ITO, Mandi Gobindgarh V. M/s Modi Oil & General Mills, Mandi Gobindgarh

ITA 149/CHANDI/2016

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 8322 (ITAT-CHANDIGARH)
• Duration Of Justice: 11 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-02-2017
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Next Hearing Date: 09-02-2017
• Assessment Year: 2010-2011
• Appeal Filed On: 29-02-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Rejection of books of accounts; Unexplained investment; Income from undisclosed sources
• Section: 143(3); 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH,CHANDIGARH BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND MS. ANNAPURNA GUPTA, ACCOUNTANT MEMBER ITA NO.149/CHD/2016 ASSESSMENT YEAR:2010-11 ITO, VS M/S MODI OIL & GENERAL MILLS, WARD 2, RAILWAY GODOWN ROAD, MANDI GOBINDGARH MANDI GOBINDGARH PAN NO. AAAFT5253C ITA NO.112/CHD/2016 ASSESSMENT YEAR:2010-11 M/S MODI OIL & GENERAL MILLS, VS DCIT, RAILWAY GODOWN ROAD, CIRCLE, MANDI GOBINDGARH MANDI GOBINDGARH PAN NO. AAAFT5253C (APPELLANT) (RESPONDENT) ASSESSEE BY : SH. SUDHIR SEHGAL DEPARTMENT BY : SH. RAVI SARANGAL, CIT,DR, SH. ARVIND SUDARSHAN,JCIT SH. PARDEEP KUMAR GOYAL,DCIT ITA NO.261/CHD/2016 ASSESSMENT YEAR:2012-13 M/S VIMAL ALLOYS (P)LTD VS. DCIT,CIRCLE, AMLOH ROAD MANDI GOBINDGARH. MANDI GOBINDGARH PAN NO. AAACV7801M (APPELLANT) (RESPONDENT) ITA NO.247/CHD/2016 ASSESSMENT YEAR:2012-13 ACIT,CIRCLE, VS M/S VIMAL ALLOYS (P)LTD MANDI GOBINDGARH AMLOH ROAD MANDI GOBINDGARH. PAN NO. AAACV7801M (APPELLANT) (RESPONDENT) 2 ASSESSEE BY : SH. K.P.BAJAJ,ADV DEPARTMENT BY : SH. RAVI SARANGAL,CIT, DR, SH. ARVIND SUDARSHAN,JCIT SH. PARDEEP KUMAR GOYAL,DCIT ITA NO.920/CHD/2015 ASSESSMENT YEAR:2010-11 M/S BHATHAL STEEL ROLLING MILLS VS. I.T.O. C-53, FOCAL POINT WARD-1 MANDI GOBINDGARH. MANDI GOBINDGARH. PAN NO. AAHFB 9310M (APPELLANT) (RESPONDENT) ITA NO.926/CHD/2015 ASSESSMENT YEAR:2010-11 I.T.O. WARD-1, VS M/S BHATHAL STEEL ROLLING MILLS MANDI GOBINDGARH C-53, FOCAL POINT MANDI GOBINDGARH. PAN NO. AAHFB 9310M (APPELLANT) (RESPONDENT) ASSESSEE BY : SH. ASHOK KUMAR GHERA,ADV DEPARTMENT BY : SH. RAVI SARANGAL,CIT,DR, SH. ARVIND SUDARSHAN,JCIT SH. PARDEEP KUMAR GOYAL,DCIT ITA NO.38/CHD/2016 ASSESSMENT YEAR:2010-11 M/S ASHIRWAD STRIPS P.LTD VS. JCIT, 43, SECTOR-3, BLOCK-A RANGE LOHA BAZAR, MANDI GOBINDGARH MANDI GOBINDG ARH PAN NO. AAFCA4857M (APPELLANT) (RESPONDENT) ITA NO.39/CHD/2016 ASSESSMENT YEAR:2010-11 I.T.O. WARD-2, VS M/S ASHIRWAD STRIPS P.LTD MANDI GOBINDGARH 43, SECTOR-3, BLOCK-A LOHA BAZAR, MANDI GOBINDGARH PAN NO. AAFCA4857M (APPELLANT) (RESPONDENT) ASSESSEE BY : SH. SUDHIR SEHGAL,ADV SH. KUSHAL CHOPRA, CA DEPARTMENT BY : SH. RAVI SARANGAL,CIT,DR, SH. ARVIND SUDARSHAN,JCIT 3 SH. PARDEEP KUMAR GOYAL,DCIT ITA NO.531/CHD/2015 ASSESSMENT YEAR:2010-11 M/S DHIMAN IRON & VS. DCIT,CIRCLE, STEEL INDS P.LTD. MANDI GOBINDGARH G.T.ROAD KHANNA SIDE, MANDI GOBINDGARH PAN NO. AACCD5702F (APPELLANT) (RESPONDENT) ITA NO.586/CHD/2015 ASSESSMENT YEAR:2010-11 ACIT,CIRCLE VS M/S DHIMAN IRON & MANDI GOBINDGARH STEEL INDUSTRIES P.LTD. G.T.ROAD, KHANN SIDE, MANDI GOBINDGARH PAN NO. AACCD5702F (APPELLANT) (RESPONDENT) ASSESSEE BY : SH. ASHWANI KUMAR & MS.KANIKA G UPTA DEPARTMENT BY : SH. RAVI SA RANGAL,CIT,DR, SH. ARVIND SUDARSHAN,JCIT SH. PARDEEP KUMAR GOYAL,DCIT ITA NO.401/CHD/2016 ASSESSMENT YEAR:2012-13 M/S BANSAL IRON & VS. DCIT,CIRCLE STEEL ROLLING MILLS, MANDI GOBINDGARH. G.T.ROAD,SIRHIND SIDE MANDI GOBINDGARH PAN NO. AABFB 4635R (APPELLANT) (RESPONDENT) ITA NO.335/CHD/2016 ASSESSMENT YEAR:2012-13 DCIT, CIRCLE VS M/S BANSAL IRON & MANDI GOBINDGARH STEEL ROLLING MILLS G.T.ROAD,SIRHIND SIDE MANDI GOBINDGARH PAN NO. AABFB 4635R (APPELLANT) (RESPONDENT ASSESSEE BY : SH. ASHWANI KUMAR & MS.KANIKA GUPTA DEPARTMENT BY : SH. RAVI SARANGA L,CIT,DR, SH. ARVIND SUDARSHAN,JCIT SH. PARDEEP KUMAR GOYAL,DCIT 4 ITA NO.87/CHD/2016 ASSESSMENT YEAR:2010-11 M/S R.K. PLACE & RE-ROLLING MILLS VS. ITO,WARD-1 G.T.ROAD, MANDI GOBINDGARH MANDI GOBINDGARH PAN NO. AADFR6507N (APPELLANT) (RESPONDENT) ITA NO.153/CHD/2016 ASSESSMENT YEAR:2010-11 ITO WARD-1 VS M/S R.K.PLATE & RE-ROLLING MILLS MANDI GOBINDGARH G.T.ROAD, MANDI GOBINDGARH PAN NO. AADFR6507N (APPELLANT) (RESPONDENT ASSESSEE BY : SH. ASHWANI KUMAR & MS.KANIKA GUPT A DEPARTMENT BY : SH. RAVI SARAN GAL,CIT,DR, SH. ARVIND SUDARSHAN,JCIT SH. PARDEEP KUMAR GOYAL,DCIT ITA NO 918/CHD/2015 ASSESSMENT YEAR:2010-11 M/S RAJ STEEL ROLLING MILLS VS. JCI T, GURU KI NAGRI, RANGE MANDI GOBINDGARH MANDI GOBINDGARH MANDI GOBINDGARH. PAN NO. AABFR7828J (APPELLANT) (RESPONDENT) ITA NO.925/CHD/2015 ASSESSMENT YEAR:2010-11 ITO WARD-2 VS M/S RAJ STEEL ROLLING MILLS MANDI GOBINDGARH GURU KI NAGRI, MANDI GOBINDGARH PAN NO. AABFR 7828J ITA NO 348/CHD/2016 ASSESSMENT YEAR:2011-12 M/S RAJ STEEL ROLLING MILLS VS. ACIT,CIRCLE GURU KI NAGRI MANDI GOBINDGARH. MANDI GOBINDGARH PAN NO. AABFR7828J (APPELLANT) (RESPONDENT) 5 ITA NO.497/CHD/2016 ASSESSMENT YEAR:2011-12 ITO WARD-2 VS M/S RAJ STEEL ROLLING MILLS MANDI GOBINDGARH GURU KI NAGRI, MANDI GOBINDGARH PAN NO. AABFR 7828J ITA NO 349/CHD/2016 ASSESSMENT YEAR:2012-13 M/S RAJ STEEL ROLLING MILLS VS. DCIT,CIRCLE GURU KI NAGRI MANDI GOBINDGARH. MANDI GOBINDGARH PAN NO. AABFR7828J (APPELLANT) (RESPONDENT) ITA NO.616/CHD/2016 ASSESSMENT YEAR:2012-13 ITO WARD-2 VS M/S RAJ STEEL ROLLING MILLS MANDI GOBINDGARH GURU KI NAGRI, MANDI GOBINDGARH PAN NO. AABFR 7828J (APPELLANT) (RESPONDENT