Assistant Commissioner of Income-tax, Jalna Circle, Jalna V. M/s. Gajlaxmi Steel, Jalna

ITA 1434/PUN/2018

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 9239 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-09-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2014-2015
• Appeal Filed On: 11-09-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MRS SHABANA PARVEEN
• Keywords: Rule of consistency

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, PUNE . , , BEFORE SHRI D. KARUNAKARA RAO, AM AND SHRI VIKAS AWASTHY, JM . / ITA NO.1434/PUN/2018 / ASSESSMENT YEAR : 2014-15 ACIT, JALNA CIRCLE, JALNA. ....... / APPELLANT / V/S. M/S. GAJLAXMI STEEL, F-4, 5, 6, PHASE-II, ADDL. MIDC AREA, JALNA-431203. PAN : AACCG0547R / RESPONDENT REVENUE BY : MRS. SHABANA PARVEEN ASSESSEE BY : SHRI S. N. PURANIK / DATE OF HEARING : 15.07.2019 / DATE OF PRONOUNCEMENT : 19.09.2019 / ORDER PER D. KARUNAKARA RAO, AM: THIS APPEAL IS FILED BY THE REVENUE AGAINST THE ORDER OF CIT(A)-1, AURANGABAD DATED 07.06.2018 FOR THE ASSESSMENT YEAR 2014-15. 2. THE GROUNDS RAISED BY THE REVENUE ARE AS UNDER :- 1. THE LD. COMMISSIONER OF INCOME-TAX (A)-I ERRED IN PASSING THE ORDER BOTH ON THE FACTS OF THE CASE AND IN LAW. 2. THE LD. COMMISSIONER OF INCOME-TAX (A)-I ERRED IN ALLOWING RELIEF FOR RS. 4,38,86,292/- BEING ADDITION MADE BY THE AO ON ACCOUNT OF SUPPRESSED PRODUCTION ON THE BASIS OF ELECTRICITY CONSUMPTION. 3. THE LD. COMMISSIONER OF INCOME-TAX (A)-I ERRED IN DIRECTING THAT NO ADDITION CAN BE MADE MERELY ON BASIS OF ELECTRICITY CONSUMPTION FORMULA. 4. THE CIT(A)-I ERRED IN IGNORING THE FACT THAT THE DEPARTMENT IS IN APPEAL BEFORE HON'BLE BOMBAY HIGH COURT, BENCH AT AURANGABAD IN ASSESSEE'S CASE FOR EARLIER YEARS. 2 ITA NO.1434/PUN/2018 5. THE ORDER OF THE CIT(A) BE VACATED AND ORDER OF THE AO BE RESTORED. 6. THE APPELLANT CRAVES LEAVE TO ADD, AMEND OR ALTER ANY OTHER GROUND AT THE TIME OF HEARING. 3. BRIEFLY STATED THE RELEVANT FACTS INCLUDE THAT THE ASSESSEE IS ENGAGED IN THE BUSINESS OF MANUFACTURING OF MS BILLETS FOR RE-ROLLING MILLS FOR MANUFACTURING OF MS BARS. THIS IS A CASE WHERE THERE IS AN ALLEGATION OF CLANDESTINE PRODUCTION OF BILLETS ON THE BASIS OF CONSUMPTION OF ELECTRICITY. THE DISCUSSION GIVEN IN PARA 5 OF THE ORDER OF THE ASSESSING OFFICER AND ESTIMATION WAS MADE ON THE EXCESS PRODUCTION OF THE ASSESSEE COMPANY BASED ON THE ELECTRICITY CONSUMPTION. THIS IS ALSO A CASE WHERE THERE WAS SCRUTINY OF ACCOUNTS OF THE ASSESSEE BY THE DGCEI OF INTERNAL EXCISE DEPARTMENT. ACCORDINGLY, ON THE BASIS OF ESTIMATION, NET SUPPRESSING PRODUCTION WAS