK OF THE EXCISE AND INC OME TAX DEPARTMENTS. DEVIATING FROM THE SAID GROUNDS OF APPEAL, IT IS TH E ARGUMENT OF THE LD. AR FOR THE ASSESSEE THAT SO LONG AS THE ADDITION IS RE STRICTED TO THE GROSS PROFIT RATE OF 4% OF SUCH CLANDESTINELY REMOVED GOODS OF 6 987.37 MTS OF TMT BARS FROM THE PREMISES OF THE ASSESSEE, ASSESSEE WILL NO T HAVE ANY GRIEVANCE AGAINST THE REVISION ORDER OF THE CIT, EVEN IF IT M EANS CONFIRMING OF THE REVISION ORDER OF THE CIT. LD.AR SUBMITTED THAT TH E ASSESSEE ACCEPTED THE DECISION OF THE TRIBUNAL RELATING TO ADOPTING 4% OF THE SALES RELATING TO THE SAID REMOVED GOODS IN THE EARLIER YEARS. THUS, ACC ORDING TO AR THIS ASPECT OF MANNER OF TAXING THE RELATABLE INCOME HAS REACHE D FINALITY AND NO APPEAL IS FILED BEFORE THE HONBLE HIGH COURT ON THIS ISSU E. 6. IT IS THE SUBMISSION OF THE LD. AR THAT SO LONG AS THE TRIBUNALS ORDER RELATING TO THE DIRECTION OF ADOPTING THE GROSS PRO FIT OF 4% ON THE 5 ITA NOS.1026 & 1027/PUN/2016 M/S.RAJURI STEEL PVT. LTD. & M/S.META ROLLS & COMMODITIES PVT. LTD., SUPPRESSED PRODUCTION IS FOLLOWED BY THE REVENUE, LD. AR FOR THE ASSESSEE SHALL NOT PRESS THE OTHER LEGAL GROUNDS, I.E. QUEST IONING THE VALIDITY OF THE JURISDICTION OF THE PR.CIT U/S.263 OF THE ACT. THI S CONSTITUTES A CONCESSION THE AR WANTS TO GRANT TO END THE LITIGATION. IN OT HER WORDS, THIS IS THE CASE OF LD. AR FOR THE ASSESSEE THAT ORDER U/S.263 OF TH E ACT IS ACCEPTABLE IF THE DIRECTION GIVEN IN PARA 4 OF THE REVISION ORDER IS AMENDED RESTRICTING THE ADDITION TO THE EXTENT OF 4% OF THE SAID GOODS AS D IRECTED BY THE TRIBUNAL IN THE EARLIER ASSESSMENT YEARS. 7. IN ALTERNATIVE TO THE ABOVE CONCESSION, LD.AR SU BMITTED THAT IT IS THE CASE OF CHANGE OF OPINION. ON THIS ISSUE OF FORMAT ION OF AN OPINION BY THE AO ON THE ISSUE UNDER CONSIDERATION, BRINGING OUR A TTENTION TO THE LETTER OF CORRESPONDENCE BETWEEN THE ASSESSEE AND THE AO DURI NG THE REGULAR ASSESSMENT PROCEEDINGS, LD. AR FOR THE ASSESSEE SUB MITTED THAT THE AO EXAMINED THE SAID ISSUE RELATING TO THE FACT OF REM OVAL OF GOODS CLANDESTINELY FROM THE PREMISES AND THE EVASION OF INCOME TAX THE REOF. AFTER DUE VERIFICATION, AO ACCEPTED THE ADDITIONAL INCOME OF RS.19,33,180/- IN THE CASE OF M/S. RAJURI STEEL PVT. LTD. AND RS.9,54,182/- IN THE CASE OF M/S. META ROLLS & COMMODITIES PVT. LTD. THEREFORE, IT IS THE CASE OF CHANGE OF OPINION AND THE ORDER OF THE CIT CONSTITUTES ANOTHER PLAUSIBLE OPINION. IN THIS CASE, CIT THRUST HIS OPINION