ITO, Ward-4, Ahmednagar V. Shri Amit Vallabhray Pandit, Sangamner

ITA 2030/PUN/2012

• Counselvise Citation: 203024514 RSA 2012
• Duration Of Justice: 1 year(s) 5 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-03-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 28-01-2014
• Assessment Year: 2008-2009
• Appeal Filed On: 19-10-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P L PATHADE
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCHE A, PUNE BEFORE SHRI SHAILENDRA KUMAR YADAV, JUDICIAL MEMBER AND SHRI G.S. PANNU, ACCOUNTANT MEMBER ITA NO.2030/PN/2012 (ASSESSMENT YEAR : 2008-09) INCOME TAX OFFICER, WARD 4, AHMEDNAGAR. . APPELLANT VS. SHRI AMIT VALLABHRAIY PANDIT, S.NO.151, PLOT NO.3/4, PARIS ISPAT AT VELHALE SANGAMNER, TAL. SANGAMNER, DIST. AHMEDNAGAR. PAN : AAXPP7811M . RESPONDENT DEPARTMENT BY : SHRI P. L. PATHADE ASSESSEE BY : SHRI NIKHIL PATHAK DATE OF HEARING : 28-01-2014 DATE OF PRONOUNCEMENT : 20-03-2014 ORDER PER G. S. PANNU, AM THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST AN ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-I, PUNE DATED 30.03.2012 WHICH, IN TURN, HAS ARISEN FROM AN ORDER DATED 23.12.2010 PAS SED BY THE ASSESSING OFFICER U/S 143(3) OF THE INCOME-TAX ACT, 1961 (IN SHORT THE ACT), PERTAINING TO THE ASSESSMENT YEAR 2008-09. 2. IN THIS APPEAL, ALTHOUGH THE REVENUE HAS RAISED MULTIPLE GROUNDS OF APPEAL BUT THE SOLITARY GRIEVANCE IS WITH REGARD TO THE ACTION OF THE CIT(A) IN DELETING THE ADDITION OF RS.1,15,18,566/- MADE BY T HE ASSESSING OFFICER ON ACCOUNT OF ASSESSEES CLAIM OF LOSS DUE TO FIRE. 3. IN BRIEF, THE RELEVANT FACTS ARE AS FOLLOWS. TH E RESPONDENT-ASSESSEE IS AN INDIVIDUAL WHO IS INTER-ALIA CARRYING ON THE BUS INESS OF MANUFACTURING OF MS INGOTS FROM IRON SCRAP AND SPONGE IRON. DURING THE YEAR UNDER CONSIDERATION, ITA NO.2030/PN/2012 A.Y. 2008-09 THE ASSESSING OFFICER NOTICED THAT DUE TO OCCURRENC E OF FIRE IN THE FACTORY PREMISES ON 05.03.2008, ASSESSEE HAD CLAIMED THAT R AW MATERIALS TO THE TUNE OF 1756 MTS WAS DAMAGED AND ACCORDINGLY, THE ASSESS EE HAD VALUED ITS CLOSING STOCK LESS TO THAT EXTENT. ASSESSEES CLAI M WAS THAT THE STOCK OF SPONGE IRON TO THE EXTENT OF 488.890 MT WAS DAMAGED WHEREAS THE STOCK OF LIGHT METAL SCRAP (I.E. LMS) OF 1267.273 MT WAS DAM AGED. THE ASSESSING OFFICER HAS ACCEPTED THE DAMAGE OF SPONGE IRON STOC K OF 488.890 MT AND ALLOWED THE SAME. HOWEVER, FOR THE REASONS GIVEN I N THE ASSESSMENT ORDER, THE ASSESSING OFFICER HAS NOT ACCEPTED THE DAMAGE T O THE STOCK OF LMS SCRAP OF 1267.273 MT CLAIMED BY THE ASSESSEE. THE PRIMAR Y REASON WEIGHING WITH THE ASSESSING