The ITO, Ward-5(2), Ahmedabad V. Reclamation Welding Pvt. Ltd., Ahmedabad

ITA 1807/AHD/2007

• Counselvise Citation: [2010] 135 COUNSELVISE.COM (IT) 9245 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 6 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-11-2010
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: D
• Next Hearing Date: 03-11-2010
• Assessment Year: 2002-2003
• Appeal Filed On: 01-05-2007
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: ABHIJEET KUMAR N

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH D BEFORE SHRI G.D.AGRAWAL, VICE-PRESIDENT (AZ) AND SHRI MUKUL KR. SHRAWAT, JUDICIAL MEMBER DATE OF HEARING : 03/11/2010 DRAFTED ON: 08 /11/2010 ITO, WARD-5(2) AHMEDABAD VS. M/S.RECLAMATION WELDING PVT.LTD.129/129-A, G.V.M.M.ESTATE ODHAV AHMEDABAD PAN/GIR NO. : AAACR 7383 J (APPELLANT) .. (RESPONDENT) APPELLANT BY : SHRI ABHIJEET KUMAR N. D.R. RESPONDENT BY: SHRI TUSHAR P.HEMANI, A.R. O R D E R PER SHRI MUKUL KR. SHRAWAT, JUDICIAL MEMBER : THESE TWO APPEALS ARE EMANATED FROM TWO SEPARATE OR DERS OF LEARNED CIT(APPEALS)-XI, AHMEDABAD BOTH IDENTICALLY DATED 21/02/2007 RESPECTIVELY FOR ASSESSMENT YEARS 2002-0 3 AND 2004-05 ON THE FOLLOWING GROUNDS:- GROUNDS RAISED FOR ASSESSMENT YEAR 2002-03 1. THE LD. COMMISSIONER OF INCOME TAX (A)- XI, AHM EDABAD HAS ERRED IN LAW AND ON FACTS IN DIRECTING TO ALLOW THE DEDUCTION OF RS.78,03,398/- UNDER SECTION 80IA OF THE INCOME TAX ACT, 1961. 2. THE LD. COMMISSIONER OF INCOME TAX (A) XI, AH MEDABAD HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION MADE OF RS.20,84,412/- ON ACCOUNT OF DISALLOWANCE OF FREI GHT AND OCTROI EXPENSES. 1.ITA NO.1807/AHD/2007 A.Y. 2002-03 2.ITA NO.1808/AHD/2007 A.Y. 2004-05 ITA NOS.1807 & 1808/AHD/2007 ITO VS. M/S.RECLAMATION WELDING P.LTD. ASST.YEARS - 2002-03 & 2004-05 (RESPECTIVELY) - 2 - 3. THE LD. COMMISSIONER OF INCOME TAX (A) XI, AH MEDABAD HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION MADE OF RS.4,34,824/- BEING THE DIFFERENCE IN THE AMOUNT OF CONVERSION CHARGES CREDITED IN THE PROFIT AND LOSS ACCOUNT OF THE ASSESSEE AND THE PAYMENT OF CONVERSION CHARGES TO THE ASSESSEE A S STATED IN THE TAX AUDIT REPORT OF THE PRINCIPAL I.E. AIA ENGINEER ING LIMITED. 4. THE LD. COMMISSIONER OF INCOME TAX (A) XI, AH MEDABAD HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION MADE OF RS.81,68,011/- BEING THE SUPPRESSED CONVERSION CHAR GES ON ACCOUNT OF CLAIMING EXCESS BURNING LOSS. GROUNDS RAISED FOR ASSESSMENT YEAR 2004-05 1. THE LD. COMMISSIONER OF INCOME TAX (A) XI, AHM EDABAD HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDIT ION MADE OF RS.27,02,925/- ON ACCOUNT OF DISALLOWANCE OF FREIG HT, OCTROI AND CARTAGE EXPENSES. 