SHRI ANURAG PANDEY, BALODA BAZAR(C.G0 V. ITO-1(3), RAIPUR (CG)

ITA 23/BIL/2011

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 85396 (ITAT-RAIPUR)
• Duration Of Justice: 3 year(s) 11 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-12-2014
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2006-2007
• Appeal Filed On: 18-01-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: SHRI S K MEENA
• Assessee Lawyers: P C JAIN MALOO
• Keywords: Assessment record
• Section: 263; 143(3); 142(1)

Judgement Text

INCOME TAX APPELLATE TRIBUNAL,BENCH -RAIPUR . .. . . .. . , ,, , ! ! ! !, ,, , . .. . . .. . BEFORE S/SH.H.L.KARWA,PRESIDENT AN D RAJENDRA,ACCOUNTANT MEMBER ./ ITA NO.23/BLPR/2011- # # # # / // / ASSESSMENT YEAR -2006-07 SHRI ANURAG PANDEY, PROP. M/S. RAJENDRA RICE MILL, LAWAN, BALODABAZAR (CG) PAN:AFUPP 0698 E V/S. INCOME-TAX OFFICER- 1(3), RAIPUR. ( ) / // / APPELLANT ) ( *+) / RESPONDENT ) ASSESSEE BY : SH. P.C. JAIN MALOO, C.A. REVENUE BY : SH. SHRI S.K. MEENA, DR - /DATE OF HEARING : 22-12-2014 - /DATE OF PRONOUNCEMENT : 22 -12-2014 # # # # , 1961 1961 1961 1961- - - - 254 254254 254( (( (1 11 1) )) ) ORDER U/S.254(1)OF THE INCOME-TAX ACT,1961(ACT) PER RAJENDRA,AM < << < = = = =, ,, , ! ! ! ! : CHALLENGING THE ORDER DT. 02.12.2010 OF THE COMMISS IONER OF INCOME-TAX, RAIPUR,PASSED U/S. 263 OF THE ACT, THE ASSESSEE HAS RAISED FOLLOWING GROUN DS OF APPEAL: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LEARNED CIT HAS ERRED IN HOLDING THE ASSESSMENT ORDER PASSED BY THE ASSESSING OFFICER AS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE. THE LEARNED CIT HAS FURTHER ERRED IN SETTI NG ASIDE THE ASSESSMENT WITH A DIRECTION TO MAKE PROPER ENQUIRY ON PRODUCTION AND USE OF HUSK B Y THE ASSESSEE. THE ORDER OF CIT IS UNJUSTIFIED, UNWARRANTED AND UNCALLED FOR. 2. IN THIS CASE,AN ORDER U/S. 143(3) OF THE ACT WAS PA SSED BY THE ASSESSING OFFICER (AO)ON 10.11. 2008 DETERMINING THE TOTAL INCOME OF THE ASSESSEE A T RS.2.56 LACS. AFTER EXAMINING THE ASSESSMENT RECORD, THE CIT HELD THAT THE ORDER PASSED BY THE A O WAS, PRIMA FACIE, ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE, AS THE AO HAD NOT MADE ANY ENQUIRY ABOUT THE PRODUCTION AND SALE OF HUSK. A NOTICE DATED 04.05.2009 WAS ISSUED TO THE A SSESSEE,U/S. 263 OF THE ACT,PROPOSING TO REVISE THE ORDER. IN THE NOTICE, THE CIT MENTIONED THAT AS PER THE TAX AUDIT REPORT, THE ASSESSEE HAD MILLED 12300 QUINTAL PADDY ON HIS OWN ACCOUNT, THAT IT HAD DECLARED CUSTOM MILLING AT RS.24.50 LACS @ RS. 35/- PER QUINTAL,THAT IT HAD MILLED 82300 QUINT ALS OF PADDY,THAT THE ASSESSEE HAD SHOWN SHORTAGE @ 28%. AFTER EXCLUDING SHORTAGE ON ACCOUNT OF MOISTURE, DUST @ 5%, HE CALCULATED THAT NET SHORTAGE CAME TO 23%. AS PER CIT, NEITHER THE A SSESSEE HAD OFFERED ANY EXPLANATION FOR THIS SHORTAGE NOR THE AO HAD MADE ANY ENQUIRY IN THIS RE GARD.HE HELD THAT THE YIELD OF RICE HAD BEEN SHOWN VERY LOW AT 60%, THAT THE ACCEPTANCE OF SHORT AGE AT 23% BY THE AO WAS GROSSLY ERRONEOUS. 