CALCULATED AND SUCH NET SUPPRESSION PRODUCTION WORKS OUT RS.4,38,86,292/-. DURING THE PROCEEDINGS BEFORE THE FIRST APPELLATE AUTHORITY, THE ASSESSEE RELIED ON VARIOUS DECISIONS INCLUDING THAT OF THE DECISION OF THE CO-ORDINATE BENCH OF THE TRIBUNAL IN THE CASE OF BHAGYALAXMI STEEL ALLOYS PVT. LTD. VIDE ITA NO.1292/PUN/2012 DATED 15.07.2015 WHERE THE CIT(A) HELD THAT THERE IS NO CONTRARY MATERIAL TO SUPPORT THE ESTIMATION AND GRANTED RELIEF TO THE ASSESSEE. THE APPEAL OF THE REVENUE WAS DISMISSED BY THE TRIBUNAL. APPLYING THE SAID PRINCIPLE, THE CIT(A) GRANTED RELIEF TO THE ASSESSEE IN THIS YEAR ALSO AS PER THE DISCUSSION GIVEN IN PARA 5 OF THE FIRST APPELLATE ORDER. THE RELEVANT LINES READ OUT BEFORE US BY THE LD. COUNSEL FOR THE ASSESSEE. 3 ITA NO.1434/PUN/2018 4. AGGRIEVED, THE REVENUE IS IN APPEAL BEFORE US WITH THE ABOVE EXTRACTED GROUNDS. 5. THE LD. DR FOR THE REVENUE RELIED HEAVILY ON THE ORDER OF THE ASSESSING OFFICER AND PRAYED FOR SETTING ASIDE THE ORDER OF THE CIT(A). 6. ON THE OTHER HAND, REBUTTING THE CLAIM OF THE ASSESSEE, LD. AR FOR THE ASSESSEE RELIED ON THE ORDER OF THE CIT(A) AND FILED A COPY OF THE DECISION OF THE TRIBUNAL OF THIS BENCH IN THE CASE OF RHISHI STEEL & ALLOYS PRIVATE LIMITED VS. ADDL. CIT VIDE ITA NOS.219 TO 221/PUN/2012 FOR THE ASSESSMENT YEARS 2006-07 TO 2008-09 AND OTHERS DATED 05.08.2015 AND SUBMITTED THAT, ON IDENTICAL FACTS, THE APPEALS OF THE REVENUE WAS DISMISSED BY THE TRIBUNAL. 7. WE HEARD BOTH THE SIDES ON THIS ISSUE AND PERUSED THE FACTS AND ORDERS OF THE REVENUE AUTHORITIES AND THE DECISION OF THE TRIBUNAL PLACED BEFORE US. CONSIDERING THE SAME, WE FIND THERE IS NO DISPUTE ON THE FACT THAT THE ASSESSING OFFICER MADE ADDITION BASED ON THE ESTIMATION WITH REFERENCE TO THE CONSUMPTION OF ELECTRICITY. THIS IS A CASE WHERE THE DGCEI SCRUTINIZED THE ACCOUNTS OF THE ASSESSEE. WE FURTHER FIND ON SIMILAR FACTS IN THE CASE OF BHAGYALAXMI STEEL ALLOYS PVT. (SUPRA), THE RELIEF WAS GRANTED BY THE TRIBUNAL TO THE ASSESSEE. AGGRIEVED WITH THE SAID RELIEF GRANTED BY THE CIT(A), THE REVENUE FILED THE PRESENT APPEAL INFORMING THAT THE REVENUE ALREADY FILED AN APPEAL BEFORE THE HONBLE JURISDICTIONAL HIGH COURT FOR THE EARLIER ASSESSMENT YEARS AND, THEREFORE, 4 ITA NO.1434/PUN/2018 THIS IS THE INTENTION OF THE REVENUE TO FILE THE PRESENT APPEAL IS TO KEEP THE ISSUE ALIVE ON THIS ISSUE . 