2. THE LD. COMMISSIONER OF INCOME TAX (A) XI, AHMEDABAD HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION MADE OF RS.1,12,02,358/- BEING THE SUPPRESSED CONVERSION CH ARGES ON ACCOUNT OF CLAIMING EXCESS BURNING LOSS. 2. IT IS INFORMED IN THE BEGINNING ITSELF THAT TH E IN BETWEEN YEAR I.E. ASSESSMENT YEAR 2003-04 HAS ALREADY BEEN DECIDED BY THE TRIBUNAL. WE SHALL FIRST TAKE UP THE REVENUES APPEAL FOR ASS ESSMENT YEAR 2002- 03, FOR WHICH GROUNDS-WISE DISCUSSION IS AS FOLLOWS : 2.1. APROPOS GROUND NO.1 (FOR ASSESSMENT YEAR 2002-03), THOUGH THIS ISSUE HAS ALREADY BEEN DEALT WITH IN REVENUES APPEAL PERTAINING TO THIS ASSESSEE FOR ASSESSMENT YEAR 2003-04 BY ITAT D BENCH AHMEDABAD BEARING ITA NO.2954/AHD/2006 VIDE AN ORDE R DATED ITA NOS.1807 & 1808/AHD/2007 ITO VS. M/S.RECLAMATION WELDING P.LTD. ASST.YEARS - 2002-03 & 2004-05 (RESPECTIVELY) - 3 - 31/12/2009 BUT, AT THE OUTSET, THE BENCH HAS OBSERV ED THAT IN THAT YEAR THERE WAS ONLY ONE QUESTION DEALT WITH WAS RELATED TO THE SUBMISSION OF REQUISITE FORM NO.10CCB AND THE FURNISHING OF AUDIT REPORT, WHICH WAS ONLY DECIDED AND HELD THAT IF THE REQUISITE CONDIT ION HAS BEEN FULFILLED EVEN BEFORE THE COMPLETION OF THE ASSESSMENT, THEN THE CLAIM OF DEDUCTION U/S.80IA OF THE ACT SHOULD NOT BE DENIED . HOWEVER, THE OTHER ISSUE ON MERITS WAS IN RESPECT OF THE ADMISSIBILITY OF CLAIM FOR A CONCERN WHO IS MANUFACTURING THE CASTINGS ON JOB-WORK BASIS, WHIC H WAS NOT ADDRESSED. DUE TO THIS REASON, THE ISSUE WAS DISCU SSED AT SOME LENGTH TO ASCERTAIN THE MERITS AS ALSO THE CORRECT FACTUAL AS PECT. 3. BARE MINIMUM FACTS WHICH WE CONSIDER NECESSARY TO MENTION AS EXTRACTED FROM THE CORRESPONDING ASSESSMENT ORDER P ASSED U/S.143(3) OF THE ACT, DATED 29/12/2006 WERE THAT THE ASSESSEE- COMPANY IS STATED TO BE ENGAGED IN THE BUSINESS OF JOB-WORK AND ALSO CON VERSION WORK. PRIMARILY THE JOB/CONVERSION WORK WAS DONE IN RESPE CT OF THE HOLDING COMPANY VIZ. AIA ENGINEERING LTD. THE ASSESSING OFF ICER HAS DISALLOWED THE CLAIM FOR TWO REASONS. FIRST REASON WAS THAT THE ASSESSEE HAD SHOWN IN THE PROFIT & LOSS ACCOUNT THE INCOME F ROM JOB-WORK OR CONVERSION WORK. HOWEVER, THE ASSESSEE HAD NOT SHO WN ANY SALES-TAX ON THE SAID INCOME WHICH ACCORDING TO HIM PROVED THAT SINCE THE ASSESSEE WAS ONLY DOING JOB-WORK, THEREFORE, THE APPLICABILI TY OF PAYMENT OF SALES- TAX DID NOT ARISE. SECOND REASON AS OBSERVED BY THE ASSESSING OFFICER THAT WAS THAT THE ASSESSEE WAS NOT ENGAGED IN THE P RODUCTION OF ANY ARTICLE OR THING BECAUSE THE ASSESSEE HAS NOT ACCOU NTED FOR ANY FINISHED GOODS OR EVEN SEMI-FINISHED GOODS. THIRD REASON GIVEN BY THE ASSESSING OFFICER WAS THAT THE AUDITOR HAD NOT COMMENTED ABOU T THE MANUFACTURING ITA NOS.1807 & 1808/AHD/2007 ITO VS. M/S.RECLAMATION WELDING P.LTD. ASST.YEARS - 2002-03 & 2004-05 (RESPECTIVELY) - 4 - DETAILS OF THE ASSESSEE AND THE COLUMN WAS LEFT WIT H THE REMARKS NOT APPLICABLE. FINALLY THE FOURTH REASON FOR DISALLOWANCE FOR THE CLAIM WAS THAT THE ASSESSEE HAD NOT FURNISHED AUDIT REPOR T AS PER RULE 18BBB ON THE PRESCRIBED FORM 10CCB. AS PER ASSESSING OF FICER, THE FURNISHING OF REQUISITE FORM WAS A MANDATORY REQUIREMENT. 