M/S AGROTECH INDIA, MAHASAMUND V. ITO-2(2), RAIPUR (CG)

ITA 24/BIL/2011

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 85399 (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: D K JAIN
• Assessee Lawyers: P C JAIN MALOO
• Keywords: Assessment record
• Section: 263; 143(3)

Judgement Text

INCOME TAX APPELLATE TRIBUNAL,BENCH -RAIPUR . .. . . .. . , ,, , ! ! ! !, ,, , . .. . . .. . BEFORE S/SH.H.L.KARWA,PRESIDENT AN D RAJENDRA,ACCOUNTANT MEMBER ./ ITA NO.24/BLPR/2011- # # # # / // / ASSESSMENT YEAR -2006-07 M/S. AGROTECH INDIA, PITIYAJHAR, MAHASAMUND. PAN: AAEFA 4523 G V/S. INCOME-TAX OFFICER- 2(2), RAIPUR. ( ) / // / APPELLANT ) ( *+) / RESPONDENT ) ASSESSEE BY : SH.P.C. JAIN MALOO, CA REVENUE BY : SH. D.K. JAIN, D.R. - /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. 25.11.2010 OF THE COMMISS IONER OF INCOME-TAX, RAIPUR,PASSED U/S. 263 OF THE ACT, THE ASSESSEE HAS RAISED FOLLOWING GROU NDS 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 OFFICE R AS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE. THE LEARNED CIT HAS FURTHER ER RED IN SETTING ASIDE THE ASSESSMENT WITH A DIRECTION TO MAKE PROPER ENQUIRY ON PRODUCTION AN D USE OF HUSK BY THE ASSESSEE. THE ORDER OF CIT IS UNJUSTIFIED, UNWARRANTED AND UNCALL ED FOR. 2. IN THIS CASE,AN ORDER U/S. 143(3) OF THE ACT WAS PA SSED BY THE ASSESSING OFFICER (AO)ON 22.12. 2008,DETERMINING THE TOTAL INCOME OF THE ASSESSEE A T RS.1.85 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.A NOTICE DATED 09.08.201 0 WAS ISSUED TO THE ASSESSEE,U/S. 263 OF THE ACT,PROPOSING TO REVISE THE ORDER.IN THE NOTICE, TH E CIT MENTIONED THAT THE ASSESSEE WAS A RICE MILLER AND DERIVED INCOME FROM MANUFACTURE AND SALE OF RICE AND ITS BYE-PRODUCTS,THAT THE ASSESSEE/AUDITOR HAD NOT GIVEN FULL DETAILS IN COLU MN 28 OF THE AUDIT REPORT,THE ASSESSEE HAD NOT DISCLOSED THE YIELD OF FINISHED GOODS FULLY,THAT TH E YIELD OF RICE,RICE BRAN AND BROKED RICE HAD BEEN DECLARED AT 74.02% ONLY,THAT REMAINING PORTION(25.9 8%)HAD BEEN DECLARED AS SHORTAGE,THAT THE AO HAD NOT CALLED FOR ANY EXPLANATION IN THIS REGAR D,THAT THAT SO CALLED SHORTAGE WAS PADDY HUSK WHICH WAS A SALEABLE COMMODITY AND COMMANDED A PRIC E OF RS.80-100 PER QUINTAL,THAT THE SHORTAGE SHOWN BY THE ASSESSEE WAS HIGHLY EXCESSIVE ,THAT THE AO HAD FAILED TO ENQUIRE THE SAME TO LOGICAL END. 3.IN RESPONSE TO THE NOTICE THE ASSESSEE STATED BEF ORE THE CIT THAT HUSK PRODUCED BY THE ASSESSEE WAS USED IN THE BOILER WHEN BOILED RICE WAS PRODUCE D,THAT THE ASSESSEE WAS OWNING A PAR BOILING PLANT,THAT ALL THE HUSK WAS CONSUMED INTERNALLY,THA T UNUSED HUSK WAS SOLD FOR RS.5,000/-,THAT THE AO DID NOT MAKE INQUIRY IN THAT REGARD,THAT THE AO HAD NOT SPECIFICALLY MENTIONED ABOUT THE YIELD AND SALE OF HUSK BUT IT DID NOT MEAN THAT AO HAD PA SSED ORDER WITHOUT INQUIRY,THAT HUSK PRODUCED DURING THE COURSE OF MILLING LIED IN OPEN GROUND AN D IS LOST IN