SUBSTITUTING THAT OF THE AO. TH E SAME IS NOT PERMITTED LEGALLY U/S.263 OF THE ACT. THUS, ACCORDING TO THE LD.AR OF THE ASSESSEE, THE REVISION ORDER CONSTITUTES AN INVALID AND UNSUSTAIN ABLE ONE UNDER THE LAW. 8. PER CONTRA, LD. DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE REBUTTED THE ARGUMENTS OF THE LD. COUNSEL FOR THE A SSESSEE STATING THAT, THE AO DID NOT CONDUCT VERIFICATION PROPERLY INTO THE B ASIC FACTS RELATING TO RAW MATERIAL, INVESTMENTS OF FUNDS NEEDED FOR PRODUCTIO N OF THE UNACCOUNTED 6 ITA NOS.1026 & 1027/PUN/2016 M/S.RAJURI STEEL PVT. LTD. & M/S.META ROLLS & COMMODITIES PVT. LTD., STOCKS/GOODS REMOVED CLANDESTINELY. FURTHER, AO DI D NOT FOLLOW THE DECISION OF HIS PREDECESSORS ON THE SAME ISSUE, I.E. INCOME ATTRIBUTABLE TO THE CLANDESTINELY MANUFACTURED GOODS AND THEIR REMOVAL TO AVOID PAYING EXCISE DUTY AND THE INCOME TAX. THE FINDINGS OF THE AO IN THE ASSESSMENT ORDERS FOR A.YRS. 2006-07, 2007-08 AND 2008-09, THE FINDIN GS OF THE CIT(A) AND TRIBUNAL ORDER VIDE ITA NOS. 289 TO 291/PN/2012 FOR THE SAID ASSESSMENT YEARS AND ITA NOS. 426 TO 428/PN/2012, ARE CONVENIE NTLY IGNORED BY THE AO WHILE ACCEPTING THE ADDITIONAL INCOME OF RS.19,33,1 80/- IN THE CASE OF M/S. RAJURI STEEL PVT. LTD. AND RS. 9,54,182/- IN THE CA SE OF META ROLLS & COMMODITIES PVT. LTD. HOWEVER, WITHOUT CONCEDING, LD. DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE FAIRLY AGREED TO THE FACT OF THE ISSUE RELATING TO THE TAXATION OF INCOME RELATABLE TO THE SAID GOO DS REMOVED CLANDESTINELY WAS SCRUTINIZED BY THE AO IN THE REGULAR ASSESSMENT PROCEEDINGS. THUS, LD. DR FOR THE REVENUE RELIED HEAVILY ON THE ORDER OF T HE PR.CIT-1, AURANGABAD AND SUBMITTED THAT THE AOS ORDER IS PREJUDICIAL TO THE INTEREST OF THE REVENUE AND THEREFORE, THE PR.CITS OBSERVATIONS AN D DIRECTIONS ARE VALID AND SUSTAINABLE. IT IS THE ARGUMENT OF THE LD. DR FOR THE REVENUE THAT THE AOS ORDER SUFFERS FROM ERRONEOUS ASSUMPTION OF FAC TS SO FAR AS THE REQUIREMENT OF COMPUTING THE RELATED ADDITIONAL INC OME CORRECTLY. 9. THEREFORE, WE FIND IT IS A FACT THAT THE ISSUE O F TAXATION OF INCOME RELATABLE TO THE GOODS REMOVED AND SOLD CLANDESTINE LY IS NOT SPECIFIC TO THE CURRENT YEAR ONLY AND IT IS RELEVANT FOR MORE ASSES SMENT YEARS I.E. FROM A.Y. 2006-07 ONWARDS. ALREADY, THERE IS FINDING OF THE AOS FOR THE ASSESSMENT YEARS, I.E. 2006-07 TO 2008-09 IN EXISTENCE AT THE RELEVANT POINT OF TIME. ON THIS FACTUAL MATRIX, WE NEED TO EXAMINE IF THE REGU