Omsairam Steel & Alloys Pvt Ltd, Jalna V. Assistant Commissioner of Income tax,

ITA 114/PUN/2017

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 1386 (ITAT-PUNE)
• Duration Of Justice: 2 year(s) 7 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-09-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2007-2008
• Appeal Filed On: 16-01-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: Kiran Shinde
• Keywords: Unexplained investment; Revised return; Set aside
• Section: 6; 201

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, PUNE BEFORE SHRI D. KARUNAKARA RAO, AM AND SHRI PARTHA SARATHI CHAUDHURY , JM . / I TA NOS. 114 /PUN/20 17 / ASSESSMENT YEAR : 2007 - 08 OMS AIRAM STEEL & ALLOYS PVT. LTD. C/O. BANSILAL KABRA ADVOCATE, 1 ST FLOOR, AMBIKA MARKET, JALNA - 431 203. PAN : AAACO6232H ....... / APPELLANT / V/S. THE ASSISTANT COMMISSIONER OF INCOME TAX, JALNA CIRCLE, JALNA / RESPONDENT . / ITA NOS. 1369/PUN/2018 / ASSESSMENT YEAR : 2007 - 08 OMS AIRAM STEEL & ALLOYS PVT. LTD. C/O. BANSILAL KABRA ADVOCATE, 1 ST FLOOR, AMBIKA MARKET, JALNA - 431 203. PAN : AAACO6232H ....... / APPELLANT / V/S. THE ASSISTANT COMMISSIONER OF INCOME TAX, JALNA CIRCLE, JALNA / RESPONDENT A SSESSEE BY : NONE REVENUE BY : SHRI KIRAN SHIND E 2 ITA NO. 114 /PUN/20 17 ITA NO.1369/PUN/2018 A.Y. 2007 - 08 / DATE OF HEARING : 11 .0 9 .2019 / DATE OF PRONOUNCEMENT : 12 .09 .2019 / ORDER PER PARTHA SARATHI CHAUDHU RY, JM : THESE TWO APPEALS PREFERRED BY THE ASSESSEE EMANATES FROM THE SEPARATE ORDERS OF THE LD. CIT(APPEALS) - 1, AURANGABAD DATED 01.11.2016 AND 15.06.2018 RESPECTIVELY FOR THE ASSESSMENT YEAR 2007 - 08 AS PER THE GROUNDS OF APPEAL ON RECORD. 2. THESE CASES WERE HEARD TOGETHER. SINCE ISSUES COMMON, FACTS ARE SIMILAR, THESE CASES ARE BEING DISPOSED OF VIDE THIS CONSOLIDATED ORDER. 3. AT THE TIME OF HEARING, NEITHER THE ASS ESSEE WAS PRESENT NOR WAS REPRESENTED BY ANY AUTHORIZED REPRESENTATIVE BEFORE US. THAT ON CHECKING OF THE RECORDS, IT WAS FOUND THAT THE NOTICE WAS DULY SERVED AND THE DATE OF HEARING WAS DULY INFORMED TO THE ASSESSEE. FURTHER, THE RECORD DEMONSTRATES THAT EVEN BEFORE THE LD. CIT(APPEALS), THE ASSESSEE WAS NOT APPEARED PERSONALLY AND HE HAS FILED ONLY WRITTEN SUBMISSIONS. THE ATTITUDE OF THE ASSESSEE IS THEREFORE EVASIVE IN NATURE, EVADING THE LEGAL PROCEEDINGS BEFORE THE CONCERN AUTHORITY. THEREFORE, WE PR OPOSE TO IMPOSE COST OF RS.10,000/ - ON THE ASSESSEE IN VIEW OF HIS EVASIVE CONDUCT AND IGNORING THE DATE OF HEARING BEFORE THE TRIBUNAL IN SPITE OF BEING WELL INFORMED. THE ASSESSEE SHALL PAY THE COST IN ACCORDANCE WITH RULE 32A(2) OF THE INCOME TAX APPELL ATE TRIBUNAL RULES, 1963. 