ACIT, Jaipur V. PUHP FORGINGS PVT. LTD., Jaipur

ITA 1079/JPR/2016

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 2180 (ITAT-JAIPUR)
• Duration Of Justice: 4 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-04-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2013-2014
• Appeal Filed On: 08-12-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NEENA JAIF
• Assessee Lawyers: S L PODDAR DHK
• Keywords: Business expenditure
• Section: 143(3); 2

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHE S, JAIPUR JH HKKXPUN] YS[KK LNL; ,OA JH DQY HKKJR] U;KF;D LNL; DS LE{K BEFORE: SHRI BHAGCHAND, AM AND SHRI KUL BHARAT, JM VK;DJ VIHY LA-@ ITA NO. 1079/JP/2016 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2013-14. THE ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE-4, JAIPUR. CUKE VS. M/S PUSHP FORGINGS PVT. LTD. F - 393A, ROAD NO. 9F2,VKI,JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN NO. AA CCP9191J VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT JKTLO DH VKSJ LS@ REVENUE BY : SMT. NEENA JAIF (JCIT) FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI S. L. PODDAR (ADVOCATE) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 07.04.2017. ?KKS'K .KK DH RKJH[K@ DATE OF PRONOUNCEMENT : 17 /04/2017. VKNS'K@ ORDER PER SHRI KUL BHARAT, JM. THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF LD. CIT (A)-2, JAIPUR, DATED 30.09.2016 PERTAINING TO ASSESSMENT Y EAR 2013-14. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL :- (I) WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, LD. CIT(A) HAS ERRED IN DELETING THE ADDITI ON OF RS. 1,10,49,086/- MADE BY THE AO ON ACCOUNT OF UNDISCLO SED SALE OF SCRAP. (II) THE APPELLANT CRAVES ITS RIGHTS TO ADD, AMEND OR ALTER ANY OF THE GROUNDS ON OR BEFORE THE HEARING. 2. ONLY EFFECTIVE GROUND IS AGAINST DELETION OF ADD ITION OF RS. 1,10,49,086/- MADE BY THE AO ON ACCOUNT OF UNDISCLOSED SALE OF SC RAP. 2 ITA NO. 1079/JP/2016 M/S PUSHP FORGINGS PVT. LTD. JAIPUR. 3. BRIEFLY, STATED THE FACTS ARE THAT THE CASE OF T HE ASSESSEE WAS SELECTED FOR SCRUTINY ASSESSMENT UNDER THE CATEGORY OF CASS, AND THE ASSESSMENT UNDER SECTION 143(3) OF THE INCOME TAX ACT, 1961 WAS MADE VIDE OR DER DATED 16/03/2016. THEREBY, THE ASSESSING OFFICER MADE ADDITION ON ACC OUNT OF UNDISCLOSED SALE OF SCRAP AND DISALLOWANCE ON INTEREST OF INCOME TAX. 4. AGGRIEVED BY THIS, THE ASSESSEE PREFERRED AN APP EAL BEFORE LD. CIT(A), WHO AFTER CONSIDERING THE SUBMISSIONS, DELETED THE DISA LLOWANCE MADE ON ACCOUNT OF UNDISCLOSED SALE OF SCRAP BY FOLLOWING THE DECISION OF CO-ORDINATE BENCH OF THIS TRIBUNAL, RENDERED IN ITA NO. 659/JP/2012 IN ASSESS EES OWN CASE PERTAINING TO THE ASSESSMENT YEAR 2009-10. NOW, THE REVENUE IS IN AP PEAL BEFORE THIS HONBLE TRIBUNAL. 