LAR ASSESSMENT ORDER OF THE AO CONSTITUTES AN ERRONEOUS ONE IN SO FAR AS PR EJUDICIAL FOR THE INTEREST 7 ITA NOS.1026 & 1027/PUN/2016 M/S.RAJURI STEEL PVT. LTD. & M/S.META ROLLS & COMMODITIES PVT. LTD., OF REVENUE AND IF THE AO HAS TAKEN A VIEW IN THOSE PROCEEDINGS ON THIS ISSUE. IF THE AO, IN THE REGULAR ASSESSMENT PROCEE DINGS AND THE CIT, IN THE REVISION PROCEEDINGS, SHOULD HAVE FOLLOWED THE TRIB UNALS DIRECTION FOR ADOPTING 4% AS THE GROSS PROFIT FOR TAXATION OF SUC H CLANDESTINE SALES. CIT, ALTHOUGH REFERRED TO THE SAME IN HIS ORDER, IGNORED THE SAME AT THE TIME OF DIRECTING THE AO FOR FRESH ASSESSMENT WITH CONDITIO NS. FURTHER, WE NEED TO ADDRESS TO THE ISSUES IF THE EXISTENCE OF AN OPINIO N OF AO PREVAILS OVER THE FACTUAL ERRORS IN THE ORDERS OF THE AO OF THE REGUL AR ASSESSMENT. THEREFORE, THE FOLLOWING ISSUES ARE FOUND TO BE ADDRESSED BY U S TO ADJUDICATE THE GROUND OF THE APPEAL. THEY ARE: 1. WHETHER THE AO FORMED OPINION DURING THE TIME OF REGULAR ASSESSMENT PROCEEDINGS AND IF THE AOS ORDER IS ERR ONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE AS HELD BY T HE CIT? 2. WHETHER THE REVISION ORDER OF THE AO IS SUSTAINA BLE IN ITS ENTIRETY AND IF THE DIRECTION OF THE CIT GIVEN IN P ARA 3 OF HIS ORDER REQUIRES ASSESSMENT? 10. IN THE PRECEDING PARAGRAPHS, WE MADE REFERENCE TO THE QUESTIONNAIRE AND RELATED CORRESPONDENCE IN THE PRECEDING PARAGRA PHS OF THIS ORDER. CONSIDERING THE CORRESPONDENCE EXISTED BETWEEN THE AO AND THE ASSESSEE ON THE SAME ISSUE, WE FIND THE ABOVE CORE ISSUE WAS SCRUTINIZED AT LENGTH AND ADDITION WAS MADE BY THE AO IN THE REGULAR ASSE SSMENT. THAT IS POSSIBLE ONLY WHEN THE AO FORMED AN OPINION ON THAT ISSUE. FROM THAT POINT OF VIEW, THE OPINION EXISTS IN PRINCIPLE. HOWEVER, IN OUR VIEW, THE SAME SUFFER FROM ERRORS. ERROR INCLUDES FAILURE OF AO T O BRING TO TAX THE INCOME AT LEAST EQUIVALENT OF 4% OF THE SALES, IF NOT MORE RE LATABLE TO THE GOODS REMOVED CLANDESTINELY. IN THAT SENSE OF THE MATTER , THE AOS ORDER IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENU E. TAXATION OF INCOME OF 8 ITA NOS.1026 & 1027/PUN/2016 M/S.RAJURI STEEL PVT. LTD. & M/S.META ROLLS & COMMODITIES PVT. LTD., RS.19,33,180/- IS LESS THAN THE EQUIVALENT OF 4% OF THE SALES RELATABLE TO THE CLANDESTINE SALES. THEREFORE, IN PRINCIPLE, WE FIN D PR.CIT IS JUSTIFIED IN SETTING ASIDE THE AOS ORDER AS ERRONEOUS AND PREJUDICIAL T O THE INTEREST OF REVENUE. FURTHER, IT IS RELEVANT TO MENTION THAT THE LD. AR FOR THE ASSESSEE HAS FAIRLY SUBMITTED/GIVEN THE CONCESSION IN STATING THAT HE I S NOT PRESSING THE LEGAL ISSUES SO LONG AS THE DIRECTION OF THE AO IS MODIFI ED IN THE MANNER NARRATED ABOVE. 