Assistant Commissioner of Income-tax, V. M/s. Jai Bharat Steel Rolling Mills, Nashik

ITA 1581/PUN/2015

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 9472 (ITAT-PUNE)
• Duration Of Justice: 2 year(s) 1 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-01-2018
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 08-01-2018
• Assessment Year: 2007-2008
• Appeal Filed On: 03-12-2015
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Additional evidence; Revised return
• Section: 69C; 143(3); 148; 6

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A , PUNE , , BEFORE MS. SUSHMA CHOWLA, JM AND SHRI ANIL CHATURVEDI, AM . / ITA NO. 1 512 /P U N/20 1 5 / ASSESSMENT YEAR : 20 0 7 - 08 M/S. JAI BHARAT STEEL ROLLING MILLS , PLOT NO.A - 16, MIDC, AMBAD, NASHIK - 422010 . / APPELLANT PAN: AACFJ4109P VS. THE ASST. COMMISSIONER OF INCOME TAX, CIRCLE - 1, NASHIK . / RESPONDENT . / ITA NO. 1 581 /P U N/20 1 5 / ASSESSMENT YEAR : 20 0 7 - 08 THE ASST. COMMISSIONER OF INCOME TAX, CIRCLE - 1, NASHIK . / APPELLANT VS. M/S. JAI BHARAT STEEL ROLLING MILLS, PLOT NO.A - 16, MIDC, AMBAD, NASHIK - 422010 . / RESPONDENT PAN: AACFJ4109P ASSESSEE BY : SMT. DEEPA KHARE REVENUE BY : SHRI AJAY MODI, JCIT / DATE OF HEARING : 08 . 0 1 .201 8 / DATE OF PRONOUNCEMENT: 12 . 0 1 .201 8 2 ITA NO. 1512 /PUN/20 15 ITA NO. 1581 /PUN/20 15 / ORDER PER SUSHMA CHOWLA, JM: THE CROSS APPEALS FILED BY ASSESSEE AND REVENUE ARE AGAINST ORDER OF CIT(A) - I , NASHIK , DATED 10.09.2015 RELATING TO ASSESSMENT YEAR 20 0 7 - 08 AGAINST ORDER PASSED UNDER SECTION 143(3) R.W.S. 147 OF INCOME TAX ACT 1961 (IN SHORT THE ACT). 2 . THE CROSS APPEALS FILED BY ASSESSEE AND REVENUE WERE HEARD TOGETHER AND ARE BEING DISPOSED OF BY THIS CONSOLIDATED ORDER FOR THE SAKE OF CONVENIENCE. 3. THE ASSESSEE IN ITA NO. 1 512 /PUN/201 5 HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: - 1. THE LEARNED CIT(A) ERRED IN LAW AND ON FACTS IN CONFIRMING ADDITION OF RS . 19,61,337/ - AT 50 % OF THE ADDITION MADE BY THE LEARNED AO TOWARDS ALLEGED CLA N DESTINE REMOVAL OF GOODS INSTEAD OF DELETING THE ENTIRE ADDITION. 2. THE LEARNED CIT(A) ERRED IN LAW AND ON FACTS IN CONFIRMING THE ACTION OF THE LEARNED AO OF REJECTING THE BOOKS OF ACCOUNTS U/S 145. 3. THE LEARNED CIT(A) ERRED IN LAW AND ON FACTS IN HOLDING THAT THE PROCEEDINGS UNDERTAKEN UNDER EXCISE LAWS ARE SUFFICIENT TO MAKE ADDITION IN THE HANDS OF THE APPELLANT. LEARNED CIT(A) FAILED TO APPRECIATE THAT THE PROCEEDINGS UNDER EXCISE ACT WER E DISPUTE AND WERE PENDING BEFORE THE APPELLATE AUTHORITIES. 4. THE LEARNED CIT ERRED IN LAW AND ON FACTS IN NOT APPRECIATING THAT THE ADDITIONS ARE MADE ON THE BASIS OF SEARCH CONDUCTED BY CENTRAL EXCISE DEPARTMENT AND THE ASSESSMENTS MADE UNDER THE CENT RAL EXCISE ACT ARE UNDER DISPUTE. 