OFFICER TO REJECT THE CLAIM OF DAMAGE TO THE STOCK OF LMS WAS THE REPORT OF THE SURVEYOR OF THE INSURANCE COMPANY WHICH ACCORDING TO HIM SHOWED THAT THERE WAS NO DAMAGE CAUSED TO THE STOCK OF LMS. THE ASSESSING OFFICER NOTICED THAT IT WAS ON THE STRENG TH OF SUCH REPORT OF THE SURVEYOR THAT THE CLAIM OF THE ASSESSEE WITH REGARD TO THE DAMAGE TO LMS WAS REJECTED BY THE INSURANCE COMPANY. AS PER THE ASSESSING OFFICER, THE REPORT OF THE SURVEYOR SHOWED THAT THERE WAS NO PHY SICAL DAMAGE OR LOSS TO THE LMS. WITH RESPECT TO THE RELIANCE PLACED BY TH E ASSESSEE ON THE PANCHNAMA WHICH WAS PREPARED AND PRESENTED TO THE P OLICE AUTHORITIES, THE ASSESSING OFFICER OBSERVED THAT THE QUANTITIES OF D AMAGE STOCK MENTIONED THEREIN WAS ONLY AN APPROXIMATION AND THE SAME DID NOT CONSTITUTE THE BEST EVIDENCE TO ALLOW THE CLAIM OF THE ASSESSEE. FOR T HE AFORESAID REASONS, THE ASSESSING OFFICER DISALLOWED THE LOSS IN RELATION T O THE LMS STOCK AMOUNTING TO RS.1,15,18,566/- 4. IN APPEAL BEFORE THE CIT(A), ASSESSEE ASSAILED T HE ORDER OF THE ASSESSING OFFICER IN LAW AND ON FACTS. THE RELIANC E PLACED BY THE ASSESSING OFFICER ON THE FINAL REPORT PREPARED BY THE SURVEYO R APPOINTED BY THE INSURANCE COMPANY WAS SOUGHT TO BE ASSAILED BY POIN TING OUT THAT THE SAME WAS CHALLENGED BY THE ASSESSEE IN LEGAL PROCEEDINGS AND THAT THE SURVEY ITA NO.2030/PN/2012 A.Y. 2008-09 REPORT WAS NOT CORRECT. A COPY OF THE CORRESPONDEN CE BETWEEN THE ASSESSEE AND THE INSURANCE COMPANY WITH RESPECT TO SUCH DISP UTE WAS REFERRED TO BEFORE THE CIT(A), WHICH WAS ALSO BEFORE THE ASSESS ING OFFICER. WITH RESPECT TO THE QUANTITIES MENTIONED IN THE PANCHNAMA, ASSES SEE EXPLAINED THAT THE SAID PANCHNAMA WAS PREPARED AT THE TIME WHEN THE FI RE WAS STILL ON AND THE QUANTITIES MENTIONED THEREIN COULD ONLY BE DONE ON AN APPROXIMATION. THE FIRE CONTINUED FOR ALMOST TWO DAYS AND JUSTIFYING T HE APPROXIMATION IN THE PANCHNAMA, ASSESSEE POINTED OUT THAT THE QUANTITY O F SPONGE IRON STOCK MENTIONED THEREIN WAS 500 MT AND EVEN THE INSURANCE COMPANY HAD ACCEPTED THAT THE SPONGE IRON OF 488.890 MT WAS DAM AGED. THUS, THE DAMAGE STOCK MENTIONED IN THE PANCHNAMA TALLIED WIT H THE ULTIMATE DAMAGE ACCEPTED EVEN BY THE INSURANCE COMPANY. SIMILARLY, IT WAS POINTED OUT THAT IN THE PANCHNAMA PREPARED ASSESSEE HAD APPROXIMATED TH E DAMAGE TO LMS OF 1300 MT WHEREAS ON EXACT COMPUTATION THE SAME WAS C LAIMED AT 1267.273 MT. IT WAS THEREFORE CONTENDED THAT THE PANCHNAMA PREPARED COULD NOT BE STRAIGHTWAY REJECTED AS LACKING IN EVIDENTIARY VALU E. 5. WITH RESPECT TO THE DAMAGE TO STOCK OF LMS SCRAP , IT WAS POINTED OUT THAT THOUGH THE