3 ITA NO. 114 /PUN/20 17 ITA NO.1369/PUN/2018 A.Y. 2007 - 08 ITA NO. 1369/PUN/2018 A.Y. 2007 - 08 4. WE HAVE RECORDED THE SUBMISSIONS OF THE LD. DR QUA THE ASSESSEE. IN ORDER TO ADJUDICATE THE ISSUE, AS A MATTER OF CONVENIENCE, THE LD. DR REFERRED TO ITA NO.1369/PUN/2018 AS LEAD CASE. THE LD. DR SUBMITTED THAT IN BOTH THE APPEALS, THE ISSUE IS WITH REGARD TO THE ADDITION MADE FOR CLANDESTINE REMOVAL OF MATERIAL. THE OB SERVATION OF THE LD. CIT(APPEALS) ON THIS ISSUE IS AS FOLLOWS: .. HOWEVER TH ERE WAS CLANDESTINE REMOVAL OF GOODS DURING THE PERIOD I. E. SEPTEMBER, 2005 TO DECEM BER, 2006 FALLING IN AY 2006 - 07 & 2007 - 08. AS PER THE WORKING GIVEN BY THE APPELLANT COMPANY VIDE LETTER DATED 13.05.2016, TH ERE WAS CLANDESTINE REMOVAL OF GOODS AT 230 MT VALUED AT RS.41,51,070/ - IN THE CURRENT YEAR INSTEAD OF RS.27,47,185/ - TAKEN BY THE AO . THE GP @7.36% ON UNACCOUNTED SALES/CLANDESTINE REMOVAL OF GO ODS WOULD WORK OUT TO RS.3,05,510 /. IT IS NOT IN DISPUTE THAT THE APPELLANT COMP ANY HAS CATEGORICALLY ADMITTED BEFORE DGCEI THAT ENTIRE RAW MATERIAL WAS PURCHASED IN CASH. IN THE ABSENCE OF RELEVANT DETAILS FOR UNACCOU NTED PURCHASES OF RAW MATERIAL AND ROTATION OF FUNDS, THE UNEX PLAINED INVESTMENT RELATING TO SUPPRESSED PRODUCTION IS TAKEN AT 50% OF RS. 41,5 1 ,070/ - WHICH WORKS OUT TO RS.20,75,535/ - . THE TOTAL ADDITION ON THIS ACCOUNT INCLUDING GP WOULD WORK OUT TO RS.23,81,054/ - . TH E COUNSEL OF THE APPELLANT HAS BROUGHT TO MY N OTICE THAT IT HA D OFFERED ADDITIONAL INCOME OF RS.19,78,995/ - ON ACCOUNT OF CLAND ESTINE REMOVAL OF GOODS IN THE REVISED RETURN OF INCOME AND COPY OF THE SAME HAS BEEN PLACED ON THE RECORD. IT WOULD THEREFORE IMPLY THAT THE AO HAD MADE DOUBLE ADDITION TO TH AT EXTENT. I ACCORDINGLY DIRECT THE AO TO RESTRICT THE ADDITION ON THIS ACCOUNT TO RS.4,02,059/ - (RS.23,81,054/ - LESS RS.19,78,995/ - ) INSTEAD OF RS.27,47,185/ - MADE BY HIM. THIS GROUND OF APPEAL IS PARTLY ALLOWED. IT IS CLEAR THAT THE UNDERSIGNED HAD CONF IRMED ADDITION TO THE EXTENT OF RS.23,81,054/ - ON ACCOUNT OF ESTIMATION OF GP @7.36% AND UNEXPLAINED INVESTMENT IN THE CLANDESTINE REMOVAL OF GOODS. OUT