3.1. BEFORE CONCLUDING THE QUESTION OF DISALLOWAN CE, THE ASSESSING OFFICER HAS ALSO MENTIONED THAT FOR ASSESSMENT YEAR 2003-04, THE SAID CLAIM OF DEDUCTION U/S.80IA WAS DISALLOWED BY HIS P REDECESSOR, HOWEVER, THE SAID ORDER WAS REVERSED BY LEARNED CIT(APPEALS) AND NOW THE DEPARTMENT HAS FILED THE SECOND APPEAL BEFORE THE T RIBUNAL. WITH THESE REMARKS, THE CLAIM OF DEDUCTION U/S.80IA OF RS.78,0 3,698/- WAS REJECTED. THE MATTER WAS CARRIED BEFORE THE FIRST APPELLATE A UTHORITY. 4. LEARNED CIT(APPEALS) HAS CONSIDERED BOTH THE A SPECTS. IN RESPECT OF THE QUESTION OF DISALLOWANCE ON THE GROUND OF JOB- WORK ACTIVITY, THE LEARNED CIT(APPEALS) HAS DISCUSSED THE MEANING OF W ORD INDUSTRY VIS- -VIS THE MANUFACTURING AND PROCESSING ACTIVITY. H E HAS CITED J.B. KHARWAR & SONS (163 ITR 394)[GUJ.], EAST INDIA HOT ELS (209 ITR 854) AND NORTHERN AROMATICS LTD. (196 CTR 479)[DELHI] AN D WARREN LABORATORIES (3 SOT 638)[MUM-TRIBUNAL]. IN THE L IGHT OF THESE DECISIONS, IT WAS HELD THAT THE ALLEGED JOB-WORK ACTIVITY WAS NOTHING BUT A MANUFACTURING ACTIVITY BECAUSE THE END PRODUC T WAS COMMERCIALLY A DIFFERENT PRODUCT AND CAME INTO EXIS TENCE AFTER PROCESSING AND LIKE-WISE ACTIVITY. ITA NOS.1807 & 1808/AHD/2007 ITO VS. M/S.RECLAMATION WELDING P.LTD. ASST.YEARS - 2002-03 & 2004-05 (RESPECTIVELY) - 5 - 5. IN RESPECT OF THE SECOND ASPECT, I.E. NON-FURNISHING OF FORM NO.10CCB ALONGWIH THE RETURN, THE LEARNED CIT(APPEALS) HAS CITED A.N. ARUNACHALAM (75 TAXMANN 529)[MAD.] FOR THE PRO POSITION THAT THOUGH THE AUDIT REPORT DID NOT ACCOMPANY ALONG-WIT H THE RETURN BUT IF THE SAME WAS MADE AVAILABLE TO THE ASSESSING OFFICE R BEFORE THE COMPLETION OF THE ASSESSMENT, THEN REQUISITE CONDIT ION WAS FULFILLED. HE HAS ALSO CITED SHIVANAND ELECTRONICS (209 ITR 63)[B OM] AND HELD THAT IN VIEW OF THE FACTUAL AND LEGAL POSITION, IT WAS ESTA BLISHED THAT THE REPORT BEING FILED DURING THE COURSE OF ASSESSMENT PROCEED INGS HAS TO BE ACCEPTED AS DUE COMPLIANCE OF THE PROVISION. THE CONCLUDING PARA IS REPRODUCED BELOW:- 3.2.5. IN THE LIGHT OF ABOVE DISCUSSIONS, I AM OF THE VIEW THAT THE APPELLANT HAS BEEN GETTING THE BENEFITS U/S.80I A OF I.T.ACT, 1961 SINCE ASSESSMENT YEAR 1994-95. THE FACTS AND CIRCUMSTANCES IN APPELLANTS CASE HAVE NOT BEEN CHA NGED. SINCE THEN THE APPELLANT CONTINUES TO MANUFACTURE THE CAS TINGS ETC. ON JOB WORK BASIS AND FULL FILLING ALL THE CONDITIONS. THE APPELLANT ALSO HAS FILED THE AUDITED REPORT AS PER SECTION 44 AB OF INCOME-TAX ACT, 1961 WHICH IS AS PER THE PREVAILING PROVISIONS OF THE AC T. THEREFORE, IT IS THE SUBMISSION OF THE A.R. THAT TH E APPELLANT WAS NOT REQUIRED TO BE FILE REPORT INFORM 10CCB TO GET THE