FIRE HAD TAKEN PLACE ON 05.03.2008 YET TILL THE ASSESSMENT PROCEEDINGS WERE COMPLETED, THE SAID DAMAGE LMS SCR AP WAS LYING IN THE FACTORY PREMISES AND ASSESSING OFFICER WAS ALSO REQ UESTED TO MAKE A PHYSICAL INSPECTION OF THE SAME, IF HE SO DESIRED. ASSESSEE ALSO REFERRED TO COPIES OF THE ADVERTISEMENTS INSERTED IN THE LOCAL NEWSPAPERS REGARDING THE SALE OF SUCH DAMAGE MATERIAL, BUT THERE WAS NO RESPONSE. B EFORE THE CIT(A), ASSESSEE ALSO REFERRED TO THE ORDER OF THE COMMISSI ONER OF CENTRAL EXCISE & CUSTOMS DATED 17.02.2009 WHEREIN HE HAD TAKEN DUE N OTE OF THE DAMAGE STOCK AND DIRECTED THE ASSESSEE TO REVERSE THE CENV AT CLAIM IN RESPECT OF THE RAW MATERIAL DAMAGED IN FIRE. ON THE BASIS OF THE SAID ORDER OF THE EXCISE AUTHORITIES, THE ASSESSEE POINTED OUT THAT THE ASSE SSING OFFICER WAS WRONG IN REJECTING ASSESSEES PLEAS OF THE DAMAGED STOCK WHE REAS ANOTHER REVENUE ITA NO.2030/PN/2012 A.Y. 2008-09 DEPARTMENT OF THE GOVERNMENT OF INDIA HAD ACCEPTED THE SAME. BEFORE THE CIT(A), ASSESSEE ALSO ASSERTED THAT THE ENTIRE STOC K RECORDS WERE PRODUCED BEFORE THE ASSESSING OFFICER AND THERE WAS NO INFIR MITY FOUND IN THE MAINTENANCE OF RECORDS BY THE ASSESSEE. 6. THE CIT(A) HAS ELABORATELY DEALT WITH EACH OF TH E POINTS RAISED BY THE ASSESSEE AND HAS ULTIMATELY ACCEPTED ASSESSEES PLE A FOR THE LOSS SUFFERED ON ACCOUNT OF STOCK OF LMS DUE TO FIRE. ACCORDINGLY, HE HAS DIRECTED THE ASSESSING OFFICER TO DELETE THE ADDITION OF RS.1,15 ,18,566/-. AGGRIEVED WITH THE SAID ORDER OF THE CIT(A), REVENUE IS IN APPEAL BEFORE US. 7. BEFORE US, THE LEARNED DEPARTMENTAL REPRESENTATI VE HAS PRIMARILY REITERATED THE POINTS RAISED BY THE ASSESSING OFFIC ER, WHICH WE HAVE ALREADY ADVERTED TO IN PARA 3 OF THIS ORDER AND ARE NOT BEI NG REPEATED FOR THE SAKE OF BREVITY. THE LEARNED DEPARTMENTAL REPRESENTATIVE H AS POINTED OUT THAT THE ASSESSING OFFICER BASED HIS ASSESSMENT OF THE LOSS ON ACCOUNT OF FIRE, ON THE BASIS OF THE REPORT OF THE SURVEYOR APPOINTED BY TH E INSURANCE COMPANY AND THEREFORE HE WAS JUSTIFIED IN REJECTING THE CORRECT NESS OF THE LOSS CLAIMED BY THE ASSESSEE WITH REGARD TO THE LMS STOCK. IN PART ICULAR, THE LEARNED DEPARTMENTAL REPRESENTATIVE REFERRED TO THE COPY OF THE REPORT OF THE SURVEYOR WHEREIN IT IS STATED THAT THE FIRE DID NOT CAUSE AN Y PHYSICAL LOSS OR DAMAGE TO THE LMS STOCK. ON THIS BASIS, IT IS SOUGHT TO BE S UBMITTED THAT THE CIT(A) ERRED IN ALLOWING THE CLAIM OF THE ASSESSEE. 8. THE LEARNED COUNSEL APPEARING FOR THE RESPONDENT -ASSESSEE HAS SUPPORTED THE ORDER OF CIT(A) AND HAS REFERRED TO T HE PAPER BOOK FILED, WHEREIN IS PLACED THE MATERIAL RELIED UPON BY THE C IT(A) IN DELETING THE ADDITION MADE BY THE ASSESSING OFFICER. ITA NO.2030/PN/2012 A.Y. 2008-09 9. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIO NS. AT THE OUTSET, ONE MAY OBSERVE THAT THERE IS NO DISPUTE TO THE FACT TH AT AN INCIDENT OF FIRE TOOK PLACE IN THE FACTORY PREMISES OF THE ASSESSEE, WHIC H RESULTED IN DAMAGE TO THE MATERIALS STORED IN THE PREMISES. THE ASSESSEE HAD CLAIMED LOSS TO THE TUNE OF 1756 MT OF RAW MATERIAL, WHICH COMPRISED OF STOC K OF SPONGE IRON AND LMS. THERE IS NO DISPUTE IN SO FAR AS THE LOSS CLAIMED O N ACCOUNT OF SPONGE-IRON STOCK WEIGHING 488.890 MT IS CONCERNED. THE DISPUT E AROSE ONLY WITH RESPECT TO THE DAMAGE CLAIMED WITH RESPECT TO THE LMS STOCK OF 1267.273 MT, WHICH THE ASSESSING OFFICER HAS REJECTED AND ACCORDINGLY AN ADDITION OF RS.1,15,18,566/- WAS MADE TO THE RETURNED INCOME. THE STAND OF THE ASSESSING OFFICER IS BASED ON THE REPORT OF THE SUR VEYOR APPOINTED BY THE INSURANCE COMPANY TO ASSESS AND QUANTIFY THE DAMAGE . IT IS ALSO EVIDENT THAT THE PANCHNAMA PREPARED AT THE TIME OF FIRE WAS ALSO SOUGHT TO BE PRODUCED AS AN EVIDENCE FOR QUANTIFICATION OF THE DAMAGE, AND T HE SAME HAS NOT BEEN RELIED UPON BY THE ASSESSING OFFICER. ACCORDING TO THE ASSESSING OFFICER, INFORMATION IN THE PANCHNAMA WAS FURNISHED BY THE A SSESSEE AND THEREFORE CANNOT BE ACCEPTED AS A CREDIBLE AND COGENT MATERIA L FOR ALLOWING THE CLAIM OF LOSS. WITH REGARD TO THE INSURANCE COMPANY NOT HAV ING ACCEPTED THE VERSION OF THE ASSESSEE WITH REGARD TO THE DAMAGE TO THE ST OCK OF LMS, ASSESSEE POINTED OUT THAT THE INITIALLY THE INSURANCE COMPAN Y HAD REFUSED EVEN A SINGLE RUPEE OF COMPENSATION BUT SUBSEQUENTLY AGREED TO CO MPENSATE FOR THE DAMAGE TO THE STOCK OF SPONGE IRON ONLY. THIS ASPE CT WAS BROUGHT OUT BY THE ASSESSEE TO SAY THAT THE SURVEYOR REPORT REFERRED T O BY THE ASSESSING OFFICER WAS A SUBJECT-MATTER OF CONTINUING DISPUTE WITH THE INSURANCE COMPANY AND THEREFORE IT COULD NOT BE CONSIDERED AS FINAL SO AS TO REJECT ASSESSEES PLEA FOR THE LOSS ON ACCOUNT OF DAMAGE STOCK OF LMS. BEFORE US, IN THE COURSE OF HEARING, THE LEARNED COUNSEL FOR THE ASSESSEE MADE A STATEMENT AT BAR THAT EVEN PRESENTLY THE DISPUTE WITH THE INSURANCE COMPA NY IS CONTINUING. ITA NO.2030/PN/2012 A.Y. 2008-09 10. THE CIT(A) HAS TAKEN INTO CONSIDERATION THE REP ORT OF THE SURVEYOR AND ACCORDING TO HIM SUCH A REPORT WAS REQUIRED TO BE C ONSIDERED ON ITS MERITS ALONG WITH THE OTHER EVIDENCE ON RECORD AND CANNOT BE HELD AGAINST THE ASSESSEE MECHANICALLY. WE ARE IN AGREEMENT WITH TH E AFORESAID PROPOSITION OF THE CIT(A) BECAUSE IT IS ALSO RELEVANT THAT THE STAND