5. THE LEARNED CIT(A) ERRED IN LAW AND ON FACTS IN CONFIRMING ADDITION ON THE BASIS OF STATEMENTS RECORDED FROM SHRI UMESH MODI WHICH WAS NOT CONFRONTED TO THE APPELLANT NOR THE APPELLANT HAD ANY OPPORTUNITY TO REQUEST FO R THE CROSS EXAMINATION OF THE PERSON. 3 ITA NO. 1512 /PUN/20 15 ITA NO. 1581 /PUN/20 15 4. THE REVENUE IN ITA NO. 1 581 /PUN/201 5 HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: - 1) WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) - 1, NASHIK IS JUSTIFIED IN DELETING THE ADDITION OF RS.25,29,727/ - ON ACCOUNT OF ALLEGED CONCEALED SALE, WHERE THE ADDITION OF RS.44,91,064/ - MADE BY THE AO. 2) THE APPELLANT PRAYS T HE ORDER OF THE ASSESSING OFFICER MAY BE RESTORED. 3) THE APPELLANT PRAYS TO ADDUCE SUCH FURTHER EVIDENCE TO SUBSTANTIATE HIS CASE. 5. THE ISSUE RAISED IN THE CROSS APPEALS FILED BY THE ASSESSEE AND REVENUE IS AGAINST ADDITION MADE ON ACCOUNT OF GROSS PR OFIT ON THE ALLEGED CLANDESTINE REMOVAL OF GOODS WITHOUT PAYMENT OF EXCISE DUTY . 6. BRIEFLY, IN THE FACTS OF THE CASE, THE ASSESSEE WAS PARTNERSHIP FIRM, WHICH WAS ENGAGED IN THE MANUFACTURE OF INGOTS / BILLETS. FOR THE YEAR UNDER CONSIDERATION, THE ASSESSEE HAD FURNISHED THE RETURN OF INCOME DECLARING TOTAL INCOME OF RS.8,33,010/ - . THE ASSESSING OFFICER RECEIVED INFORMATION FROM THE OFFICE OF THE COMMISSIONER OF CENTRAL EXCISE, AURANGABAD THAT THE ASSESSEE HAD INDULGED IN MANUFACTURE OF FINISHED GOODS AND REMOVAL THEREOF WITHOUT PAYING EXCISE DUTY. THE VALUE OF SUPPRESSED PRODUCTION AN D THE EXCISE DUTY EVASION WAS ALSO FORWARDED BY THE DGCEI. THE ASSESSEE HAD MADE THE PAYMENT OF EXCISE DUTY ON SUCH CLANDESTINE REMOVAL OF GOODS WITHOUT PAYMENT OF EXCISE DUTY. THE ASSESSEE ALSO ADMITTED THAT RAW MATERIAL USED IN THE PRODUCTION OF FINISH ED GOODS WAS OBTAINED IN CASH, FOR WHICH NO RECORDS WERE MAINTAINED. SIMILARLY, RECEIPTS ON SALE OF FINISHED PRODUCTS WERE ALSO IN CASH AND NOT ACCOUNTED FOR IN THE BOOKS OF ACCOUNT . THE ASSESSING OFFICER THUS, RECORDED REASONS FOR REOPENING THE ASSESSME NT UNDER SECTION 147 OF THE ACT AND ISSUED NOTICE UNDER SECTION 148 OF THE ACT. THE ASSESSEE FILED REVISED RETURN OF INCOME 4 ITA NO. 1512 /PUN/20 15 ITA NO. 1581 /PUN/20 15 DECLARING TOTAL INCOME OF RS.14,01,400/ - BY INCLUDING ADDITIONAL INCOME OF RS.5,68,390/ - AS GP OF 3.62% ON ALLEGED CONCEALED SALE A MOUNT OF RS.50,59,454/ - . THE CASE OF ASSESSEE WAS TAKEN UP FOR SCRUTINY. THE ASSESSING OFFICER AFTER GOING THROUGH VARIOUS ASPECTS OF THE CASE, WAS OF THE VIEW THAT NO DEDUCTION OF EXPENSES IS TO BE ALLOWED AND THE PLEA OF ASSESSEE THAT ONLY GP SHOULD BE ADDED WAS NOT ACCEPTED. HOWEVER, THE SET OFF OF INCOME OF RS.5,68,390/ - OFFERED BY THE ASSESSEE IN THE RETURN OF INCOME IN RESPONSE TO NOTICE UNDER SECTION 148 OF THE ACT WAS ALLOWED AGAINST ADDITION OF RS. 50,59,454/ - AND THE BALANCE SUM OF RS.44,91,064/ - WAS ADDED IN THE HANDS OF ASSESSEE. 