M/s Dev Alloys Pvt. Ltd., Khanna V. ITO, W-4, Khanna

ITA 1582/CHANDI/2017

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 4506 (ITAT-CHANDIGARH)
• Duration Of Justice: 1 year(s) 6 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-05-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2012-2013
• Appeal Filed On: 17-11-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A K DHIR SR DR
• Keywords: Rejection of books of accounts; Business income
• Section: 133(6); 2

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL, CHANDIGARH BE NCH SMC CHANDIGARH !', # BEFORE: SMT. DIVA SINGH, JM !./ ITA NO. 1582/CHD/2017 #& ' (' / ASSESSMENT YEAR : 2012-13 M/S DEV ALLOYS PRIVATE LIMITED., OPP POWER HOUSE, G.T.ROAD, KHANNA. VS THE ITO, WARD - 4, KHANNA ./ PAN NO: AAACD6223F / APPELLANT / RESPONDENT / ASSESSEE BY : SHRI ASHWANI KUMAR / REVENUE BY : SHRI A.K.DHIR, SR.DR ! ' # / DATE OF HEARING : 13.05.2019 $%&'() # / D ATE OF PRONOUNCEMENT : 31.05.2019 )*/ ORDER THE PRESENT APPEAL HAS BEEN FILED BY THE ASSESSEE ASSAILING THE CORRECTNESS OF THE ORDER DATED 11.09.2017 OF CIT(A) -2, LUDHIANA PERTAINING TO 2012-13 ASSESSMENT YEAR ON THE FOLLOWING GROUNDS : 1. THAT THE ORDER OF THE LD. CIT(A) IS AGAINST THE FAC TS OF THE CASE AND IS BAD IN LAW. 2. THAT THE LD. CIT(A) HAS ERRED IN CONFIRMING THE ACT ION OF THE LD. A.O. FOR REJECTION OF BOOKS OF ACCOUNTS BY DRAWING ADVERSE INFERENCE FROM VARIATION IN POWER CONSUMPTION. 3. THAT THE LD. CIT(A) HAS ERRED IN CONFIRMING THE ADD ITION OF RS. 23,30,046/- ON ACCOUNT OF G.P. RATE ON THE DECLARED TURNOVER OF TH E ASSESSEE AS PER BOOKS OF ACCOUNTS. 4. THAT THE LD. CIT(A) HAS ERRED IN NOT ADJUDICATING GROUND NO. 4 OF THE A SSESSEE'S APPEAL WHICH WAS WITHOUT PREJUDICE TO THE ABOVE GRO UNDS FOR APPLYING THE ENHANCED G.P. RATE ON ENTIRE TURNOVER I.E. INCLUSIVE OF EXCI SE DUTY, WHEREAS, THERE CAN BE NO PROFIT ON EXCISE DUTY. 5. THAT THE APPELLANT CRAVES LEAVE TO ADD, A MEND OR DELETE ANY OF THE GROUNDS OF APPEAL BEFORE THE SAME IS FINALLY HEARD & DISPOSED OFF. 2. THE LD. AR ADDRESSING GROUND NOS. 1 TO 3 INVITED ATTENTION TO ASSESSMENT ORDER PAGE 2 PARA 2 SO AS TO SUBMIT THAT BOOKS OF A CCOUNT WERE PRODUCED, EXAMINED AND TEST-CHECKED. IN VIEW OF THE FACT THA T THE ASSESSEE EXPRESSED HIS ITA-1582/CHD/2017 A.Y. 2012-13 PAGE 2 OF 7 INABILITY TO PRODUCE DAILY PRODUCTION REGISTER, ELE CTRICITY BILLS ETC. ON 12.02.2015 IT WAS SUBMITTED THE GP RATE OF THE ASSE SSEE HAS BEEN TINKERED WITH. INVITING ATTENTION TO THE UN-NUMBERED