5. AT THE OUTSET, LD. COUNSEL FOR THE ASSESSEE CONT ENDED THAT THE IDENTICAL ISSUE IN ASSESSEES OWN CASE RELATING TO THE EARLIER YEAR S HAS BEEN DECIDED BY THE TRIBUNAL IN ITA NO. 376/JP/2015, ITA NO. 659/JP/2012 PERTAIN ING TO THE ASSESSMENT YEAR 2009-10. LD. DEPARTMENTAL REPRESENTATIVES CONCEDED THE FACTS, THAT UNDER THE IDENTICAL FACTS THE HONBLE TRIBUNAL HAS DECIDED T HIS ISSUE IN FAVOUR OF THE ASSESSEE. HOWEVER, IT IS CONTENDED THAT THE REVENUE HAS CHALL ENGED THE FINDING OF THE TRIBUNAL BEFORE THE HONBLE HIGH COURT. IT IS CONTENDED THA T THE HONBLE HIGH COURT HAS NOT DECIDED THE ISSUE AND THE OPERATION OF THE ORDER OF THE HONBLE TRIBUNAL HAS NOT BEEN STRAYED. 6. WE HAVE HEARD THE RIVAL CONTENTIONS, PERUSED TH E MATERIAL AVAILABLE ON RECORD AND GONE THOUGH THE ORDER OF THE AUTHORITIES BELOW. THE LD. CIT(A) HAS DECIDED THE ISSUE IN PARA 2.3 HAS UNDER- 3 ITA NO. 1079/JP/2016 M/S PUSHP FORGINGS PVT. LTD. JAIPUR. 2.3. I HAVE PERUSED THE FACTS OF THE CASE, THE ASS ESSMENT ORDER AND THE SUBMISSIONS OF THE APPELLANT. IN THE ASSESSMENT YE AR 2009-10 IN THE CASE OF ASSESSEES SISTER CONCERN PUSHP ENTERPRISES, THE IS SUE HAS BEEN DECIDED BY ITA NO. 659/JP/2012 BY THE HONBLE ITAT, JAIPUR BEN CH IN FAVOUR OF THE ASSESSEE OF THE ASSESSEE OBSERVING AS UNDER:- WE FIND NO INFIRMITY IN THE ORDER OF LD. CIT(A) I NASMUCH AS NOTHING HAS BEEN BROUGHT ON RECORD BY LD. ASSESSING OFFICER THAT THE ASSESSEES JOB WORKERS RETURNED ANY SCRAP TO ASSESSEE. NOTHING HAS ALSO BEEN BROUGH T ON RECORD TO DEMONSTRATE IN ANY WAY THAT ASSESSEE INDULGED IN ANY SALE OF SCRAP OUTSIDE THE BOOKS OF ACCOUNT. THIS IS FURTHER INDICATED BY NEW CENVAT CREDIT RULE S, WHICH HOLDS THAT THE SCRAP WAS NOT REQUIRED TO BE RETURNED TO THE ASSESSEE. T HE SAME IS REFERRED TO BY THE JUDGMENT IN THE CASE OF M/S ROCKET ENGINEERING CORP ORATION VS. CCE (SUPRA). THE ASSESSEE FURTHER PROVIDED EVIDENCE FROM M/S NOBLE I NDUSTRIES, WHICH HAS DONE A JOB WORK OF 3.56 CRORE AND HAS SHOWN THE INCOME ATT RIBUTABLE TO SALES OF SCRAP OF RS. 747109/- IN ITS BOOKS. THESE FACTS AND OBSERVA TIONS DEMONSTRATE THAT THE ASSESEE DID NOT RECEIVE ANY SCRAP BACK FROM JOB WOR KERS. THERE BEING NO EVIDENCE WHATSOEVER SUGGESTING ANY UNACCOUNTED SALES BY THE ASSESSEE, THE ORDER OF LD. CIT(A) ON THESE ISSUES IS UPHELD. IN VIEW OF THE ABOVE DECISION OF HONBLE ITA, JAIPU R BENCH AND THE FACTS BEING SIMILAR TO THE ABOVE CASE, THIS GROUND OF APP EAL IS ALLOWED. UNDER THE IDENTICAL FACT, THE CO-ORDINATE BENCH OF THIS TRIBUNAL IN ITA NO. 659/JP/2012 HAS DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE IN PARA 8.1 TO 8.2 AS UNDER:- 8.1 APROPOS THE SECOND