THE ACIT, -2(1), Ujjain V. M/S. SHRINIWAS BOARD AND PAPER PVT. LTD., Ujjain

ITA 151/IND/2015

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 5752 (ITAT-INDORE)
• Duration Of Justice: 2 year(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-03-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2010-2011
• Appeal Filed On: 05-03-2015
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: MOHD. JAVED
• Section: 32; 147; 131; 68; 246; 69; 145; 27; 148; 54; 37; 6; 56; 263; 63; 132; 12; 28; 144; 10; 90; 154; 2; 11; 15; 271(1)(b); 139; 92

Judgement Text

ACIT VS. M/S SHRINIVAS BOARD 1 , , IN THE INCOME TAX APPELLATE TRIB UNAL, INDORE BENCH, INDORE BEFORE SHRI C.M. GARG, JUDICIAL MEMBER AND SHRI O.P. MEENA, ACCOUNTANT MEMBER I.T.A. NO. 151/IND/2015 ASSESSMENT YEAR 2010-11 ASSTT. COMMISSIONER OF INCOME TAX 2(1), INDORE :: /APPELLANT VS M/S SHRINIWAS BOARD AND PAPER PRIVATE LIMITED UJJAIN PAN AACCS-7555D :: / RESPONDENT / REVENUE BY SHRI MOHD. JAVED - DR !' #$% / ASSESSEE BY SHRI S.S. DESHPANDE & '' %( DATE OF HEARING 2 7 .3.2017 )*+,- %( DATE OF PRONOUNCEMENT 2 8 .3.2017 / O R D E R PER SHRI C.M. GARG, JM THIS APPEAL HAS BEEN FILED BY THE REVENUE AGAINST T HE ORDER OF THE LEARNED CIT(A), UJJAIN, DATED 10.12.2014 IN FIR ST APPEAL NO. U- 80/2013-4 DATED 10.12.2014 FOR THE ASSESSMENT YEAR 2010-11. ACIT VS. M/S SHRINIVAS BOARD 2 5. BEFORE US, THE LD. SENIOR D.R., HOWEVER, RELIED ON THE ORDER OF THE AO BUT COULD NOT CONTROVERT THE FINDING OF THE LD. CIT(A) BY BRINING ANY SUPPORTIVE MATERIAL ON RECORD WHEREAS T HE LEARNED COUNSEL FOR THE ASSESSEE HAS, RELYING ON THE ORDER OF THE LD. CIT(A), REITERATED THE SUBMISSIONS MADE BEFORE LD. CIT(A). 6. WE HAVE PERUSED THE ORDERS OF LOWER AUTHORITIES AND MATERIAL AVAILABLE ON RECORD. WE FIND THAT THE AO HAS HIMSEL F NOTED THAT THE ASSESSEE HAS MAINTAINED REGISTER FOR URD PURCHASES AND DOCUMENTED THE PURCHASES IN THE LEDGER ACCOUNT BY O PENING RESPECTIVE PARTIES ACCOUNT IN THE LEDGER. THE ASSES SEE HAS ALSO PRODUCED WEIGHMENT SLIPS OF THE VEHICLES SHOWING TH E VEHICLES LOADED WITH WASTE PAPER AND WEIGHT AFTER UNLOADING THE WASTE PAPER. LD. CIT(A) HAS NOTED THAT THE ASSESSEE HAD FILED TH E COPY OF REGISTER MAINTAINED FOR RECORDING PURCHASES FROM URD SUPPLIE RS FOR THE MONTH OF APRIL, 2008 ALONG WITH COPIES OF SOME BILL S WHICH WAS PREPARED BY THE ASSESSEE ON THE BASIS OF PURCHASES FROM URD SUPPLIERS, WEIGHMENT SLIPS, PAYMENT VOUCHERS AND L EDGER ACCOUNTS OF SOME PARTIES. ASSESSEE ALSO PRODUCED THE COPIES OF EXCISE REGISTER AND EXCISE RETURN IN SUPPORT OF ITS CONTEN TION THAT PURCHASE ARE ALSO DULY BEING RECORDED IN EXCISE RECORDS. BEF ORE LD. CIT(A), THE ASSESSEE HAS EXPLAINED THE FACT THAT IT REDUCED THE COST OF RAW MATERIAL BY MAKING LOCAL URD PURCHASES FROM LOCAL M ARKETS IN PLACE OF FOREIGN MARKET AND AT THE SAME TIME, IT COULD GE T SAME YIELD FROM LOCAL URD PURCHASES. IN PURCHASES FROM LOCAL URD SU PPLIERS, THE