BENEFITS U/S.80IA OF I.T.ACT, 1961. HOWEVER, THE A.O. DID NOT GIVE ANY OPPORTUNITY TO SUBMIT SAID REPORT BEFORE COMPLETION OF ASSESSMENT. THE A.R. HAS RELIED UPON THE VARIOUS DECISIONS OF H IGH COURTS IN THIS REGARD. THEREFORE, AFTER VERIFYING THE CASE LAWS RELIED UPON BY THE A.R. AND ALSO IN THE LIGHT OF ABOVE DISCUSIS IONS, I AM OF THE OPINION THAT THE APPELLANT WAS NOT REQUIRED TO FILE AUDITED REPORT IN FORM 10CCB SINCE IT WAS NOT APPLICABLE FOR THE A PPELLANT. AS APPLICABLE TO THE APPELLANT, A REPORT U/S.44AB HAS BEEN FILED. THEREFORE, I AM INCLINED TO ACCEPT THE SUBMISSIONS OF THE A.R. AND ACCORDINGLY THE A.O. IS DIRECTED TO ALLOW THE DEDUC TION AS CLAIMED BY THE APPELLANT. THEREFORE, THIS GROUND OF APPEA L IS ALLOWED. ITA NOS.1807 & 1808/AHD/2007 ITO VS. M/S.RECLAMATION WELDING P.LTD. ASST.YEARS - 2002-03 & 2004-05 (RESPECTIVELY) - 6 - 6. WITH THIS LEGAL AND FACTUAL BACKGROUND, WE HAVE HEARD BOTH THE SIDES AT SOME LENGTH. AS FAR AS THE REASON OF DIS ALLOWANCE CONNECTED WITH THE ISSUE OF NON-FURNISHING OF FORM NO.10CCB A LONGWITH THE AUDIT REPORT WITH THE RETURN, WE HAVE ALREADY NOTICED THA T THE RESPECTED CO- ORDINATE BENCH D AHMEDABAD VIDE ORDER DATED 31/12 /2009 (SUPRA) HAS DECIDED IN FAVOUR OF THE ASSESSEE, RELEVANT PARAGRA PH NO.4; REPRODUCED BELOW:- 4. WE HAVE HEARD THE LEARNED DR AND THE LEARNED A R. THE LEARNED DR BASICALLY RELIED ON THE ORDER OF THE AO . ON THE OTHER HAND, THE LEARNED AR SUBMITTED THAT THE ISSUE IS C OVERED IN FAVOUR OF THE ASSESSEE BY THE DECISIONS OF THE HON'BLE GUJ ARAT HIGH COURT IN THE CASE OF CIT VS. GUJARAT OIL AND ALLIED INDUS TRIES (1993) 201 ITR 325 (GUJ) AND CIT VS. MAYUR FOUNDATION (2005) 2 74 ITR 562 (GUJ) FOR THE PROPOSITION THAT EVEN IF AUDIT REPORT IS NOT FILED ALONG WITH THE RETURN, BUT IF IT IS FILED BEFORE CO MPLETION OF THE ASSESSMENT, THEN THE CLAIM OF THE ASSESSEE COULD NO T BE DENIED. SINCE THE ISSUE IS DIRECTLY COVERED IN FAVOUR OF TH E ASSESSEE AND IT IS NOT DISPUTED THAT THE ASSESSEE HAS FILED THE AUD IT REPORT IN CORRECT FORM BEFORE MAKING OF THE ASSESSMENT, THERE IS NO CASE FOR DISALLOWING THE CLAIM. IN ANY CASE, THE BREACH IS TECHNICAL, THE FACTS AND CIRCUMSTANCES OF THE CASE REMAIN THE SAME , THERE IS NO CASE FOR DISALLOWING THE CLAIM. AS A RESULT, THIS GROUND OF REVENUE IS REJECTED. 6.1. FOLLOWING THE ABOVE VIEW, THIS PART OF THE OBJ ECTION OF THE REVENUE, THUS, GETS REJECTED. NEXT THE QUESTION IS ABOUT THE CLAIM IN RESPECT OF A BUSINESS-CONCERN DOING JOB-WORK. CERTAIN FINDING ON FACTS HAVE ALREADY BEEN RECORDED BY THE LEARNED CIT(APPEA LS) THROUGH WHICH IT HAD REVEALED THAT THE ACTIVITY WHICH WAS C ARRIED OUT BY THE ITA NOS.1807 & 1808/AHD/2007 ITO VS. M/S.RECLAMATION WELDING P.LTD. ASST.YEARS - 2002-03 & 2004-05 (RESPECTIVELY) - 7 - ASSESSEE CONVERSE THE GOODS RECEIVED INTO FINISHED GOODS BY APPLYING CERTAIN