11. FURTHER, IT IS THE CASE OF THE PR.CIT THAT, IN TAXING MERE INCOME OF RS.19,33,180/- IN THE CASE OF M/S. RAJURI STEEL PVT . LTD. AND RS. 9,54,182/- IN THE CASE OF META ROLLS & COMMODITIES PVT. LTD., RES PECTIVELY FOR ASSESSMENT YEAR 2011-12, THE AOS ORDERS ARE FACTUALLY ERRONEO US IN SO FAR CASE PREJUDICIAL TO THE INTEREST OF THE REVENUE. WHEN T HE ASSESSEE CLANDESTINELY REMOVED 6987.37 MT OF TMT BARS IN THE CASE OF M/S. RAJURI STEEL PVT. LTD. AND 3281.13 MT OF TMT BARS IN THE CASE OF META ROLL S & COMMODITIES PVT. LTD., OF THE TAXING ADDITIONAL INCOME OF RS.19,33,1 80/- IN THE CASE OF M/S. RAJURI STEEL PVT. LTD. AND RS. 9,54,182/- IN THE CA SE OF META ROLLS & COMMODITIES PVT. LTD., (SUPRA), WITHOUT CONDUCTING PROPER ENQUIRIES AMOUNTS TO ERRONEOUS ORDERS BY THE AOS. AS PER THE CIT, TH E TOTAL OF THE CLANDESTINE SALES OF SUCH REMOVED GOODS WORKS OUT TO CRORES OF RUPEES. IN OUR VIEW, IN PRINCIPLE, THERE IS A CASE FOR SUSTAINING THE REVIS ION ORDER OF THE PR.CIT AND THEREFORE, THE DECISION IS AGAINST THE ASSESSEE. T HE FACT THE AO FORMED AN OPINION DOES NOT HELP THE ASSESSEE AND THE OPINION, BASED ON ERRONEOUS ASSUMPTION OF FACT DOES NOT MAKE THE ORDER OF PR.CI T UNSUSTAINABLE. 12. CONSIDERING THE CONCESSION GIVEN BY THE LD. AR FOR THE ASSESSEE AND IN VIEW OF THE EXISTING ORDER OF THE TRIBUNAL, WE A RE OF THE OPINION THAT IN PRINCIPLE THE ORDER OF THE PR.CIT IS SUSTAINABLE AN D THE SAME IS VALID. 9 ITA NOS.1026 & 1027/PUN/2016 M/S.RAJURI STEEL PVT. LTD. & M/S.META ROLLS & COMMODITIES PVT. LTD., HOWEVER, REGARDING THE DIRECTION IN THE REVISION OR DER, THE PR.CIT FAILED TO GRANT PROPER DIRECTIONS RELATING TO THE EXTENT OF L OSS OF REVENUE. THE SAID BECOMES OBVIOUSLY EVIDENT, MORESO, WHEN THE TRIBUNA L IS CATEGORICAL IN QUANTIFYING THE EXTENT OF TAX LOSS. THEREFORE, ON HEARING BOTH THE PARTIES, WE UNDERSTAND THAT THE ORDER OF THE PR.CIT-1, AURAN GABAD IS SUSTAINABLE IN PRINCIPLE, AS THE AO ERRED IN MAKING ADDITION OF ON LY RS.19,33,180/- INSTEAD OF ADOPTING THE FIGURE OF 4% OF THE SUPPRESSED QUAN TITY OF MANUFACTURING OF 6987.37 MT OF TMT BARS IN THE CASE OF M/S. RAJURI S TEEL PVT. LTD. AND RS.9,54,182/- IN THE CASE OF META ROLLS & COMMODITI ES PVT. LTD. 13. PR.CIT REFERRED TO THE ORDER OF THE TRIBUNAL AN D THE FINDING