OF THE ASSESSEE ON THE DAMAGED STOCK HAS BEEN CONSIDERED BY THE EXCISE AUT HORITIES ALSO IN TERMS OF WHICH THE CENVAT CREDIT OF RS.42,89,749/- HAS BEEN DIRECTED TO REVERSED, A COPY OF THE ORDER OF THE COMMISSIONER OF CENTRAL EX CISE & CUSTOMS DATED 17.02.2009 HAS BEEN FURNISHED IN THE PAPER BOOK AT PAGE 154-155 WHEREBY IT IS EVIDENT THAT THE STOCK IN QUESTION WAS FOUND TO HAVE NOT BEEN UTILIZED IN THE PRODUCTION OF FINISHED EXCISABLE GOODS AND THEREFOR E THE CENVAT CREDIT TAKEN BY THE ASSESSEE WAS DIRECTED TO BE REFUNDED/REVERSE D. MOREOVER, WHEN ASSESSEE HAS DISPUTED THE REPORT OF THE SURVEYOR, I T CANNOT BE STRAIGHTAWAY RELIED UPON, BUT HAS TO BE OBJECTIVELY ANALYZED ON THE BASIS OF OTHER MATERIAL ON RECORD AND THEREFORE WE FIND NO ERROR IN THE APP ROACH OF THE CIT(A) ON THIS ASPECT. 11. MOREOVER, THE CIT(A) HAS ALSO NOTICED THAT THE MENTION OF THE QUANTITY OF LMS STOCK AT 431.220 MT IN THE SURVEYOR REPORT H AS BEEN WRONGLY INTERPRETED TO SAY THAT IT WAS IN RESPECT OF DAMAGE D LMS STOCK. AS PER THE CIT(A) THE ASSESSEE HAD REFERRED TO THE VARIOUS COR RESPONDENCES IN THIS REGARD TO SHOW THE DISCREPANCY WAS THAT THE STOCK O F LMS OF 431.220 MT REFERRED TO IN THE REPORT OF THE SURVEYOR WAS THE R EMAINING QUANTITY OF LMS AND NOT THE DAMAGED STOCK OF LMS. THE CIT(A) HAS A LSO NOTICED THAT IN THE ONGOING DISPUTE WITH THE INSURANCE COMPANY, ASSESSE E HAD APPOINTED AN INDEPENDENT SURVEYOR FOR A TECHNICAL ANALYSIS WHO H AVE SURVEYED THE QUANTUM OF DAMAGE AND THE EXTENT OF DAMAGE, AS CLAI MED BY THE ASSESSEE WAS FOUND TO BE CORRECT. THE CIT(A) HAS NOTICED TH AT SUCH INDEPENDENT PIECE OF EVIDENCE WAS UNJUSTLY DISREGARDED BY THE ASSESSI NG OFFICER MERELY ON THE GROUND THAT SAME WAS SELF-SERVING. NOTHING HAS BEE N BROUGHT ON RECORD ITA NO.2030/PN/2012 A.Y. 2008-09 BEFORE US BY THE REVENUE, WHICH WOULD ENABLE US TO DISTRACT FROM THE AFORESAID INFERENCE DRAWN BY THE CIT(A). 12. APART THEREFROM, WE ALSO FIND THAT BONAFIDES OF THE ASSESSEES CLAIM OF LOSS ARE QUITE EVIDENT BECAUSE DURING THE ASSESSMEN T PROCEEDINGS, ASSESSEE ASSERTED BEFORE THE ASSESSING OFFICER THAT THE DAMA GE STOCK OF LMS WAS STILL LYING IN THE FACTORY FOR DISPOSAL AND THAT THE ASSE SSING OFFICER COULD PHYSICALLY VERIFY THE SAME. THE ASSESSEE ALSO PRODUCED COPY O F THE ADVERTISEMENT IN THE NEWSPAPER OF NOVEMBER, 2009 CALLING FOR QUOTATI ONS FOR SALE OF SUCH DAMAGED MATERIAL, WHICH HAS ALSO BEEN PLACED IN THE PAPER BOOK FILED BEFORE US AND THE LEARNED COUNSEL POINTED OUT THAT THE ENT IRE STOCK WAS OF NO USE, AND THEREFORE, IT WAS NOT POSSIBLE TO DISPOSE OF TH E SAME. IN OUR CONSIDERED OPINION, IN SUCH A