PAGE 3 OF THE ASSESSMENT ORDER, IT WAS HIS SUBMISSION THAT THE ASSESSEE ADMITTEDLY GAV E SPECIFIC REASONS WHY ON THE SAID DATE SUPPORTING DOCUMENTS FOR 2012-13 ASSE SSMENT YEAR COULD NOT BE PRODUCED. FOR READY REFERENCE, SAID REPLY IS EXTRA CTED FROM THE RECORD HEREUNDER : 'THE ASSESSEE HAS ALREADY CLOSED ITS BUSINESS FROM DURING 2012 ONWARDS. THE ACCOUNT OF THE ASSESSEE HAS BECOME NPA. THE UNIT IS UNDER THE POSSESSION OF PUNJAB & SIND BANK, KUKAR MAJRA , MANDI GOBINDGARH. THE AS SESSEE HAS NO ACCESS TO THE UNIT AS THE SAME IS UNDER LOCK AND KEY OF THE BANK. IN SUPPORT OF THE SAME COPY OF POSSESSION NOTICE ISSUED BY BANK IS ENCLOSED. MOREO VER, THE ELECTRIC CONNECTION HAS ALSO BEEN DISCONTINUED. IN VIEW OF THE ABOVE FACTS, WE ARE UNABLE TO PR OVIDE THE DAILY STOCK REGISTERS, CENVAT RECORDS & ELECTRIC BILLS AS REQUIRED.' 2.1 IT WAS ALSO HIS SUBMISSION THAT THE SAID POSITI ON ON FACTS WAS ALSO CONFIRMED BY THE ASSESSING OFFICER FROM THE MANAGER , PUNJAB & SIND BANK TO THE AO. THIS FACT, IT WAS SUBMITTED, IS EVIDENT F ROM PARA 4 OF THE ASSESSMENT ORDER ITSELF. FOR READY REFERENCE, THE RELEVANT EX TRACT FROM THE ORDER IS REPRODUCED HEREUNDER : 4. IN RESPONSE TO ASSESSEE'S SUBMISSION A LETTER HA S BEEN WRITTEN TO THE MANAGER, PUNJAB & SIND BANK U/S 133(6) OF THE ACT REGARDING OFFICE RECORDS OF THE ASSESSEE. IN RESPONSE TO WHICH REPLY HAS BEEN RECEIVED AS UNDER: ' WITH REGARD TO THE PRODUCTION REGISTER FOR THIS Y EAR MAINTAINED BY THE PARTY, WE HAVE TO SUBMIT THAT WE HAVE NOT DEALT WITH ANY OFFI CE RECORDS OF THE PARTY DURING THE PROCESS OF THE PHYSICAL POSSESSION OF THE UNIT.' 2.2 ADDRESSING THE MANNER IN WHICH THE ADDITION HAS BEE N MADE BY THE AO AND CONFIRMED BY THE CIT(A), LD. AR INVITED ATTENTI ON TO THE UN-NUMBERED PAGE 18 OF THE ASSESSMENT ORDER (PARA 16) TO SHOW THAT I GNORING THE FACTS AS SET OUT IN THE ORDER ITSELF AND IGNORING THE EXPLANATION GI VEN WHICH HAD ALSO BEEN EXTRACTED IN THE ORDER ITSELF, THE ADDITION HAS BEE N MADE WITHOUT ADDRESSING EITHER THE FACTS OR THE EXPLANATION. RELYING UPON THE EXPLANATION OFFERED BEFORE THE AO FOR THE DROP IN THE GP RATE IN THE YE AR UNDER CONSIDERATION WHICH HAS ALSO BEEN EXTRACTED AT PAGE 13 TO PAGE 16 IN PARA 19 IN THE ORDER IT WAS ARGUED THAT G.P. CAN NEVER BE STATIC. THE REAS ONS HAVE BEEN GIVEN. THESE HAVE NOT BEEN ASSAILED. THE ADDITION MADE IN THE CI RCUMSTANCES WAS STATED TO ITA-1582/CHD/2017 A.Y. 2012-13 PAGE 3 OF 7 BE ARBITRARY. ACCORDINGLY, IT WAS HIS SUBMISSION TH AT IN THE PECULIAR FACTS AND CIRCUMSTANCES APART FROM SUSPICION, THERE IS NOTHIN G ELSE ON RECORD. IT WAS ARGUED THAT IT IS AN ACCEPTED FACT THAT THE GP RATE IS A RESULT OF MANY FACTORS AND MERELY BECAUSE THERE IS VARIATION THEREIN, IT C ANNOT NECESSARILY LEAD TO THE CONCLUSION THAT THE ACCOUNTS OF THE ASSESSEE ARE NO T RELIABLE. 