DCIT 1(3), MUMBAI V. UNI ABEX ALLOY PRODUCTS LTD, MUMBAI

ITA 1742/MUM/2011

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 75866 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-03-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: J
• Next Hearing Date: 13-03-2014
• Assessment Year: 2002-2003
• Appeal Filed On: 03-03-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: SANJAY R PARIKH

Judgement Text

M/S UNI ABEX ALLOY PRODUCTS LTD., 1 IN THE INCOME TAX APPELLATE TRIBUNAL J BENCH, MUM BAI BEFORE SHRI VIJAY PAL RAO, JUDICIAL MEMBER AND SHRI NARENDRA KUMAR BILLAIYA, ACCOUNTANT MEMBER ITA NO. 1742/MUM/2011 ASSESSMENT YEAR.2002-03 DY. COMMISSIONER OF INCOME TAX- 1(3), MUMBAI. R. NO. 540/564, 5 TH FLOOR AAYAKAR BHAWAN, M.K. ROAD, NEW MARINE LINES, MUMBAI 400 020. VS. M/S UNI ABEX ALLOY PRODUCTS LTD., SIR VITTAL THUCKERSES MARG, NEW MARINE LINES MUMBAI 400 020. PAN: AAACU1444R APPELLANT RESPONDENT RE VENUE BY SHRI MAURYA PRATAP A SSESSEE BY SHRI SANJAY R. PARIKH ORDER PER VIJAY PAL RAO, JM THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER DATED 6.12.2010 OF CIT(A) FOR THE A.Y. 2002-03. THE REVEN UE HAS RAISED THE SOLITARY GROUND IN THIS APPEAL AS UNDER:- WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE CIT(A) ERRED IN DELETING THE ADDITION OF RS. 25,86,663/-. BEING DISCREPANCY IN RAW MATERIAL. 2. WE HAVE HEARD THE LD. DR AS WELL AS LD. AR AND C ONSIDERED THE RELEVANT MATERIAL ON RECORD. AT THE OUTSET WE NOTE THAT CIT(A) HAS DECIDED THIS ISSUE BY FOLLOWING THE EARLIER YEARS ORDER IN PARA 4 AND 5 AS UNDER:- DATE OF HEARING 13.3.2014 DATE OF PRONOUNCEMENT 21 - 03 - 2014 M/S UNI ABEX ALLOY PRODUCTS LTD., 2 4. LD . COUNSEL OF APPELLANT HAS ARGUED AGAINST THE ADDITIO N IN A V ARIETY OF WAYS. HIS KEY ARGUMENT IS THAT WITHOUT RE JECTING THE BOOK RESULTS DISCLOSED BY APPELLANT, WITHOUT FINDING ANY THING WRONG IN THE MANUFACTURING REC ORDS , ADDITION TO INCOME ON ACCOUNT OF EXCESS CONSUMPTION CANNOT BE MADE. H E HA S A LSO DRAWN - MY ATTENTION TO THE STANDARDS PRESCRIBED BY THE MINISTRY OF C OMM E RC E A ND T H E INSTITUTE - OF ' SCIENCE IN RESPECT OF CONSUMPTION OF RAW MATERIAL I N APPELLANT'S LINE OF MANUFACTURING . LAST OF ALL HE HAS DRAWN - ATTENTION TO TH E ORDER OF FIRST APPELLATE AUTHORITY IN APPELLANT'S OWN CASE FOR ASS ESSMENT YEA R 1997 - 98 AND 1998-99 WHERE SIMILAR ADDITION MADE WERE DELETE D. 5 . I HAVE PERUSED THE FACTS OF THE CASE. I FIND THAT ASSESSING OFFICER H AS S I MPL Y GONE INTO THE DEFICIT OF FINISHED PRODUCT AS EMERGI NG FROM THE MA NUFACTURING WITHOUT GOING INTO THE DETA I LS OF THE MANUFACTURING . PROCESS. T H E KEY F A CT THA T LOSS DOES OCCUR IN THIS ACTIVITY HAS ' BEEN IGNORED BY HIM . THE EXI STENCE OF LOSS IN - THE MANUFACTURING IS CONFIRMED BY THE STANDARDS SET BY MINISTRY OF COMME RCE AND OTHER INSTITUTIONS. THE ISSUE HAS ALSO BEEN DECIDED IN FA VOUR OF APP E LLANT BY PREDECESSOR APPELLATE COMMISSIONERS IN APPELLANT'S O W N CASE . THE F A CTS AND THE BASIS OF ADDITIONS IN THOSE Y E ARS WERE THE SAME. T H E R E FOR E R E SP E CTFULLY . FOLLOWING THE DECIS I ON OF MY PREDECESSOR APPELLATE COMMISSIONERS ON THE ISSUE, IT IS HELD THAT THE ADD ITION MADE BY ASSESSING OFFICER ON ACCOUNT OF SHORTAGE OF RAW MAT ERIAL IS NOT JUSTIFIED AND IS DELETED. 3. CIT(A) HAS DECIDED THIS ISSUE BY FOLLOWING THE O RDERS FOR A.Y. 1997-98 AND 1998-99 AND THE DEPARTMENT HAS ACC EPTED THE ORDER OF THE CIT(A) ON THIS ISSUE FOR A.Y. 1997 -98 AND 1998- 99. THE LD. DR HAS NOT DISPUTED THIS FACT THAT THE DEPARTMENT HAS ACCEPTED THE ORDER OF CIT(A) FOR THE A.Y. 1997- 98 AND 1998-99 ON THE ISSUE. SINCE THE BASIS OF ADDITION I N THE EARLIER YEARS AND FOR THE YEAR UNDER CONSIDERATION WAS FOUN D BY THE CIT(A) AS IDENTICAL AND WHEN THE DEPARTMENT HAS AC CEPTED THE CLAIM OF THE ASSESSEE FOR A.Y. 1997-98 AND 1998-99 AS ALLOWABLE THEN THE AO IS NOT PERMITTED TO DISALLOW THE CLAIM WITHOUT POINTING OUT ANY CHANGE IN FACTS FOR THE YE AR UNDER M/S UNI ABEX ALLOY PRODUCTS LTD., 3 CONSIDERATION. FURTHER THE AO HAS DISALLOWED THE LO SS OF RAW MATERIAL IN THE MANUFACTURING PROCESS WITHOUT BRING ING ON RECORD THE FACT THAT HOW THE LOSS IN THE CASE OF TH E ASSESSEE IS ABNORMAL IN COMPARISON TO THE NORMAL LOSS IN THE MA NUFACTURING PROCESS PREVAILING IN THE BUSINESS. ACCORDINGLY, WE DO NOT FIND ANY ERROR OR ILLEGALITY IN THE ORDER OF CIT(A) QUA THIS ISSUE. 7. IN THE RESULT APPEAL OF THE REVENUE IS DISMISSED . ORDER PRONOUNCED IN THE OPEN COURT ON 21 /03/ 2014 SD/- SD/- (N.K. BILLAIYA) (VIJAY PAL RAO) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI DATED 21/03/2014 SKS SR. P.S COPY TO: THE APPELLANT THE RESPONDENT THE CONCERNED CIT(A) THE CONCERNED CIT THE DR, J BENCH, ITAT, MUMBAI BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCHES, MUMBAI