ASSESSEE BY : SH. ASHWANI KUMAR & MS.KANIKA GUPT A DEPARTMENT BY SH. RAVI SARANGAL,CI T,DR, SH. ARVIND SUDARSHAN,JCIT SH. PARDEEP KUMAR GOYAL,DCIT ITA NO 268/CHD/2016 ASSESSMENT YEAR:2010-11 M/S ROYAL ISPAT UDYOG VS. DCIT,CIRCLE VILL KUMBH , AMLOH ROAD, MANDI GOBINDGARH. MANDI GOBINDGARH PAN NO. AAJFR 5217P (APPELLANT) (RESPONDENT) ITA NO.275/CHD/2016 ASSESSMENT YEAR:2010-11 ITO WARD-1 VS M/S ROYAL ISPAT UDYOG, MANDI GOBINDGARH VILLAGE KUMBH,AMLOH ROAD, MANDI GOBINDGARH PAN NO. AAJFR 5217P 6 ITA NO 269/CHD/2016 ASSESSMENT YEAR:2011-12 M/S ROYAL ISPAT UDYOG VS. ACIT,CIRCLE VILL KUMBH , AMLOH ROAD, MANDI GOBINDGARH. MANDI GOBINDGARH PAN NO. AAJFR 5217P (APPELLANT) (RESPONDENT ITA NO 271/CHD/2016 ASSESSMENT YEAR:2012-13 M/S COLDRIP STEELS P.LTD VS. ITO WARD-2 G.T.ROAD, MANDI GOBINDGARH. MANDI GOBINDGARH PAN NO. AAACC6945K (APPELLANT) (RESPONDENT) ASSESSEE BY : SH. K.P.BAJAJ DEPARTMENT BY : SH. RAVI SARANGAL,CI T,DR, SH. ARVIND SUDARSHAN,JCIT SH. PARDEEP KUMAR GOYAL,DCIT ITA NO 315/CHD/2016 ASSESSMENT YEAR:2011-12 M/S A.P.S. INTERNATIONAL VS. ITO WARD-1 C/O PURI ENTERPRISES, MANDI GOBINDGARH. AMLOH ROAD, NEAR RAJDHANI MILLS MANDI GOBINDGARH PAN NO. AANFA0835E (APPELLANT) (RESPONDENT) ITA NO.449/CHD/2016 ASSESSMENT YEAR:2011-12 ITO WARD-1 VS M/S A.P.S. INTERNATIONAL, MANDI GOBINDGARH C/O PURI ENTERPRISES, AMLOH ROAD, NEAR RAJDHANI MILLS MANDI GOBINDGARH PAN NO. AANFA0835E ITA NO 316/CHD/2016 ASSESSMENT YEAR:2012-13 M/S A.P.S. INTERNATIONAL VS. ITO WARD-1 C/O PURI ENTERPRISES, MANDI GOBINDGARH. AMLOH ROAD, NEAR RAJDHANI MILLS MANDI GOBINDGARH PAN NO. AANFA0835E (APPELLANT) (RESPONDENT) 7 ASSESSEE BY : SH. PARIKSHIT AGGARWA L DEPARTMENT BY : SH. RAVI SARA NGAL,CIT,DR, SH. ARVIND SUDARSHAN,JCIT SH. PARDEEP KUMAR GOYAL,DCIT ITA NO 89/CHD/2016 ASSESSMENT YEAR:2010-11 M/S BHARAT PIPE INDUSTRY VS. DCIT,CIRCLE C/O SUKHWINDER SINGH, MANDI GOBINDGARH. WARD-4, NEAR SATNAM KANTA, GOBINDGARH ROAD, AMLOH PAN NO. AAEFB 7311D (APPELLANT) (RESPONDENT) ITA NO.152/CHD/2016 ASSESSMENT YEAR:2010-11 I.T.O. WARD-1 VS M/S BHARAT PIPE INDUSTRY MANDI GOBINDGARH C/O SUKHWINDER SINGH,, WARD-4, NEAR SATNAM KANTA, GOBINDGARH ROAD, AMLOH PAN NO. AAEFB 7311D (APPELLANT) (RESPONDENT ASSESSEE BY : SH. ASHOK GOYAL,C.A DEPARTMENT BY : SH. RAVI SARANGAL,CI T,DR, SH. ARVIND SUDARSHAN,JCIT SH. PARDEEP KUMAR GOYAL,DCIT ITA NO 147/CHD/2016 ASSESSMENT YEAR:2011-12 M/S NATURAL CASTINGS VS. JCIT,RANGE, AMBEY MAJRA ROAD, MANDI GOBINDGARH. VILLAGE MULLANPUR KALAN, MANDI GOBINDGARH. PAN NO. AAFFN 4459F (APPELLANT) (RESPONDENT) ITA NO.150/CHD/2016 ASSESSMENT YEAR:2011-12 I.T.O. WARD-1 VS M/S NATURAL CASTINGS MANDI GOBINDGARH AMBEY MAJRA ROAD VILLAGE MULLANPUR KALAN, MANDI GOBINDGARH. PAN NO. AAFFN 4459F (APPELLANT) (RESPONDENT 8 ASSESSEE BY : SH. SUDHIR SEHGAL,ADV & SH KUSHACHOPRA,C A DEPARTMENT BY : SH. RAVI SARAN GAL,CIT,DR, SH. ARVIND SUDARSHAN,JCIT SH. PARDEEP KUMAR GOYAL,DCIT ITA NO 333/CHD/2016 ASSESSMENT YEAR:2011-12 DCIT,CIRCLE VS. M/S C.S.CASTINGS PVT.LTD, MANDI GOBINDGARH. G.T.RAOD,MODEL TOWN MANDI GOBINDGARH. PAN NO. AACCC 1339D (APPELLANT) (RESPONDENT) ITA NO.346/CHD/2016 ASSESSMENT YEAR:2011-12 JCIT,RANGE VS M/S C.S.CASTINGS PVT.LTD, MANDI GOBINDGARH G.T.RAOD,MODEL TOWN MANDI GOBINDGARH. PAN NO. AACCC 1339D (APPELLANT) (RESPONDENT ASSESSEE BY : SH. ASHWANI KUMAR & MS.KANIKA GUPTA, CA DEPARTMENT BY : SH. RAVI SARANGAL,CIT ,DR, SH. ARVIND SUDARSHAN,JCIT SH. PARDEEP KUMAR GOYAL,DCIT ITA NO 129/CHD/2016 ASSESSMENT YEAR:2012-13 M/S PARADISE STEEL ROLLING MILLS VS. I.T.O.WARD-2, G.T.ROAD MANDI GOBINDGARH KHANNA SIDE, MANDI GOBINDGARH. PAN NO. AADFP 0406A (APPELLANT) (RESPONDENT) ITA NO.151/CHD/2016 ASSESSMENT YEAR:2012-13 I.T.O.WARD-1 VS M/S PARADISE STEEL ROLLING MILLS, MANDI GOBINDGARH G.T.RAOD, KHANNA SIDE MANDI GOBINDGARH. PAN NO. AADFP 0406A (APPELLANT) (RESPONDENT) APPELLANT BY : SH. SUDHIR SEHGAL & KUSHAL C HOPRA RESPONDENT BY : SH. RAVI SARANGAL,CIT,DR, 9 SH. ARVIND SUDARSHAN,JCIT SH. PARDEEP KUMAR GOYAL,DCIT ITA NO 49/CHD/2016 ASSESSMENT YEAR:2011-12 M/S LAKSHMI STEEL ROLLING MILLS, VS. JCIT ,RAGE G.T.ROAD MANDI GOBINDGARH SIRHIND SIDE, MANDI GOBINDGARH. PAN NO. AAAFL 3827A (APPELLANT) (RESPONDENT) ITA NO.45/CHD/2016 ASSESSMENT YEAR:2011-12 A.C.I.T.,CIRCLE VS M/S LAKSHMI STEEL ROLLING MILL S MANDI GOBINDGARH G.T.RAOD, SIRHIND SIDE MANDI GOBINDGARH. PAN NO. AAAFL 3827A (APPELLANT) (RESPONDENT ASSESSEE BY : SH. PARIKSHIT AGGARWAL,C. A DEPARTMENT BY : SH. RAVI SARANGAL,CIT, DR, SH. ARVIND SUDARSHAN,JCIT SH. PARDEEP KUMAR GOYAL,DCIT ITA NO 345/CHD/2016 ASSESSMENT YEAR:2012-13 M/S SHREE KRISHNA STEEL ROLLING, VS. I.T.O.WARD-2 MILLS, G.T.ROAD,SIRHIND SIDE, MANDI GOBINDGARH MANDI GOBINDGARH. PAN NO. ABOFS9253J (APPELLANT) (RESPONDENT) ITA NO.445/CHD/2016 ASSESSMENT YEAR:2012-13 I.T.O.WARD-2 VS M/S SHREE KRISHNA STEEL ROLLING MI LLS MANDI GOBINDGARH G.T.RAOD, SIRHIND SIDE MANDI GOBINDGARH. PAN NO. ABOFS 9253J (APPELLANT) (RESPONDENT ASSESSEE BY : SH. ASHWANI KUMAR & MS.KANIKA GUPTA,C. AS DEPARTMENT BY : SH. RAVI SARANGA L,CIT,DR, SH. ARVIND SUDARSHAN,JCIT SH. PARDEEP KUMAR GOYAL,DCIT 10 ITA NO 917/CHD/2015 ASSESSMENT YEAR:2010-11 M/S ADARSH STEEL ROLLING MILLS , VS. DCIT,CIRCL E, G.T.ROAD, MANDI GOBINDGARH MANDI GOBINDGARH. PAN NO. AACFA 5164F (APPELLANT) (RESPONDENT) ITA NO.924/CHD/2015 ASSESSMENT YEAR:2010-11 I.T.O.WARD-2 VS M/S ADARSH STEEL ROLLING MILLS MANDI GOBINDGARH G.T.ROAD, MANDI GOBINDGARH. PAN NO. AACFA 5164F ITA NO 347/CHD/2016 