2.3 IN THE FACTS OF THE PRESENT CASE, IT WAS ARGUED THE ASSESSEE HAS GIVEN AN EXPLANATION AS TO WHY THE SPECIFIC DETAILS CALLED F OR COULD NOT BE PLACED BEFORE THE AO. THESE FACTS IT WAS SUBMITTED, ARE NOT REBU TTED. AT THE COST OF REITERATION, IT WAS SUBMITTED THAT RIGHT FROM THE A SSESSMENT STAGE, THE ASSESSEE HAS BEEN PLEADING THAT ITS BUSINESS WAS DE CLARED AS A NON- PERFORMING ASSET, THE FACTORY PREMISES WERE UNDER L OCK AND KEY OF THE BANK AND THE ELECTRICITY CONNECTION ALSO STOOD DISCONTIN UED; THE FACT THAT IN THE IDENTICAL BUSINESS IN GOBIND GARH AREA ALL SIMILAR BUSINESSES WERE FACING THE SITUATION OF DIS-CONNECTED ELECTRICITY CONNECTION D UE TO BUSINESS FAILURES WHICH WERE COMMON FACTS ARGUED BEFORE THE AO AND WE LL KNOWN TO THE SAID AUTHORITY WHICH HAVE BEEN IGNORED FOR REASONS, BEST KNOWN TO THE DEPARTMENT. 2.4 INVITING ATTENTION TO THE BURNING LOSS OF TH E ASSESSEE, IT WAS SUBMITTED THAT IT WAS ARGUED AND DEMONSTRATED TO BE REASONABL Y COMPARED TO THE STANDARD BURNING LOSS IN THE INDUSTRY. THE DETAILE D EXPLANATION ON RECORD, IT WAS SUBMITTED, REMAINS UNCONTESTED. 2.5 IN THE SAID BACKGROUND, IT WAS ARGUED, ONCE TH E BOOKS OF ACCOUNT HAVE BEEN AUDITED, EXPLANATION WHY THEY CANNOT BE PRODUC ED IS VERIFIED BY THE AO HIMSELF, THESE ESTIMATED ADDITIONS CANNOT BE RESORT ED. THE DEPARTMENT HAS TO BEING ON RECORD SOME JUSTIFIABLE REASON TO VARY TH E RESULT UNLESS THERE IS SOME REASON ON RECORD TO VARY THE GP. THE BOOK RESULTS CANNOT BE TINKERED WITH ARBITRARILY PURELY ON SUSPICIONS. 3. THE LD. SR.DR RELIES UPON PARA B PAGE 9 TO 12 OF THE UN-NUMBERED ASSESSMENT ORDER. THE FACT THAT THE ASSESSEE HAD S TOPPED ITS BUSINESS DUE TO PROBLEMS AMONGST THE DIRECTORS IN 2012 ITSELF AND T HE FACT THAT THE ASSESSEE HAD BECOME A NON-PERFORMING ASSET AND THE FACTORY P REMISES ITSELF REMAINED UNDER THE LOCK AND KEY OF THE PUNJAB & SIND BANK AT THE RELEVANT POINT OF ITA-1582/CHD/2017 A.Y. 2012-13 PAGE 4 OF 7 TIME AND THAT THE ASSESSEE FACED DISCONNECTION OF E LECTRICITY ETC. WERE NOT DISPUTED BY THE LD. SR.DR. SIMILARLY, THE CLAIM OF COMPARATIVE GP RATIO OVER THE YEARS AND THE DETAILS AS MADE AVAILABLE IN THE YIELD CHART, BURNING LOSS ETC. REMAINED UNREBUTTED. HOWEVER RELIANCE WAS PLACED UP ON THE ORDERS OF THE AUTHORITIES BELOW. 