PROCESS. IN THE PAPER-BOOK A JOB AGREEM ENT HAS ALSO BEEN PLACED ON RECORD. ON PERUSAL, IT HAD REVEALED TH AT THE ASSESSEE HAD THE NECESSARY INFRASTRUCTURE TO MANUFACTURE THE CASTINGS ON JOB-W ORK BASIS. THE HOLDING COMPANY WAS SUPPLYING THE NECESSARY RAW-MATERIAL ALONGWITH FOUNDRY MATERIAL TO MANUFACTURE DIFFERENT KINDS OF CASTINGS AS PER THE REQUIREMENT. HOWEVER, THE SAME WAS DONE IN TERMS OF THE JOB- WORK AGREEMENT. ON ACCOUNT OF THE ACCEPTED FACTUAL POSITION THAT THE RAW-MATERIAL HAS BEEN SUPPLIED BY THE SAID CONCERN THEREFORE THE ASSESSEE HAD NOT SHOWN THE PURCHASE AND CONSUMPTION OF RAW-M ATERIAL. THE OBJECTION OF THE A.O. WAS INCORRECT AND WITHOUT APP RECIATING THE CORRECT FACTUAL MATRIX OF THE CASE. LIKEWISE THERE WAS NO F ORCE IN THE ALLEGATION THAT NO EXCISE DUTY WAS PAID ON THE MANUFACTURED AR TICLE, HOWEVER THE REASON WAS THAT THE ASSESSEE WAS NOT UNDER LEGAL OB LIGATION TO PAY THE DUTY BUT THE LEGAL OBLIGATION WAS OF THE SAID CONCE RN WHO USED TO SUUPLY THE RAW-MATERAIL. IN SUPPORT OF THE CLAIM, A LONG L IST OF CASE LAWS IS PLACED, NAMELY, J.B. KHARWAR & SONS (163 ITR 394)[G UJ.], EAST INDIA HOTELS (209 ITR 854) AND NORTHERN AROMATICS LTD. (1 96 CTR 479)[DELHI], WARREN LABORATORIES (3 SOT 638)[MUM-T RIBUNAL] AND CIT VS. TAJ FIRE WORKS INDUSTRIES (288 ITR 92)[MAD.]. IN THIS REPORTED JUDGEMENT, THE ASSESSEE WAS PRODUCING FIRE WORKS ON JOB-WORK BASIS. THE ASSESSEE WAS PRODUCING CRACKERS FROM RAW-MATERI AL SUPPLIED BY AN ANOTHER CONCERN. THE COURT HAS HELD THAT THE ASSE SSEE WAS A MANUFACTURER AS IT PRODUCED A NEW MATERIAL VIZ.CRAC KERS. AS PER THE OBSERVATION, THE ASSESSEE HAD SATISFIED THE TEXT OF AN INDUSTRIAL UNDERTAKING BECAUSE IT WAS ENGAGED IN A SYSTEMATIC AND ORGANIZED ACTIVITY OF PRODUCTION BY ENGAGING LABOURERS TO PRO DUCE THE END PRODUCT, ITA NOS.1807 & 1808/AHD/2007 ITO VS. M/S.RECLAMATION WELDING P.LTD. ASST.YEARS - 2002-03 & 2004-05 (RESPECTIVELY) - 8 - I.E. CRACKERS, THEREFORE, IT WAS HELD THAT ENTITLED FOR THE DEDUCTION. IN THE LIGHT OF THE FACTUAL AND LEGAL DISCUSSION AS MA DE HEREINABOVE, THE OVERALL CIRCUMSTANCES THUS WARRANTS TO UPHELD THE F INDINGS OF LEARNED CIT(APPEALS). ON BOTH THE COUNTS, THIS GROUND OF THE REVENUE IS HEREBY DISMISSED. 7. APROPOS GROUND NO.2, THE OBSERVATION OF THE ASSESSING OFFICER WAS THAT IN TERMS OF AN AGREEMENT WITH THE HOLDING COMPANY, AIA ENGINEERING LTD. THE FREIGHT IN RESPECT OF INCOMING RAW-MATERIAL AND DISPATCH OF THE GOODS WAS TO BE BORNE BY THE SAID HOLDING COMPANY, THEN THE ASSESSEE HAS WRONGLY DEBITED THE FREIGHT I N PROFIT & LOSS ACCOUNT. WHEN THE MATTER HAD GONE BEFORE THE FI RST APPELLATE AUTHORITY, THE LEARNED CIT(APPEALS) EXAMINED EACH HEAD OF THE EXPENDITURE IN RESPECT OF WHICH FREIGHT AND OCTROI, ETC. WERE CLAI MED. THE LEARNED CIT(APPEALS) HAS DISTINGUISHED THE NATURE OF EXPEND ITURE WITH THE