OF TRIBUNAL ON THE EXTENT OF LOSS OF REVENUE RELATABLE TO THE G OODS REMOVED CLANDESTINELY FROM THE PREMISES AT THE BACK OF THE EXCISE/INCOME-TAX DEPARTMENTS. TRIBUNAL HELD THAT IT IS REASONABLE T O RESTRICT THE ADDITION TO 4% OF SUCH GOODS REMOVED CLANDESTINELY. WHEN THE F ACTS OR OPERATION OF ASSESSEE ARE SIMILAR, THE PR.CIT SHOULD HAVE GIVEN A CATEGORICAL FINDING/DIRECTION TO THE AO TO RESTRICT THE 4% OF S UCH GOODS REMOVED CLANDESTINELY IN BOTH THE CASES UNDER CONSIDERATION . 14. HOWEVER, THE DIRECTION BY THE PR.CIT AS GIVEN I N PARA 4 OF HIS ORDER IS REQUIRED TO BE AMENDED SINCE THERE IS DIRECTION EXI STING ON THE EXTENT OF LOSS OF REVENUE BY VIRTUE OF THE ORDER OF THE TRIBUNAL I N THE EARLIER ASSESSMENT YEARS IN ITA NOS. 289 TO 291/PN/2012 AND ITA NOS. 4 26 TO 428/PN/2012 FOR THE ASSESSMENT YEARS 2006-07 TO 2008-09 ORDER DATED 05-08-2015 R.W. CORRIGENDUM ORDER DATED 17-02-2016. WE PROCEED TO EXTRACT THE RELEVANT PARAGRAPH WHICH READS AS UNDER : 10 ITA NOS.1026 & 1027/PUN/2016 M/S.RAJURI STEEL PVT. LTD. & M/S.META ROLLS & COMMODITIES PVT. LTD., 3. ON PERUSAL OF THE RECORD, WE FIND THAT BY AN ER ROR, THE FINDINGS OF THE TRIBUNAL IN PARA 14 WITH SPECIAL REFERENCE TO FROM LINE 5 TO 7, NEEDS CORRECTION TO THE EXTENT THAT THE ADDITIONAL INCOME TO BE ADDED IN THE HANDS OF THE ASSESSEE IS EQUIVALENT TO PROFITS ON SUPPRES SED PRODUCTION @4% OR ACTUAL GP RATE DECLARED BY THE ASSESSEE WHICHEVER W AS HIGHER. IN VIEW THEREOF, WE PASS THIS CORRIGENDUM ORDER AND THE PAR A 14, I.E. FROM LINE 45 TO 7 WOULD NOW BE SUBSTITUTED BY FOLLOWING PARA : 14. HOWEVER, THE AO IS DIRECTED TO INCLUDE ADDITIO NAL INCOME IN THE HANDS OF ASSESSEE ON ACCOUNT OF CLANDESTINE REM OVAL OF GOODS WITHOUT PAYMENT OF EXCISE DUTY AS ADMITTED BY ASSES SEE BEFORE DCGEI, AURANGABAD. ACCORDINGLY, WE DIRECT THE ASSE SSING OFFICER TO VERIFY FROM THE RECORDS FOR THE RESPECTIVE YEARS AN D 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 MA TERIAL WITHOUT PAYMENT OF EXCISE DUTY, BY THE ASSESSEE BEFORE THE EXCISE AUTHORITIES. THUS, THE ASSESSEE IS DIRECTED TO FIL E THE REQUISITE DETAILS OF PROCEEDINGS BEFORE THE EXCISE AUTHORITIES, BEFOR E THE ASSESSING OFFICER IN ORDER TO COMPUTE THE ADDITIONAL INCOME I N THE HANDS OF ASSESSEE IN THE RESPECTIVE YEARS. 4. CONSEQUENTLY, THE CORRIGENDUM IS PASSED IN THE C ASE OF THE RESPECTIVE ASSESSEE. 