Assistant Commissioner of Income-tax, V. M/s. M.B. Sugar & Pharmaceuticals Ltd., Nashik

ITA 1357/PUN/2015

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 9236 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 8 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-06-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2011-2012
• Appeal Filed On: 14-10-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Search and seizure
• Section: 143(3); 10

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, PUNE , , , , BEFORE MS. SUSHMA CHOWLA, JM AND SHRI ANIL CHATURVEDI , AM . / I TA NO. 1357/PUN/2015 / ASSESSMENT YEAR : 2011 - 12 THE ASSISTANT COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE - 2, NASHIK. ....... / APPELLANT / V/S. M/S. M.B. SUGAR & PHARMACEUTICALS LTD., LODHA BHAWAN, MAHAVIR NAGAR MARG, NEAR GOVT. HOSPITAL, SATANA ROAD, MALEGAON, NASHIK - 423 203 PAN : AABCM2351A / RESPONDENT A PPELLANT BY : SHRI AJAY MODI RE SPONDENT BY : SHRI PRAMOD SHINGTE / DATE OF HEARING : 2 8 .0 6 .2017 / DATE OF PRONOUNCEMENT : 30 .06.2017 / ORDER PER SUSHMA CHOWLA , JM THE APPEAL FILED BY THE REVENUE IS AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS) - 12, PUNE DATED 29.07.2015 RELATING TO ASSESSMENT YEAR 2011 - 12 AGAINST ORDER PASSED UNDER SECTION 143(3) OF THE INCOME TAX ACT, 1961 ( IN SHORT THE ACT). 2. THE REVENUE HAS RAISED FOLLOWING GROUN DS OF APPEAL: - 2 ITA NO . 1357/PUN/2015 A.Y. 2011 - 12 1. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) WAS RIGHT IN ADJUDICATING THE CASE MERELY ON THE JUDICIAL PRECEDENT SET UP BY THE HONBLE ITAT, PUNE IN ASSESSEES OWN CASE WITHOUT APPRECIATING THE FAC TS OF THE CASE AND WITHOUT CONSIDERING THAT THE ASSESSEE HAS COMPLETELY FAILED TO DISCHARGE ITS ONUS TO CORROBORATE THE CLAIMS MADE BY IT. 2. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) IS JUSTIFIED IN IGNORING THE FACTS ON RECORDS WHICH GOES TO SHOW THAT IN THE PRESENT CASE, THE DISALLOWANCE/ ADDITION WAS BASED ON PROPER APPRECIATION OF THE FACTS AND OF THE CASE AND FURTHER, THE PROCESSING LOSS OF THE ASSESSMENT YEAR UNDER CONSIDERATION WAS ON A VERY HIGH SIDE. 3. THE APPELLANT CRAVES TO ADD, AMEND OR DELETE ANY OF THE ABOVE GROUNDS. 3. THE LD. AR FOR THE ASSESSEE AT THE OUTSET POINTED OUT THAT THE ISSUE RAISED IN THE PRESENT APPEAL IS SQUARELY COVERED BY THE ORDER OF THE TRIBUNAL IN ASSESSEES OWN CASE IN APPEAL FILED BY REVENUE IN ITA NOS. 1380 TO 1383, 1822 TO 1824/PN/2012 RELATING TO ASSESSMENT YEARS 2004 - 05 TO 2010 - 11 , ORDER DATED 21.03.2014 . HE FURTHER POINTED OUT THAT THE COMMISSIONER OF INCOME TAX (APPEALS) HAD ALLOWED CLAIM OF THE ASSESSEE FOLLOWING THE SAID ORDER OF THE TRIBUNAL. HE FURTHER STRESSE D THAT THE FACTS OF THE PRESENT YEAR WERE COMPARABLE TO THE FACTS IN THE EARLIER YEAR. ANOTHER ASPECT WHICH HAS BEEN POINTED OUT BY THE LD. AR FOR THE ASSESSEE IS PROCESS LOSS INCURRED IN THE MANUFACTURING UNIT FOR THE YEAR UNDER CONSIDERATION WAS 6.38% AND FOR ASSESSMENT YEAR 2012 - 13 WAS 7.13% AND FOR ASSESSMENT YEAR 2013 - 14 WAS 6.92% AND THE SAME HA S BEEN ACCEPTED BY THE ASSE SSING OFFICER VIDE ORDER PASSED U/S. 143(3) OF THE ACT. 4 . THE LD. DR FOR THE REVENUE PLACED RELIANCE ON THE ORDER OF THE ASSESSING OFFICER. 5 . WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE RECORD. BRIEFLY THE FACTS RELATING TO ISSUE ARE THAT THE AS SESSEE WAS ENGAGED IN THE BUSINESS OF MANUFACTURING OF PHARMA GRADE SUGAR. THE ASSESSEE HAD CLAIMED PROCESS LOSS OF 6.38 % DURING THE YEAR UNDER CONSIDERATION. THE ASSESSING OFFICER 3 ITA NO . 