ASSESSMENT YEAR:2011-12 M/S ADARSH STEEL ROLLING MILLS , VS. DCIT,CIRCL E, G.T.ROAD, MANDI GOBINDGARH MANDI GOBINDGARH. PAN NO. AACFA 5164F (APPELLANT) (RESPONDENT) ITA NO.617/CHD/2016 ASSESSMENT YEAR:2011-12 I.T.O.WARD-2 VS M/S ADARSH STEEL ROLLING MILLS MANDI GOBINDGARH G.T.ROAD, MANDI GOBINDGARH. PAN NO. AACFA 5164F (APPELLANT) (RESPONDENT) ASSESSEE BY : SH. ASHWANI KUMAR & MS.KANIKA GUPTA,C.AS DEPARTMENT BY : SH. RAVI SARANGAL ,CIT,DR, SH. ARVIND SUDARSHAN,JCIT SH. PARDEEP KUMAR GOYAL,DCIT ITA NO 88/CHD/2016 ASSESSMENT YEAR:2010-11 M/S NABHA STEEL LTD., VS. DCIT,CIRCLE, G.T.ROAD,SIRHIND SIDE, MANDI GOBINDGARH MANDI GOBINDGARH. PAN NO. AACN6486G (APPELLANT) (RESPONDENT) 11 ITA NO.114/CHD/2016 ASSESSMENT YEAR:2010-11 A.C.I.T.,CIRCLE VS M/S NABHA STEEL LTD., MANDI GOBINDGARH G.T.RAOD,SIRHIND SIDE MANDI GOBINDGARH. PAN NO. AACN6486G ASSESSEE BY : SH. ASHOK GOYAL,C.A DEPARTMENT BY : SH. RAVI SARANGAL,CIT ,DR, SH. ARVIND SUDARSHAN,JCIT SH. PARDEEP KUMAR GOYAL,DCIT ITA NO 400/CHD/2016 ASSESSMENT YEAR:2012-13 M/S BANSAL ALLOYS & METALS PVT.LTD. VS. DCIT,CIRC LE, G.T.ROAD,SIRHIND SIDE, MANDI GOBINDGARH MANDI GOBINDGARH. PAN NO. AAACB 7472L (APPELLANT) (RESPONDENT) ITA NO.494/CHD/2016 ASSESSMENT YEAR:2012-13 D.C.I.T.,CIRCLE VS M/S BANSAL ALLOYS & METAL PVT. LTD., MANDI GOBINDGARH G.T.RAOD,SIRHIND SIDE MANDI GOBINDGARH. PAN NO. AAACB7472L ASSESSEE BY : SH. ASHWANI KUMAR & MS.KANIKA GUPTA, C.AS DEPARTMENT BY : SH. RAVI SARAN GAL,CIT,DR, SH. ARVIND SUDARSHAN,JCIT SH. PARDEEP KUMAR GOYAL,DCIT ITA NO 237/CHD/2016 ASSESSMENT YEAR:2011-12 M/S HIND ALLOYS VS. I.T.O.WARD-1, VILLAGE KUMBH,AMLOH ROAD, MANDI GOBINDGARH MANDI GOBINDGARH. PAN NO. AADFH4996F (APPELLANT) (RESPONDENT) ITA NO.273/CHD/2016 ASSESSMENT YEAR:2011-12 D.C.I.T.,CIRCLE VS M/S HIND ALLOYS, MANDI GOBINDGARH VILLAGE KUMBH,AMLOH ROAD MANDI GOBINDGARH. PAN NO. AADFH4996F 12 ASSESSEE BY : SH. SUDHIR SEHGAL & KUSHAL C HOPRA DEPARTMENT BY : SH. RAVI SARANGAL,CIT,DR, SH. ARVIND SUDARSHAN,JCIT SH. PARDEEP KUMAR GOYAL,DCIT ITA NO 238/CHD/2016 ASSESSMENT YEAR:2011-12 M/S EDEN STEEL ALLOYS, VS. JCIT-RANGE, NEAR POWERGRID,AMBEY MAJRA, MANDI GOBINDGARH MULLANPUR ROAD, VILLAGE MULLANPUR KALAN P.O. SANGATPURA SODHIAN SIRHIND.-140405 PAN NO. AACFE5797L (APPELLANT) (RESPONDENT) ITA NO.274/CHD/2016 ASSESSMENT YEAR:2011-12 D.C.I.T.,CIRCLE VS M/S EDEN STEEL ALLOYS MANDI GOBINDGARH NEAR POWERGRID,AMBEY MA JRA MULLANPUR ROAD, VILLAGE MULLANPUR KALAN P.O. SANGATPURA SODHIAN SIRHIND.-140405 PAN NO. AACFE5797L APPELLANT) (RESPONDENT) ASSESSEE BY : SH. SUDHIR SEHGAL & KUSHAL CH OPRA DEPARTMENT BY : SH. RAVI SARANGAL,CIT,DR, SH. ARVIND SUDARSHAN,JCIT SH. PARDEEP KUMAR GOYAL,DCIT ITA NO 281/CHD/2016 ASSESSMENT YEAR:2012-13 M/S NORTHERN INDIA VS. ITO-WARD-2 STEEL ROLLING,MILLS MANDI GOBINDGARH GURU KI NAGRI MANDI GOBINDGARH PAN NO. AABFN1838L (APPELLANT) (RESPONDENT) ITA NO.248/CHD/2016 ASSESSMENT YEAR:2012-13 I.T.O.-WARD-2 VS M/S M/S NORTHERN INDIA MANDI GOBINDGARH STEEL ROLLING, MILLS GURU KI NAGRI MANDI GOBINDGARH PAN NO. AABFN1838L APPELLANT) (RESPONDENT) 13 ASSESSEE BY : SH. RAJIV DATTA DEPARTMENT BY : SH. RAVI SARANGAL,CIT, DR, SH. ARVIND SUDARSHAN,JCIT SH. PARDEEP KUMAR GOYAL,DCIT ITA NO 393/CHD/2016 ASSESSMENT YEAR:2010-11 M/S BABA BALAKNATH ALLOYS VS. ITO-WARD-1 C/O NIDHISH IRON & STEEL CO. MANDI GOBINDGARH HARCHAND MILL ROAD MANDI GOBINDGARH PAN NO. AAIFB 8905H (APPELLANT) (RESPONDENT) ITA NO.453/CHD/2016 ASSESSMENT YEAR:2010-11 I.T.O.-WARD-2 VS BABA BALAKNATH ALLOYS, MANDI GOBINDGARH C/O NIDHISH IRON & STEEL CO. HARCHAND MILL ROAD MANDI GOBINDGARH PAN NO. AAIFB 8905H APPELLANT) (RESPONDENT) ASSESSEE BY : SH. RAJIV DATTA DEPARTMENT BY : SH. RAVI SARANG AL,CIT,DR, SH. ARVIND SUDARSHAN,JCIT SH. PARDEEP KUMAR GOYAL,DCIT ITA NO 288/CHD/2016 ASSESSMENT YEAR:2011-12 M/S FRIENDS INDUSTRIES VS. ACIT,CIRCLE AMLOH ROAD. MANDI GOBINDGARH MANDI GOBINDGARH PAN NO. AAAFF 1788L (APPELLANT) (RESPONDENT) ASSESSEE BY : SH. RAJIV DATTA DEPARTMENT BY : SH. RAVI SARANGAL,CIT ,DR, SH. ARVIND SUDARSHAN,JCIT SH. PARDEEP KUMAR GOYAL,DCIT ITA NO.414/CHD/2016 ASSESSMENT YEAR:2012-13 M/S GANESH STEEL INDUSTRIES VS I.T.O. -WARD-2 G.T.RAOD, MANDI GOBINDGARH MANDI GOBINDGARH PAN NO. AABFG 3528N APPELLANT) (RESPONDENT) 14 ASSESSEE BY : SH. K.P.BAJAJ,ADV DEPARTMENT BY : SH. RAVI SARANG AL,CIT,DR, SH. ARVIND SUDARSHAN,JCIT SH. PARDEEP KUMAR GOYAL,DCIT ITA NO 450/CHD/2016 ASSESSMENT YEAR:2010-11 M/S JAIN STEEL INDUSTRIES VS. DCIT-CIRCLE G.T.ROAD KHANNA SIDE MANDI GOBINDGARH MANDI GOBINDGARH PAN NO. AAGFJ8726N (APPELLANT) (RESPONDENT) ITA NO.495/CHD/2016 ASSESSMENT YEAR:2010-11 DCIT-CIRCLE VS M/S JAIN STEEL INDUSTRIES, MANDI GOBINDGARH G.T.ROAD KHANNA SIDE. MANDI GOBINDGARH PAN NO. AAGFJ 8726N APPELLANT) (RESPONDENT) ASSESSEE BY : SH. RAJIV SALDI DEPARTMENT BY : SH. RAVI SARANGAL,CIT,D R, SH. ARVIND SUDARSHAN,JCIT SH. PARDEEP KUMAR GOYAL,DCIT ITA NO 418/CHD/2016 ASSESSMENT YEAR:2010-11 M/S ARIHANT STEEL ROLLING MILLS VS. DCIT-CIRCLE C/O SHRI MANOJ KUMAR, MANDI GOBINDGARH HOUSE NO.132,SECTOR -4 D SHASHTRI NAGAR, MANDI GOBINDGARH PAN NO. AACFA0430E (APPELLANT) (RESPONDENT) ITA NO.452/CHD/2016 ASSESSMENT YEAR:2010-11 I.T.O.-WARD-2 VS M/S ARIHANT STEEL ROLLING MILLS, MANDI GOBINDGARH C/O SHRI MANOJ KUMAR HOUSE NO.132,SECTOR -4 D, SHASHTRI NAGAR, MANDI GOBINDGARH PAN NO. AACFA0430E APPELLANT) (RESPONDENT) 15 ASSESSEE BY : SH. SUDHIR SEHGAL DEPARTMENT BY : SH. RAVI SARANGAL,CIT ,DR, SH. ARVIND SUDARSHAN,JCIT SH. PARDEEP KUMAR GOYAL,DCIT ITA NO 627/CHD/2016 ASSESSMENT YEAR:2011-12 M/S JORAWAR ENGINEERING VS. JCIT-RANGE & FOUNDRY FORGE PVT.LTD, MANDI GOBINDGARH SIRHIND SIDE MANDI GOBINDGARH PAN NO. AABCJ4261A (APPELLANT) (RESPONDENT) ITA NO.660/CHD/2016 ASSESSMENT YEAR:2011-12 I.T.O.