The ACIT, Circle-6, Surat V. Dada Associates, Surat

ITA 1115/AHD/2012

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 94633 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 5 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-11-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 02-11-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 22-05-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SAMIR VAKIL
• Assessee Lawyers: M K PATEL
• Section: 143(3)

Judgement Text

ITA NO . 1115 /AHD / 20 1 2 ASSESSMENT YEAR: 2 0 0 8 - 09 PAGE 1 OF 4 IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD D BENCH, AHMEDABAD [CORAM: PRAMOD KUMAR AM AND S.S. GODARA JM] ITA NO. 1115 / AHD / 2 0 1 2 ASSESSMENT YEAR: 20 0 8 - 09 ASSTT. COMMISSIONER OF INCOME TAX, ....... .. . ..... APPELLANT C IRCLE 6, SURAT, SURA T. VS. DADA ASSOCIATES , .... .................. .... .. RESPONDENT 204, GIDC, PANDESARA, SURAT. [PAN AACFD 0419 N] APPEARANCES BY: SAMIR VAKIL FOR THE APPELLANT M.K. PATEL FOR THE RESPONDENT DATE OF CONCLUDING THE HEARING : NOVEMBER 2 ND , 201 5 DATE OF PRONOUNCING THE ORDER : NOVEMBER 6 TH , 2015 O R D E R PER PRAMOD KUMAR AM: 1. BY WAY OF THIS APPEAL, THE ASSESSING OFFICER HAS CHALLENGED CORRECTNESS OF LD . CIT(A) S ORDER DATED 16 TH FEBRUARY, 201 2 IN THE MATTER OF ASSESSMENT UNDER SECTION 143(3) . OF THE INCOME TAX ACT, 1961 ( THE ACT FOR SHORT) ON THE FOLLOWING GROUNDS : - 1. ON THE FACTS AND IN THE CIRCUMSTANCE OF THE CASE AND IN LAW, T HE CIT(A) - IV, SURAT HAS ERRED IN DELETING THE ADDITION ON ACCOUNT OF UNACCOUNTED JOB WORK OF RS.22,35,810/ - MA DE BY THE ASSESSING OFFICER. 2. ON THE FACTS AND CIRCUMSTANCES OF T HE CASE AND IN LAW, T HE CIT(A) - IV, SUR A T OUGHT TO HAVE UPHELD THE ORDER OF THE ASSESSING OFFICER. ITA NO . 1115 /AHD / 20 1 2 ASSESSMENT YEAR: 2 0 0 8 - 09 PAGE 2 OF 4 2. TO ADJUDICATE ON THIS APPEAL ONLY A FEW MATERIAL FACTS NEED T O BE TA K EN NOTE OF. THE ASSESSEE IS ENGAGED IN THE BUSINESS OF PROCESSING OF GRAY CLOTH ON JOB WORK BASIS . DURING THE COURSE OF ASSESSMENT PROCEEDINGS , THE ASSESSING OFFICER NOTED THAT THERE IS HUGE VARIATION IN CONSUMPTION OF COLOUR AND CHEMICALS AND IN CONSUMPTION OF ELECTRICI TY AND GAS WHICH ARE MAJOR INPUTS FOR THE PROCESSING WORK CARRIED ON BY THE ASSESSEE. IT WAS IN T HIS BACKDROP THAT HE REQUIRED THE ASSESSEE TO SHOW CAUSE AS TO WHY ADDITION OF RS.22,35,810/ - NOT BE MADE ON THE BASIS OF COMPUTATION OF ESTIMATED PRODUCTION WITH THE HELP OF FIGURES FOR AVERAGE CONSUMPTION OF POWER PER METER. THE ASSESSEE DID EXPLAIN THAT CONSUMPTION OF POWER CANNOT BE CONSIDERED TO BE THE YARD STICK FOR MEASURING PRODUCTION AS MACHINES HAVE TO BE KEPT RUNNING AND