ACIT, Central Circle - VII, Kolkata, Kolkata V. M/s. Mantora Oil Products Ltd, Kolkata

ITA 1118/KOL/2012

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 92070 (ITAT-KOLKATA)
• Duration Of Justice: 2 year(s) 11 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-07-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2005-2006
• Appeal Filed On: 01-08-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ANIL KUMAR PANDE
• Assessee Lawyers: MANISH TIWARI
• Keywords: Unexplained expenditure
• Section: 148

Judgement Text

I.T.A. N O . 1118 / KOL ./20 1 2 ASSESSMENT YEAR: 200 5 - 20 0 6 PAGE 1 OF 5 IN THE INCOME TAX APPELLATE TRIBUNAL, KOLKATA B BENCH, KOLKATA BEFORE SHRI P.K. BANSAL , ACCOUNTANT MEMBER AND SHRI MAHAVIR SINGH , JUDICIAL MEMBER I.T.A. NO. 1118 / KOL / 20 1 2 ASSESSMENT YEAR : 200 5 - 20 0 6 ASSISTANT COMMISSIONER OF INCOME TAX, ...... ...... .. . APPELLANT CENTRAL CIRCLE - VII, KOLKATA - 700 001 - VS. - M/S. MANTORA OIL PRODUCTS LIMITED, ...... .. ....... ..... . RESPONDE NT 16, TARACHAND DUTTA STREET, 2 ND FLOOR, KOLKATA - 700 073 [PAN : AA BCM 8155 E ] APPEARANCES BY: SHRI ANIL KUMAR PANDE, JCIT , SR. D.R., FOR THE DEPARTMENT SHRI MANISH TIWARI, FCA , FOR THE ASSESSEE DATE OF CONCLUDING THE HEARING : JU LY 02 , 2 01 5 DATE OF PRONOUNCING THE ORDER : JU LY 27 , 201 5 O R D E R PER P.K. BANSAL : THIS A PPEAL HA S BEEN FILED BY THE REVENU E AGAINST T HE ORDER OF LD. COMMISSIONER OF INCOME TAX (APPEALS) , CENTRAL - 1, KOLKATA D ATED 2 3 . 0 5 .20 1 2 FOR THE ASSESSMENT YEAR 200 5 - 0 6 BY TAKING THE FOLLOWING EFFECTIVE GROUND OF APPEAL: - THE LD. CIT(A) ERRED ON FACTS AND CIRCUMSTANCES OF THE CASE BY DELETING THE ADDI TION OF RS.3,32,75,131/ - MADE BY AO ON ACCOUNT OF UNEXPLAINED EXPENDITURE . 2. THE FACTS RELATING TO THIS GROUND ARE THAT THE ASSESSEE SUBMITTED THE RETURN DISCLOSING AN INCOME OF RS.11,38,536/ - ON 31.10.2005. ASSESSMENT WAS COMPLETED ON AN INCOME OF RS.1 1,62,290/ - . SUBSEQUENTLY NOTICE UNDER SECTION 148 WAS ISSUED ON THE GROUND THAT THE EXPENDITURE TO THE EXTENT OF RS.3,32,75,131/ - TOWARDS RAW MATERIAL CONSUMED WAS NOT REFLECTED IN THE PROFIT & LOSS ACCOUNT. ACCORDINGLY ASSESSMENT WAS I.T.A. N O . 