-WARD-1 VS M/S JORAWAR ENGINEERING & MANDI GOBINDGARH . FOUNDR Y FORGE PVT.LTD SIRHIND SIDE MANDI GOBINDGARH PAN NO. AABCJ4261A APPELLANT) (RESPONDENT) ASSESSEE BY : SH. DEEPAK AGGARWAL,ADV DEPARTMENT BY : SH. RAVI SARANGA L,CIT,DR, SH. ARVIND SUDARSHAN,JCIT SH. PARDEEP KUMAR GOYAL,DCIT ITA NO 30/CHD/2016 ASSESSMENT YEAR:2011-12 M/S PUNJAB STEEL FORGING & VS. JCIT-RANGE AGRO INDUSTRIES, MANDI GOBINDGARH KHANNA SIDE MANDI GOBINDGARH PAN NO. AABFP4154H (APPELLANT) (RESPONDENT) ITA NO.40/CHD/2016 ASSESSMENT YEAR:2011-12 ACIT-CIRCLE VS M/S PUNJAB STEEL FORGING &AGRO MANDI GOBINDGARH. INDUSTRIES,KHANNA SIDE MANDI GOBINDGARH. PAN NO. AABFP 4154HA APPELLANT) (RESPONDENT) 16 ITA NO 31/CHD/2016 ASSESSMENT YEAR:2010-11 M/S INDER SINGH & SONS VS. I.T.O.-WARD-1 AMLOH ROAD MANDI GOBINDGARH MANDI GOBINDGARH PAN NO. AAAFI 8854N (APPELLANT) (RESPONDENT) ITA NO.927/CHD/2015 ASSESSMENT YEAR:2010-11 I.T.O.WARD-1 VS M/S INDER SINGH & SONS MANDI GOBINDGARH AMLOH ROAD MANDI GOBINDGARH PAN NO. AAAFI 8854N APPELLANT) (RESPONDENT ITA NO 575/CHD/2015 ASSESSMENT YEAR:2010-11 M/S KARAM STEEL CORPORATION, VS. JCIT-RANGE NASRALI ROAD MANDI GOBINDGARH MANDI GOBINDGARH PAN NO. AABFK2488F (APPELLANT) (RESPONDENT) ITA NO.585/CHD/2015 ASSESSMENT YEAR:2010-11 ACIT-CIRCLE VS M/S KARAM STEEL CORPORATION MANDI GOBINDGARH NASRALI ROAD MANDI GOBINDGARH PAN NO. AABFK2488F ITA NO 419/CHD/2016 ASSESSMENT YEAR:2011-12 M/S KARAM STEEL CORPORATION, VS. ACIT-CIRCLE NASRALI ROAD MANDI GOBINDGARH MANDI GOBINDGARH PAN NO. AABFK2488F (APPELLANT) (RESPONDENT) ITA NO.615/CHD/2016 ASSESSMENT YEAR:2011-12 DCIT-CIRCLE VS M/S KARAM STEEL CORPORATION MANDI GOBINDGARH NASRALI ROAD MANDI GOBINDGARH PAN NO. AABFK2488F (APPELLANT) (RESPONDENT) 17 ASSESSEE BY : SH. SUDHIR SEHAL & KUSHAL CH OPRA DEPARTMENT BY : SH. RAVI SARANGAL,CIT,DR, SH. ARVIND SUDARSHAN,JCIT SH. PARDEEP KUMAR GOYAL,DCIT ITA NO 532/CHD/2015 ASSESSMENT YEAR:2010-11 M/S BHODEY STEEL ROLLING MILLS, VS. ITO, WARD-1 NEAR P.S.E.B., G.T.ROAD MANDI GOBINDGARH MANDI GOBINDGARH PAN NO. AABFB1257H (APPELLANT) (RESPONDENT) ITA NO.594/CHD/2015 ASSESSMENT YEAR:2010-11 ITO, WARD-2 VS M/S BHODEY STEEL ROLLING MILLS MANDI GOBINDGARH NEAR P.S.E.B., G.T.ROAD MANDI GOBINDGARH PAN NO. AABFB1257H APPELLANT) (RESPONDENT) APPELLANT BY : SH. ASHWANI KUMAR, MS. KANIK A GUPTA RESPONDENT BY : SH. RAVI SARANGAL,CIT,DR, SH. ARVIND SUDARSHAN,JCIT SH. PARDEEP KUMAR GOYAL,DCIT ITA NO.511/CHD/2016 ASSESSMENT YEAR:2012-13 M/S UNIPEARL ALLOYS VS ITO WARD-2 VILLAGE TOORAN, MANDI GOBINDGARH AMLOH ROAD MANDI GOBINDGARH PAN NO. AABFU 3696 F (APPELLANT) (RESPONDENT) ASSESSEE BY : SH. SUDHIR SEHGAL, SH. KUSH AL CHOPRA DEPARTMENT BY : SH. RAVI SARANGAL,CIT,DR, SH. ARVIND SUDARSHAN,JCIT SH. PARDEEP KUMAR GOYAL,DCIT ITA NO.534/CHD/2015 ASSESSMENT YEAR:2010-11 M/S SURYA STEEL INDUSTRIES VS DCIT CIRCLE CHATARPURA ROAD, MANDI GOBINDGARH VILLAGE AMBEY MAJRA MANDI GOBINDGARH PAN NO. AAZFS 3717 K (APPELLANT) (RESPONDENT) 18 ASSESSEE BY : SH. ASHWANI KUMAR, MS. KANIKA GUPTA DEPARTMENT BY : SH. RAVI SARANGAL,CIT,DR, SH. ARVIND SUDARSHAN,JCIT SH. PARDEEP KUMAR GOYAL,DCIT ITA NO 299/CHD/2016 ASSESSMENT YEAR:2010-11 M/S PUSHPANJALI STRIPS MILLS, VS. JCIT RANGE MULLANPUR KALAN MANDI GOBINDGARH MANDI GOBINDGARH PAN NO. AAJFP 0868 Q (APPELLANT) (RESPONDENT) ITA NO.272/CHD/2016 ASSESSMENT YEAR:2010-11 ITO, WARD-1 VS M/S PUSHPANJALI STRIPS MILLS, MANDI GOBINDGARH MULLANPUR KALAN MANDI GOBINDGARH PAN NO. AAJFP 0868 Q (APPELLANT) (RESPONDENT) ASSESSEE BY : SH. ATUL GOYAL, CA DEPARTMENT BY : SH. RAVI SARANGAL,CIT,DR, SH. ARVIND SUDARSHAN,JCIT SH. PARDEEP KUMAR GOYAL,DCIT ITA NO 198/CHD/2016 ASSESSMENT YEAR:2012-13 M/S KING STEEL ROLLING MILLS, VS. ITO WARD-2 G.T. ROAD, SIRHIND SIDE MANDI GOBINDGARH MANDI GOBINDGARH PAN NO. AAAFK 8872 G (APPELLANT) (RESPONDENT) ASSESSEE BY : SH. SUDHIR SEHGAL, SH. KUSHAL CHOPRA DEPARTMENT BY : SH. RAVI SARANGAL,CIT,DR, SH. ARVIND SUDARSHAN,JCIT SH. PARDEEP KUMAR GOYAL,DCIT ITA NO 206/CHD/2016 ASSESSMENT YEAR:2011-12 M/S ARUN STEELS, VS. ITO WARD-1 G.T. ROAD, SIRHIND SIDE MANDI GOBINDGARH MANDI GOBINDGARH PAN NO. AADFA 9302 Q (APPELLANT) (RESPONDENT) 19 ASSESSEE BY : SH. ASHWANI KUMAR, MS. KANIK A GUPTA DEPARTMENT BY : SH. RAVI SARANGAL,C IT,DR, SH. ARVIND SUDARSHAN,JCIT SH. PARDEEP KUMAR GOYAL,DCIT ITA NO 447/CHD/2016 ASSESSMENT YEAR:2010-11 ITO WARD-1, VS. M/S R.K. STEELS & ALLOYS MANDI GOBINDGARH AMLOH ROAD, MANDI GOBINDGARH PAN NO. AABFR 2937 G (APPELLANT) (RESPONDENT) CO NO.19/CHD/2016 (IN ITA NO 447/CHD/2016) ASSESSMENT YEAR:2010-11 M/S R.K. STEELS & ALLOYS VS ITO WARD-1, AMLOH ROAD, MANDI GOBINDGARH MANDI GOBINDGARH PAN NO. AABFR 2937 G (APPELLANT) (RESPONDENT) ASSESSEE BY : SH. SUDHIR SEHGAL, SH. KUSHAL CHOPRA DEPARTMENT BY : SH. RAVI SARANGAL,CIT,DR, SH. ARVIND SUDARSHAN,JCIT SH. PARDEEP KUMAR GOYAL,DCIT ITA NO 113/CHD/2016 ASSESSMENT YEAR:2010-11 M/S MODI WIRE PRODUCTS VS JCIT RANGE, RAILWAY GODOWN ROAD MANDI GOBINDGARH MANDI GOBINDGARH PAN NO. AABFM 3477 A (APPELLANT) (RESPONDENT) ASSESSEE BY : SH. SUDHIR SEHGAL, SH. KUSHAL C HOPRA DEPARTMENT BY : SH. RAVI SARANGAL,CIT, DR, SH. ARVIND SUDARSHAN,JCIT SH. PARDEEP KUMAR GOYAL,DCIT ITA NO 305/CHD/2016 ASSESSMENT