Dankuni Super Service Station, Hooghly V. Income Tax Office, Hooghly

ITA 2159/KOL/2013

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 83110 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 1 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-09-2014
• Appeal Filed By: Assessee
• Bench Allotted: SMC
• Assessment Year: 2005-2006
• Appeal Filed On: 19-07-2013
• Court: TRIBUNAL
• Department Lawyers: MD GAYALUDDIN ANSARI JCITSR
• Assessee Lawyers: TAPAN JYOTI ROY PARTNER
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, BENCH S MC, KOLKATA [BEFORE SHRI MAHAVIR SINGH, JM ] ITA NO.2159/KOL/2013 ASSESSMENT YEAR : 2005-06 ( APPELLANT ) (RESPONDENT) DANKUNI SUPER SERVICE STATTION -VERSUS- I.T.O., WA RD-1(2), HOOGHLY HOOGHLY (PAN:AADFD 7940 B) FOR THE APPE LLANT: SHRI TAPAN JYOTI ROY, (PARTNER) FOR THE RESPONDENT: MD.GAYALUDDIN ANSARI, JCIT,SR.DR DATE OF HEARING : 22.08.2014. DATE OF PRONOUNCEMENT : 05.09.2014 ORDER THIS APPEAL OF ASSESSEE IS ARISING OUT OF O RDER OF CIT(A)-XXXVI, KOLKATA IN APPEAL NO.87/CIT(A)-XXXVI/KOL/WD-1(2),HG./07-08/391 DATED 20/05/2013. ASSESSMENT WAS FRAMED BY I.T.O. WARD-1(2), HOOGHLY U/S 143(3) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) FO R A.Y. 2005-06 VIDE ITS ORDER DATED 19.12.2007. 2. THE ONLY ISSUE IN THIS APPEAL OF ASSESSEE IS AG AINST THE ORDER OF CIT(A) CONFIRMING THE ADDITION MADE BY AO ON ACCOUNT OF SU PPRESSION OF SALE BY SHOWING EXCESS EVAPORATION OR LOSS AT RS.3,71,207/-. FOR T HIS ASSESSEE HAS RAISED THE FOLLOWING GROUND:- 2. THAT THE ADDITION OF RS.3,71,207/- TAKING THE P LEA THAT THERE IS SUPPRESSION OF SALE BY SHOWING EXCESS EVAPORATION AND OTHER LOSSES IS A FIG OF IMAGINATION WITHOUT ANY BASIS KEEPING IN VIEW THE DAY TO DAY QUANTITATIVE STOCK R EGISTER MAINTAINED BY THE APPELLANT AND SO THIS ADDITION SHOULD BE DELETED. 3. I HAVE HEARD THE RIVAL CONTENTIONS AND GONE THRO UGH FACTS AND CIRCUMSTANCES OF THE CASE. I FIND THAT ASSESSEE HAS CLAIMED SHORTAGE DUE TO EVAPORATION AND LOSS OF HANDLING OF RS.45908/- ON ACCOUNT OF PETROL AND RS. 3900/- ON ACCOUNT OF DIESEL AND ITA NO.2159/KOL/2013 DANKUNI SUPER SERVICE S TATION, HOOGHLY A.YR.2005-06 2 RS.24400/- ON ACCOUNT OF SUPER DIESEL. AO MADE DISA LLOWANCE OF CLAIM OF SHORTAGE DUE TO EVAPORATION AND LOSS OF HANDLING AT RS.3,71, 207/- BY DISCUSSING THE FACTS IN PARA 7 AS UNDER :- THE ESTIMATION GIVEN BY THE ASSESSEE IS VERY MUCH ON THE HIGHER SIDE, THUS THE