7. THE CIT(A) ON THE OTHER HAND, WAS OF THE VIEW THAT IT IS A CASE WHERE THE ASSESSEE HAD CLANDESTINELY REMOVED GOODS FROM ITS FACTORY PREMISES AND SOLD THE SAME FOR RS.50,59,454/ - . BEFORE THE CIT(A), THE ASSESSEE FILED WRITTEN SUBMISSIONS AND ALSO COMPUTED THE ADDITION IN ITS HANDS AT RS.12,72,100/ - . HOWEVER, REJ ECTING THE SUBMISSION OF ASSESSEE THAT FOR OUT OF BOOKS SALES, OUT OF BOOKS PURCHASES WERE ALSO MADE ; HE WAS OF THE VIEW THAT PART PURCHASES WERE RECORDED AND PART PURCHASES WERE OUT OF BOOKS. ACCORDINGLY, THE ASSESSING OFFICER WAS DIRECTED TO RESTRICT TH E ADDITION TO 50% OF SALES AS NO SALES COULD TAKE PLACE WITHOUT PURCHASES. THE TOTAL ADDITION WAS RESTRICTED TO RS.19,61,337/ - . 8. BOTH THE ASSESSEE AND REVENUE ARE IN APPEAL AGAINST RESPECTIVE PORTIONS OF THE ORDER OF CIT(A). 9. THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE POINTED OUT THAT IN VIEW OF VARIOUS DECISIONS IN THE CASE OF STEEL GROUP OF CASES, THE ADDITION 5 ITA NO. 1512 /PUN/20 15 ITA NO. 1581 /PUN/20 15 SHOULD BE RESTRICTED TO GP @ 4% AND THE ASSESSEE HAS ALREADY DECLARED AT 6.69%. 10. THE LEARNED DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE HOWEVER, REFERRING TO THE ORDER OF CIT(A) POINTED OUT THAT UNDER PARA 4.2, THE ASSESSEE IN THE APPELLATE PROCEEDINGS , HAD OFFERED ADDITIONAL INCOME OF RS.12,72,100/ - I.E. NET PROFIT WAS WORKED OUT AT RS.7,89,159/ - AND THE INITIAL INVESTMENT WA S OFFERED AT RS.4,82,912/ - . 11. THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE IN REJOINDER POINTED OUT THAT THOUGH NET PROFIT WAS OFFERED AND THE ASSESSEE HA D ALSO ADMITTED THAT INITIAL INVESTMENT WAS MADE OUT OF BOOKS OF ACCOUNT BUT BOTH THE ASS ESSING OFFICER AND CIT(A) HAVE NOT MADE ANY ADDITION UNDER SECTION 69C OF THE ACT AND ONLY ADDITION WAS MADE ON ACCOUNT OF NET PROFIT. 12. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. THE ISSUE WHICH ARISES IN THE PRESENT APPEAL IS ESTIMAT ION OF PROFIT ON CLANDESTINE REMOVAL OF GOODS WITHOUT PAYMENT OF EXCISE DUTY. THE EXCISE AUTHORITIES IN THE PRESENT CASE HAD MADE CERTAIN ENQUIRIES, UNDER WHICH THE ASSESSEE ADMITTED TO HAVE CLANDESTINELY REMOVED GOODS WITHOUT PAYMENT OF EXCISE DUTY TO TH E EXTENT OF RS.50,59,454/ - . THE QUESTION WHICH ARISES BEFORE US IS THE ADDITION IN RESPECT OF SUCH GOODS WHICH HAVE BEEN CLANDESTINELY REMOVED WITHOUT PAYMENT OF EXCISE DUTY. THE CASE OF REVENUE BEFORE US IS THAT ENTIRE SALES NEED TO BE ADDED IN THE HAND S OF ASSESSEE. HOWEVER, THE CASE OF ASSESSEE IS THAT ONLY GP RATE IS TO BE APPLIED TO WORK OUT THE ADDITIONAL INCOME IN THE HANDS OF ASSESSEE. THE ASSESSEE IN