YEAR:2011-12 M/S MODI WIRE PRODUCTS VS ACIT CIRCLE, RAILWAY GODOWN ROAD MANDI GOBINDGARH MANDI GOBINDGARH PAN NO. AABFM 3477 A (APPELLANT) (RESPONDENT) 20 ASSESSEE BY : SH. DEEPAK AGGARWAL, CA DEPARTMENT BY : SH. RAVI SARANGAL,CIT,DR, SH. ARVIND SUDARSHAN,JCIT SH. PARDEEP KUMAR GOYAL,DCIT ITA NO 328/CHD/2016 ASSESSMENT YEAR:2011-12 M/S SHREE SALASAR STEEL STRUCTURALS, VS. JCIT RAN GE P. LTD. MANDI GOBINDGARH VILLAGE AMBEY MAJRA, MANDI GOBINDGARH PAN NO. AAKCS 3670 D (APPELLANT) (RESPONDENT) ITA NO 334/CHD/2016 ASSESSMENT YEAR:2011-12 DCIT CIRCLE VS M/S SHREE SALASAR MANDI GOBINDGARH STEEL STRUCTURAL S,P. LTD. VILLAGE AMBEY MAJRA, MAN DI GOBINDGARH PAN NO. AAKCS 3670 (APPELLANT) (RESPONDENT) ASSESSEE BY : SH. RAJIV DATTA, CA DEPARTMENT BY : SH. RAVI SARANGAL,CIT ,DR, SH. ARVIND SUDARSHAN,JCIT SH. PARDEEP KUMAR GOYAL,DCIT DATE OF HEARING : 09/02/2017 DATE OF PRONOUNCEMENT : 14.02.2017 O R D E R PER BENCH THIS ORDER SHALL DISPOSE OFF ALL THE ABOVE CROSS APPEALS WHICH ARE INVOLVING THE IDENTICAL ISSUE. 2. WE HAVE HEARD LD. REPRESENTATIVES OF ALL THE ASSESSEES, LD. CIT-DR SHRI RAVI SARANGAL. SHRI PRAD EEP 21 KUMAR GOYAL, DCIT AND SHRI ARVIND SUDERSHAN, JCIT A RE ALSO PRESENT IN THE COURT TO ASSIST THE BENCH. 3. THE LD. REPRESENTATIVES OF BOTH THE PARTIES MAIN LY ARGUED IN THE CROSS APPEALS OF ASSESSEE M/S MODI OI L & GENERAL MILLS. THEREFORE, FOR THE PURPOSE OF DISPO SAL OF ALL THE CROSS APPEALS, THE FACTS ARE TAKEN AND CONS IDERED FROM THE CROSS APPEALS OF M/S MODI OIL & GENERAL MI LLS. ITA 149/2016 : (DEPARTMNTAL APPEAL) ITA 112/2016 : (ASSESSEE'S APPEAL) ASSESSMENT YEAR : 2010-11 4. BOTH THE CROSS APPEALS ARE DIRECTED AGAINST THE ORDER OF LD. CIT(APPEALS) PATIALA DATED 30.12.2015 FOR ASSESSMENT YEAR 2010-11. THE ASSESSEE FILED RETURN OF INCOME DECLARING AN INCOME OF RS. 1,60,23,090/- AND THE SAME WAS PROCESSED. 5. THE BRIEF FACTS ARE THAT THE APPELLANT COMPANY I S IRON AND STEEL ROLLING MILL. THE A.O. HAS OBSERVED THAT IN THIS CASE, ELECTRICITY CONSUMED IS DIRECTLY RELA TED TO PRODUCTION OF FINISHED GOODS. THE PROCESS OF PRODUC TION OF FINISHED GOODS INVOLVES HEATING OF RAW MATERIAL I.E. INGOTS, BILLETS, SLABS ETC. AND, THEREAFTER, PASSIN G THE SAME THROUGH VARIOUS ROLLERS FOR GETTING DESIRED FI NISHED GOODS I.E. ROUNDS, SQUARES AND BARS. THINNER SECTIO NS ENTAIL HIGHER CONSUMPTION OF ELECTRICITY AS THESE H AVE TO 22 PASS THROUGH A HIGHER NUMBER OF ROLLERS. IN ORDER T O CO- RELATE THE CONSUMPTION OF ELECTRICITY VIS-A-VIS THE PRODUCTION SHOWN, THE A.O. GATHERED INFORMATION REGARDING CONSUMPTION OF ELECTRICITY FROM THE ELECT RICITY BOARD. THE A.O. ANALYZED THE DATA AND REPRODUCED TH E SAME IN DIFFERENT ANNEXURES DULY ENCLOSED WITH THE ASSESSMENT ORDER. ANNEXURE-A SHOWS THE CONSUMPTION OF ELECTRICITY PMT OF FINISHED GOODS ON DAILY BASIS FOR THE ENTIRE YEAR. IT WAS OBSERVED THAT THE ELECTRICITY CONSUMPTION PMT. OF FINISHED GOODS VARIES WIDELY WH ILE THE AVERAGE FOR THE ENTIRE YEAR IS 45.93 UNITS. THE ANNEXURE-B SHOWS THE DAYS ON WHICH ELECTRICITY CONSUMED IS LOW BUT THE PRODUCTION OF FINISHED GOOD S IS VERY HIGH. ANNEXURE-C SHOWS THE DAYS ON WHICH THE CONSUMPTION OF ELECTRICITY UNITS IS VERY HIGH WHERE AS THE PRODUCTION OF FINISHED GOODS IS VERY LOW. FURTH ER, THERE ARE CERTAIN DAYS WHEN THERE IS HIGH CONSUMPTI ON OF ELECTRICITY BUT NO PRODUCTION OF FINISHED GOODS. THE DETAILS ARE REPRODUCED IN THE ASSESSMENT ORDER. ANNEXURE-D SHOWS THE DAYS ON WHICH THERE IS LOW CONSUMPTION OF ELECTRICITY BUT NO PRODUCTION OF FIN ISHED GOODS. 5(I) WHEN CONFRONTED ON THIS ISSUE, THE APPELLANT SUBMITTED THAT THE CONSUMPTION OF ELECTRICITY DEPEN DS ON VARIOUS FACTORS. THE APPELLANT IS MANUFACTURING DIFFERENT TYPES OF PRODUCTS NAMELY M.S. ROUNDS AND BARS ETC. FROM STEEL INGOTS, AND BILLETS ETC. AND T HAT TOO 23 OF DIFFERENT SIZES. FURTHER THE CONSUMPTION OF ELEC TRICITY DEPENDS ON THE QUALITY OF RAW MATERIAL AND FURNACE OIL, SUPPLY OF ELECTRICITY, MACHINERY BREAKDOWN, LABOUR PROBLEMS, OVER HEATING ETC. FURTHER THERE WAS MISMA TCH IN PERIOD OF RECORDING OF FINISHED PRODUCTS AND RECORDING OF CONSUMPTION OF ELECTRICITY. DETAILED SUBMISSION OF THE APPELLANT IS REPRODUCED IN THE ASSESSMENT ORDER. 5(II) THE A.O., HOWEVER, DID NOT ACCEPT THE SUBMISS ION OF THE APPELLANT. THE A.O. CONCLUDED THAT THERE WAS NO EVIDENCE ON RECORD RELATING TO THE TYPES, SIZES AND QUALITY OF FINISHED GOODS PRODUCED ON DAILY BASIS. THE A.O. FURTHER NOTED THAT EVEN ON MONTHLY BASIS THERE IS A LARGE VARIATION IN THE CONSUMPTION OF ELECTRICITY U NITS PMT. OF FINISHED GOODS AS REPRODUCED IN THE ASSESSM ENT YEAR. THE A.O., THEREAFTER, REJECTED THE BOOKS OF ACCOUNTS U/S 145(3) OF THE IT ACT'61. THE A.O. RELI ED ON THE CASE OF MELTON INDIA VS. COMMISSIONER OF TRADE OF TAX (UP) APPEAL NO. (CIVIL) 373 OF 2007 (SC), SHREE GANPATI EMBROIDERY PVT. LTD. VS. CIT 16 DTR (P & H) AND KANCHWALA GEMS VS. JCIT 288 ITR 10 (SC). THE A.O., THEREAFTER, ADOPTED THE QUANTUM OF ELECTRICIT Y CONSUMED PMT. ON THE BASIS OF MINIMUM VALUE OF AVERAGE ELECTRICITY CONSUMED PMT. FOR A PERIOD OF 3 0 DAYS ASSUMING THAT WITHIN A PERIOD OF 30 DAYS VARIO US TYPES AND SIZES OF FINISHED GOODS WOULD HAVE BEEN 24 PRODUCED. THE LOWEST VALUE, FROM THIS CHART IS 37.5 3 UNITS PMT. PERTAINING TO THE PERIOD FROM 25.01.2010 TO 15.03.2010. ON THIS BASIS, THE A.O. ESTIMATED THE UNACCOUNTED PRODUCTION. THE A.O. COMPUTED THE QUANTUM OF ACTUAL FINISHED GOODS PRODUCED AND, THEREAFTER, ASCERTAINED THE UNACCOUNTED PRODUCTION