ASSESSEE HAS THE OPTION TO MAKE SPOT INSPECTION AND REJECTION WHEREVER QUALITY DOES NOT FOUND UPTO THE MARK. THE ASSESSEE HAS MAINTAINED RECORD FOR THE URD PURCHASES EXCEPT BILL S AS KABADIS DO NOT ISSUE BILLS TO WHOM ASSESSEE USED TO MAKE PURCH ASES. WITHOUT EXAMINING THE QUALITY OF RAW MATERIAL, THE AO WAS N OT RIGHT IN APPLYING THE AVERAGE RATE OF RAW MATERIAL BY MAKING COMPARISON OF THE RATES WITH THE RD & URD PURCHASES. THE RATIO LA ID DOWN IN THE FOLLOWING JUDICIAL PRONOUNCEMENTS FURTHER SUPPORTS THE CASE OF THE ASSESSEE: - 1. CIV VS. DHANRAJGIRJI RAJA NARSINGIRIJI (1973) 91 ITR 544 (SC); AND 2. DHAKESHWARI COTTON MILLS LTD. VS. CIT, (1954) 26 ITR 775, 782 (SC). ACIT VS. M/S SHRINIVAS BOARD 3 7. ON CONSIDERATION OF ABOVE FACTS IN THE LIGHT THE JUDICIAL PRONOUNCEMENTS, WE ARE OF THE VIEW THAT LD. CIT(A) WAS RIGHT IN DELETING THE ADDITION. MOREOVER, REVENUE HAS NOT BR OUGHT ANY CONTRARY MATERIAL BEFORE US TO CONTROVERT THE ACTIO N OF THE LD. CIT(A). THUS, WE CONFIRM THE ORDER OF THE LD. CIT(A). 2. FROM THE ORDER OF THE TRIBUNAL DATED 1.12.2015 I N THE ASSESSEES OWN CASE FOR THE ASSESSMENT YEAR 2009-10 IT IS CLEARLY DISCERNIBLE THAT THE TRIBUNAL HAS DISMISS THE APPEA L OF THE REVENUE, UPHOLDING THE ORDER OF THE LEARNED CIT(A). THE TRIB UNAL OBSERVED THAT THE ASSESSEE HAS EXPLAINED THE FACT THAT IT RE DUCED THE COST OF RAW MATERIAL BY MAKING LOCAL URD PURCHASES FROM LOC AL URD SUPPLIERS AND THE ASSESSEE HAD AN OPTION TO MAKE SP OT INSPECTION AND REJECTION, IF FOUND NECESSARY, WHEREVER QUALITY DOES NOT FIND UP TO THE MARK AND STANDARDS REQUIRED FOR THE ASSESSEE . THIS FACT HAS NOT BEEN CONTROVERTED BY THE ASSESSING OFFICER FOR THE ASSESSMENT YEAR 2010-11 ALSO THAT THE ASSESSEE HAS MAINTAINED RECORD FOR URD LOCAL PURCHASES EXCEPT BILLS BECAUSE KABADIES DO NO T ISSUE BILLS TO WHOM ASSESSEE USED TO MAKE LOCAL PURCHASES OF URD. AFTER OBSERVING THE ABOVE, THE TRIBUNAL CONCLUDED THAT TH E ASSESSING OFFICER WAS NOT RIGHT IN APPLYING THE AVERAGE RATE OF RAW MATERIAL BY MAKING COMPARISON OF THE RATES WITH RD & URD PURCHA SES AND, HENCE, THE IMPUGNED ADDITION MADE BY THE ASSESSING OFFICER ON THE ACIT VS. M/S SHRINIVAS BOARD 4 ISSUE WAS RIGHTLY DELETED BY THE LEARNED CIT(A). O N SPECIFIC QUERY BY THE BENCH, THE LEARNED DR FAIRLY ACCEPTED THAT T HE FACTS AND CIRCUMSTANCES OF THE CASE PERTAINING TO THE ISSUE F OR THE ASSESSMENT YEAR 2010-11 ARE SIMILAR TO THE ASSESSME NT YEAR 2009- 10. THUS, WE ARE UNABLE TO SEE ANY VALID REASON TO TAKE A DIFFERENT VIEW FROM THE VIEW WHICH HAS ALREADY BEEN TAKEN BY THE TRIBUNAL FOR THE ASSESSMENT YEAR 2009-10 AND THUS RESPECTFUL LY FOLLOWING THE SAME, THE SOLE GROUND OF THE REVENUE, BEING DE VOID OF MERIT, IS DISMISSED. 11. IN THE RESULT, THE APPEAL OF THE REVENUE STANDS DISMISSED. THE ORDER HAS BEEN PRONOUNCED IN OPEN COURT ON 28 TH MARCH, 2017. SD/- SD/- ( ! (O.P.MEENA) (C.M. GARG) ACCOUNTANT MEMBER JUDICIAL MEMBER MARCH 28, 2017. DN/