THE RETURN OF INCOME FILED IN RESPONSE TO NOTICE UNDER SECTION 148 OF 6 ITA NO. 1512 /PUN/20 15 ITA NO. 1581 /PUN/20 15 THE ACT HAD OFFERED ADDIT IONAL INCOME OF RS. 5,68,390/ - BEING PROFIT EARNED ON SUCH CLANDESTINE REMOVAL OF GOODS WITHOUT PAYMENT OF EXCISE DUTY. 13. WE HAVE ALREADY DECIDED SIMILAR ISSUE IN BUNCH OF APPEALS . WE FIND THAT SIMILAR ISSUE OF ESTIMATION OF PROFIT ON THE ALLEGED SUPP RESSION OF PRODUCTION ON CLANDESTINE REMOVAL OF GOODS AROSE BEFORE THE TRIBUNAL IN ITO VS. SHRI ANAND OMPRAKASH PAHADE IN ASSESSMENT YEAR 2010 - 11 IN ITA NO.1887/PN/2014, WHEREIN THE TRIBUNAL VIDE ORDER 18.10.2016, HELD AS UNDER: - 6. ON PERUSAL OF RECORD, WE FIND THAT IN THE CASE OF ASSESSEE, THERE WAS NO ENQUIRY OR SEARCH OR INVESTIGATION BY THE EXCISE DEPARTMENT, UNDER WHICH ANY CASE OF SUPPRESSED PRODUCTION WAS DETECTED AND / OR CLANDESTINE REMOVAL OF GOODS WITHOUT PAYMENT OF EXCISE DUTY WAS MADE BY THE EXCISE DEPARTMENT. THE ASSESSEE HAD NOT MOVED ANY PETITION BEFORE ANY AUTHORITY OF EXCISE OR THE INCOME TAX AUTHORITY ADMITTING ANY CLANDESTINE REMOVAL OF GOODS WITHOUT PAYMENT OF EXCISE DUTY. THE SOLE BASIS FOR ADDITION IN THE HAND S OF ASSESSEE WAS ERRATIC CONSUMPTION OF ELECTRIC UNITS. THE ASSESSING OFFICER ON THE BASIS OF ADDITION MADE IN THE CASE OF VARIOUS OTHER UNITS HAD MADE THE ADDITION IN THE HANDS OF ASSESSEE ON ACCOUNT OF ESTIMATION OF PROFIT ON SUPPRESSED PRODUCTION, WHI CH IN TURN, WAS BASED ON CONSUMPTION OF ELECTRICITY. 7. WE FIND THAT SIMILAR ISSUE OF ESTIMATION ON ACCOUNT OF ERRATIC CONSUMPTION OF ELECTRICITY AROSE BEFORE THE TRIBUNAL IN BUNCH OF APPEALS. THE TRIBUNAL IN SHREE OM ROLLING MILLS PVT. LTD. VS. ADDL. C IT IN ITA NOS.125 & 127/PN/2012 AND CROSS APPEALS IN ITA NOS.430 & 431/PN/2012, RELATING TO ASSESSMENT YEARS 2007 - 08 & 2008 - 09 VIDE ORDER DATED 15.07.2015 HAD CONSIDERED THE ISSUE AT LENGTH VIDE PARAS 54 TO 87 AND VIDE PARAS 88 AND 89, THE TRIBUNAL HAD DEL ETED THE ADDITION ON BOTH COUNTS I.E. ADDITION MADE ON ACCOUNT OF SUPPRESSED PRODUCTION AND ALLEGED INVESTMENT IN PURCHASES, WHICH READ AS UNDER: - 88. IN THE ENTIRETY OF THE ABOVE SAID FACTS AND CIRCUMSTANCES, WE HOLD THAT NO EXTRAPOLATION OF SALES FOR 3 00 DAYS CAN BE MADE IN THE HANDS OF THE ASSESSEE ON THE BASIS OF THE EVIDENCE FOUND FOR CLANDESTINE REMOVAL OF MATERIAL WITHOUT PAYMENT OF EXCISE DUTY FOR FEW DAYS, WHICH IN TURN, HAS BEEN ADMITTED BY THE ASSESSEE BY WAY OF FILING PETITION BEFORE THE SETTL EMENT COMMISSION, WHICH IN TURN, HAS ALSO BEEN ACCEPTED BY THE SETTLEMENT COMMISSION. MERELY BECAUSE THE SETTLEMENT COMMISSION ACCEPTED THE CLAIM OF THE ASSESSEE OF ADDITIONAL EXCISE DUTY PAYABLE ON THE SAID CLANDESTINE REMOVAL OF MATERIAL WITHOUT PAYMENT OF EXCISE DUTY DOES NOT ESTABLISH THE CASE OF THE REVENUE