4. BOTH THE PARTIES SUBMITTED THAT THE FACTS AS AVA ILABLE IN THE ASSESSMENT ORDER WERE ADDRESSED AS THE REASONS FOR MAKING THE ADDITION ARE SET OUT IN DETAIL IN THE SAID ORDER AND THE CIT(A) HAS ONLY CO NFIRMED THE FINDING WITHOUT GIVING ANY SPECIFIC INDEPENDENT FINDING. IN VIEW OF THIS THE FINDINGS AND EXPLANATIONS AVAILABLE IN THE SAID ORDER HAVE BEEN REFERRED TO. 5. I HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED T HE MATERIAL AVAILABLE ON RECORD. IT IS SEEN THAT ADMITTEDLY THE ASSESSEE IN THE YEAR UNDER CONSIDERATION HAD BECOME A NON PAYING ASSET AND THE UNIT HAD COME UNDER THE POSSESSION OF PUNJAB & SIND BANK, KUKAR MAJRA, MANDI GOBINDGARH. AS A RESULT OF THESE EVENTS, THE ASSESSEE ADMITTEDLY CLA IMED THAT IT HAD NO ACCESS TO THE UNIT SINCE IT WAS UNDER LOCK AND KEY OF THE BAN K. THE SAID POSITION OF FACT AS PER RECORD HAS BEEN CONFIRMED BY THE RESPONSIBLE PERSON OF THE BANK ON QUERY RAISED BY THE AO HIMSELF. NO REBUTTAL ON FAC TS IS MADE AVAILABLE BY THE REVENUE. THE REASON FOR NOT PROVIDING STOCK REGISTE RS, CENVET RECORD AND ELECTRIC BILLS CONSEQUENTLY I FIND STAND ADDRESSED BY A PLAUSIBLE AND COGENT EXPLANATION WHICH HAS NOT BEEN UPSET BY THE REVENUE . IT IS SEEN THAT THE AO BEFORE MAKING THE ADDITION, REFERRED TO THE FACTS O N RECORD TAKEN INTO CONSIDERATION BY HIM WHICH HAVE BEEN HEAVILY RELIED UPON BY LD. SR.DR. FOR READY REFERENCE, THESE ARE EXTRACTED HEREUNDER : B. THE PRODUCTION OF STEEL INGOTS WORKED OUT BY Y OU CANNOT BE ACCEPTED BECAUSE AS PER INFORMATION COLLECTED BY THIS OFFICE FROM THE PUNJA B STATE POWER CORPORATION LIMITED REGARDING DATE-WISE CONSUMPTION OF ELECTRICITY UNIT S THOUGH ELECTRICITY HAS BEEN CONSUMED ON VARIOUS DATES BUT LESS PRODUCTION HAS BEEN SHOWN ON THESE DATES AS PER THE PRODUCTION DETAILS OBTAINED FROM CENTRAL EXCISE, RANGE VI, MAN DI GOBINDGARH BY YOU. FURTHER, THERE IS NO CONSISTENCY IN THE CONSUMPTION OF ELECTRICITY UNITS VIS-A-VIS STEEL INGOTS PRODUCTION. THE DETAILS OF PRODUCTION HAVE BEEN TABULATED MONTHWISE AS PER TABL E BELOW. THE CONSUMPTION OF ELECTRICITY IN UNITS PMT VARIES LOT. MONTH CONSUMPTION OF ELECTRICITY UNITS AS PER DATA SUPPLIED BY THE PSEB SIRHIND PRODUCTION OF STEEL INGOTS AS PER CENTRAL EXCISE RECORD (MT) PROD. OF STEEL INGOTS PER UNIT APRIL,2011 1263300 1173 1076.982 ITA-1582/CHD/2017 A.Y. 2012-13 PAGE 5 OF 7 MAY,2011 1023090 727 1407.276 JUNE,2011 1001880 578 1733.356 JULY,2011 913440 1053 