FOR EACH MONTH AFTER DEDUCTING THE FINISHED GOODS PRODU CED DURING THE MONTHS AS SHOWN IN THE BOOKS OF ACCOUNTS . THEREAFTER, ON THE BASIS OF AVERAGE SALES RATE TOTA L UNACCOUNTED PRODUCTION WAS ESTIMATED IN MONETARY TERMS AND THEN ADOPTING THE GROSS PROFIT RATE SHOWN BY THE APPELLANT, THE UNACCOUNTED PROFIT OUT OF THE UNACCOUNTED PRODUCTION WAS WORKED OUT. SECONDLY, TH E PEAK UNACCOUNTED PRODUCTION FOR THE RELEVANT MONTH WAS DETERMINED AND BY MULTIPLYING WITH THE AVERAGE SALES RATE OF FINISHED GOODS, THE UNACCOUNTED INVESTMENT WAS WORKED OUT. 5(III) THE ASSESSING OFFICER PASSED THE ASSESSMENT ORDER DATED 15.02.2013 AND MADE THE ADDITION OF RS. 1,90,01,568/- AND COMPUTED THE TOTAL INCOME OF THE ASSESSEE AT RS. 3,50,24,654/-. THE ADDITIONS WERE MADE ON ACCOUNT OF UNACCOUNTED INVESTMENT IN UNACCOUNTED PRODUCTION AND UNACCOUNTED PROFIT OUT OF THE UNACCOUNTED PRODUCTION. 6. THE ADDITIONS WERE CHALLENGED BEFORE LD. CIT(APPEALS) AND ASSESSEE FILED DETAILED WRITTEN 25 SUBMISSIONS AND REITERATED THE SUBMISSIONS MADE BEF ORE ASSESSING OFFICER. IT WAS CONTENDED THAT DIFFERENT TYPE OF PRODUCTS OF VARYING SIZES WERE BEING MANUFACTURE D. THE ASSESSEE ALSO RELIED ON REPORT OF NATIONAL INST ITUTE OF SECONDARY STEEL TECHNOLOGY ACCORDING TO WHICH TH E CONSUMPTION OF ELECTRICITY DEPENDS ON VARIOUS FACTO RS. NO DEFECTS HAVE BEEN POINTED OUT IN THE BOOKS OF ACCOUNT. ALL THE PURCHASES, SALES AND EXPENSES ARE DULY VOUCHED. THE UNIT IS UNDER CENTRAL EXCISE AND ALL RECORDS ARE MAINTAINED. THEREFORE, BOOKS OF ACCOUN T HAVE BEEN WRONGLY REJECTED BY THE ASSESSING OFFICER AND ADDITIONS ARE WHOLLY UNJUSTIFIED. THE LD. CIT(APPE ALS) FOLLOWED THE ORDER OF HIS PREDECESSOR IN THE CASE O F M/S KARAM STEEL CORPORATION DATED 30.03.2015 AND REPRODUCED THE SAME IN THE IMPUGNED ORDER IN WHICH THE ESTIMATION OF CONSUMPTION OF ELECTRIC PER METRIC TO N OF PRODUCTION WAS UPHELD AND THE PROFIT ESTIMATED BY T HE ASSESSING OFFICER ON THE UNACCOUNTED PRODUCTION WAS CONFIRMED. THE LD. CIT(APPEALS), HOWEVER, ACCEPTED THE ARGUMENT OF THE ASSESSEE REGARDING CIRCULATION OF T HE STOCK AS ONLY PART OF THE STOCK WILL KEEP ON CIRCUL ATING IN THE CHAIN OF PRODUCTION AND SUBSEQUENT SALES. T HE LD. CIT(APPEALS), ULTIMATELY SUSTAINED THE ADDITION OF RS. 55,78,821/- ON ACCOUNT OF UNACCOUNTED INVESTMEN T SUBJECT TO VERIFICATION BY THE ASSESSING OFFICER AN D APPEAL OF THE ASSESSEE WAS PARTLY ALLOWED. 26 7. IT MAY BE NOTED HERE THAT THE ASSESSEE IN THIS APPEAL HAS CHALLENGED THE REJECTION OF THE BOOKS OF ACCOUNT UNDER SECTION 145(3)/144 OF INCOME TAX ACT ALONGWITH UPHOLDING OF THE ADDITION OF RS. 55,78,52 1/- ON ACCOUNT OF UNACCOUNTED INVESTMENT AGAINST ADDITI ON OF RS. 1,29,13,563/-. IN THE GROUND OF APPEAL ALSO , ASSESSEE HAS STATED THAT LD. CIT(APPEALS) HAS ERRED IN NOT GIVING ANY FINDING AGAINST ADDITION OF RS. 60,88,005/- MADE BY ASSESSING OFFICER ON ACCOUNT OF UNACCOUNTED PROFIT OUT OF UNACCOUNTED PRODUCTION. THE REVENUE DEPARTMENT IN THEIR APPEAL HAS CHALLENGED T HE ORDER OF LD. CIT(APPEALS) IN RESTRICTING THE ADDITI ON OF RS. 1,90,01,568/- TO THE EXTENT OF RS. 1,16,66,526/ -. 8. THE LD. COUNSEL FOR THE ASSESSEE CONTENDED THAT PR. COMMISSIONER OF INCOME TAX, PATIALA HAS ALREADY SUBSEQUENT TO PASSING OF THE ORDERS UNDER SECTION 143(3) OF THE ACT CONSTITUTED A COMMITTEE TO VERIFY NORMAL VARIATION IN CONSUMPTION OF ELECTRICITY FOR MANUFACTURING EACH METRIC TON OF FINISHED GOODS AND THE COMMITTEE HAS GIVEN A REPORT ON 25.05.2016, THEREFO RE, LD. PR. COMMISSIONER OF INCOME TAX ISSUED SOME INTE RNAL GUIDELINES REGARDING ACCEPTABILITY OF VARIATION UPT O 15% AND NO ADDITIONS HAVE BEEN MADE ON SIMILAR ISSUE IN SUBSEQUENT YEARS BY THE ASSESSING OFFICER IN SOME C ASES OF ASSESSEE ON SIMILAR ISSUES IN FAVOUR OF THE ASSE SSEE. 27 8(I) THE LD. DR SOUGHT TIME TO VERIFY THE STAND OF THE DEPARTMENT WITH REGARD TO CASES DECIDED SUBSEQUENTL Y BY THE DEPARTMENT ON THE BASIS OF THE INTERNAL GUIDELINES ISSUED AFTER CONSTITUTING A COMMITTEE. ON THE DATE OF HEARING, LD. DR FILED COPIES OF THE MIN UTES OF THE COMMITTEE AND REPORT OF ADDL. CIT, RANGE MAND I GOBINDGARH DATED 25.05.2016 AND LETTER ADDRESSED TO CIT-DR BY THE OFFICE OF PR. COMMISSIONER OF INCOME TAX, PATIALA DATED 30.01.2017 FOR EXPLAINING THE STAND O F THE DEPARTMENT. THE AFORESAID LETTER DATED 30.01.2007 IS REPRODUCED AS UNDER : OFFICE OF THE PRINCIPAL COMMISSIONER OF INCOM E TAX AAYKAR BHAWAN. PATIALA PH:0175-221 4883/FAX: [phone] F.NO.PR. CIT/PTA/TECH/CONSP. OF ELECT/90/16-17 DATED : 30.01.2017 TO THE COMMISSIONER OF INCOME TAX (D.R.-1), INCOME TAX APPELLATE TRIBUNAL, ROOM NO. 402, 4 TH FLOOR, AAYKAR BHAWAN, HIMALAYA MARG, SECTOR 17-E, CHANDIGARH-160017. SIR, SUB: APPEALS BEFORE THE ITAT IN RESPECT OF CASES OF CONSUMPTION OF ELECTRICITY VIZ-Z-VIZ SUPPRESSION/ UNACCOUNTED PROD UCTION OF MANDI GOBINDGARH- REGARDING - ********** KINDLY REFER TO YOUR OFFICE LETTER NO. 1064 DATED 24.01.2017 ON THE SUBJECT CITED ABOVE. 