15. HOWEVER, REGARDING THE DIRECTION GIVEN IN PARA 4 OF THE REVISION ORDER OF THE PR.CIT, WE FIND THAT THE DETAILS REQUIRED BY THE PR.CIT ARE NOT POSSIBLE TO BE FILED BY THE ASSESSEE RELATING TO THE SAID GO ODS CLANDESTINELY REMOVED IN BOTH THE CASES. ON THE ISSUE OF ADDITIONAL INCO ME, WE DIRECT THE AO TO AMEND HIS ORDER AND QUANTIFY THE LOSS OF REVENUE IN CONNECTION WITH THE ORDER OF THE TRIBUNAL IN EARLIER ASSESSMENT YEARS, IF THE FACTS ARE SAME. 16. WITH THE SAID AMENDMENT, WE ARE OF THE OPINION THAT GROUND NO.8 RAISED BY THE ASSESSEE IS ALLOWED AND OTHER GROUNDS STAND DISMISSED. ACCORDINGLY, THE GROUND NO.8 RAISED BY THE ASSESSEE IS ALLOWED. RESTS OF THE GROUNDS OF THE ASSESSEE ARE DISMISSED. ACCORDINGLY , THE GROUNDS RAISED BY THE ASSESSEE ARE PARTLY ALLOWED. 17. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PA RTLY ALLOWED. 11 ITA NOS.1026 & 1027/PUN/2016 M/S.RAJURI STEEL PVT. LTD. & M/S.META ROLLS & COMMODITIES PVT. LTD., ITA NO. 1027/PUN/2016 META ROLLS & COMMODITIES PV T. LTD. : 18. BRIEFLY STATED RELEVANT FACTS ARE THAT THE ASSE SSEE IS A PRIVATE LIMITED COMPANY AND ENGAGED IN THE BUSINESS OF MANUFACTURIN G OF M.S. BILLETS AND TMT BARS. ASSESSEE ELECTRONICALLY FILED THE RETURN OF INCOME ON 30-09-2011 DECLARING TOTAL INCOME OF RS.4,58,58,513/-. LIKE I N THE CASE OF (RAJURI), THERE WAS DISCOVERY/DUTY EVASION BY THE EXCISE DEPARTMENT IN RESPECT OF MANUFACTURE OF GOODS OF 3281.13 METRIC TONNES, WHIC H WERE REMOVED CLANDESTINELY AND SOLD TO VARIOUS PARTIES. THE MAT TER WENT TO THE SETTLEMENT COMMISSION AND THE ASSESSEE ADMITTED TO THE SAID AL LEGATION OF THE DGCEI AND OFFERED TO PAY THE RELEVANT EXCISE DUTY IN ORDE R TO BUY PEACE OF MIND WITH THE SAID DEPARTMENT. THERE IS INCOME TAX ANGL E TO THESE GOODS. THEREFORE, AO VIDE HIS ORDER DATED 18-06-2013 MADE ADDITION OF RS.9,54,182/- AS PER THE CALCULATION PROVIDED BY TH E ASSESSEE. IN THIS APPEAL ALSO, THE PR.CIT INVOKED THE PROVISIONS OF SECTION 263 OF THE ACT SETTING ASIDE THE ASSESSMENT ORDER OF THE AO WITH THE DIRECTION T O RE-FRAME THE ASSESSMENT AS PER THE LAW AFTER CONSIDERING PROPER FACTS, SUBMISSIONS OF THE ASSESSEE AND ALSO AFTER VERIFYING THE OBSERVATIONS OF PR.CIT. SIMILAR ISSUE WAS THE SUBJECT MATTER OF ADJUDICATION BEFORE THE P UNE BENCH OF THE TRIBUNAL AND THE SAME WAS DISCUSSED IN THE PRECEDING PARAGR APHS OF THIS ORDER IN CONNECTION WITH THE APPEAL BY RAJURI. TRIBUNAL HEL D THAT CALCULATING THE ADDITIONAL INCOME RELATABLE TO THE SAID CLANDESTINE LY REMOVED GOODS AMOUNTING TO 3281.13 METRIC TONNES APPLYING THE FLA T RATE OF 4% OF THE SAID GOODS