THAT THE SAID FIGURES OF ADDITIONAL PRODUCTION SHOULD BE UTILIZED FOR EXTRAPOLATING THE SALES IN THE HANDS OF THE ASSESSEE FOR THE ENTIRE YEAR. ADMITTEDLY, THE ASSESSEE HAD OFFERED ADDITIONAL INCO ME 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 7 ITA NO. 1512 /PUN/20 15 ITA NO. 1581 /PUN/20 15 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, BY THE ASSESSEE EITHER BEFORE THE SETTLEMENT COMMISSION OR BEFORE THE EXCISE AUTHORITIES, IN THE HANDS OF THE ASSESSEE. WE HAVE HEARD BUNCH OF APPEALS AND IN SOME YEARS, THERE IS NO ADMISSION OF CLANDESTINE REMOVAL OF MATERIAL WITHOUT PAYMENT OF EXCISE DUTY AND IN THOSE YEARS IN THE ABSENCE OF ANY EVIDENCE AND / OR ANY INVESTIGATION OR INQUIRY MA DE BY THE ASSESSING OFFICER AND WHERE THE ASSESSING OFFICER HAS FAILED TO COLLECT ADDITIONAL EVIDENCE, NO ADDITION CAN BE MADE IN THE HANDS OF THE ASSESSEE, BY WAY OF EXTRAPOLATION OF SALES FOR 300 DAYS ON ACCOUNT OF ANY EVIDENCE FOUND IN ANY PRECEDING OR SUCCEEDING YEARS. FURTHER, NO ADDITION CAN BE MADE IN THE HANDS OF THE ASSESSEE, WHERE NO PETITION HAS BEEN FILED BY THE ASSESSEE BEFORE THE SETTLEMENT COMMISSION IN ANY OF THE RESPECTIVE YEARS OR BEFORE THE EXCISE AUTHORITIES. 89. SINCE WE HAVE DELETED T HE ADDITION IN THE HANDS OF ASSESSEE ON BOTH ACCOUNTS I.E. ADDITION MADE ON ACCOUNT OF ERRATIC CONSUMPTION OF ELECTRICITY AND ADDITION PROPOSED ON THE BASIS OF EVIDENCE FOUND FOR THE PART OF THE YEAR OF CLANDESTINE REMOVAL OF MATERIAL WITHOUT PAYMENT OF EX CISE DUTY, NEXT ADDITION MADE IN THE HANDS OF THE ASSESSEE I.E. ALLEGED INVESTMENT IN THE PURCHASES FOR EFFECTING SUCH SALES WHICH GOODS HAVE BEEN CLANDESTINELY REMOVED, IS NOT SUSTAINABLE. ACCORDINGLY, WE HOLD THAT NO ADDITION CAN BE MADE IN THE HANDS OF THE ASSESSEE ON ACCOUNT OF ALLEGED INVESTMENT IN PURCHASES UNDER SECTION 69C OF THE ACT. 8. THEREAFTER, CORRIGENDUM ORDER WAS PASSED BY THE TRIBUNAL SUBSTITUTING PARA 88 OF THE TRIBUNAL VIDE ORDER DATED 17.02.2016 AND IT WAS HELD AS UNDER: - 3. ON PERUSA L OF THE RECORD, WE FIND THAT BY AN ERROR, THE FINDINGS OF THE TRIBUNAL IN PARA 88 WITH SPECIAL REFERENCE TO FROM LINE 17 TO 22, NEEDS CORRECTION TO THE EXTENT THAT THE ADDITIONAL INCOME TO BE ADDED IN THE HANDS OF THE ASSESSEE IS EQUIVALENT TO PROFITS ON SUPPRESSED PRODUCTION @ 4% OR ACTUAL GP RATE DECLARED BY THE ASSESSEE WHICHEVER WAS HIGHER. IN VIEW THEREOF, WE PASS THIS CORRIGENDUM ORDER AND THE PARA 88 I.E. FROM LINE 17 TO 22 WOULD NOW BE SUBSTITUTED BY FOLLOWING PARA. 88. 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, BY 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, THE ADDITIONAL INCOME @ 4% OR ACT UAL 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 8 ITA NO. 1512 /PUN/20 15 ITA NO. 1581 /PUN/20 15 EXCISE DUTY, BY THE ASSESSEE BEFORE THE EXCISE AUTHORITIES. THUS, THE ASSESSEE 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. 