3. IN RESPONSE TO THE NOTICE,IT WAS STATED BY THE ASSE SSEE THAT DURING THE ASSESSMENT, THE AO HAD MADE ENQUIRIES ABOUT THE ASSESSEES BUSINESS, THAT IT WAS NOT A CASE WHERE NO HUSK SALE HAD BEEN SHOWN BY THE ASSESSEE, THAT HE HAD SOLD HUSK WORTH RS.2.31. LACS, WHICH WAS INCLUDED IN TOTAL SALE FIGURE OF 1.01 CROES,THAT NORMALLY 20 KG OF HUSK WA S PRODUCED FROM MILLING OF ONE QUINTAL OF PADDY,THAT PRODUCTION CHART WAS SUBMITTED BEFORE TH E AO ABOUT THE ASSESSEES YIELD, THAT THOUGH THE ASSESSMENT ORDER DID NOT MENTION ABOUT THE ENQU IRIES IN THIS REGARD BUT THE AO HAD PASSED THE ORDER AFTER MAKING NECESSARY ENQUIRIES. AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE A ND THE CASE RECORDS, THE CIT HELD THAT THE BASIC CLAIM MADE BY THE ASSESSEE THAT THE AO HAD ENQUIRED ABOUT THE SALE AND PRODUCTION OF HUSK WAS NOT BORNE OUT ON RECORD,THAT NO SEPARATE DETAILS WE RE AVAILABLE ABOUT THE SALE OF HUSK, THAT THE PRODUCTION DETAILS FILED BEFORE THE AO GAVE FIGURE OF SHORTAGE OF 28% IN PRODUCTION, THAT THERE WERE DETAILS ABOUT PRODUCTION OF RICE,BROKEN RICE A ND RICE BRAN, THAT THERE WAS NO SUGGESTION ABOUT WHAT HAPPENED TO 28% OF THE PRODUCE REPRESENTING HU SK,THAT THE AO HAS NOT MADE ANY ATTEMPT TO 2 ITA NO. 23/BLPR/2011-SHRI ANURAG PANDEY ENQUIRE ABOUT ITS USE, THAT THE AO HAD FAILED TO AP PRECIATE THAT HUSK WAS NOT A WASTAGE BUT WAS A VALUABLE BY-PRODUCT IN ASSESSEES LINE OF BUSINESS, THAT IT WAS IN GREAT DEMAND IN THE AREA FOR USE IN HUSK BASED POWER PLANTS, BRICKS-CLINS ETC.,THAT THE FIGURE OF RS.2.31 LACS CLAIMED TO REPRESENT SALE OF HUSK WAS NOT SEPARATELY AVAILABLE IN THE DETAILS FILED BEFORE THE AO, THAT THE CLAIM MADE BY THE ASSESSEE ABOUT ENQUIRY BY THE AO ABOUT PRODUCTION A ND SALE OF HUSK WAS INCORRECT, THAT FAILURE OF AO IN MAKING PROPER ENQUIRY ABOUT THE SALE OF HUSK WAS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE.AS A RESULT, HE SET ASIDE THE ORDER OF T HE AO AND DIRECTED HIM TO MAKE PROPER ENQUIRY ON PRODUCTION AND USE OF HUSK BY THE ASSESSEE AND P ASS A FRESH ORDER AFTER GIVING PROPER OPPORTUNITY TO THE ASSESSEE. HE REFERRED TO THE ORD ERS OF ITAT DELIVERED IN THE CASE OF TARACHAND PREMCHAND VS. ITO (ITA NO. 44/BLPR/2010) ORDER DATE D 14.07.2010 AND STATED THAT THE TRIBUNAL HAD UPHELD THE ACTION OF THE CIT IN INVOKING THE PR OCEEDINGS U/S. 263 ON THE SAME GROUND AND UNDER SIMILAR CIRCUMSTANCES. 4. BEFORE US THE AR OF THE ASSESSEE STATED THAT THE AS SESSEE HAD FILED NECESSARY DETAILS BEFORE THE AO DURING THE ASSESSMENT PROCEEDINGS,THAT THE DETAI LS OF SALE OF HUSK WERE AVAILABLE, THAT THE ORDER PASSED BY THE AO WAS NOT ERRONEOUS OR PREJUDI CIAL TO THE INTEREST OF REVENUE.HE REFERRED TO THE CASES OF (I) CIT VS. SATPAL AGGARWAL(293 ITR 90 ), (II) MALABAR INDUSTRIAL CO. LTD. VS.CIT(243 ITR 83)(III) CIT VS. INTERNATIONAL TRAVEL HOUSE LTD .