EVAPORATION BENEFIT IS COMPUTED AS BELOW. THE DISALLOWED AMOUNT IS CONSIDERED TO HAVE BEEN SOLD AND IS ADDED BACK TO THE GROSS PROFIT AS INCOME. PETROL DIESEL SUPER DIESEL TOTAL STOCK FOR THE YEAR 183392 2464584 359982 CLOSING STOCK 14120 34850 13690 SHORTAGE AS PER ASSESSEE 1252 10871 890 PERCENTAGE OF SHORTAGE ALLOWED 0.06 0.01 0.01 SHORTAGE ALLOWED IN LITRES 110 246 36 BALANCE OF SHORTAGE TREATED AS SALES 1142 10625 854 CLOSING STOCK VALUE PER LITRE 40.2 28.32 28.57 TOTAL OF SALES FOR DISALLOWED SHORTAGE 1142X40.20 10625X28.32 854X28.57 VALUE OF SALES NOT CONSIDERED BY ASSESSEE RS.45,908 RS.3,00,900 RS.24,400 TOTAL RS.3,71,207/- TABLE-2 FROM THE DISCUSSIONS MADE ABOVE, RS.3,71,207/- IS B EING ADDED BACK TO THE TOTAL INCOME AS SALES ESTIMATED FROM ALLOWED EVAPORATION. THIS IS A DDED BACK TO THE TOTAL INCOME. 4. AGGRIEVED, ASSESSEE PREFERRED APPEAL BEFORE CIT( A), WHO DISMISSED THE APPEAL OF ASSESSEE WITHOUT PASSING A SPEAKING ORDER AND ST ATED THAT GROUND NO.2:THIS GROUND OF APPEAL WAS NOT PRESSED BY THE APPELLANT D URING APPELLATE PROCEEDING AND HENCE DISMISSED . AGGRIEVED, NOW ASSESSEE IS IN APPEAL BEFORE ITAT. 5. I HAVE HEARD THE RIVAL CONTENTIONS AND GONE THRO UGH FACTS AND CIRCUMSTANCES OF THE CASE. I FIND THAT CIT(A) HAS DISMISSED THE APPE AL OF ASSESSEE ONLY ON THE PREMISE THAT ASSESSEE HAS NOT PRESSED. WHEN THIS WAS CONFRO NTED TO THE PARTNER OF THE FIRM HE ITA NO.2159/KOL/2013 DANKUNI SUPER SERVICE S TATION, HOOGHLY A.YR.2005-06 3 WAS TAKEN ABACK AND STATED THAT ASSESSEE NEVER MADE A STATEMENT THAT HE DID NOT WANT TO PRESS THIS ISSUE. HE VEHEMENTLY CONTENDED THIS I SSUE. I HAVE CALLED RECORDS OF CIT(A), FROM WHICH IT IS EVIDENT THAT THE ASSESSEE HAS FILED WRITTEN SUBMISSION BEFORE CIT(A) AND HE ASKED FOR REMAND REPORT FROM AO, WHER EIN THE ENTIRE DISALLOWANCE IS DISCUSSED. I HAVE GONE THROUGH THE CASE RECORDS OF ASSESSEES APPEAL BEFORE CIT(A) BUT COULD NOT FIND ANYTHING WHICH SHOWS THAT THE ASSESS EE HAS NOT PRESSED THIS ISSUE BEFORE CIT(A). FROM THE VERY ORDER OF CIT(A), IT IS CLEAR THAT THE ASSESSEE HAS FILED WRITTEN SUBMISSIONS AND THERE IS REMAND REPORT OF THE AO AL SO. THESE FACTS PROVE THAT THE ISSUE WAS CONTESTED AND THERE IS NO SURRENDER OF THE ISSU E BEFORE CIT(A). IN TERMS OF THE ABOVE, I AM OF THE VIEW THAT CIT(A) HAS NOT APPLIED HIS MIND TO THE ISSUE BUT I FAIL TO UNDERSTAND THAT WHY HE HAS DISMISSED THE APPEAL OF ASSESSEE AS NOT PRESSED. 