STROM,RAIN AND THEFT,THAT IT WAS NOT POSSIBLE TO KEEP QUANTITY DETAILS REGARDING PRODUCT ION OF HUSK. AFTER CONSIDERING THE SUBMISSION OF THE ASSESSEE,TH E CIT HELD THAT THE ISSUE OF PRODUCTION OF HUSK AND SALE OF HUSK HAD BEEN SPECIFICALLY INQUIRED BY THE AO WAS NOT BORN OUT OF RECORD,THAT BEFORE THE AO THE ASSESSEE HAD SUBMITTED THAT YIELD OF RIC E WAS 74%,THAT THE AO DID NOT MAKE INQUIRY ABOUT THE BALANCE 26%OF THE RAW MATERIAL WHICH REPR ESENTED HUSK,THAT THE ASSESSEE HAD MENTIONED 2 ITA NO. 24/BLPR/2011-AGROTECH INDIA BEFORE THE AO THAT FOR MANUFACTURING BOILED RICE IT WAS USING ELECTRICITY,THAT THE CLAIM MADE BY THE ASSESSEE ABOUT CONSUMPTION OF POWER WAS CONTRAR Y TO THE CLAIM MADE DURING 263 PROCEEDINGS WHEREIN IT WAS CLAIMED THAT HUSK WAS USED FOR IN HO USE MILLING,THAT THE AO HAD NOT MADE ANY INQUIRY ABOUT PRODUCTION AND USE OF HUSK DURING TH E COURSE OF ASSESSMENT PROCEEDINGS,THAT THE AO HAD FAILED TO APPRECIATE THAT HUSK WAS A VALUABL E BYE-PRODUCT IN THE ASSESSEES LINE OF BUSINESS,THAT IT WAS IN GREAT DEMAND FOR RUNNING HU SK BASED POWER PLANTS,THAT MOST OF THE DEALERS DEALING IN RICE MANUFACTURING SHOWED SUBSTANTIAL IN COME FROM SALE OF HUSK,THAT THE AO HAD FAILED TO MAKE PROPER INQUIRY,THAT THE ORDER OF THE AO WA S ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE. AS A RESULT, HE SET ASIDE THE ORDER OF THE 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. SUNBEAM AUTO LTD.(332 ITR 1 67),(II)CIT VS. ANIL KUMAR SHARMA(335 ITR 83),(III) 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 YIELD AND SALE O F HUSK.WE FIND THAT THE AO HAD MADE ANY INQUIRY ABOUT YIELD OF HUSK AND SUBSEQUENT SALE.HE ACCEPTED THE BOOK RESULT OF THE ASSESSEE WHEREIN 74 PRODUCTION WAS SHOWN AND NO EXPLANATION WAS FILED ABOUT REMAINING 26%(APP.)PADDY.IT IS A KNOWN FACT THAT HULLING OF P ADDY RESULTS IN MANUFACTURE OF RICE, BROKEN RICE, BRAN AND HUSK.THE OVERALL PERCENTAGE OF RECOV ERY IS ALMOST STANDARDISED AND IT IS ACCEPTED PRACTICE THAT PADDY HUSK IS RECOVERED AT THE RATE O F 20%. IN THE CASE UNDER CONSIDERATION, THE AO HAD NOT MADE ANY ENQUIRIES ABOUT THIS ASPECT.WE FIN D THAT THE CIT HAS DIRECTED THE AO TO MAKE ENQUIRIES ON PRODUCTION AND USE OF HUSK BY THE ASSE SSEE AND TO PASS A FRESH ORDER AFTER GIVING PROPER OPPORTUNITY TO THE ASSESSEE.IN OUR OPINION, THE INTEREST OF THE ASSESSEE IS NOT PREJUDICED BY THE ORDER OF CIT. CONSIDERING THE FACTS THAT THE AO LEFT A VITAL ASPECT OF ASSESSMENT UNATTENDED,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 OR NOT TO THE FACTS OF THE CASE BEFORE US. HOWEVER, CONSIDERING THE ABOVE DISCUSSIO N,WE DECIDE THE EFFECTIVE GROUND OF APPEAL AGAINST THE ASSESSEE AND UPHOLD THE ACTION TAKEN BY THE CIT U/S. 263 OF THE ACT. 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 /RAIPUR. F DATE: 22.12.2014 3 ITA NO. 24/BLPR/2011-AGROTECH INDIA - -- - *#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