IS REASONABLE. IGNORING THE SAID FINDINGS OF THE TRIBUNAL, AO/PR.CIT, DECIDED THE ISSUE DIFFERENTLY. PR.CIT HELD THAT OR DER OF THE AO IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE. 12 ITA NOS.1026 & 1027/PUN/2016 M/S.RAJURI STEEL PVT. LTD. & M/S.META ROLLS & COMMODITIES PVT. LTD., 19. AGGRIEVED WITH THE SAID ORDER OF THE PR.CIT-1, AURANGABAD, THE ASSESSEE IS IN APPEAL BEFORE US. 20. BOTH THE ASSESSEES AUTHORISED REPRESENTATIVE AN D DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE RELIED ON THEIR RESP ECTIVE ARGUMENTS MADE BEFORE US IN CONNECTION WITH SAID APPEALS RELATING TO RAJURI. LD.AR SAYS THAT THE REVISION ORDER OF THE PR.CIT CONSTITUTES THE PR ODUCT OF CHANGE OF OPINION AS AO THOROUGHLY SCRUTINIZED THE QUANTITY OF INCOME TAXABLE ON THIS ACCOUNT. 21. PER CONTRA, THE CASE OF THE REVENUE IS THAT THE FAILURE TO TAX @ 4% OF THE SALES OF 3281.13 METRIC TONNES OF TMT BARS CONS TITUTES THE CASE OF LOSS OF REVENUE. 22. AFTER HEARING BOTH THE SIDES, WE FIND THE FACTS OF THE ASSESSEE ARE IDENTICAL TO THE CASE OF M/S. RAJURI STEEL PVT. LTD . WE HAVE ALREADY ADJUDICATED THE ISSUE AND HELD THAT THE DIRECTION I N THE ORDER OF THE PR.CIT NEEDS AN AMENDMENT IN SO FAR AS ADOPTION OF 4% OF T HE VALUE OF CLANDESTINELY REMOVED GOODS, IN LIEU OF THE ORDER O F THE TRIBUNAL CITED (SUPRA). OTHERWISE, WE CONFIRM THE ORDER OF PR.CIT AND DISMISSED THE GROUNDS RAISED BY THE ASSESSEE. THEREFORE, FOLLOWI NG THE SAME PARITY OF REASONING, ACCORDINGLY, THE GROUNDS RAISED BY THE A SSESSEE ARE DISMISSED WITH THE EXEMPTION OF GROUND, WHICH DEALS WITH THE ASPECTS OF INCORRECT ASSUMPTION OF FACTS. AO ERRED IN NOT CONSIDERING T HE EXISTING FINDINGS OF THE TRIBUNAL RELATING TO TAXABLE PROFITS @ 4% OF THE SA LES OF THE SAID CLANDESTINELY REMOVED GOODS. 23. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PA RTLY ALLOWED. 13 ITA NOS.1026 & 1027/PUN/2016 M/S.RAJURI STEEL PVT. LTD. & M/S.META ROLLS & COMMODITIES PVT. LTD., 24. TO SUM UP, THE APPEALS FILED BY BOTH THE ASSESS EES ARE PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 20 TH DAY OF SEPTEMBER, 2017. SD/- SD/- (VIKAS AWASTHY) (D. KARUNAKARA RAO) /JUDICIAL MEMBER / ACCOUNTANT MEMBER PUNE; DATED : 20 TH SEPTEMBER, 2017. / COPY OF THE ORDER FORWARDED TO : / BY ORDER , // TRUE COPY // //TRUE COPY// SENIOR PRIVATE SECRETARY , / ITAT, PUNE 1. / THE APPELLANT 2. / THE RESPONDENT 3. THE CIT(A) - 1, AURANGABAD 4. CIT - 1, AURANGABAD 5. , , A BENCH PUNE; 6. / GUARD FILE.