KEEPING MORE TIME EVEN IF LE SS WORK IS DONE. REJECTING THESE ARGUMENTS , AS ALSO O TH ER CONTENTIONS ADVANCED BY THE ASSESSEE , T HE ASSESSING OFFICER CONCLUDED AS FOLLOWS: - 6.5 FROM THE ABOVE DISCUSSION IT I S V ERY CLEAR T HAT THE ASSESSEE IS NOT IN A POSITION TO FURNISH ANY SATISFACTORY REPLY TO THE SHOW CAUSE AND IT IS CRYS T AL CLEAR THAT THERE IS A HUGE DISCREPANCY IN THE CONSUMPTION OF POWER AND COLOUR AND CHEMICAL V IS A VIS JOB WORK DONE WHICH CLEARLY ESTABLISH THAT THE ASSESS E E HAS SUPPRESS E D THE A C TUAL PRODUCTION DE T AILS OF WHICH AR E NARRATED AT LENGTH IN THE SHOW CAUSE. IT IS VERY CLEAR T HAT THE ASSESSEE HAS UNDERTAKEN UNACCOUNTED JOB WORK OF RS. 22,35,810/ - AND SAME IS HERBY ADDED IN THE INCOME OF THE ASSESSEE FOR THE YEAR UNDER CONSIDERATION. NO CREDIT FOR ANY OF THE EXPENSES REQ UIRES TO BE GIVEN SINCE THE ASS E SS E E HAS ALREADY DEBITED ALL THE E X PENSE RELATED WITH THE PRODUCTION IN ITS P&L ACCOUNT. PENALTY PROCEEDINGS U/S. 271(1)(C) ARE HEREBY INITIATED FOR CONCEALMENT OF INCOME. (ADDITION OF RS.22,35,810/ ) 3. AGGRIEVED BY THE S TAND SO TAKEN BY THE ASSESSING OFFICER , ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE LD . CIT(A) WHO DELETED THE IMPUGNED ADDITION BY FOLLOWING HIS DECISION FOR T HE A.Y. 2004 - 05 WHICH HAS BEEN UPHELD BY THE TRIBUNAL. WHILE DELETING THE ADDITION , THE LD . CIT ( A ) OBSERVED A S FOLLOWS : - ITA NO . 1115 /AHD / 20 1 2 ASSESSMENT YEAR: 2 0 0 8 - 09 PAGE 3 OF 4 2.1 DURING THE COURSE OF APPEAL PROCEEDINGS SIMILAR ARGUMENTS AS IN ASSESSMENT WERE MADE. IT WAS FURTHER SUBMITTED T HAT SIMILAR ADDITION MADE ON THE BASIS OF POWER CONSUMPTION HAD BEEN DELETED BY THE CIT(A) FOR A.Y. 2004 - 0 5 IN THEIR OWN CASE AND THE DECISION OF THE CIT (A) WAS UPHELD BY THE HON BLE ITAT. IT WAS FURTHER SUBMITTED THAT IN A.Y. 2005 - 06 , SMALL ADDITION TO GP WAS RETAINED BY THE CIT(A) AND SUBSEQUENTLY CONFIRMED BY THE HON BLE ITAT, AS THE GP IN THAT YEAR WAS F OUND TO BE LOWER IN COMPARISON TO THE PRECEDING YEAR AND THOUGH COLOUR AND CHEMICAL HAD BEEN PURCHASED CERTAIN BILLS WERE FROM CONCERNS RELATED TO ROHIT PANWALA GROUP. IT WAS ARGUED THAT THE GP IN THE CURRENT YEAR WAS HIGHER T HAN IN THE PRECEDING YEAR AN D THERE I S NO FINDING REGARDING PURCHASES BEING NOT GENUINE AND THEREFORE THE ADDITION OUGHT TO BE DELETED IN TOTALITY. IT WAS FURTHER SUBMITTED THAT ADDITION MADE OUT OF CONSUMPTION OF COLOUR AND CHEMICAL HAD BEEN DELETED IN A.Y. 2007 - 08 BY THE CIT(A) ACC EPTING THAT IT WAS NOT POSSIBLE TO MAINTAIN DE TAILS OF CONSUMPTION OF COLOUR AND CHEMICAL ON DAY TO DAY BASIS AND THAT CONSUMPTION OF COLOUR AND CHEMICAL DEPENDS UPON THE PREFERENCE AND REQUIREMENT OF THE CUSTOMER S AND ALSO FOR THE RE AS ON THAT NO BOGUS PU RCHASE S WERE FOUND. A COPY OF THE ORDERS WAS SUBMITTED. THE APPELLANT ALSO RELIED ON THE FOLLOWING DECISIONS : - M/S EASTERN ENTERPRISES ITA NO.3072/AHD/2008 SUNITA DYEING MILLS PVT. LTD . ITA NO.897/AHD/31.01.2006 PIGEON T EXTILES I T A NO.1861/AHD/3.11. 