867.464 AUGUST,2011 1070070 1245 859.493 SEPT.,2011 1121250 1191 941.435 OCT.,2011 897720 935 960.128 NOV.,2011 1156470 1252 923.698 DEC.2011 1033320 948 1090.000 JAN.,2012 959760 1079 889.490 FEB.,2011 633120 993 637.583 MARCH,2012 312840 694 450.778 TOTAL 11386260 11868 959.408 FROM THE ABOVE CHART, IT IS AMPLY CLEAR THAT THERE IS HUGE VARIATION IN ALL THE CONSUMPTION OF ELECTRICITY UNITS AND PRODUCTION AS PER CENTRAL EXC ISE RECORD OBTAINED BY THIS OFFICE. ELECTRICITY IS THE MAIN INPUT IN PRODUCTION OF STEEL INGOTS. FURTHER, IN YOUR CASE FOR THE A.Y. 2012-13, A COMPA RATIVE CHART OF THE GP/NP HAS BEEN SUBMITTED BY YOU VIDE YOUR REPLY DATED 02.02.2015. IT HAS BEEN OBSERVED THAT THERE IS SHARP DECLINE IN THE GROSS PROFIT RATE DECLARED BY YOUR C ONCERN FOR THE YEAR UNDER CONSIDERATION WHEN COMPARED WITH THE GROSS PROFIT RATES DECLARED BY YOUR CONCERN FOR THE IMMEDIATE PRECEDING YEAR. FOR THE YEAR UNDER CONSIDERATION, T HE GROSS PROFIT RATE DECLARED BY YOUR CONCERN IS 1.98% ON THE TOTAL SALES AGGREGATING TO RS.44.80 CRORES AS AGAINST 2.89% ON TOTAL SALES OF RS.35.39 CRORES FOR THE A.Y. 2011-12. IT H AS ALSO BEEN OBSERVED THAT IN IDENTICAL MANUFACTURING CONCERNS IN THE AREA E.G. M/S NIDHI S TEEL INDUSTRIES, BHADLA ROAD, VILL ALOUR, KHANNA IT IS ABOUT 4% TO 5% DURING THE ASSESSMENT Y EAR UNDER CONSIDERATION. FURTHER, THE WASTAGE CLAIMED BY YOU IS 8.31% WHICH IS ALSO ON HIGHER SIDE AS COMPARED TO YOUR OWN CASE FOR THE PRECEDING ASSESSMENT YEAR 2011-12 IT WAS AT 7.76%. PLEASE EXPLAIN/JUSTIFY THE SAME. THEREFORE, IT IS GATHERED THAT THERE ARE WHOOPING V ARIATIONS IN YOUR BOOK RESULTS. KEEPING IN VIEW THE G.P. IN COMPARABLE CASES AS MENTIONED ABOV E PLEASE SHOW CAUSE WHY THE G.P. DECLARED BY YOU AT 1.98% MAY NOT BE INCREASED TO AT LEAST 3-50%. YOUR REPLY SHOULD REACH THIS OFFICE ON OR BEFORE 23 .03.2015 FAILING WHICH THE CASE WILL BE DECIDED ON MERITS AS PER MATERIAL AVAILABLE ON RECO RD.' 5.1. THE ASSESSEE'S EXPLANATION EXTRACTED IN PAGES 13 TO 16 OF THE ASSESSMENT ORDER WHICH IS HEAVILY RELIED UPON BY THE LD. AR IS ALSO NECESSARY TO BE REFERRED TO FOR THE SAKE OF COMPLETENESS: 9. IN RESPONSE TO THIS SHOW CAUSE, THE ASSESSEE HAS SU BMITTED AS ' WE HAVE ALREADY SUBMITTED THAT THE UNIT OF THE AS SESSEE WAS NOT RUNNING IN SMOOTH CONDITION DUE TO DISPUTE AMONGST THE DIRECTORS AND PAUCITY OF FUNDS. THE UNIT WAS ULTIMATELY CLOSED DOWN DURING THE LAST PHASE OF 201 2. THE BANK ACCOUNT OF THE ASSESSEE BECAME NPA AND THE BANK I.E. PUNJAB & SIND BANK, KU KARMAJRA