2. AS DESIRED, I HAVE BEEN DIRECTED TO INT IMATE THAT THE PARAWISE COMMENTS ON THE ARGUMENTS OF THE ASSESSEES , WHOSE CASES ARE PENDING BEFORE THE ITAT, CHANDIGARH, ARE BEING SENT AS UNDE R:- 28 I ) IT IS CONTENDED THAT PR. COMMISSIONER OF INCOME TAX, PATIALA HAS ALREADY SUBSEQUENT TO PASSING OF ORDERS U/S 143(3) ISSUED SOME INTERNAL GUIDELI NES REGARDING ACCEPTABILITY OF VARIATION UPTO 15% AND NO ADDITION HAVE BEEN MADE ON SIMILAR ISSUE IN SUBSEQUENT YEARS BY THE AO IN THE SAME CASES OF ASSESSEE ON SIMILAR ISSUES IN FAVOUR OF ASSESSEE. IN THIS REGARD, IT IS SUBMITTED THAT WITH REGARD TO PENDENCY OF APPEALS BEFORE THE HON'BLE ITAT PERTAINING TO ASSESSMENT YEARS 2010-11 TO 2012-13, ON THE ISSUE OF ELECTRICITY, THE DEPARTMENT HAS ESTIMATED THE UNACCOUNTED PRODUCTION AFTER REJECTING THE BOOKS OF ACCOUNTS BECAUSE THERE WAS WIDE VARIATION IN THE CONSUMPTION OF ELECTRICITY UNITS PER METRIC TON PRODUCTION OF FINISHED GOODS. THEREAFTER, FOR ESTIMATION U/S 144, IN CASE OF ROLLING MILLS, THE AVERAGE OF 30 DAYS AND IN CASE OF INDUCTION FURNACES 10 DAYS AVERAGE INVOLVING THE LEAST CONSUMPTION OF ELECTRICITY UNITS FOR PRODUCTION OF ONE METRIC TON WAS TAKEN TO WORK OUT THE ALLEGED UNACCOUNTED PRODUCTION ON WHICH GROSS PROFIT WAS APPLIED TO DETERMINE THE UNACCOUNTED INCOME. SIMILARLY, BY ADOPTING NUMBER OF HOLDING DAYS, UNEXPLAINED INVESTMENT IN THE ALLEGED UNACCOUNTED PRODUCTION WAS ESTIMATED. THEREAFTER, TAKING INTO CONSIDERATION THE GRIEVANCES AMONGST THE TAX PAYERS, A COMMITTEE WAS CONSTITUTED BY THE PR. COMMISSIONER OF INCOME TAX, PATIALA. THE SAID COMMITTEE WAS REQUIRED TO EXAMINE THE ACTUAL BUSINESS STATE OF AFFAIRS OF THE ASSESSEES ENGAGED IN PRODUCTION I.E. STEEL ROLLING MILLS AND FURNACES. THE COMMITTEE BY VISITING VARIOUS UNITS FOUND THAT VARIATION IN CONSUMPTION OF ELECTRIC UNITS OF DIFFERENT SIZES OF FINISHED GOODS PRODUCED ARE THERE. THEREFORE, THE COMMITTEE ONLY IN THOSE CASES WHERE THERE WAS WIDE VARIATION CONSIDERED THEIR CASES FOR THE PURPOSES OF REJECTION OF BOOKS OF ACCOUNTS. FURTHER, ON THE BASIS OF FINDING GIVEN BY VISITING VARIOUS UNITS, IT WAS DECIDED THAT UPTO 15% VARIATION IN THE CONSUMPTION OF ELECTRICITY UNITS PER MT OF FINISHED GOODS PRODUCED ARE JUSTIFIABLE AND REASONABLE HAVING REGARD TO THE FACTS AND CIRCUMSTANCES OF EACH CASE IN THE IRON & STEEL INDUSTRY BECAUSE ZERO VARIATION CANNOT BE VISUALIZED OR ACHIEVED BY ANY LEVEL OF TECHNOLOGY GIVEN THE DIFFERENT NATURE OF RAW MATERIAL, MACHINERY AND FINISHED GOODS. HOWEVER, IN THE EARLIER YEARS ONLY THE CYCLE INVOLVING MINIMUM NUMBER OF CONSUMPTION OF ELECTRICITY UNIT WAS CONSIDERED FOR ESTIMATION OF UNACCOUNTED PRODUCTION/INCOME WHICH WAS CULLED FROM ASSESSEES BOOKS OF ACCOUNT TO EXTRAPOLATE THE ALLEGED 29 UNACCOUNTED PRODUCTION WHICH LED TO UNREASONABLE/UNJUSTIFIED ADDITIONS NOT BASED ON THE ACTUA L FACTS AND CIRCUMSTANCES OF THE ASSESSEES BECAUSE WHILE EXTRAPOLATING UNACCOUNTED PRODUCTION, THE AVERAGE INDUSTRIAL NORM OF NUMBER OF ELECTRICITY UNITS CONSUMED PER MT OF FINISHED GOODS WAS NOT TAKEN INTO CONSIDERATION. THERE ARE NUMBER OF CASES WHERE UNACCOUNTED PRODUCTION WAS EXTRAPOLATED EVEN BY TAKING 15 TO 20 UNITS OF ELECTRICITY FOR PRODUCTION OF PER MT FINISHED GOODS, WHICH IS IMPOSSIBLE. IN ORDER TO MAKE THE ESTIMATION U/S 144 MORE FAIR AND REASONABLE, IT WAS DECIDED TO ADOPT AVERAGE OF MINIMUM AND MAXIMUM NUMBER OF UNITS CONSUMED PER CYCLE OF 30 DAYS/10 DAYS ON THE BASIS OF BOOK'S OF ACCOUNT MAINTAINED BY EACH ASSESSES. THE IDEA WAS TO CONSIDER BOTH THE EXTREMES TO ARRIVE AT FAIR AND JUDICIOUS ESTIMATION OF INCOME. HOWEVER, THE DEPARTMENT HAS KEPT THE MAIN ISSUE ALIVE I.E. REJECTION OF BOOKS OF ACCOUNTS BY MODIFYING THE BASIS OF ESTIMATION OF UNACCOUNTED PRODUCTION ON THE BASIS OF MINIMUM AND MAXIMUM VALUE OF AVERAGE ELECTRICITY CONSUMED PER MT FOR A CONTINUOUS PERIOD OF 30 DAYS IN THE CASE OF ROLLING MILLS AND 10 DAYS IN THE CASE OF FURNACES, ALONGWITH UNEXPLAINED INVESTMENT IN UNACCOUNTED PRODUCTION. IT IS WORTHWHILE TO MENTION HERE THAT EVERY YEAR IS AN INDEPENDENT ASSESSMENT YEAR. HOWEVER; CONSIDERING THE FACTS & CIRCUMSTANCES OF EACH CASE, THE APPEALS MAY BE DECIDED ON MERITS. II) IT IS ALSO CONTENDED THAT IN SOME CASES OF SUBSEQUENT ASSESSMENT YEARS OF THESE ASSESSEES, THE ASSESSING OFFICERS HAVE MADE ADDITIONS AFTER CONSIDERING FAVORABLY ONE THIRD OF SUCH VARIATION INSTEAD OF HALF PERCENT AS ALLOWED BY THE CIT(APPEALS), PATIALA IN CASES UNDER APPEAL. THE DECISION OF THE LD. CIT(A), PATIALA IN ESTIMATING TOTAL UNDISCLOSED INVESTMENT IN RESPECT OF THAT UNACCOUNTED PRODUCTION AT HALF OF THE PEAK UNACCOUNTED PRODUCTION COMPUTED ON MONTHLY BASIS I.E. 15 DAYS WAS NOT ACCEPTED BY THE DEPARTMENT AS THE AOS HAVE ADOPTED THE QUANTUM OF ELECTRICITY CONSUMED PER MT ON THE BASIS OF MINIMUM VALUE OF AVERAGE ELECTRICITY CONSUMED PER MT FOR A CONTINUOUS PERIOD OF 30 DAYS ASSUMING THAT WITHIN A PERIOD OF 30 VARIOUS TYPES AND SIZES OF FINISHED GOODS WOULD HAVE BEEN PRODUCED. THE DEPARTMENT IS ALREADY IN APPEAL BEFORE THE ITAT ON THE DECISION OF THE CIT(APPEALS). FURTHER, THE AOS EXAMINED THE ISSUES HAVING REGARD TO THE FACTS & CIRCUMSTANCES OF EACH CASE AS 30 YOURS FAITHFULLY, SD/- ( BALDEV SINGH ) INCOME TAX OFFICER HQ.)(TECH.),PATIALA 8(II). THE COPY OF THE AFORESAID LETTER IS PROVIDED TO COUNSELS FOR VARIOUS ASSESSEES APPEARING AT THE TIM E OF HEARING OF THE CROSS-APPEALS. LD. COUNSELS FOR ASSESSEES HAVE ARGUED THAT SINCE THE DEPARTMENT HAS CONSIDERED THE GRIEVANCES BY CONSTITUTING A COMMITT EE BY LD. PR. COMMISSIONER OF INCOME TAX, PATIALA AND COMMITTEE HAS GIVEN CERTAIN GUIDELINES AS TO HOW TH E ASSESSMENT SHALL HAVE TO BE FRAMED AND IN SUBSEQUEN T YEARS, ON THE BASIS OF THE SAME GUIDELINES, THE ASSESSING OFFICER DID NOT MAKE ADDITIONS AGAINST TH E ASSESSEE, THEREFORE, MATTER MAY BE REMANDED TO THE ASSESSING OFFICER TO RE-DECIDE ALL THE ISSUES INVOL VED IN CROSS-APPEALS IN ACCORDANCE WITH LAW AND IN ACCORDA NCE WITH GUIDELINES ISSUED BY THE LD. PR. COMMISSIONER OF INCOME TAX, PATIALA AS ABOVE. 