6. NOW COMING TO THE MERITS OF THE CASE, THE PARTNE R OF THE ASSESSEE FIRM BEFORE ME FILED COPY OF THE MARKETING DISCIPLINE GUIDELINE S ISSUED BY INDIAN OIL FOR THE USE OF DEALERS OF ALL MARKETING COMPANY. IN THESE GUIDE LINES THE EVAPORATION AND HANDLING LOSSES ARE PRESCRIBED AS UNDER:- STOCK RECONCILIATION SHOULD BE CARRIED OUT AND VAR IATION, IF ANY, ESTABLISHED AFTER TAKING INTO ACCOUNT THE NORMAL VARIATION IN OPERATI ONAL LEVELS OF +/-4% OF TANK STOCK AND AFTER CONSIDERING THE FOLLOWING FACTORS : (I) EVAPORATION/HANDLING LOSSES IN MS AS FOLL OWS : 0.75% ON QUANTITY SOLD UPTO AN ANNUAL AVERAGE OF 60 0 KLS. 0.60% ON ADDITIONAL QUANTITY BEYOND AN ANNUAL AVERA GE OF 600 KLS. (II) HANDLING LOSSES IN HSD AS FOLLOWS : 0.25% ON QUANTITY SOLD UPTO AN ANNUAL AVERAG E OF 600 KLS. 0.20% ON ADDITIONAL QUANTITY BEYOND AN ANNUA L AVERAGE OF 600 KLS. III) SHRINKAGE LOSSES ON MS/HSD AND TEMPERATURE VARIATION ALLOWANCE (TVA) QUANTITIES ON MS AND HSD TO BE TAKEN INTO ACCOUNT ( ONLY IN THOSE CASES/LOCATIONS WHERE AND WHEN THE TVA IS APPLICABLE). IN CASE THERE IS VARIATION IN STOCKS BEYOND THE PERMISSIBLE LIMITS, SALES AND SUPPLIES OF ALL PRODUCTS TO BE SUSPENDED IMMEDIATEL Y, SAMPLES TO BE DRAWN AND SENT FOR TESTING WITHIN 10 DAYS AS WELL AS DEALERS EXPLANAT ION TO BE CALLED FOR WITHIN 7 DAYS. 7. FROM THE ABOVE IT IS CLEAR THAT THERE IS DEFINIT E LOSS ON ACCOUNT OF EVAPORATION AND HANDLING IN THIS LINE OF TRADE. THESE ARE RECOG NIZED BY INSTITUTES CONTROLLING OIL COMPANIES. BUT THIS FACT HAS NOT BEEN EXAMINED AT T HE LEVEL OF CIT(A) AND THE APPEAL ITA NO.2159/KOL/2013 DANKUNI SUPER SERVICE S TATION, HOOGHLY A.YR.2005-06 4 WAS DISMISSED AS NOT PRESSED. IN SUCH CIRCUMSTANCES , I DIRECT AO TO TAKE INTO CONSIDERATION THESE FACTS OF LOSS AS RECOGNIZED BY INSTITUTES CONTROLLING THESE OIL COMPANIES AND DECIDE THIS ISSUE AFRESH. THE APPEAL OF ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES BY SETTING ASIDE TO THE FILE OF AO. 8. IN THE RESULT THE APPEAL OF THE ASSESSEE IS ALLO WED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE COURT ON 05.09.2014. [ MAHAVIR SINGH ] JUDICIAL MEMBER DATE: 05.09.2014 R.G.(.P.S.) COPY OF THE ORDER FORWARDED TO: 1. DANKUNI SUPER SERVICE STATION, P.O.DANKUNI, DELHI R OAD, DIST. HOOGHLY, PIN:712331. 2 THE I.T.O.-WARD-1 (2), HOOGHLY. 3. THE CIT, 4. THE CIT(A)-XXXVI, KOLKATA 5. DR, KOLKATA BENCHES, KOLKATA TRUE COPY, BY ORDER, ASST. REGISTRAR , ITAT, KOLKATA BENCHES