SITUATION, IT IS UNIMAGINABLE TH AT ANY PRUDENT BUSINESSMAN WOULD NOT UTILIZE SUCH STOCK FOR HIS BUSINESS IF IT WAS IN A GOOD CONDITION. WE ALSO NOTICE THAT DURING THE YEAR THE TOTAL TURNOVER OF ASSESSEES BUSINESS IS TO THE TUNE OF RS.29.75 CRORES AND CONSIDERED IN THAT LIGHT THE STOCK IN DISPUTE OF ALMOST OF RS.1.15 CRORES IS NOT AN INSIGNIFICANT AM OUNT. CONSIDERING THE AFORESAID BACKGROUND, IN OUR VIEW, THE CIT(A) HAS A PPROPRIATELY CONSIDERED THE MATERIAL AND EVIDENCE ON RECORD AND HAS RIGHTLY CONCLUDED THAT THE LOSS IN QUESTION WAS ALLOWABLE. BEFORE PARTING, WE MAY REP RODUCE HEREINAFTER SOME OF THE FACTUAL FINDINGS RECORDED BY THE CIT(A) WHIC H, IN OUR VIEW, HAVE NOT BEEN ASSAILED BY THE REVENUE BEFORE US ON THE BASIS OF ANY COGENT MATERIAL OR EVIDENCE :- 3.3.2. THE BUSINESS OF MANUFACTURING OF INGOTS OWNE D BY THE APPELLANT WAS DEFINITELY ALSO COVERED UNDER THE CEN TRAL EXCISE ACT, FOR THE ABOVE REASON, IT IS ALSO APPARENT FROM THE DOCUMENT S SUBMITTED IN THE PAPER BOOK THAT AN INFORMATION WAS PLACED WITH THE EXCISE AUTHORITIES ALONG WITH TAHASILDAR, POLICE STATION, BANK ETC. IMMEDIATELY A FTER THE INCIDENCE OF FIRE. THE TURNOVER OF THE AFORESAID BUSINESS IS IN CRORES AND HENCE BOOKS OF ACCOUNTS OF THE APPELLANT HAVE BEEN AUDITED BY THE AUDITORS. THE ASSESSING OFFICER HAS NOWHERE STATED IN THE ASSESSMENT ORDER THAT THE BOOKS OF ACCOUNTS ARE NOT MAINTAINED OR THE MAINTENANCE WAS DEFECTIVE IN THE MANNER WHICH CAN RENDER IT UNRELIABLE. THE OBJECTION RAISE D IN THE ASSESSMENT BY THE ASSESSING OFFICER THAT THE RELEVANT STOCK REGISTER WITH ENTRIES IN RESPECT OF PURCHASE OF RAW MATERIALS, ITS CONSUMPTION AND CLOS ING STOCK ON DAY-TO-DAY ITA NO.2030/PN/2012 A.Y. 2008-09 BASIS WAS NOT PRODUCED ON BEING ASKED WHILE ANALYZI NG THE CLAIM OF LOSS DUE TO FIRE, WAS ALSO OBJECTED BY THE APPELLANT AS FACT UALLY INCORRECT. IN SUPPORT OF THE ABOVE, THE APPELLANT HAS PRODUCED COPIES OF VAR IOUS LETTERS FILED BEFORE THE ASSESSING OFFICER DURING THE COURSE OF ASSESSMENT, WHEREIN IT WAS DEMONSTRATED THAT IT WAS SPECIFICALLY MENTIONED THA T THE STOCK REGISTER AND BOOKS ETC. ARE PRODUCED FOR THE INSPECTION OF THE A SSESSING OFFICER. THEREFORE, IN THE MATERIALS AVAILABLE ON RECORD, I FIND NO MAT ERIAL WHICH COULD INDICATE THAT BOOKS WERE NOT MAINTAINED PROPERLY. THE LOSS DUE TO FIRE WAS CLAIMED WHILE VALUING THE CLOSING STOCK. THE SAME, AS DISCUSSED A BOVE, COMPRISED OF 1267 MT OF LMS AND 488 MT OF SPONGE IRON. THE ASSESSING OFFICER HAS ACCEPTED THE LOSS OF SPONGE IRON BUT HAS REFUSED TO ACCEPT T HE LOSS OF LMS, ONLY ON THE BASIS OF FINAL SURVEY REPORT. FROM THE MATERIALS PL