1 4 . THE TRIBUNAL CONSISTENTLY HAD HELD THAT GP RATIO OF 4% IS TO BE A PPLIED ON SUCH SALES WHICH HAVE BEEN MADE OUT OF GOODS CLANDESTINELY REMOVED WITHOUT PAYMENT OF EXCISE DUTY, WHICH WAS OVER AND ABOVE THE GP DECLARED BY THE ASSESSEE. HOWEVER, IN THE CASE OF ASSESSEE WHILE EXPLAINING ITS CASE BEFORE THE CIT(A), THE ASSESS EE HAS ELABORATELY CONSIDERED VARIOUS ASPECTS OF TRANSACTIONS IN RELATION TO THE VALUE OF GOODS PURCHASED AND THE OTHER COSTS FOR THE MANUFACTURING AND THUS, WORKED OUT TOTAL COST OF RAW MATERIAL PURCHASED OUT OF BOOKS, THE COST OF TRANSACTION AND SET OFF OF THE SAME AGAINST THE SALE VALUE OF 250.950 MT OF FINISHED GOODS I.E. MS STEEL BARS, WHICH IS AS PER THE STATEMENT PREPARED BY THE CENTRAL EXCISE DEPARTMENT. THE ASSESSEE HAD WORKED OUT THE PROFIT AT RS.7,89,159/ - . THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE HAS NOT DISPUTED THE SAID WORKING AND HENCE, THE SAID NET PROFIT AS WORKED OUT BY THE ASSESSEE IS TO BE TAKEN AS PROFIT EARNED BY THE ASSESSEE AND THE SAME NEEDS TO BE ADDED IN THE HANDS OF ASSESSEE. HOWEVER, THE CREDIT FOR RS.5,68,390/ - I.E. ADDITIONAL INCOME OFFERED BY THE ASSESSEE IS TO BE ALLOWED TO THE ASSESSEE. 15. NOW, COMING TO THE INITIAL INVESTMENT MADE OUT OF BOOKS OF ACCOUNT IN THE ALLEGED PURCHASES OF RS.4,82,912/ - . THE ASSESSEE IN THE ASSESSMENT PROCEEDINGS AND ALSO BEFORE THE CIT(A) HAD ADMITTED TO THE ALLEGED PURCHASES BUT BOTH THE ASSESSING OFFICER AND CIT(A) HAVE ONLY MADE THE ADDITION ON ACCOUNT OF NET PROFIT ON THE SALE VALUE OF CLANDESTINELY REMOVED GOODS WITHOUT PAYMENT OF EXCISE DUTY AND HAV E NOT MADE ANY ADDITION UNDER SECTION 69C OF 9 ITA NO. 1512 /PUN/20 15 ITA NO. 1581 /PUN/20 15 THE ACT. ACCORDINGLY, WE FIND NO MERIT IN THE STAND OF LEARNED DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE IN THIS REGARD AND IN THE ABSENCE OF ANY ADDITION BEING MADE UNDER SECTION 69C OF THE ACT BY THE AUTHORITIES BELOW, NO FURTHER ADDITION IS TO BE MADE ON THIS ACCOUNT IN THE HANDS OF ASSESSEE. THUS, THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE AND THE REVENUE ARE PARTLY ALLOWED. 16 . IN THE RESULT, BOTH THE APPEALS OF ASSESSEE AND THE REVENUE ARE PARTLY ALLOWED. ORDER PRONOUNCED ON THIS 12 TH DAY OF JANUARY , 201 8 . SD/ - SD/ - (ANIL CHATURVEDI) (SUSHMA CHOWLA) / ACCOUNTANT MEMBER / JUDICIAL MEMBER / PUNE ; DATED : 12 TH JANUARY , 201 8 . G G C C V V S S R R / COPY OF THE ORDER IS FORWARDED TO : 1. / THE APPELLANT ; 2. / THE RESPONDENT; 3. ( ) / THE CIT (A) - I , NASHIK ; 4. THE PR. CIT - I , NASHIK ; 5. , , / DR A , ITAT, PUNE; 6. / GUARD FILE. / BY ORDER , // TRUE COPY // / SR. PRIVATE SECRETARY , / ITAT, PUNE