1118 / KOL ./20 1 2 ASSESSMENT YEAR: 200 5 - 20 0 6 PAGE 2 OF 5 COMPLETED UNDER SECTI ON 147/143(3) ON 16.12.2010 AT A TOTAL INCOME OF RS.3,44,37,420/ - AFTER MAKING AN ADDITION OF RS.3,32,75,131/ - ON THE GROUND THAT THE SAME WAS NOT INCLUDED IN THE PROFIT AND LOSS ACCOUNT AND IT REPRESENTED THE INCOME OF THE ASSESSEE. THE ASSESSING OFFICER NOTED IN PARA 4 O F THE NOTES O N ACCOUNTS THAT THE TOTAL EXPENDITURE TOWARDS RAW MATERIAL CONSUMED WITH CRUDE OIL WAS RS.1,90,91,26,133/ - . WHILE ON THE BASIS OF SCHEDULE P TO THE PROFIT AND LOSS ACCOUNT, THE ASSESSING OFFICER COMPUTED THE FIGURE OF THE RA W MATERIAL CONSUMED AT RS.1,85,80,11,483/ - . THE ASSESSING OFFICER WAS OF THE VIEW THAT THE ASSESSEE HAS DEBITED ONLY A SUM OF RS.1,85,80,11,483/ - IN THE PROFIT AND LOSS ACCOUNT, WHILE ACTUALLY THE ASSESSEE SPENT A SUM OF RS.1,90,91,26,133/ - ON ACCOUNT OF R AW MATERIAL CONSUMED. THUS THERE WAS A DIFFERENCE OF RS.5,11,14,650/ - , WHICH WAS SPENT BY THE ASSESSEE OUTSIDE THE BOOKS OF ACCOUNT. THE ASSESSING OFFICER FURTHER NOTED THAT SINCE THE ASSESSEE HAS AVAILED MODVAT CREDIT OF RS.1,78,39,519/ - , THEREFORE, THE N ET DIFFERENCE REMAINS ONLY RS.3,32,75,131/ - AND ADDED THE SAME AS INCOME OF THE ASSESSEE UNDER SECTION 69C. THE ASSESSEE WENT IN APPEAL BEFORE THE CIT(APPEALS) AND THE CIT(APPEALS) DELETED THE ADDITION. 3 . WE HAVE HEARD THE RIVAL SUBMISSIONS AND CAREFULLY CONSIDERED THE SAME ALONG WITH THE ORDER OF TAX AUTHORITIES BELOW. WE HAVE ALSO REFERRED TO THE ANNUAL ACCOUNTS OF THE ASSESSEE, WHICH ARE AVAILABLE IN THE PAPER BOOK, ESPECIALLY PROFIT & LOSS ACCOUNT AT PAGE 14 AS WELL AS SCHEDULE P , WHICH IS AVAILABLE AT PAGE 24 OF THE PAPER BOOK. FROM THE PROFIT AND LOSS ACCOUNT IT IS APPARENT THAT THE ASSESSEE HAS SHOWN THE RAW MATERIAL CONSUMED AT RS.1,94,03,13,927/ - AND IN SCHEDULE P THE ASSESSEE HAS GIVEN THE WORKING HOW THE FIGURE OF RS.1,94,03,13,927.67 HAS BE EN ARRIVED AT. WHILE WORKING OUT THIS FIGURE WE NOTED THAT THE ASSESSEE HAS TAKEN THE OPENING STOCK OF THE RAW MATERIAL AND ADDED THE PURCHASES THEREON AND REDUCED THERE FROM THE CLOSING STOCK THE OPENING AS WELL AS CLOSING STOCK CONSISTS OF RAW MATERIAL, RAW MATERIAL IN TRANSIT AS WELL AS CHEMICALS. IN THE NOTES O N ACCOUNTS, NO DOUBT THE ASSESSE HAS SHOWN THE CONSUMPTION OF CRUDE OIL AT RS.1,90,91,26,133/ - WHICH IS AVAILABLE AT I.T.A. N O . 1118 / KOL ./20 1 2 ASSESSMENT YEAR: 200 5 - 20 0 6 PAGE 3 OF 5 PAGE 29 OF THE PAPER BOOK. THE RAW MATERIAL OF THE ASSESSEE DOES NOT ONLY CONSI ST OF CRUDE OIL BUT ALSO CONSISTS OF CHEMICALS, HYDROGEN GAS, ETC. THE ASSESSING OFFICER WHILE WORKING OUT THE DIFFERENCE HAS NOT TAKEN THESE FIGURES INTO CONSIDERATION. THIS FACT IS APPARENT FROM THE RECONCILIATION AS HAS BEEN SUBMITTED BY THE ASSESSEE AN D IS AVAILABLE ON RECORD, WHICH IS REPRODUCED AS UNDER: - PARTICULARS RAW MATERIAL CONSUMED AS PER SCHEDULE P RAW MATERIAL (CRUDE OIL) CONSUMED AS PER NOTES ON ACCOUNTS