ACED AVAILABLE BEFORE THE ASSESSING OFFICER, THE APPELLANT HAD DEMONSTRATED T HAT THE FINAL SURVEY REPORT IN RESPECT OF QUANTITY OF LMS DAMAGED WAS FACTUALLY INCORRECT AND WAS NOT EVEN BASED ON THE JOINT WEIGHMENT REPORT PREPARED B Y THE TEAM OF THE SURVEYOR ALONG WITH THE APPELLANT AND HIS ACCOUNTS EXECUTIVE, AFTER EVALUATING THE STOCK IMMEDIATELY AFTER FIRE FROM 18.3.2008 TO 21.3.2008. THE COPY OF THIS REPORT HAS BEEN ENCLOSED. FROM THE ABOVE, THE APPEL LANT HAS DEMONSTRATED THAT THE STOCK ASSESSED BY THE JOINT WEIGHMENT REPO RT FOR SPONGE IRON OF 488.890 MT WAS FOR QUANTITY DAMAGED AFTER FIRE, WHE REAS THE SAME AT 431.220 MT FOR LMS WAS FOR THE REMAINING QUANTITY W HICH SURVIVED AFTER FIRE (INCLUDING 15% IMPURITIES). ON THIS STRENGTH THE AP PELLANT HAS EXPLAINED TO THE ASSESSING OFFICER THAT THE FINDING GIVEN BY THE SUR VEYOR IN THE FINAL REPORT THAT THE QUANTITY OF DAMAGED LMS WAS AT 431 MT WAS INCOR RECT. I HAVE CAREFULLY CONSIDERED THE ENTIRE MATERIALS PLACED IN THE PAPER BOOK, WHICH WAS ALSO SHOWN TO HAVE BEEN GIVEN BEFORE THE ASSESSING OFFIC ER AND FIND THAT THE ASSESSING OFFICER, DEFINITELY HAS ERRED IN ONLY EMP HASIZING ON A PARTICULAR FINDING APPEARING IN THE FINAL SURVEY REPORT, AND I N DISREGARDING ALL OTHER MATERIALS PLACED BEFORE HIM. NO DOUBT, THE APPELLAN T HAD CLAIMED INSURANCE CLAIM OF APPROXIMATELY RS.2.7 CRORES BUT THE SURVEY OR HAS ASSESSED THE COMPENSATION AT NIL ON THE GROUND THAT THE FIRE WAS CAUSED DUE TO INTERNAL COMBUSTION, NOT COVERED IN THE POLICY. THE APPELLAN T HAS BEEN FIGHTING ALMOST INSISTENTLY AGAINST THE FINDING OF THE INSURANCE CO MPANY AND THE SURVEYOR APPOINTED BY IT. FROM THE MATERIALS AVAILABLE, IT I S APPARENT THAT THE MAIN EMPHASIS INITIALLY OF THE FIGHT WAS ON THE FINDING ABOUT THE CAUSE OF FIRE AND THE FACT THAT THE SAME WAS NOT COVERED IN THE POLICY BU T SUBSEQUENTLY ON ITS REALIZATION THAT THE SURVEYOR HAS ALSO IN THEIR FIN AL REPORT TAKEN THE QUANTITY OF DAMAGED LMS AT 431 MT, DESPITE THE MENTION IN THE J OINT WEIGHMENT REPORT PREPARED IMMEDIATELY AFTER FIRE FROM 18.3.2008 TO 2 1.3.2008 BY THE TEAM OF SURVEYOR, THAT THE FIGURE OF LMS OF 431.22 MT WAS N OT IN RESPECT OF DAMAGED LMS BUT WAS IN RESPECT OF REMAINING QUANTITY OF THE LMS. IT IS APPARENT THAT THE APPELLANT HAS BEEN RAISING THIS DISCREPANCY ALM OST REGULARLY IN ALL THEIR CORRESPONDENCES MADE WITH VARIOUS AUTHORITIES AND T HEREFORE, IT WAS NOT FAIR ON THE PART OF THE ASSESSING OFFICER TO DISREGARD S UCH EVIDENCES AND ONLY RELY ON THE FINDING GIVEN IN THE FINAL REPORT THAT THERE WAS NO DAMAGE TO THE LMS STOCK. IT IS ALSO NOTABLE IN THIS RESPECT THAT THE