OF ABOVE, THE APPELLANT COMPANY HAD BEEN ALLOWED RELIEF TO THE EXTENT OF RS.19,78,995/ - AS OFFERED IN T HE REVISED RETURN OF INCOME AND NET ADDITION OF RS.4,02,059/ - WAS SUS TAINED 5. WE HAVE PERUSED THE CASE RECORDS AND HEARD THE SUBMISSIONS MADE BY THE LD. DR. WE HAVE GIVEN CONSIDERABLE THOUGH T TO THE FINDINGS RECORDED BY THE FIRST APPELLATE AUTHORITY. WE FURTHER FIND THAT ON THE SAME ISSUE OF 4 ITA NO. 114 /PUN/20 17 ITA NO.1369/PUN/2018 A.Y. 2007 - 08 CLANDESTINE REMOVAL OF MATERIAL, THE CO - ORDINATE BENCH OF THE TRIBUNAL, PUNE IN THE CASE OF ITA NOS. 284, 285 & 286/PN/2012 & ORS FOR ASSESSMENT YEARS 2006 - 07, 2007 - 08 & 2008 - 09 DECIDED ON 17.02.2016 H AS HELD AND OBSERVED AS UNDER: 59. .ADMITTEDLY, THE ASSESSEE HAD OFFERED ADDITIONAL INCOME ON THE SAID CLANDESTINE REMOVAL OF MATERIAL WITHOUT PAYMENT OF EXCISE DUTY, WHICH IS TO BE ADDED AS INCOME IN THE HANDS OF THE ASSESSEE. THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE FAIRLY ADMITTED THAT IN CASE THE SAID ADDITIONAL INCOME HAS NOT BEEN ADDED WHILE COMPUTING THE INCOME IN THE HANDS OF THE ASSESSEE FOR THE RESPECTIVE YEARS, THE SAME MAY BE DIRECTED TO BE ADDED IN THE HANDS OF THE RESPECTIVE ASSESSEE IN RESPECTIVE YEARS. ACCORDINGLY, WE DIRECT THE ASSESSING OFFICER TO VERIFY FROM THE RECORDS FOR THE RESPECTIVE YEARS AND INCLUDE THE ADDITIONAL INCOME ON ACCOUNT OF SUCH ADMITTED CLANDESTINE REMOVAL OF MATERIAL WITHOUT PAYMENT OF EXCISE DUTY, B Y THE ASSESSEE EITHER BEFORE THE SETTLEMENT COMMISSION OR BEFORE THE EXCISE AUTHORITIES, IN THE HANDS OF THE ASSESSEE. ACCORDINGLY, WE DIRECT THE ASSESSING OFFICER TO VERIFY FROM THE RECORDS FOR THE RESPECTIVE YEARS AND INCLUDE IN THE HANDS OF ASSESSEE, T HE 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 MATERIAL WITHOUT PAYMENT OF EXCISE DUTY, BY THE ASSESSEE BEFORE THE EXCISE AUTHORITIES. THUS, THE A SSESSEE IS DIRECTED TO FILE THE REQUISITE DETAILS OF PROCEEDINGS BEFORE THE EXCISE AUTHORITIES, BEFORE THE ASSESSING OFFICER IN ORDER TO COMPUTE THE ADDITIONAL INCOME IN THE HANDS OF ASSESSEE IN THE RESPECTIVE YEARS. THAT AS PER THE AFORESAID VIEW OF THE TRIBUNAL, THE MATTER HAS BEEN RESTORED TO THE FILE OF ASSESSING OFFICER FOR VERIFICATION AS PER THE DIRECTIONS CONTAINED THEREIN. THE LD. DR CONCEDED THAT AS PER THE AFORESAID DECISION OF THE CO - ORDINATE BENCH OF THE TRIBUNAL, PUNE, IN THE INSTANT CASE ALSO, THE MATTER MAY BE RESTORED BACK TO THE FILE OF ASSESSING OFFICER FOR VERIFICATION FROM THE RECORDS FOR THE YEAR UNDER CONSIDERATION AS PER DIRECTIONS CONTAINED HEREINABOVE. 