2006 PRATISTHA PRINTS I T A NO. 2124/AHD/2007 PRAGATI FASHION ITA NO.3162/AHD/2007 2.2 I HAVE GONE THROUGH THE FACTS OF THE CASE. I FIND THAT THE ISSUE LINKING PRODUCTION TO POWER AND GAS CONSUMPTION IS COVERED IN FAVOUR OF THE APPELLANT BY THE DECISION OF THE HON BLE TRIBUNAL IN THE ASSESSEE S OWN CASE FOR A.Y. 2004 - 05 WHEREIN THE ORDER OF THE CIT(A) THAT PRODUCTION CANNOT BE DIRECTLY LINKED WITH CONSUMPTION OF POWER A ND GAS WAS UPHELD. I ALSO FIND THAT THERE IS NO FINDING IN THE ORDER REGARDING ANY BO GUS PURCHASES OF COLOUR A ND CHEMICAL. I T IS ALSO SEEN THAT NO DEFECTS HAVE BEEN POINTED OUT IN THE BOOKS OF ACCOUNT MAINTAINED . THE GP EARNED D URING THE YEAR IS HIGHER THAN I N THE PREVIOUS YEAR. THE A.O. HA S NOT POINTED OUT ANY MISTAKE IN THE EXPLANATIO N OF THE ASSESSEE REGARDING VARIATION IN CONSUMPTION OF COLOUR AND CHEMICAL BEING ON ACCOUNT OF DIFFERENCE IN JOB WORK ACTUALLY CARRIED OUT. RESPECTFULLY FOLLOWING THE DECISIONS OF THE JURISDICTIONAL TRIBUNAL AND FOR THE REASONS GIVEN ABOVE, THE ADDITION MADE IS DELETED. 4. THE ASSESSING OFFICER IS NOT SATISFIED AND IS IN APPEAL BEFORE US. 5. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE MATERIAL ON RECORD AND DULY CONSIDERED FACTS OF THE CASE IN THE LIGHT OF THE APPLICABLE LEGAL POSITION. W E FIND THA T THE LD . CIT ( A ) HAS FOLLOWED HIS OWN ORDER FOR THE A.Y. 2004 - 05 WHICH HAS BEEN APPROVED AND ITA NO . 1115 /AHD / 20 1 2 ASSESSMENT YEAR: 2 0 0 8 - 09 PAGE 4 OF 4 CONFIRMED BY A CO - ORDINATE BENCH OF THIS T RIBUNAL VIDE ORDER DATED 15.10.2010. I N THIS VIEW OF THE MAT T ER A ND RESPECTFULLY FOLLOW ING THE ESTEEMED VIEW OF THE CO - O RDINATE BENCH, WE SEE NO REASONS TO INTERFERE IN THE WELL REASONED FINDINGS OF THE LD . CIT(A). IT WAS INDEED JUSTIFIED IN FOLLOWING HIS ORDER FOR THE A.Y. 2004 - 05 WHICH HAS BEEN, A S NOTED AB OVE, CONFIRMED BY THIS TRIBUNAL . WE SEE NO INFIRMITY IN THIS ACT ION OF THE LD. C IT(A). WE , THEREFORE , DECLINE T O INTERFERE IN THE MATTER. 6. IN THE RESULT, APPEAL IS DISMISSED. P RONOUNCED IN THE OPEN COURT ON THIS 6 TH D AY OF NOVEMBER , 2015. SD/ - SD/ - S.S. GODARA PRAMOD KUMAR (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) AHMEDABAD , THE 6 TH DAY OF NOVEMBER, 201 5 PBN/* COPIES TO: (1) THE APPELLANT (2) THE RESPONDENT (3) COMMISSIONER (4) CIT(A) (5) DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCHES, AHMEDABAD