8. CONSIDERING THE SAME, IN OUR VIEW, SUCH REASONS FOR FILING THE APPEAL IS UNSUSTAINABLE. FURTHER, WE PERUSED THE ORDER OF THE CIT(A) AND FIND THE CONTENTS OF PARA 5 OF THE ORDER OF THE CIT(A) ARE RELEVANT IN THIS REGARD AND THE SAME ARE EXTRACTED HEREUNDER :- 5. . SINCE THE FACTS WERE IDENTICAL TO THAT OF THE CASE DECIDED BY THE TRIBUNAL, THEREFORE, FOLLOWING THE DECISION OF THE COORDINATE BENCH OF THE TRIBUNAL IN THE CASE OF BHAGYALAXMI STEEL ALLOYS PVT. LTD. ITA NOS.1292/PN/2012 AND IN ABSENCE OF ANY CONTRARY MATERIAL BROUGHT TO ITS NOTICE, THE GROUNDS RAISED BY THE REVENUE WERE DISMISSED BY THE ITAT, PUNE AND THE ADDITION SUSTAINED BY THE CIT(A) WAS ALSO DELETED. ACCORDINGLY THE APPEAL OF THE REVENUE WAS DISMISSED. REVERTING BACK TO THE PRESENT CASE, THE ASSESSING OFFICER HAD MADE THE ADDITION OF RS.4,38,86,292/- ON THE BASIS OF WRONG PRESUMPTION/ASSUMPTIONS. I FIND IT QUITE BAFFLING THAT THE A.O. HAD LEVELLED THE ALLEGATION OF UNRECORDED SALES AGAINST THE APPELLANT COMPANY ON THE BASIS OF SOME MATHEMATICAL EXERCISE WITHOUT ANY CORROBORATIVE EVIDENCE ON RECORD. THIS ALLEGATION OF THE A.O. HAS REMAINED UNSUBSTANTIATED AND IT IS NOTHING MORE THAN A SWEEPING STATEMENT. THE PRODUCTION OF THE ASSESSEE COMPANY IS LIABLE TO CENTRAL EXCISE DUTY AND HENCE, THE ASSESSEE HAS ALSO MAINTAINED RECORDS AND REGISTER AS PRESCRIBED UNDER CENTRAL EXCISE ACT. CONSIDERING THE JUDICIAL RATIOS, IT IS CLEAR THAT NO ADDITION CAN BE MADE MERELY ON BASIS OF ELECTRICITY CONSUMPTION FORMULA. THIS VIEW IS ALSO SUPPORTED BY THE DECISIONS OF VARIOUS TRIBUNALS SUCH AS JANTA TILES VS. ACIT (66 TTJ 695) (JURISDICTIONAL PUNE BENCH); DCIT KOLAPUR VS. J. D. THOTE DAIRIES (JURISDICTIONAL PUNE BENCH IN ITA NO 115/PN/2000 DECISION DATED 31/05/2011); ROOP NIKETAN VS. ACIT (90 TTJ 1097) (MUMBAI BENCH) AND ITO VS. GURUBACHANSINGH JUNEJA (55 ITD 75). RESPECTFULLY FOLLOWING THE ABOVE DECISIONS AND THE FACTS & CIRCUMSTANCES OF THE PRESENT CASE, I DIRECT THE AO TO DELETE THE ADDITION OF RS.4,38,86,292/- MADE BY HIM. THIS GROUND OF APPEAL IS ACCORDINGLY ALLOWED. 9. CONSIDERING THE ABOVE AND FOLLOWING OF RULE OF CONSISTENCY, WE ARE OF THE OPINION THAT THE ORDER OF THE CIT(A) IS FAIR AND REASONABLE ON THIS 5 ITA NO.1434/PUN/2018 ISSUE AND IT DOES NOT CALL FOR ANY INTERFERENCE. THUS, THE RELEVANT GROUNDS RAISED BY THE REVENUE ARE DISMISSED. 10. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED ON 19 TH DAY OF SEPTEMBER, 2019. SD/- SD/- ( /VIKAS AWASTHY) ( . /D. KARUNAKARA RAO) / JUDICIAL MEMBER / ACCOUNTANT MEMBER / PUNE; / DATED : 19 TH SEPTEMBER, 2019. SUJEET / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT. 2. / THE RESPONDENT. 3. THE CIT(A)-1, AURANGABAD. 4. THE CCIT, NASHIK. 5. , , , / DR, ITAT, A BENCH, PUNE. 6. / GUARD FILE. / BY ORDER, // TRUE COPY // SENIOR PRIVATE SECRETARY , / ITAT, PUNE.