Assistant Commissioner of Income-tax, V. M/s. Rhishi Steel & Alloys Pvt. Ltd., Jalna

ITA 2067/PUN/2014

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 7239 (ITAT-PUNE)
• Duration Of Justice: 2 year(s) 1 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-01-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 12-01-2017
• Assessment Year: 2005-2006
• Appeal Filed On: 17-11-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: M K GAUTAM
• Assessee Lawyers: N O N E
• Section: 143(3); 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, PUN E , , !'#'' $ , % & BEFORE SHRI R.K. PANDA, AM AND SHRI VIKAS AWASTHY, JM / ITA NO. 2067/PUN/2014 %' ( ')( / ASSESSMENT YEAR : 2005-06 THE ASSTT. COMMISSIONER OF INCOME TAX, CIRCLE 1, AURANGABAD ....... / APPELLANT ' /VS. M/S. RHISHI STEEL & ALLOYS PVT. LTD., P. NO. D-55/7, ADDL. MIDC, JALNA PAN : AABCR3131P / RESPONDENT ASSESSEE BY : N O N E REVENUE BY : SHRI M.K. GAUTAM / DATE OF HEARING : 12-01-2017 / DATE OF PRONOUNCEMENT : 13-01-2017 * / ORDER PER VIKAS AWASTHY, JM : THIS APPEAL BY THE DEPARTMENT IS DIRECTED AGAINST THE OR DER OF COMMISSIONER OF INCOME TAX (APPEALS), AURANGABAD DATED 25 -08-2014 FOR THE ASSESSMENT YEAR 2005-06. 2. THE BRIEF FACTS OF THE CASE AS EMANATING FROM RECORD S ARE: THE ASSESSEE IS A PRIVATE LIMITED COMPANY AND IS ENGAGED IN T HE BUSINESS OF MANUFACTURING M.S. STEEL INGOTS. ON THE BASIS OF INFORMAT ION RECEIVED FROM THE OFFICE OF COMMISSIONER OF CENTRAL EXCISE AND 2 ITA NO. 2067/PUN/2014, A.Y. 2005-06 CUSTOMS, PROVISIONS OF SECTION 148 OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) WERE INVOKED AND T HE ASSESSMENTS FOR ASSESSMENT YEARS 2005-06 TO 2008-09 WERE REOPENE D. AS PER INFORMATION RECEIVED BY THE DEPARTMENT FROM THE OFFICE OF COMMISSIONER OF CENTRAL EXCISE AND CUSTOMS, IT WAS ALLEGED T HAT THE ASSESSEE HAD INDULGED IN SUPPRESSION OF PRODUCTION AND C LANDESTINE REMOVAL OF FINISHED PRODUCTS WITHOUT PAYMENT OF EXCISE DUTY . INFORMATION WAS ALSO RECEIVED THAT THE ASSESSEE, IN AN AN OTHER MATTER IN CONNECTION WITH AN ACTION CONDUCTED BY THE DIRECTORAT E GENERAL OF CENTRAL EXCISE INTELLIGENCE CONFESSED AND ADMITTED TO CLAN DESTINE REMOVAL OF FINISHED PRODUCTS WITHOUT EXCISE COVER. ON THE BASIS OF SAID INFORMATION THE DEPARTMENT TOOK RE-COURSE TO RE-ASSESS MENT PROCEEDINGS. THE ASSESSING OFFICER VIDE ORDER DATED 04-03-2013 P ASSED U/S. 143(3) R.W.S. 147 OF THE ACT MADE ADDITION OF ` 7,11,76,880/- ON ACCOUNT OF INCOME FROM SUPPRESSED SALE. AGGRIEVED BY THE SAID ASSESSMENT ORDER, THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS). THE COMMISSIONER OF INCOME TAX (APPEALS) VIDE IMPUGNED ORDER ES TIMATED THE GROSS PROFIT @ 4% ON SUPPRESSED PRODUCTION. NOW, TH E DEPARTMENT IS IN APPEAL AGAINST THE SAID FINDINGS OF COMMISSIONER OF INCOM E TAX (APPEALS). 3. THE DEPARTMENT HAS ASSAILED THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS) BY RAISING FOLLOWING GROUNDS : 1. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE CASE THE CIT(A) WAS JUSTIFIED IN QUANTIFYING THE SUPPRESSED PRODUCT ION @ 4% EVEN AFTER ACCEPTING THE FACT THAT THE ASSESSEE INDULGED IN CL ANDESTINE REMOVAL OF GOODS WITHOUT PAYMENT OF TAXES? 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE W HETHER THE CIT(A) WAS JUSTIFIED IN NOT APPRECIATING THE FACT THAT MAN UFACTURING AND ADMINISTRATIVE EXPENSES ON THE UNACCOUNTED PRODUCTI ON WORKED OUT IN 3 ITA NO. 2067/PUN/2014, A.Y. 2005-06 THE APPELLATE ORDER HAD ALREADY BEEN BORNE BY THE P RODUCTION SHOWN IN THE BOOKS OF ACCOUNTS? 3. THE ORDER OF THE AA BE RESTORED AND THAT OF THE CIT (A) BE VACATED. 4. THE APPELLANT CRAVES LEAVE TO ADD, AMEND OR ALTER A NY GROUNDS OF APPEAL. 4. SHRI M.K. GAUTAM REPRESENTING THE DEPARTMENT SUBMITTE D AT THE OUTSET THAT THE ISSUE RAISED BY THE DEPARTMENT IN APPE AL IS COVERED BY THE ORDER OF TRIBUNAL IN ASSESSEES OWN CASE IN ITA NO. 1467/PN/2012 FOR THE ASSESSMENT YEAR 2009-10 DECIDED ON 15-07-2015 ALONG WITH OTHER BUNCH OF APPEALS. 5. NONE HAS APPEARED ON BEHALF OF THE ASSESSEE. THE NO TICE OF APPEAL WAS SENT TO THE RESPONDENT/ASSESSEE AT THE AD DRESS MENTIONED IN FORM NO. 36 THROUGH RPAD. THE APPEAL WAS FIRST LISTED FO R HEARING ON 30-05-2016. ON THE SAID DATE SINCE NONE APPEARED ON BEHALF OF RESPONDENT/ASSESSEE, THE APPEAL WAS ADJOURNED TO 04-0 8-2016. FRESH NOTICE WAS ISSUED TO THE ASSESSEE. AGAIN NONE APPEARED ON BEHALF OF THE ASSESSEE ON 04-08-2016 AND THE APPEAL WAS ADJOUR NED TO 20-10-2016. ON 20-10-2016 AGAIN NEITHER THE ASSESSEE NOR ANY AUTHORIZED REPRESENTATIVE OF THE ASSESSEE APPEARED. F RESH NOTICE WAS ISSUED TO THE ASSESSEE/RESPONDENT THROUGH THE OFFICE OF DEPARTMENTAL REPRESENTATIVE FOR 12-01-2017. THE LD. DR HAS FILED SERVICE REPORT . THE NOTICE OF HEARING IS DULY ACKNOWLEDGED BY PANKAJ AGARWAL, DIRECTOR OF THE ASSESSEE COMPANY. DESPITE SERVICE OF NOTICE NO ONE HAS APPEARED TO REPRESENT THE ASSESSEE/RESPONDENT. IT SEEMS THAT THE ASS ESSEE IS NOT INTERESTED IN PURSUING ITS CAUSE. THEREFORE, WE ARE DECID ING THIS APPEAL BY THE DEPARTMENT ON THE BASIS OF SUBMISSIONS OF LD. DR AN D THE MATERIAL AVAILABLE ON RECORD. 4 ITA NO. 2067/PUN/2014, A.Y. 2005-06 6. WE HAVE HEARD THE SUBMISSIONS MADE BY THE DEPARTME NTAL REPRESENTATIVE AND HAVE PERUSED THE IMPUGNED ORDER. WE HAVE ALSO CONSIDERED THE DECISION OF CO-ORDINATE BENCH OF THE TRIBUN AL IN THE CASE OF BHAGYALAXMI STEEL ALLOYS PVT. LTD. VS. THE ASSTT. CO MMISSIONER OF INCOME TAX IN ITA NO. 1292/PN/2012 FOR THE ASSESSMEN T YEAR 2009-10 WHEREIN BUNCH OF APPEALS INVOLVING SIMILAR ISSUES W ERE DISPOSED OF INCLUDING THE CROSS APPEALS IN THE CASE OF ASSE SSEE IN ITA NO. 1467/PN/2012 AND ITA NO. 1524/PN/2012 FOR ASSESSME NT YEAR 2009-10. 