Adarsh Steel Re-Rolling Mills, V. The Dy.CIT.,Cent.Circle-2, Surat

ITA 224/AHD/2008

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 0339 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 6 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-08-2010
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 12-08-2010
• Assessment Year: 1993-1994
• Appeal Filed On: 18-01-2008
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: S C TIWARI SRDR
• Keywords: Principle of natural justice; Set aside
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH B AHMEDABAD BEFORE SHRI MAHAVIR SINGH, JUDICIAL MEMBER, AND SHRI D. C. AGRAWAL, ACCOUNTANT MEMBER ITA NO.224/AHD/2008 ASSESSMENT YEAR :1993-94 DATE OF HEARING:12.8.10 DRAFTED:13.8.10 M/S. ADARSH STEEL RE- ROLLING MILLS, VILLAGE: DELSAR, TALUKA, DAHOD PAN NO.AAEFA6062G V/S . DY.C.I.T., CENTRAL CIRCLE- 2, BARODA, AYAKAR BHAVAN, RACE COURSE, BARODA (APPELLANT) .. (RESPONDENT) APPELLANT BY :- SMT.URVASHI SHODHAN, AR RESPONDENT BY:- SHRI S.C.TIWARI, SR-DR O R D E R PER MAHAVIR SINGH, JUDICIAL MEMBER:- THIS APPEAL BY THE ASSESSEE IS ARISING OUT OF THE ORDER OF COMMISSIONER OF INCOME-TAX (APPEALS)-IV, BARODA IN APPEAL NO. CIT(A )-IV/371.B/CC.2/06-07 DATED 02-08-2007. THE ASSESSMENT WAS FRAMED ACIT, CENTRAL CIRCLE-2, BARODA U/S. 143(3) R.W.S. 254 OF THE INCOME-TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) VIDE HIS ORDER DATED 04-12-2006 FOR ASSESSMENT YEAR 1993-04. 2. THE ONLY ISSUE IN THIS APPEAL OF THE ASSESSEE IS AGAINST THE ORDER OF CIT(A) IN HOLDING THAT THE ASSESSEE IS NOT ENTITLE FOR TELESC OPING FOR WORK OUT. FOR THIS, ASSESSEE HAS RAISED THE FOLLOWING FOUR EFFECTIVE GROUNDS :- 1. THE LD. CIT(APPEALS) ERRED IN HOLDING THAT YOUR APPELLANT WAS NOT ENTITLED TO TELESCOPING FOR WORKING OUT THE PEAK AS THE HONO URABLE ITAT, AHMEDABAD HAS NOT ADJUDICATED THE SAME. 2. THE LD. CIT(APPEALS) ERRED IN HOLDING THAT THE A SSESSING OFFICER WAS CORRECT IN ADDING THE ENTIRE SUMS AS INCOME OF THE APPELLANT IN VIEW OF THE DIRECTIONS OF THE ITAT. 3. THE LD. CIT(APPEALS) ERRED IN HOLDING THAT THE A SSESSING OFFICER HAD NO JURISDICTION TO TRAVEL OUTSIDE THE LIMITS OF THE SP ECIFIC DIRECTIONS LAID DOWN BY THE HONOURABLE ITAT. ITA NO.224/AHD/2008 A.Y. 1993-94 M/S. ADARSH STEEL RE-ROLLING MILLS V. DCIT CC-2, B RD PAGE 2 4. THE ADDITIONS CONFIRMED BY THE LD. CIT(APPEALS) IS AGAINST THE PRINCIPLE OF NATURAL JUSTICE. 