1357/PUN/2015 A.Y. 2011 - 12 NOTED THAT ASSESSEE HAD FAILED TO EXPLAIN THE CULMINATION OF PROCESS LOSS A ND ITS VALUATION. THE ASSESSING OFFICER THUS DISALLOWED THE MANUFACTURING PROCESS LOSS CLAIMED BY THE ASSESSEE AT RS.1,32,09,722/ - . THE REASON FOR DISALLOWING TH E PROCESS LOSS WAS ON INFORMATION COLLECTED THROUGH SEARCH AND SEIZURE ACTION IN LODHA GROUP OF CASES. 6 . THE COMMISSIONER OF INCOME TAX (APPEALS) NOTED THAT THE CLAIM OF PROCESS LOSS WAS DIS A LLOWED IN THE ASSESSMENTS COMPLETED U/S.153A R.W.S 143 (3) FOR ASSESSMENT YEARS 2004 - 05 TO 2009 - 10 AND ALSO U/S. 143(3) OF THE ACT FOR ASSESSMENT YEAR 2010 - 11. THE ASSESSMENT YEAR UNDER CONSIDERATION BEING IMMEDIATELY SUCCEEDING YEAR WHEREIN ALSO THE ASSESSEE HAD CLAIMED PROCESS LOSS AND IT WAS ASKED TO SUBSTANTI ATE ITS CLAIM WITH EVIDENCE. HOWEVER, THE ASSESSING OFFICER DISALLOWED THE CLAIM OF THE ASSESSEE. THE COMMISSIONER OF INCOME TAX (APPEALS) NOTED THAT THE TRIBUNAL IN THE EARLIER YEARS HAD CONSIDERED DAILY PRODUCTION STATEMENTS FOUND DURING SEARCH ACTION WH ICH TALLIED WITH THE BOOK S OF ACCOUNTS AND ALSO APPRECIATED THE ACTUAL WH ICH TALLIED WITH THE BOOK S OF ACCOUNTS AND ALSO APPRECIATED THE ACTUAL MANUFACTURING PROCESS LOSS ARISING THERE FROM AND ALLOWED CLAIM OF THE ASSESSEE VIDE CONSOLIDATED ORDER RELATING TO ASSESSMENT YEARS 2004 - 05 TO 2010 - 11. THE RELEVANT FINDINGS OF THE TRI BUNAL IS REPRODUCED UNDER PARA - 5 AT PAGE NO. 11 TO 13 OF THE APPELLATE ORDER. THE COMMISSIONER OF INCOME TAX (APPEALS) FURTHER NOTED THAT THE ASSESSING OFFICER HAD NOT BROUGHT ANY MATERIALS ON RECORD TO SHOW THAT THERE WAS EXCESS STOCK OF SUGAR OR ANY INST ANCE OF UNACCOUNTED SALE OF SUGAR TO SUPPORT THE ALLEGATION THAT PROCESS LOSS CLAIMED BY THE ASSESSEE WAS BOGUS. THE COMMISSIONER OF INCOME TAX (APPEALS) ALLOWED THE CLAIM OF THE ASSESSEE IN RESPECT OF PROCESS LOSS. 7 . THE ISSUE ARISING IN THE PRESENT APPE AL IS SQUARELY COVERED BY THE TRIBUNAL S ORDER (SUPRA) IN ASSESSEES OWN CASE FOR ASSESSMENT YEARS 2004 - 05 TO 2010 - 11. FURTHER, THE REVENUE HAD FAILED TO BRING ON RECORD ANY 4 ITA NO . 1357/PUN/2015 A.Y. 2011 - 12 MATERIALS TO ESTABLISH THE FACTS OF THE PRESENT CASE , WERE AT VARIANCE TO THE FACT S IN THE EARLIER YEARS. IT MAY BE NOTED THAT AS AGAINST PROCESS LOSS OF 8.18% IN ASSESSMENT YEAR 2008 - 09, 5.84% IN ASSESSMENT YEAR 2009 - 10, 4.6 9% IN ASSESSMENT YEAR 2010 - 11, T HE ASSESSEE HAD CLAIMED PROCESS LOSS OF 6.38% IN THE INSTANT ASSESSMENT YEAR. FUR THER, THE ASSESSEE HAD CLAIMED PROCESS LOSS OF 7.13% IN ASSESSMENT YEAR 2012 - 13 AND 6.92 % IN ASSESSMENT YEAR 2013 - 14 WHICH HAS BEEN ACCEPTED BY THE ASSESSING OFFICER VIDE ORDER U/S.143(3) OF THE ACT. 8 . IN TOTALITY OF THE ABOVE FACTS AND CIRCUMSTANCES, WE FIND NO MERIT IN THE GROUND S RAISED BY THE REVENUE. UPHOLDING THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS), WE DISMISS THE GROUND S OF APPEAL RAISED BY THE REVENUE. 9 . IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSED. ORDER PRO NOUNCED ON 30TH DA Y OF JUNE , 201 7 . ORDER PRO NOUNCED ON 30TH DA Y OF JUNE , 201 7 . SD/ - SD/ - (ANIL CHATURVEDI) ( SUSHMA CHOWLA) / ACCOUNTANT MEMBER / JUDICIAL MEMBER / PUNE; / DATED : 30 TH JUNE , 2017 . SB / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT. 2. / THE RESPONDENT. 3. THE CIT (APPEALS) - 12, PUNE 4. THE CIT - 12, PUNE. 5 . , , , / DR, ITAT, B BENCH, PUNE. 6. / GUARD FILE. // TRUE COPY // / BY ORDER, /ASSISTANT REGISTRAR , / ITAT, PUNE .