TOOK PROSSESSION OF THE ASSESSEE'S UNIT. IN VIEW OF THE ABOVE FACTS, THE ASSESSEE IS UNABLE TO PROVIDE THE COMPLETE DETAILS AS CALLED FOR BY YOUR HONUR. HOWEVER, THE ASSESSEE HAS ALREAD Y PROVIDED THE NECESSARY INFORMATION REQUIRED BY YOUR HONOUR DURING THE ASSESSMENT PROCE EDINGS. HAD THE UNIT BEEN WORKING PROPERLY IN A PROFIT MAKING WAY, THERE WOULD HAVE B EEN NO REASON TO CLOSE THE UNIT. YOUR HONOUR, IS VERY MUCH AWARE OF THE ADVERSE MARKET CO NDITIONS IN THE IRON & STEEL INDUSTRY AT MANDI GOBINDGARH. ALREADY ABOUT 40% OF THE INDUSTRY HAD CLOSED DOWN ITS BUSINESS AND THE ELECTRIC CONNECTIONS HAVE BEEN DISCONNECTED. FURTHER REGARDING NUMBER OF POINTS MENTIONED BY YOU R HONOUR FOR REJECTION OF BOOKS OF ACCOUNTS, IT IS SUBMITTED THAT THE ASSESSEE HAS MAI NTAINED COMPLETE RECORDS INCLUDING DAILY ITA-1582/CHD/2017 A.Y. 2012-13 PAGE 6 OF 7 STOCK RECORDS AS PRESCRIBED UNDER THE CENTRAL EXCIS E RULES. REGARDING THE G.R'S. IN RESPECT OF INWARD & OUTWARD FREIGHT, IT IS SUBMITTE D THAT THE INWARD FREIGHT IS ON ACCOUNT OF SCRAP PURCHASED BY THE ASSESSEE AND IS DULY SUPPORT ED BY G.R'S. REGARDING OUTWARD FREIGHT, IT IS SUBMITTED THAT AS PER PRACTICE AT MA NDI GOBINDGARH THE INGOTS ARE SOLD ON FOR BASIS BY ALL THE UNITS. THUS THE OUTWARD FREIGH T IS IN RESPECT OF SALES MADE BY THE ASSESSEE. THE YIELD OF FINISHED GOODS IS AT 91.68%. THE RESU LTANT FIGURE IS NOT THE WASTAGE ONLY BUT ALSO CONSISTS OF RUNNER & RISERS WHICH IS A BYE PRO DUCTS AND IS RECYCLED IN MANUFACTURING PROCESS. THE YIELD CHART IS AS UNDER:- (I)FINISHED GOODS 91.68% (II) RUNNER&RISERS 389% (III) BURNING LOSS 4.42% THE BURNING LOSS AT 4.42% IS VERY MUCH REASONA BLE IN THIS LINE OF MANUFACTURING AND IS VERY MUCH COMPARABLE WITH OTHER UNITS. FURTHER, THE ELECTRIC CONSUMPTION SUPPLIED BY YOUR HONOUR ALSO APPEARS TO BE WRONG AS THE ASSESSEE WAS ALSO BUYING ELECTRICITY FROM PRIVATE P ARTIES. THE SAME APPEARS TO BE NOT HAVE BEEN INCLUDED IN THE DATA SUPPLIED BY YOUR HONOUR G IVING A DISTORTED PICTURE OF AVERAGE UNITS CONSUMED. THE ASSESSEE HAS ALREADY FILED REPLY IN RESPECT OF DECREASE IN GROSS PROFIT RATION VIDE LETTER DATED 02.02.2015, WHICH MAY KINDLY BE CONSIDERED. T HE WASTAGE IS NOT AT 8.31% AS ALREADY EXPLAINED ABOVE. IT IS FURTHER SUBMITTED THAT THE G.P. RATIO GIVEN B Y THE ASSESSEE AS PER CHART ALREADY FILED IS BY TAKING THE GROSS SALES I.E INCLUSIVE OF EXCISE D UTY, WHEREAS THERE COULD BE NO PROFIT ON EXCISE DUTY. THUS THE G.P. RATE FOR THE YEAR UNDER CONSIDERATION BY TAKING THE SALES NET