3. THE BRIEF FACTS ARE THAT THE ASSESSEE IS A MANUF ACTURER OF STEEL BARS, ANGLES, CHANNELS, FLATS. A SEARCH U/S.132 OF THE ACT WAS CO NDUCTED ON THE RESIDENTIAL AND BUSINESS PREMISES OF THE PARTNERS AND THE BUSINESS PREMISES OF THE ASSESSEE IN FEB.94. DURING THE COURSE OF SEARCH DISCREPANCY AS REGARDS TO STOCK WAS FOUND AND EXCESS STOCK WAS FOUND FOR THE RELEVANT FINANCIAL Y EAR 1993-94. AS PER ANNEXURE- A4/9 PAGE 5 SEIZED DURING THE COURSE OF SEARCH REVE ALS FOLLOWING SALES OF KHALSA WELDING DURING THE PERIOD ENDING ON 31-03-1993:- I) 3.5 KG OF PLATE 1 SIZE @ RS.12/KG ON 1-1-93 F OR TOTAL PRICES OF RS.42 II) 3 KG OF PLATE OF 1 SIZE @ RS.12/KG ON 2-1-93 FOR RS.36. III) 28.5 KG OF SHAFTING OF 2 SIZE @ 12/KG ON 19-1 -93 FOR RS.345/- SIMILARLY, PAGE 15, 16 OF ANNEXURE-A4/9 SUPER DEALE R INVENTORIES OF ANNEXURE-A4/9 PAGE 13 AND PAGE-6 OF ANNEXURE-A4/13, PAGE-15 OF AN NEXURE-A/1 CLEARLY REVEALED THAT ASSESSEE HAS MADE UNACCOUNTED SALE OF RS.13,82 ,704/- AND SAME WAS CONFIRMED BY CIT(A) IN THE ORIGINAL ROUND OFF APPEL LATE PROCEEDINGS. BUT THE CIT(A) HAS NOT ALLOWED THE CLAIM OF TELESCOPING AND THE AS SESSEE PREFERRED APPEAL BEFORE TRIBUNAL AND ALTERNATE SUBMISSIONS OF ASSESSEE WAS FOR TELESCOPING. THE TRIBUNAL IN ITA NO.1806/AHD/1997 FOR ASSESSMENT YEAR 1993-94 VIDE ORDER DATED 24-01 -2005 VIDE PARA-7 HEARD THE ARGUMENT OF THE LD. COUNSEL FOR THE ASSE SSEE AS UNDER:- 7. THE LD. COUNSEL FOR THE ASSESSEE CONTENDED THAT THE EXPLANATION GIVEN BY THE ASSESSEE HAS NOT BEEN QUESTIONED ANY FURTHER, T HEREFORE, THE SAME HAS TO BE ACCEPTED. THE LD. DR, ON THE OTHER HAND, CONTEND S THAT THE SEIZED WERE FOUND FROM THE PREMISES OF THE ASSESSEE, THE BURDEN TO PROPERLY EXTENT THE NATURE OF ENTRIES SQUARELY LIES ON THE ASSESSEE AS THE FACTS WERE IN HIS EXCLUSIVE KNOWLEDGE. HAVING NOT EXPLAINED THE ENTRI ES THE UPHOLDING OF ADDITIONS BY LOWER AUTHORITIES WAS FULLY JUSTIFIED. THEREFORE, THERE WAS NO FORCE IN THE PLEA OF THE ASSESSEE ABOUT THE EXPLANATION. THE LD. DR HOWEVER RESPONSE TO THE ASSESSEES ADDITIONAL GROUND CONTEN TS THAT THE MATTER MAY BE REMANDED BACK TO A.O TO CONSIDER THE ISSUE OF PEAK IF THE ASSESSEE MAKES OUT A PROPER CASE ON THIS BEHALF. AND TRIBUNAL VIDE PARA-8 DIRECTED THE ASSESSING OFFICER TO WORK OUT THE PEA K AS UNDER:- 8. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATTERS AVAILABLE ON RECORD. AS FAR AS ADDITIONS IN GROUND NOS.1 & 2 BAS ED ON SEIZED MATERIALS CONCERNED, WE ARE OF THE VIEW THAT THE ASSESSEE HAS NOT EXPLAINED THE NATURE OF ENTRIES TO HOLD THE VIEW THAT THEY ARE NOT THE U NDISCLOSED INCOME OF THE ITA NO.224/AHD/2008 A.Y. 1993-94 M/S. ADARSH STEEL RE-ROLLING MILLS V. DCIT CC-2, B RD PAGE 3 ASSESSEE. THE EXPLANATION IS VAGUE AND UNSUBSTANTIA TED. UNDER THESE CIRCUMSTANCES, IN PRINCIPLE THE ADDITIONS ARE UPHEL D. HOWEVER, WE FIND FORCE IN THE ARGUMENT OF LEARNED COUNSEL THAT A PROPER PEAK SHOULD BE WORKED OUT AND DUE TELESCOPING IF AVAILABLE SHALL BE GIVEN TO THE ASSESSEE. THE MATTER IS SET ASIDE, RESTORED BACK TO THE FILE OF ASSESSING OFFIC ER FOR THE INTIMATED PRESENCE OF CONSIDERING THE ISSUE OF PEAK WORKING AND TELESC OPING IF A PROPER PLEA IS MADE OUT BY THE ASSESSEE. 4. THE ASSESSING OFFICER GIVING EFFECT TO THE TRIBU NALS ORDER PASSED ORDER U/S.143(3) R.W.S 254 OF THE ACT DATED 04-12-2006 AN D AFTER PROVIDING OPPORTUNITY TO THE ASSESSEE, WHO SUBMITTED A STATEMENT OF WORKING OF PEAK AND AS PER THE WORKING THE ASSESSEE DISCLOSED THE PEAK SALES AT RS.7,30,59 9/-. THE AO FOUND SOME DEFECTS IN PEAK SALES AND NOTED THAT WITH REGARD TO MR. JAK URNUDDIN AT SL. NO.9, CORRECTED THE PEAK AND DETERMINE THE SAME AT RS.7,48,304/-. A GGRIEVED, ASSESSEE PREFERRED APPEAL BEFORE CIT(A). BEFORE CIT(A), ASSESSEE HAS R AISED THE ISSUE OF PROFIT ON UNACCOUNTED SALES INSTEAD OF PEAK ADDITION. THE CIT (A) CLEARLY STATED THAT THE AO HAS RE-CALCULATED THE PROPER PEAK IN VIEW OF THE DI RECTION OF THE TRIBUNAL AND HELD IN PARA-4 OF HIS APPELLATE ORDER AS UNDER:- 4. I HAVE CAREFULLY CONSIDERED THE CONTENTIONS OF LD. COUNSEL AS WELL AS GONE THROUGH THE RECORDS. WHEN THE HONBLE ITAT, AHMEDAB AD HAS SET ASIDE THE SPECIFIC MATTER WITH REGARD RE-CALCULATION OF PROPE R PEAK AND TELESCOPING, THE POWER OF THE ASSESSING OFFICER IS CONFINED TO SUCH SUBJECT MATTER ONLY WHICH WAS SPECIFICALLY REMANDED BACK. HENCE, THERE IS NO SCOPE WHATSOEVER FOR THE ASSESSING OFFICER TO CONSIDER ANY SUBJECT MATTER SU CH AS TAXING PROFIT ON UNACCOUNTED SALES WHICH IS BEYOND THE SPECIFIC DIRE CTIONS OF HONBLE ITAT, AHMEDABAD. IT WAS HELD BY HONBLE ALLAHABAD HIGH CO URT IN THE CASE OF S.P.KOCHHAR VS. ITO (145 ITR 255) THAT THE ASSESSIN G OFFICER HAS NO SCOPE TO TRAVEL BEYOND THE SPECIFIC DIRECTIONS OF ITAT. FURT HER, IT WAS HELD BY HONBLE MADHYA PRADESH HIGH COURT IN THE CASE OF CIT V/S. H OPE TEXTILES LTD. (225 ITR 993) THAT THE ASSESSING OFFICER HAS NO JURISDIC TION TO ENTER INTO