APPELLANT HAS BEEN CALLING FOR THE TECHNICAL REPORT, BEING RELIED BY THE SURVEYOR FOR THE CLAIM THAT NO DAMAGE WAS CAUSED TO THE RAW MATERIAL SPECIALLY THE LMS, B UT THE SAME WAS APPARENTLY NOT SUPPLIED. THE ASSESSING OFFICER IGNO RED THIS ASPECT ALSO. FROM THE MATERIALS AVAILABLE ON RECORD, IT IS ALSO NOTED THAT THE APPELLANT AFTER NOTICING THE APPROACH OF THE INSURER AND THE SURVEY OR, APPROACHED AN INDEPENDENT SURVEYOR AND AN INDEPENDENT TECHNICAL A NALYST, WHO HAVE CERTIFIED THE QUANTUM OF DAMAGE AND THE EXTENT OF D AMAGE CLAIMED BY THE APPELLANT TO BE CORRECT. SUCH INDEPENDENT PIECES OF EVIDENCES WERE DISREGARDED BY THE ASSESSING OFFICER ONLY ON THE GR OUND THAT THE SAME ARE SELF SERVING. IN MY CONSIDERED OPINION, EVEN IF SUC H REPORTS WERE OBTAINED BY THE APPELLANT FOR HIS OWN REQUIREMENT BUT WERE FROM RECOGNIZED TECHNICAL ITA NO.2030/PN/2012 A.Y. 2008-09 EXPERTS AND THEREFORE, CANNOT BE BRUSHED ASIDE ONLY ON THE GROUND THAT THESE ARE SELF SERVING TO THE CAUSE OF THE APPELLANT. IT HAS ALSO BEEN CLAIMED BY THE APPELLANT THAT THE ASSESSING OFFICER WAS REQUESTED TO VISIT THE SITE OF FIRE AND ASSESS THE DAMAGE HIMSELF BUT HE DID NOT CHOOSE TO DO SO. THE ASSESSING OFFICER HAS ALSO IGNORED THE ORDER OF THE JT. CIT, CENTRAL EXCISE AND THE COMMISSIONER, CENTRAL EXCISE AND CUSTOMS, NASIK WHO HAD ORDERED FOR REVERSAL OF CLAIM OF CENVAT OF RS.42,79,749/- ON TH E GROUND THAT THE DAMAGED SPONGE IRON OF 488.89 MT AND DAMAGED LMS OF 1267.27 3 MT WERE NOT UTILIZED IN THE FINISHED PRODUCTS AND THEREFORE, TH E CENVAT CREDIT OF THE AFORESAID AMOUNT RELATING TO THE ABOVE QUANTITY OF RAW MATERIALS CANNOT BE AVAILED. IN VIEW OF THE MATERIALS AVAILABLE AND THE FACT THAT THE ASSESSING OFFICER HAS FAILED TO FIND ANY DEFECT IN THE BOOKS OF ACCOUNTS, THE FINDING OF THE ASSESSING OFFICER CANNOT BE APPROVED. THE AFORESAID GROUNDS ARE THEREFORE, ALLOWED. 12. IN THE ABSENCE OF ANY COGENT MATERIAL AND EVIDE NCE ON RECORD TO CONTROVERT THE AFORESAID FINDINGS OF THE CIT(A) AND ON THE BASIS OF OUR AFORESAID DISCUSSION, WE HEREBY AFFIRM THE ORDER OF THE CIT(A) DELETING THE IMPUGNED ADDITION OF RS.1,15,18,566/-. 13. IN THE RESULT, THE APPEAL OF THE REVENUE IS DIS MISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 20 TH MARCH, 2014. SD/- SD/- (SHAILENDRA KUMAR YADAV) (G . S. PANNU) JUDICIAL MEMBER ACCOUNT ANT MEMBER PUNE, DATED : 20 TH MARCH, 2014 SUJEET/GCVSR COPY OF THE ORDER IS FORWARDED TO : - 1) THE ASSESSEE; 2) THE DEPARTMENT; 3) THE CIT(A)-I, PUNE; 4) THE CIT-I, PUNE; 5) THE DR A BENCH, I.T.A.T., PUNE; 6) GUARD FILE. BY ORDER //TRUE COPY// SR. PRIVATE SECRETARY I.T.A.T., PUNE