(45 DTR 249), ((IV) CIT VS. SUNBEAM AUTO LTD.(332 ITR 167), (V) CIT VS. ANIL KUMAR SHARMA(33 5 ITR 83), (VI) CIT VS. VIKAS POLYMERS(47 DTR 348).THE DR SUPPORTED THE ORDER OF THE CIT. 5. WE HAVE HEARD THE RIVAL SUBMISSIONS.THE UNDISPUTED FACTS OF THE CASE ARE THAT THE AO HAD PASSED AN ORDER U/S.143(3)OF THE ACT,THAT THE CIT F OUND THAT ORDER PASSED BY THE AO WAS ERRONEOUS AS WELL AS PREJUDICIAL TO THE INTEREST OF REVENUE, THAT THE CIT WAS OF THE OPINION THAT THE AO HAD NOT MADE ANY ENQUIRY ABOUT THE SALE OF HUSK. WE FIND THAT THE AO HAD ISSUED 143(2) AND 142(1) NOTICES TO THE ASSESSEE.ON A SPECIFIC QUERY BY THE BENCH ABOUT THE DETAILS FILED IN RESPONSE TO THESE NOTICES, THE AR COULD NOT PROVE THAT THE D ETAILS OF PRODUCTION OF HUSK AND CONSEQUENT SALE WAS MADE AVAILABLE TO THE AO.IT IS A KNOWN FACT THA T HULLING OF PADDY RESULTS IN MANUFACTURE OF RICE, BROKEN RICE, BRAN AND HUSK.THE OVERALL PERCEN TAGE OF RECOVERY IS ALMOST STANDARDISED AND IT IS ACCEPTED PRACTICE THAT PADDY HUSK IS RECOVERED AT T HE RATE OF 20%. IN THE CASE UNDER CONSIDERATION, THE AO HAD NOT MADE ANY ENQUIRIES ABOUT THIS ASPECT .WE FIND THAT THE CIT HAS DIRECTED THE AO TO MAKE ENQUIRIES ON PRODUCTION AND USE OF HUSK BY THE ASSESSEE AND TO PASS A FRESH ORDER AFTER GIVING PROPER OPPORTUNITY TO THE ASSESSEE.IN OUR OP INION, THE INTEREST OF THE ASSESSEE IS NOT PREJUDICED BY THE ORDER OF CIT. CONSIDERING THE FAC TS THAT THE AO LEFT A VITAL ASPECT OF ASSESSMENT, WE ARE OF THE OPINION THAT THE ACTION TAKEN BY THE CIT WAS JUSTIFIABLE.AS THE ORDERS OF THE TRIBUNAL REFERRED BY THE CIT WERE NOT MADE AVAILABLE TO US,S O WE ARE NOT IN A POSITION TO VERIFY THE FACTS WHETHER THE CIRCUMSTANCES AND FACTS OF THOSE CASES WERE IDENTICAL TO THE FACTS OF THE CASE BEFORE US.HOWEVER, CONSIDERING THE ABOVE DISCUSSION,WE DEC IDE THE EFFECTIVE GROUND OF APPEAL AGAINST THE ASSESSEE AND UPHOLD THE ACTION TAKEN BY THE CIT U/S. 263 OF THE ACT. THE CASES RELIED UPON BY THE ASSESSEE DO NOT SUPPOR T THE VIEW ADVANCED BY HIM.IN OUR OPINION THEY ARE DISTINGUISHABLE ON FACTS.IN NONE OF THE CA SES THE QUESTION OF APPLICATION OF MIND BY THE AO WAS THE ISSUE BEFORE THE HONBLE COURTS,WHEREAS THE ISSUE UNDER CONSIDERATION IN THE MATTER BEFORE THE CIT WAS NON APPLICATION OF MIND BY THE A O. AS A RESULT, APPEAL FILED BY THE ASS ESSEE STANDS DISMISSED. > #> @ A - ORDER PRONOUNCED IN THE OPEN COURT ON 22 ND ,DECEMBER,2014. - E 22 F ,2014 - . SD/- SD/- (H.L.KARWA/ . .. . . .. . ) ( ! ! ! ! / RAJENDRA) PRESIDENT/ = = = = /ACCOUNTANT MEMBER 3 ITA NO. 23/BLPR/2011-SHRI ANURAG PANDEY /RAIPUR. F DATE: 22.12.2014 - -- - *#GH *#GH *#GH *#GH IH IH IH IH / COPY OF THE ORDER FORWARDED TO : 1. APPELLANT / ) 2. RESPONDENT / *+) 3. THE CONCERNED CIT(A)/ J K , 4. THE CONCERNED CIT / J K 5. DR ITAT,RAIPUR BENCH/ H *## , . . . , 6. GUARD FILE/ . +H *# //TRUE COPY// / BY ORDER, / DY./ASST. REGISTRAR , /ITAT, RAIPUR