ANY QUESTION WHICH FALLS OUTSIDE THE LIMITS OF SPECIFIC DIRECTIONS LAID DOWN BY THE ITAT. KEEPING IN VIEW OF ABOVE FACTS AND CIRCUMSTAN CES OF THE CASE AS WELL AS RESPECTFULLY FOLLOWING THE JUDGMENTS (SUPRA), TH E CONTENTIONS OF LD. COUNSEL CANNOT BE ACCEPTED TO AND HENCE REJECTED. ALL THREE GROUNDS OF APPEAL ARE HEREBY DISMISSED. AGGRIEVED, THE ASSESSEE CAME IN SECOND APPEAL BEFOR E US. 5. BEFORE US LD. COUNSEL FOR THE ASSESSEE MADE ARGU MENT THAT ONLY GROSS PROFIT ON SALES SHOULD HAVE BEEN ADDED IN THE PEAK AND NOT THE ENTIRE SALE. EXCEPT THIS ARGUMENT, NOTHING WAS ADDUCED. FOR THIS, SHE RELIED THE TRIBUNALS DECISION IN ITA NO.2340/AHD/2009 DATED 16-10-2009 IN ASSESSEES OWN CASE FOR ASSESSM ENT YEAR ITA NO.224/AHD/2008 A.Y. 1993-94 M/S. ADARSH STEEL RE-ROLLING MILLS V. DCIT CC-2, B RD PAGE 4 1997-98. ON THE OTHER HAND, LD.SR-DR STATED THAT TH E DIRECTIONS IN THE TRIBUNALS ORDER ARE VERY CLEAR AND THE LOWER AUTHORITIES HAVE ONLY IMPLEMENTED THE ORDER OF THE TRIBUNAL AND MOREOVER THE ASSESSEE ITSELF HAS COMPU TED THE PEAK, WHICH IS ALMOST ACCEPTED BY THE ASSESSING OFFICER. 6. AFTER HEARING THE RIVAL CONTENTIONS, WE FIND THA T THE ARGUMENT OF THE ASSESSEE THAT THE PROFIT ON SALE SHOULD HAVE BEEN ADDED IN T HE PEAK AND NOT THE ENTIRE SALE, WE FIND NO SUCH ISSUE RAISED BEFORE THE TRIBUNAL IN THE EARLIER ROUND RATHER, ONLY THE ALTERNATIVE CONTENTION WAS RAISED FOR TAKING PEAK A DDITION ON ACCOUNT OF SALES FOUND AS UNACCOUNTED DURING THE COURSE OF SEARCH. ACCORDI NGLY, WE ARE OF THE VIEW THAT THE LOWER AUTHORITIES HAVE ONLY IMPLEMENTED THE DIRECTI ONS OF THE TRIBUNAL AND THEY HAVE NOT TRAVELED BEYOND THE SAME. EVEN, THE ASSESSEE IT SELF HAS COMPUTED THE PEAK SALES AND ACCEPTED THE SAME AS UNACCOUNTED INVESTME NT AND NOW THE ASSESSEE CANNOT TAKE ALTOGETHER A DIFFERENT ISSUE. ACCORDING LY, WE ARE OF THE VIEW THAT THE GROUND RAISED IN ASSESSEES APPEAL DESERVES TO BE D ISMISSED. ACCORDINGLY, WE DISMISS THIS APPEAL OF THE ASSESSEE. 7. IN THE RESULT, ASSESSEES APPEAL IS DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON 12/08/2010 SD/- SD/- (D.C.AGRAWAL) (MAHAVIR SINGH) (ACCOUNTANT MEMBER) (JUDICIAL MEMBER) AHMEDABAD, DATED : 12/08/2010 *DKP COPY OF THE ORDER FORWARDED TO :- 1. THE ASSESSEE. 2. THE REVENUE. 3. THE CIT(APPEALS)-IV, BARODA 4. THE CIT CONCERNS. 5. THE DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER, /TRUE COPY/ DEPUTY / ASSTT.REGISTRAR ITAT, AHMEDABAD