7. WE FIND THAT THE DEPARTMENT IN ITA NO. 1467/PN/2012 FOR THE ASSESSMENT YEAR 2009-10 DECIDED ON 15-07-2015 IN ASSE SSEES OWN CASE ALONG WITH OTHER BUNCH OF APPEALS HAS RAISED SIMILAR G ROUNDS OF APPEAL. THE CO-ORDINATE BENCH OF THE TRIBUNAL WHILE DECIDING THE BUNCH OF APPEALS INVOLVING SIMILAR ISSUES VIDE SINGLE ORDER DISM ISSED ALL THE APPEALS OF REVENUE. THE CO-ORDINATE BENCH WHILE DEC IDING THE APPEALS OBSERVED : 11. THE ADDITION ON ACCOUNT OF SUPPRESSED PRODUCTI ON MADE IN THE HANDS OF THE ASSESSEE WAS DELETED BY THE DIVISION B ENCH OF CESTAT VIDE ORDER DATED 22.10.2014, WHEREIN ON SPECIFIC IN SPECTION / EXPERIMENTS BY THE AUTHORITIES, CONDUCTED TO ASCERT AIN THE ELECTRICITY CONSUMPTION TO MANUFACTURE ONE MT FOUND THAT THE CO NSUMPTION OF ELECTRICITY WAS MORE THAN 1026 UNITS PER MT. THE CA SE OF THE EXCISE DEPARTMENT WAS THAT 1026 UNITS PER MT WERE REQUIRED TO MANUFACTURE ONE MT OF MS INGOTS / BILLETS AND THE ASSESSEE WAS ISSUED SHOW CAUSE NOTICE IN THIS REGARD. HOWEVER, SINCE THE PHYSICAL VERIFICATION CONDUCTED BY THE EXCISE DEPARTMENT REFLECTED HIGHER CONSUMPTIO N OF ELECTRICITY, THE TRIBUNAL CAME TO A FINDING THAT IN VIEW OF THE ADDI TIONAL EVIDENCES OF SPECIFIC VERIFICATION / TRIAL CONDUCTED BY THE REVE NUE TO ASCERTAIN THE ACTUAL ELECTRICITY CONSUMPTION, WHICH WORKED OUT TO MORE THAN 1026 UNITS PER MT, THERE WAS NO BASIS FOR MAKING ANY ADDITION IN THE HANDS OF THE ASSESSEE. THE TRIBUNAL ALSO REFERRED TO ITS EARLIER ORDER IN THE CASE OF DIFFERENT ASSESSEES, WHERE SIMILAR ADDITION WAS DE LETED. 8. THE CO-ORDINATE BENCH BY FOLLOWING THE DECISION RENDERE D IN THE CASE OF BHAGYALAXMI STEEL ALLOYS PVT. LTD. VS. ADDL. COMMISSIONE R OF INCOME TAX IN ITA NOS. 284 TO 286/PN/2012 FOR THE ASSE SSMENT YEARS 2006-07 TO 2008-09 AND CROSS APPEALS FILED BY THE REV ENUE IN ITA NOS. 5 ITA NO. 2067/PUN/2014, A.Y. 2005-06 437 TO 439/PN/2012 FOR THE ASSESSMENT YEARS 2006-07 TO 2008-09, DISMISSED THE APPEALS OF THE REVENUE ASSAILING ADOPTION OF GP RATE OF 4% AND THE DELETION OF WORKING CAPITAL REQUIRED FOR INVESTME NT IN SUPPRESSED PRODUCTION. THE LD. DR HAS FAIRLY ADMITTED THA T THE ISSUES RAISED IN THE PRESENT APPEAL ARE COVERED BY THE ORDER OF CO-ORDINATE BENCH OF THE TRIBUNAL IN ASSESSEES OWN CASE FOR ASSESSM ENT YEAR 2009-10 IN ITA NO. 1467/PN/2012 (SUPRA) AND VARIOUS OTHE R CASES INVOLVING SIMILAR ISSUES. THUS, IN VIEW OF THE FACTS OF THE PRE SENT CASE AND THE DECISION OF CO-ORDINATE BENCH OF THE TRIBUNAL, THE APPEAL OF THE DEPARTMENT IS LIABLE TO BE DISMISSED. 9. IN THE RESULT, THE APPEAL OF THE DEPARTMENT IS DISMISSED. ORDER PRONOUNCED ON FRIDAY, THE 13 TH DAY OF JANUARY, 2017. SD/- SD/- ( . . / R.K. PANDA) ( ! ' / VIKAS AWASTHY) #' / ACCOUNTANT MEMBER $ % #' / JUDICIAL MEMBER / PUNE; &# / DATED : 13 TH JANUARY, 2017 RK *+,%-.#/#)- / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT. 2. / THE RESPONDENT. 3. ' () / THE CIT(A), AURANGABAD 4. ' / THE CIT, AURANGABAD 5. !*+ %%,- , ,- , . ./0 , / DR, ITAT, B BENCH, PUNE. 6. + 1 23 / GUARD FILE. // ! % // TRUE COPY// #4 / BY ORDER, 5 6 / ASSISTANT REGISTRAR, ,- , / ITAT, PUNE