OF EXCISE WILL COME AT 2.18% AGAINST 1.98% AS PER PREV IOUS CHART. THE G.P. AFTER CONSIDERING THE SALES NET OF EXCISE FOR THE YEAR UNDER CONSIDER ATION AS WELL AS FOR LAST YEAR AS UNDER: A.Y. TURNOVER GROSS PROFIT G.P. RATIO NET OF EXCISE 2011-12 322489716 10221236 3.17% 2012-13 406752133 8886298 2.18% IN VIEW OF ABOVE, THE G.P.RATE BE KINDLY CONSIDERED @ 2.18% ON THE SALES NET OF EXCISE AS THERE CANNOT BE ANY PROFIT ON EXCISE DUTY. IT IS P RAYED THAT THE TRADING RESULTS BE KINDLY ACCEPTED. 5.2. CONSIDERING THE SAME, I AM OF THE VIEW THAT IN THE PECULIAR FACTS AND CIRCUMSTANCES OF THE CASE WHEREIN ADMITTEDLY THE AS SESSEE BEFORE THE AO PRODUCED THE AUDITED BOOKS OF ACCOUNT. AS PER RECO RD, IN THE LAST PHASE OF 2012, THE BUSINESS WAS STOPPED ON ACCOUNT OF SOME D ISPUTE AMONGST THE DIRECTORS, WHICH IS CITED AS ONE OF THE REASONS FOR THE DECLINE OF THE BUSINESS AND ULTIMATELY THE BANK TOOK POSSESSION OF THE BUSI NESS. IT IS FURTHER SEEN THAT WHEN PARA B RELIED UPON BY THE LD. SR.DR IS CONSIDERED ALONGWITH THE ABOVE EXPLANATION EXTRACTED ALSO FROM THE ASSESSMEN T ORDER, IT IS SEEN THAT THE CONCLUSIONS REFERRED TO BY THE AO QUA ELECTRICITY B ILLS ARE DE-HORSE THE EXPLANATION OFFERED NAMELY THAT OVER AND ABOVE THE ELECTRICITY UTILIZED FROM THE ELECTRIC COMPANY, ELECTRICITY WAS STATED TO HAVE BE EN PURCHASED FROM THE ITA-1582/CHD/2017 A.Y. 2012-13 PAGE 7 OF 7 PRIVATE PARTIES. NO REBUTTAL OR CONTRARY FACT HAS B EEN REFERRED TO EITHER BY THE AO OR THE CIT(A). SIMILARLY, IT IS SEEN THAT YIELD OF THE FINISHED GOODS CLAIMED AT 91.68% IS ON RECORD WHICH ALSO HAS NOT BEEN REBU TTED BY THE REVENUE OR THE CIT(A). ACCORDINGLY, IN THE PECULIAR FACTS AND CIRC UMSTANCES OF THE PRESENT CASE, I FIND THAT CONSISTENTLY THE ASSESSEE HAS GIV EN COGENT EXPLANATION FOR THE FALL IN G.P. AS WELL AS NON-PRODUCTION OF SUPPORTIN G DOCUMENTS. IN THE ABSENCE OF ANY REBUTTAL OR ATTEMPT BY THE REVENUE TO SEEK T HE RELEVANT DOCUMENTS FROM THE BANK, I FIND THAT ESTIMATED ADDITION BY RESORTI NG TO TINKERING WITH THE G.P. RATE ON FACTS WAS NOT WARRANTED IN THE PECULIAR FAC TS OF THE PRESENT CASE. THE ADDITION MADE IS, ACCORDINGLY, DIRECTED TO BE DELET ED. 6. GROUND NO. 4 RAISED BY THE ASSESSEE IS WITHOUT P REJUDICE GROUND, ACCORDINGLY, SINCE THE PRAYER MADE IN GROUND NOS. 1 TO 3 IS ALLOWED, THE PARTIES WERE NOT HEARD ON GROUND NO. 4. 7. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED . ORDER PRONOUNCED IN THE OPEN COURT ON 31.05. 2019. SD/- ( !' ) (DIVA SINGH) # / JUDICIAL MEMBER