GROUND, WHICH INCLUDES THE ADDITION AMOUNT OF RS. 1,35,56,787/- RELATING TO CONCEALED SALE OF SCRAP, THE BALANCE AMOUNT TO DIFFERENT SHOWN BY THE ASSESSEE AS RECEIVABLE FR OM SKF AND THE PAYABLE AMOUNT IN THE BOOKS OF SKF, THE ASSESSEE HA S DEMONSTRATED THAT THE DIFFERENCE WAS DUE TO THE DISPUTES PERTAIN ING TO DEFECTIVE AND INFERIOR QUALITY OF GOOD. THE ASSESSEE USED TO ACC OUNT FOR THE ACTUAL INVOICE VALUE WHEREAS THE PURCHASE WERE ACCOUNTED B Y SKF NOT ON THE BASIS OF THE SALES BILLS BUT ON THE BASIS OF SETTLE D AMOUNTS QUA THESE INVOICES. ALL THESE ISSUES HAVE BEEN DISCUSSED IN DETAILS BY THE LD. CIT(A) AS MENTIONED ABOVE. IN VIEW THEREOF, WE SEE NO INFIRMITY IN THE ORDER OF THE LD. CIT(A) ON THIS ISSUE ALSO, WHI CH IS UPHELD. THE SECOND GROUND OF REVENUE APPEAL IS DISMISSED. 8.2. APROPOS THE THIRD GROUND THE ASSESSEE DEMONS TRATED THAT AS PER RULE 4(6) OF THE CENTRAL EXCISE RULES, THE ASSESSEE WAS LIABLE FOR EXCISE DUTY ON THE NOTIONAL VALUE OF NONRETURNABLE SCRAP. THUS , THE ASSESSEE HAS 4 ITA NO. 1079/JP/2016 M/S PUSHP FORGINGS PVT. LTD. JAIPUR. TO FACT THE SITUATION WHERE THE SCRAPE WAS NOT RETU RNABLE TO IT AND ON TOP OF THAT THE EXCISE DUTY ON SUCH SCRAPE WAS ALSO PAYABLE BY THE ASSESSEE AS PER EXCISE RULES. IN VIEW THEREOF, THE EXCISE DUTY IN RESPECT OF UNRETURNED SCRAP BECOMES A STATUTORY/LEG AL LIABILITY OF THE ASSESSEE, WHICH IS ALLOWABLE BUSINESS EXPENDITURE. THE LD. CIT(A) HAS CONSIDERED THE ISSUE IN RIGHT PERSPECTIVE AND WE SE E NO INFIRMITY IN ITS ORDER ON THIS GROUND, THE SAME IS UPHELD. THE REVENUE HAS NOT BROUGHT ANY CONTRARY BINDING PR ECEDENTS AND IT IS ALSO NOT STATED THAT THE FACTS ARE DISTINGUISHABLE FROM THE EARLIER YEARS. THEREFORE, RESPECTFULLY FOLLOWING THE DECISION OF THE CO-ORDIN ATE BENCH IN ITA NO. 659/JP/2012 (SUPRA), WE DO NOT SEE ANY REASON TO INTERFERE INTO THE ORDER OF THE LD. CIT(A), SAME IS HEREBY AFFIRMED. THE GROUND RAISED IN THIS APPE AL IS REJECTED. 7. IN THE RESULT, APPEAL OF THE REVENUE IN ITA NO. 1079/JP/2016 IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON MONDAY , THE 17 TH DAY OF APRIL 2017. SD/- SD/- HKKXPUN ( DQY HKKJR ) ( BHAGCHAND ) ( KUL BHARAT ) YS[KK LNL;@ ACCOUNTANT MEMBER U;KF;D LNL;@ JUDICIAL MEMBER JAIPUR DATED:- 17 /04/2017. POOJA/ VKNS'K DH IZFRFYFI VXZSF'KR@ COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT- THE ASSISTANT COMMISSIONER OF IN COME TAX, CIRCLE-4, JAIPUR. 2. THE RESPONDENT- M/S PUSHP FORGINGS PVT. LTD. F-3 93A, ROAD NO. 9F2, JAIPUR. 3. THE CIT(A). 4. THE CIT, 5. THE DR, ITAT, JAIPUR 6. GUARD FILE (ITA NO. 1079/JP/2016) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASSISTANT. REGISTRAR 5 ITA NO. 1079/JP/2016 M/S PUSHP FORGINGS PVT. LTD. JAIPUR.