NATURE OF EXPENDITURE WHICH WAS COVERED BY THE SAID AGREEM ENT. ON THAT BASIS, HE HAS HELD THAT THE DISALLOWANCE WAS UNFOUNDED. WITH THIS BRIEF BACKGROUND, NOW BEFORE US, AN ORDER OF THE TRIBUNAL ITAT AHMEDABAD D BENCH FOR ASSESSMENT YEAR 2003-04 PASSED IN ITA NO.2954/AHD/2006 DATED 31/12/2009 IS PLACED BEFORE US, WHEREIN VIDE PARA-7 IT WAS HELD AS UNDER:- 7. WE HAVE HEARD THE LEARNED DR AND THE LEARNED A R. THE LEARNED DR BASICALLY RELIED ON THE ORDER OF THE AO AND THE LEARNED AR RELIED ON THE ORDER OF THE LEARNED CIT( A). AFTER HEARING THE PARTIES, WE DECLINE TO INTERFERE IN THE ORDER OF LEARNED CIT(A). IT IS NOT POINTED OUT BY THE DEPARTMENT A S TO WHETHER FREIGHT AND OCTROI HAVE BEEN PAID IN RESPECT OF RAW MATERIALS BROUGHT FROM THE PRINCIPAL OR FINISHED GOODS SUPPLI ED BACK TO THE PRINCIPAL. UNDER THESE CIRCUMSTANCES, THE FINDINGS GIVEN BY THE LD. ITA NOS.1807 & 1808/AHD/2007 ITO VS. M/S.RECLAMATION WELDING P.LTD. ASST.YEARS - 2002-03 & 2004-05 (RESPECTIVELY) - 9 - CIT(A) THAT THE FREIGHT AND OCTROI EXPENDITURE CLAI MED BY THE ASSESSEE WERE INCURRED ON PURCHASE OF CONSUMABLES A ND STORES MATERIALS CANNOT BE DISTURBED. AS A RESULT, THIS G ROUND OF REVENUE IS REJECTED. 7.1. ONCE ON IDENTICAL FACTS A VIEW HAS ALREADY BEE N TAKEN IN FAVOUR OF THE ASSESSEE IN RESPECT OF FREIGHT AND OCTROI, THER EFORE ON THE SAME LINES FOR THE YEAR UNDER CONSIDERATION WE HEREBY AFFIRM T HE FINDING ON FACTS OF LEARNED CIT(APPEALS). REVENUES GROUND IS DISMISSE D. 8. APROPOS GROUND NO.3, THE FACTS AS EMERGED FROM THE CORRESPONDING ASSESSMENT ORDER WERE THAT THE ACTUAL CONVERSION CHARGES PAID BY THE ASSESSEE WAS AT RS.12,33,44,819/-, HOWE VER, AS AGAINST THAT THE AMOUNT AS PER PROFIT & LOSS ACCOUNTS WAS RS.12, 29,09,995/- AS DEBITED IN P&L ACCOUNT. THE DIFFERENCE OF RS.4,3 4,824/- WAS ADDED BY THE A.O. WHEN THE MATTER HAD GONE BEFORE THE FI RST APPELLATE AUTHORITY, CERTAIN FACTS WERE APPRECIATED AND, THEREAFTER, VID E PARA 5.2.1 RELIEF WAS GRANTED AS UNDER:- 5.2.1. IT IS SEEN THAT THE APPELLANT HAS OFFERED R S.4,34,824/- AS FITTING AND HEAT TREATMENT CHARGES WHICH HAS BEE N INCLUDED IN AMOUNT OF RS.6,52,487/- WHICH HAS BEEN CREDITED TO P & L A/C. THEREFORE, HAVING CONSIDERED THE SUBMISSIONS OF THE A.R. IT APPEARS TO ME THAT THERE IS NO OMISSION ON THE PART OF THE APPELLANT TO DISCLOSE CHARGES OF RS.4,34,824/-, HENCE, THE AD DITION MADE IS DELETED. 9. THIS ISSUE HAD ALSO COME UP IN THE PAST FOR ASSE SSMENT YEAR 2003- 04 AND VIDE( ITA NO.2954/AHD/2009) ORDER DATED 31/1 2/2009, THE ITAT AHEMDABAD (SUPRA) IN PARAGRAPH NO.10 HELD AS UNDER :- ITA NOS.1807 & 1808/AHD/2007 ITO VS. M/S.RECLAMATION WELDING P.LTD. ASST.YEARS - 2002-03 & 2004-05 (RESPECTIVELY) - 10 - 10. WE HAVE HEARD THE LEARNED DR AND THE LEARNED AR. IT IS NOT POINTED OUT BY THE REVENUE THAT THE ASSESSEE HA S CLAIMED IN ITS PROFIT & LOSS