6. TAKING TOTALITY OF FACTS AND CIRCUMSTANCES INTO CONSIDERATION AND THE SUBMISSIONS OF THE LD. DR, WE SET ASIDE THE ORDER OF THE LD. CIT(APPEALS) AND RESTORE THE MATTER BACK TO THE FILE OF ASSESSING OFFICER FOR VERIFICATION AS PER 5 ITA NO. 114 /PUN/20 17 ITA NO.1369/PUN/2018 A.Y. 2007 - 08 DIRECTIONS GIVEN BY THE PUN E BENCH OF THE TRIBUNAL IN THE CASE MENTIONED HEREINABOVE (SUPRA.). 7. IN THE RESULT, APPEAL OF THE ASSESSEE IN ITA NO.1369/PUN/2018 IS ALLOWED FOR STATISTICAL PURPOSES. ITA NO.114/PUN/2017 A.Y.2007 - 08 8. AS FACTS AND ISSUES RAISED IN ITA NO.114 /PUN/ 2017 ARE IDENTICAL TO ITA NO.1369 /PUN/201 8 , OUR DECISION RENDERED IN ITA NO.1369 /PUN/201 8 WOULD APPLY MUTATIS - MUTANDIS TO ITA NO.114 /PUN/2017. HENCE, IN THIS CASE ALSO, WE SET ASIDE THE ORDER OF THE LD. CIT(APPEALS) AND RESTORE THE MATTER BACK TO THE FILE OF ASSESSING OFFICER FOR VERIFICATION AS PER DIRECTIONS GIVEN BY THE PUNE BENCH OF THE TRIBUNAL IN THE CASE MENTIONED HEREINABOVE (SUPRA.). 9. IN THE RESULT, APPEAL OF THE ASSESSEE IN ITA NO.114/PUN/2017 IS ALLOWED FOR STATISTICAL PURPOSES. 10 . IN COMBIN ED RESULT, BOTH THE APPEALS OF THE ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSES. ORDER PRO NOUNCED ON 12 TH DAY OF SEPTEMBER , 201 9 . SD/ - SD/ - D. KARUNAKARA RAO PARTHA SARATHI CHAUDHURY ACCOUNTANT MEMBER JUDICIAL MEMBER / PUNE; / DATED : 12 TH SEPTEMBER, 2019 . SB 6 ITA NO. 114 /PUN/20 17 ITA NO.1369/PUN/2018 A.Y. 2007 - 08 / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT. 2. / THE RESPONDENT. 3. THE CIT(APPEALS) - 1, AURANGABAD. 4. THE PR. CIT - 1, AURANGABAD. 5 . , , , / DR, ITAT, A BENCH, PUNE. 6 . / GUARD FILE. // TRUE COPY // / BY ORDER, / PRIVATE SECRETARY , / ITAT, PUNE . 7 ITA NO. 114 /PUN/20 17 ITA NO.1369/PUN/2018 A.Y. 2007 - 08 DATE 1 DRAFT DICTATED ON 1 1 .0 9 .2019 SR.PS/PS 2 DRAFT PLACED BEFORE AUTHOR 11 .0 9 .201 9 SR.PS/PS 3 DRAFT PROPOSED AND PLACED BEFORE THE SECOND MEMBER JM/AM 4 DRAFT DISCUSSED/APPROVED BY SECOND MEMBER AM/JM 5 APPROVED DRAFT COMES TO THE SR. PS/PS SR.PS/PS 6 KEPT FOR PRONOUNCEMENT ON SR.PS/PS 7 DATE OF UPLOADING OF ORDER SR.PS/PS 8 FILE SENT TO BENCH CLERK SR.PS/PS 9 DATE ON WHICH THE FILE GOES TO THE HEAD CLERK 10 DATE ON WHICH FILE GOES TO THE A.R 11 DATE OF DISPATCH OF ORDER