OPENING STOCK: RAW MATERIALS RAW MATERIALS - GOODS IN TRANSIT CHEMICALS TOTAL (A) 1,94,87 ,114 6,77,33,048 11,47,449 8,83,67,611 1,94,87,114/ - 6,77,33,048/ - 0 8,72,20,162/ - ADD. PURCHASES RAW MATERIALS RAW MATERIALS - GOODS IN TRANSIT CHEMICALS HYDROGEN GAS (INCLUDING FREIGHT) CA R RIAGE INWARD BROKERAGE & COMMISSION ON PURCHASE CENVAT CREDIT REVERSAL ON INPUT LESS: DISCOUNT ON PURCHASE ON CHEMICALS LESS: DISCOUNT ON PURCHASE ON RAW MATERIAL TOTAL(B) 1,78,36,29,836/ - 3,62,71,868/ - 2,17,81,926/ - 82,80,116/ - 5,21,41,597/ - 16,53,472/ - 14,290/ - 44,994/ - 15,84,936/ - 1,90,21,43,175/ - 1,78,36,29,836/ - 3,62,71,868/ - 0 0 5,05,61,178/ - 16,53,472/ - 0 0 15,84,936/ - 1,87,05,31,418/ - LESS CLOSING STOCK I.T.A. N O . 1118 / KOL ./20 1 2 ASSESSMENT YEAR: 200 5 - 20 0 6 PAGE 4 OF 5 RAW MATERIALS RAW MATERIALS - GOODS IN TRANSIT CHEMICALS TOTAL(C) 1,23,53,579/ - 3,62,71,868/ - 15,71,411/ - 5,01,96,858/ - 1, 23,53,579/ - 3,62,71,868/ - 0 4,86,25,447/ - TOTAL (A+B+C) 1,94,03,13,928/ - 1,90,91,26,133/ - FROM THIS RECONCILIATION, IT IS APPARENT THAT THERE IS NO DIFFERENCE IN THE FIGURE OF THE RAW MATERI AL CONSUMED IN THE NOTES ON ACCOUNTS. IT IS ONLY THE CONSUMPTION OF THE CRUDE OIL AND HAS BEEN SHOWN AS IS REQUIRED AS PER THE COMPANIES ACT. THE ASSESSING OFFICER, IN OUR OPINION, COULD NOT HAVE APPRECIATED THE RECONCILIATION. WHEN THE MATTER WENT BEFORE THE CIT(APPEALS), THE CIT(APPEALS) HAS DULY APPRECIATED THE RECONCILIATION AND HAS ALSO EXAMINED THE BALANCE - SHEET WITH THE NOTES ON ACCOUNTS AS WELL AS SCHEDULE P . IN VIEW OF THIS, WE ARE OF THE VIEW THAT THERE IS NO ILLEGALITY OR INFIRMITY IN THE ORDER OF CIT(APPEALS). THE CIT(APPEALS) HAS RIGHTLY DELETED THE ADDITION. IT IS NOT A CASE WHICH WARRANTS OUR INTERFERENCE. WE ACCORDINGLY CONFIRM THE ORDER OF CIT(APPEALS). 4 . IN THE RESULT, THE APPEAL FILED BY THE REVENU E STAND S DISMISS ED. ORDER PRONOUNCED IN THE OPEN COURT ON JU LY 27 , 201 5 . SD/ - SD/ - MAHAVIR SINGH P.K. BANSAL ( JUDICIAL MEMBER) ( ACCOUNTANT MEMBER) KOLKATA, THE 27 TH D AY OF JU LY , 201 5 COPIES TO : (1) ASSISTANT COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE - VII, KOLKATA - 700 001 (2) M/S. MANTORA OIL PRODUCTS LIMITED, 16, TARACHAND DUTTA STREET, 2 ND FLOOR, KOLKATA - 700 073 (3) COMMISSIONER OF INCOME - TAX (APPEALS) I.T.A. N O . 1118 / KOL ./20 1 2 ASSESSMENT YEAR: 200 5 - 20 0 6 PAGE 5 OF 5 (4) COMMISSIONER OF INCOME TAX ( 5 ) THE DEPARTMENTAL REPRESENTATIVE ( 6 ) GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL KOLKATA B ENCHES, KOLKATA LAHA/SR. P.S .