ACCOUNT A SUM OF RS.14,32,86,972/- AN D ACCORDINGLY THE PROFITS HAVE BEEN STATED IN THE RETURN. ONCE NECESSARY CORRECTIONS HAVE BEEN CARRIED OUT AND AS POINTED OU T BY THE LEARNED AR THAT THE RETURN HAS BEEN FILED ON THE B ASIS OF CORRECTED FIGURES, THEN THERE IS NO CASE OF PRESUMPTION THAT THE ASSESSEE IS ENTITLED FOR THE HIGHER CONVERSION CHARGES ON THE B ASIS OF AUDIT REPORT. PRESENTLY WE ARE RELYING ON THE STATEMENT GIVEN BY THE LEARNED AR AND IN CASE THE REVENUE FINDS THE FACTS DIFFERENT I.E. THE PRINCIPAL CLAIMS HIGHER DEDUCTION OF CONVERSION CHARGES IN THE P&L ACCOUNT, IT CAN COME UP IN MISCELLANEOUS APPLIC ATION. ACCORDINGLY, THIS GROUND OF REVENUE IS REJECTED. 10. ONCE A VIEW HAS ALREADY BEEN TAKEN, THEREFORE, FOR THIS YEAR AS WELL, WE HAVE NO REASON BUT TO FOLLOW THE SAME. HOW EVER THE INVESTIGATION IS STILL NEEDED BECAUSE THE NECESSARY INFORMATION IS NOT PLACED BEFORE IN THIS YEAR WHICH WAS APPRECIATED BY THE RESPECTED CO- ORDINATE BENCH IN THE PAST. THEREFORE NATURAL JUSTI CE DEMANDS TO RESTORE THIS GROUND BACK TO AO TO DECIDE AFRESH BUT IN THE LIGHT OF THE ABOVE OBSERVATION AFTER VERIFICATION OF THE CONNECTED ACC OUNT AS MENTIONED IN THE AFORE REPRODUCED PARAGRAPH. WITH THE RESULT, TH IS GROUND OF THE REVENUE IS PARTLY ALLOWED THAT TOO FOR STATISTICAL PURPOSE ONLY. 11. APROPOS GROUND NO.4, THE OBSERVATION OF THE ASSESSING OFFICER WAS THAT THE AVERAGE BURNING LOSS DURING THE YEAR W AS 10.92%, WHICH ACCORDING TO HIM WAS HIGHER CONSIDERING THE TYPE OF FURNACE, I.E. ELECTRIC FIRE FURNACE USED BY THE ASSESSEE. AS PER ASSESSIN G OFFICER, THE BURNING LOSS SHOULD BE ONLY 5%, HENCE, ACCORDINGLY THE ADDI TION WAS MADE. ITA NOS.1807 & 1808/AHD/2007 ITO VS. M/S.RECLAMATION WELDING P.LTD. ASST.YEARS - 2002-03 & 2004-05 (RESPECTIVELY) - 11 - 12. WHEN THE MATTER HAD GONE BEFORE THE FIRST APPEL LATE AUTHORITY, THE LEARNED CIT(APPEALS) HAS REVERSED THE FINDINGS OF T HE ASSESSING OFFICER AND ALLOWED THE CLAIM. NOW BEFORE US, IT WAS STATE D THAT FOR ASSESSMENT YEAR 2003-04, ITAT AHMEDABAD VIDE ORDER DATED 31/1 2/2009, VIDE PARA-13, THE MATTER WAS RESTORED BACK FOR A FRESH A DJUDICATION; REPRODUCED BELOW:- 13. WE HAVE HEARD THE LEARNED DR AND THE LEARNED A R. IN OUR CONSIDERED VIEW, THE ISSUE CANNOT DECIDED WITHOUT C OMPLETE DATA. THE PARTIES HAVE NOT FURNISHED THE INDUSTRY-WISE LOSS O R THE HISTORY OF THE LOSS IN THE CASE OF THE ASSESSEE FOR LAST 4/5 YEARS , THE LOSS INCURRED DURING VARIOUS PROCESS UNDERTAKEN BY THE ASSESSEE, COMPARISON OF SUCH LOSS IN DIFFERENT PROCESSES INDUSTRY-WISE AND VARIO US ASSESSMENT YEAR- WISE IN CASE OF THE ASSESSEE, OTHER COMPARATIVE INS TANCES, THE REASONS FOR INCURRING LOSS AND OTHER FACTORS SUCH AS TYPE O F MACHINERY USED, CLAIM OF MANUFACTURER OF MACHINES AS TO THE AMOUNT OF LOSS LIKELY TO OCCUR WHEN WORK IS DONE ON THEIR MACHINES. ACCORDI NGLY, WE RESTORE THIS ISSUE TO THE FILE OF THE AO FOR EXAMINING IT AFRESH. AS A RESULT, THIS GROUND OF REVENUE IS ALLOWED BUT FOR STATISTICAL PU RPOSE. 