9. THE LD. DR ALSO SUGGESTED THAT IN VIEW OF THE AB OVE STAND OF THE DEPARTMENT AND INTERNAL GUIDELINES ISS UED BY LD. PR. COMMISSIONER OF INCOME TAX, PATIALA, MAT TER AGAINST APPLYING ANY UNIFORM CRITERIA. ALL THE ISSUES INVOLVED THEREIN WERE EXAMINED BY THE RESPECTIVE AOS ON CASE TO CASE BASIS. 31 MAY BE REMANDED TO THE FILE OF THE ASSESSING OFFICE R FOR RE-CONSIDERATION OF THE ISSUES IN ACCORDANCE WITH L AW. AS NOTED ABOVE, TWO OF THE ASSESSING OFFICERS OF TH E REVENUE DEPARTMENT OF THE SAME RANGE WERE ALSO PRESENT DURING THE COURSE OF HEARING AND THEY HAVE ALSO SIMILARLY SUGGESTED THAT MATTER MAY BE REMANDED TO THE FILES OF THE ASSESSING OFFICER IN ALL THE CASES FOR RE- DECIDING THE ISSUES IN ACCORDANCE WITH THE INTERNAL GUIDELINES ISSUED BY LD. PR. COMMISSIONER OF INCOME TAX, PATIALA AS WELL AS IN ACCORDANCE WITH LAW. 10. CONSIDERING THE FACTS AND CIRCUMSTANCES OF THE CASE IN THE LIGHT OF THE INTERNAL GUIDELINES ISSUED BY THE PR. COMMISSIONER OF INCOME TAX, PATIALA BY FORMING A COMMITTEE TO CONSIDER THE GRIEVANCE OF THE TAX PAYE RS, IT IS CLEAR THAT REVENUE DEPARTMENT HAS TAKEN SOME REASONABLE BASIS TO COMPUTE THE INCOME OF THE ASSES SEE ON THE BASIS OF THE POWER CONSUMPTION. IT IS ADMIT TED FACT THAT IN SUBSEQUENT YEARS, SOME FAVOURABLE VIEW HAVE BEEN TAKEN IN FAVOUR OF THE ASSESSEES BY FOLLO WING THE SAME GUIDELINES. IT MAY BE NOTED HERE THAT THE ASSESSEE IN THIS APPEAL HAS CHALLENGED THE REJECTIO N OF THE BOOKS OF ACCOUNT UNDER SECTION 145(3)/144 OF INCOME TAX ACT ALONGWITH UPHOLDING OF THE ADDITION OF RS. 55,78,521/- ON ACCOUNT OF UNACCOUNTED INVESTMEN T AGAINST ADDITION OF RS. 1,29,13,563/-. IN THE GROU ND OF APPEAL ALSO, ASSESSEE HAS STATED THAT LD. CIT(APPEA LS) HAS ERRED IN NOT GIVING ANY FINDING AGAINST ADDITIO N OF 32 RS. 60,88,005/- MADE BY ASSESSING OFFICER ON ACCOUN T OF UNACCOUNTED PROFIT OUT OF UNACCOUNTED PRODUCTION. THE REVENUE DEPARTMENT IN THEIR APPEAL HAS CHALLENGED T HE ORDER OF LD. CIT(APPEALS) IN RESTRICTING THE ADDITI ON OF RS. 1,90,01,568/- TO THE EXTENT OF RS. 1,16,66,526/ -. SINCE ALL THE RESPECTIVE GROUNDS OF APPEAL IN CROSS APPEALS ARE CONNECTED WITH ESTIMATION OF THE UNACCOUNTED PRODUCTION BASED UPON POWER CONSUMPTION BY ESTIMATING UNACCOUNTED INVESTMENT AND UNACCOUNTE D PROFIT OUT OF UNACCOUNTED PRODUCTION AND ON THE SAM E, REVENUE DEPARTMENT HAS CONSTITUTED THE COMMITTEE TO CONSIDER THE GRIEVANCES OF THE ASSESSEES/TAX PAYERS AND LD. PR. COMMISSIONER OF INCOME TAX ISSUED THE ABOVE GUIDELINES BY MODIFYING THE BASIS OF ESTIMATION OF UNACCOUNTED PRODUCTION AND SAME GUIDELINES HAVE BEE N ADOPTED IN SUBSEQUENT YEARS BY THE RESPECTIVE ASSES SING OFFICERS, THEREFORE, IN OUR CONSIDERED VIEW, ENTIRE MATTER REQUIRES RE-CONSIDERATION AT THE LEVEL OF THE ASSES SING OFFICER. IN THIS VIEW OF THE MATTER, WE SET ASIDE THE ORDERS OF AUTHORITIES BELOW AND RESTORE THE ENTIRE ISSUE TO THE FILE OF ASSESSING OFFICER I.E. REJECTION OF THE BOOKS OF ACCOUNT UNDER SECTION 145(3)/144, UNACCOUNTED PRODUCTION OF FINISHED GOODS, UNACCOUNTED PROFIT AN D UNACCOUNTED INVESTMENT OUT OF UNACCOUNTED PRODUCTIO N WITH REFERENCE TO CONSUMPTION OF ELECTRICITY UNITS PER METRIC TON PRODUCTION OF FINISHED GOODS WITH DIRECT ION TO RE-DECIDE THE ENTIRE ISSUE IN ACCORDANCE WITH LAW I N THE LIGHT OF THE INTERNAL GUIDELINES ISSUED BY THE LD. PR. 33 COMMISSIONER OF INCOME TAX, PATIALA. THE ASSESSING OFFICER SHALL GIVE REASONABLE SUFFICIENT OPPORTUNIT Y OF BEING HEARD TO THE ASSESSEE AND ASSESSEE SHALL BE A T LIBERTY TO RAISE ANY CONTENTION BEFORE ASSESSING OF FICER FOR COMPLETION OF THE ASSESSMENT IN ACCORDANCE WITH LAW. 11. IN THE RESULT, BOTH THE CROSS APPEALS ARE ALLOW ED FOR STATISTICAL PURPOSES. REMAINING CROSS APPEALS ( AS REFERRED TO ABOVE) 12. IN THE REMAINING CROSS APPEALS, THE ISSUES ARE SAME AS HAVE BEEN CONSIDERED IN THE CROSS APPEALS O F M/S MODI OIL & GENERAL MILLS (SUPRA). IN SOME OF T HE APPEALS OF THE ASSESSEE, SOME OTHER SMALL GROUNDS H AVE ALSO BEEN RAISED WHICH HAVE NOT BEEN PRESSED BY LD. COUNSELS FOR THE ASSESSEES. THEREFORE, FOLLOWING T HE REASONS FOR DECISION IN THE CASE OF M/S MODI OIL &GENERAL MILLS (SUPRA), WE SET ASIDE THE ORDERS OF AUTHORITIES BELOW AND RESTORE THE ENTIRE ISSUE TO T HE FILE OF ASSESSING OFFICER I.E. REJECTION OF THE BOOKS OF ACCOUNT UNDER SECTION 145(3)/144, UNACCOUNTED PRODUCTION OF FINISHED GOODS, UNACCOUNTED PROFIT AN D UNACCOUNTED INVESTMENT OUT OF UNACCOUNTED PRODUCTIO N WITH REFERENCE TO CONSUMPTION OF ELECTRICITY UNITS PER METRIC TON PRODUCTION OF FINISHED GOODS WITH DIRECT ION TO RE-DECIDE THE ENTIRE ISSUE IN ACCORDANCE WITH LAW I N THE LIGHT OF THE INTERNAL GUIDELINES ISSUED BY THE LD. PR. 34 COMMISSIONER OF INCOME TAX, PATIALA. THE ASSESSING OFFICER SHALL GIVE REASONABLE SUFFICIENT OPPORTUNIT Y OF BEING HEARD TO THE ASSESSEES AND ASSESSEES SHALL BE AT LIBERTY TO RAISE ANY CONTENTION BEFORE ASSESSING OF FICER FOR COMPLETION OF THE ASSESSMENT IN ACCORDANCE WITH LAW. 13. IN THE RESULT, ALL THE CROSS APPEALS ARE ALLOWE D FOR STATISTICAL PURPOSES. 14. IN THE RESULT, ALL APPEALS OF THE ASSESSEES AND REVENUE ARE ALLOWED FOR STATISTICAL PURPOSES IN TER MS ABOVE. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- (ANNAPURNA GUPTA) (BHAVNESH SA INI) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 14 TH FEBRUARY,2017. POONAM COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) 4. THE CIT,DR ASSISTANT REGISTRAR, ITAT/CHD