13. SINCE THE RESPECTED CO-ORDINATE BENCH HAS TAKEN A VIEW AND THERE UPON RESTORED THE MATTER TO AFFIRM THE CORRECTNESS OF THE CLAIM OF BURNING-LOSS FOR RE-ADJUDICATION BY THE ASSESSING O FFICER AS PER THE DIRECTIONS, THEREFORE, FOR THE YEAR UNDER CONSIDERA TION ON IDENTICAL FACTS THE MATTER IS HEREBY RESTORED TO BE DECIDED DE NOVO , NEEDLESS TO SAY AFTER PROVIDING AN ADEQUATE OPPORTUNITY OF HEARING TO THE ASSESSEE. 14. IN THE RESULT, THE APPEAL OF THE REVENUE FOR AS SESSMENT YEAR 2002- 03 IS PARTLY ALLOWED. (B) REVENUES APPEAL FOR ASSESSMENT YEAR 2004-05 ( I.E.ITA NO.1808/AHD/2007) 15. APROPOS GROUND NO.1, REGARDING FREIGHT & OCTROI, ON IDENTICAL FACTS A VIEW HAS ALREADY BEEN TAKEN IN FAVOUR OF TH E ASSESSEE BY REJECTING ITA NOS.1807 & 1808/AHD/2007 ITO VS. M/S.RECLAMATION WELDING P.LTD. ASST.YEARS - 2002-03 & 2004-05 (RESPECTIVELY) - 12 - THE REVENUES GROUND IN THE PAST, THEREFORE, WE HAV E NO REASON TO TAKE ANY OTHER VIEW BUT TO FOLLOW THE SAME FOR THE ASSES SMENT YEAR 2002-03 (REVENUES APPEAL-SUPRA). CONSEQUENTLY, FOR THIS YEAR AS WELL REVENUES GROUND IS HEREBY DISMISSED. 16. APROPOS GROUND NO.2, REGARDING THE ISSUE OF SUPPRE SSED CONVERSION CHARGES, THE SAME IS COVERED BY OUR DECISION CONTAINING IN PARAGRAPH NO.10 SUPRA I.E. REVENUES APPEAL ON GROU ND NO.4 FOR ASSESSMENT YEAR 2002-03 AND THE DECISION OF THE TRI BUNAL FOR A.Y. 2003-04 ORDER DATED 31.12.2009 ALREADY CITED ABOVE, THEREFORE RESTORED BACK, HENCE TO BE TREATED AS PARTLY ALLOWED FOR STA TISTICAL PURPOSES. 17. IN THE RESULT, BOTH THE APPEALS OF THE REVENUE ARE PARTLY ALLOWED IN THE TERMS INDICATED. ORDER SIGNED, DATED AND PRONOUNCED IN THE COURT ON 19/ 11 /2010. SD/- SD/- ( G.D.AGRAWAL ) ( MUKUL KR. SHRAWAT ) VICE PRESIDENT (AZ) JUDICIAL ME MBER AHMEDABAD; DATED 19 / 11 /2010 T.C. NAIR, SR. PS COPY OF THE ORDER FORWARDED TO : 1. THE ASSESSEE. 2. THE DEP ARTMENT. 3. THE CIT CONCERNED. 4. THE LD. CIT(A PPEALS)-XI, AHMEDABAD 5. THE DR, AHMEDABAD BENCH. 6. THE GUARD FILE. BY ORDER, //TRUE COPY// (DY./ASSTT.REGISTRAR), ITAT, AHMEDABAD 1. DATE OF DICTATION..03/11/2010 ITA NOS.1807 & 1808/AHD/2007 ITO VS. M/S.RECLAMATION WELDING P.LTD. ASST.YEARS - 2002-03 & 2004-05 (RESPECTIVELY) - 13 - 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 04/11/2010 OTHER MEMBER 3. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S.. 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 5. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR .P.S./P.S 19.11.2010 6. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 19.11.2010 7. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK . 8. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER.. 9. DATE OF DESPATCH OF THE ORDER