ITO 17(3)(1), MUMBAI V. ASHISH INDUSTRIES, MUMBAI

ITA 2529/MUM/2012

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 84015 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 6 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-10-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 28-10-2014
• Assessment Year: 2003-2004
• Appeal Filed On: 16-04-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ASGHAR ZAIN
• Assessee Lawyers: RAJKUMAR JAJU

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, MUMBAI BEFORE SHRI D. KARUNAKARA RAO, ACCOUNTANT MEMBER AND SHRI SANJAY GARG, JUDICIAL MEMBER ./I.T.A. NO. 2529/M/2012 ( AY: 2003 - 2004 ) ITO - 17(3)(1), MUMBAI. / VS. M/S. ASHISH INDUSTRIES, C/O. KARIM KESHWANI, AMINABAD BUILDING, PRINCE ALI KHAN HOSPITAL COMPOUND, MAZGAON, MUMBAI 400 010. ./ PAN : AAAFA2177Q ( / APPELLANT) .. ( / RESPONDENT ) / APPELLANT BY : SHRI ASGHAR ZAIN / RESPONDENT BY : SHRI PRAKASH JHUNJHUNWALA & MR. RAJKUMAR JAJU / DATE OF HEARING : 28.10.2014 / DATE OF PRONOUNCEMENT : 28 .10.2014 / O R D E R PER D. KARUNAKARA RAO, AM: THIS APPEAL FILED BY THE REVENUE ON 16.4.2012 IS AGAINST THE ORDER OF THE CIT (A) - 29, MUMBAI DATED 30.1.2011 FOR THE ASSESSMENT YEAR 2003 - 2004. 2. IN THE GROUNDS, THE REVENUE QUESTIONED THE RELIEF GRANTED BY THE CIT (A), WHO DECIDED THE ISSUES BASED ON THE DECISION OF THE ITAT IN THE CASE OF ITS SISTER CONCERN M/S. BOON INDUSTRIES WHEN THE FACTS ARE IDENTICAL AND COMPARABLE. IN THE ORDER, CIT (A) HE LD THAT ESTIMATION OF PROFIT @ 10% OF THE SALES IS NOT SUSTAINABLE. FURTHER, CIT (A) HAS TEKEN THE PRODUCTION YIELD OF 1.00 KG PER ELECTRICITY CONSUMED AGAINST THE 2.5 KG PER UNIT TAKEN BY THE AO. IN THIS REGARD, LD COUNSEL FOR THE ASSESSEE BROUGHT OUR A TTENTION TO THE ORDER OF THE CIT (A) AND READ OUT THE RELEVANT PARA 5.9 AND DEMONSTRATED HOW THE DECISION IN ITS SISTER CONCERN M/S. BOON INDUSTRIES FOR THE AYS 2000 - 2001 TO 2004 - 2005 WERE DECIDED BY THE TRIBUNAL. IN PARA 5.9.2 OF THE CIT (A)S ORDER, IT WAS NARRATED AS TO HOW THE FACTS ARE COMPARABLE 2 AND ADDITIONS ARE MDE ON THE SAME BASIS DONE IN THE CASE OF M/S. BOON INDUSTRIES (SUPRA). LD COUNSEL FOR THE ASSESSEE ALSO DEMONSTRATED AS TO HOW THE CONCLUSIONS OF THE CIT (A) DO NOT NEED ANY AMENDMENT. HE ALSO MENTIONED THAT LD DR HAS NOT BROUGHT ANYTHING TO CONTROVERY THAT THE FACTS ARE DIFFERENT WITH THAT OF THE M/S. BOON INDUSTRIES. LD COUNSEL FOR THE ASSESSEE FILED A COPIES OF VARIOUS DECISIONS OF THE TRIBUNAL IN THE ASSESSEES OWN CASE FOR THE AYS 20 00 - 2001 TO 2004 - 2005 VIDE ITA NO.4059/M/2009 AND OTHERS, WHEREKIN THE TRIBUNAL HAS DECIDED IDENTICAL ISSUES RELYING ON THE SAID DECISION OF THE TRIBUNAL IN THE CASE OF M/S. BOON INDUSTRIES (SUPRA). FURTHER, LD COUSNEL FOR THE ASSESSEE ALSO FILED ANOTHER O RDER OF THE TRIBUNAL IN ASSESSEES OWN CASE FOR THE AYS 1998 - 99 AND 1999 - 2000, WHEREIN AGAIN THE TRIBUNAL RELIED HEAVILY ON THE DECISION OF THE ITAT IN THE CASE OF M/S. BOON INDUSTRIES (SUPRA). PARA 5 OF THE SAID ORDER OF THE TRIBUNAL DATED 18.1.2013 IS R ELEVANT IN THIS REGARD. HE ALSO FURNISHED ANOTHER COPY OF THE TRIBUNAL FOR THE AY 2002 - 2003 VIDE ITA NO.1559/M/2012, DATED 5.4.2013, WHEREIN ONE OF US (JM) IS THE PARTY TO THE SAID ORDER OF THE TRIBUNAL. IN THE SAID ORDER DATED 5.4.2013 (SUPRA), THE TRIB UNALS ORDER IN THE CASE OF M/S. BOON INDUSTRIES WAS CITED. PARA 3 TO 3.3 OF THE SAID ORDER OF THE TRIBUNAL IS RELEVANT IN THIS REGARD. 3. AFTER HEARING THE ABOVE ARGUMENTS OF THE LD COUNSEL AS WELL AS THE ON PERUSAL OF THE ORDERS OF THE TRIBUNAL CITED BEFORE US, WE HAVE HEARD THE LD DR AND FIND THAT HE HAS NOTHING TO DISTINGUISH ON FACTS. ON FINDING THT HE HAS DUTIFULLY RELIED ON THE ORDERS OF THE REVENUE AUTHORITIES, WE HAVE PERUSED THE ORDER OF THE TRIBUNAL DATED 5.4.2013 (SUPRA) FOR THE AY 2002 - 2003 AND FIND THE SAID PARA 3 TO 3.3 ARE RELEAVNT HERE. CONSIDERING THE IMPORTANCE OF THE SAID PARAS 3 TO 3.3, THE SAME ARE EXTRACTED WHICH READ AS FOLLOWS: 3.1 THE ISSUE UNDER REFERENCE CONCERNS AN ABIDING ISSUE FOR FIVE ASSESSMENT YEARS, I.E.,FROM AY 2000 - 01 TO AY 2004 - 05, BOTH IN THE CASE OF THE ASSESSEE AS WELL AS ITS SISTER CONCERN, BOON INDUSTRIES (SUPRA), WHICH STANDS DECIDED BY THE TRIBUNAL IN FAVOUR OF THE ASSESSEES, HOLDING THAT MERE DISPARITY IN THE CONSUMPTION OF ELECTRICITY COULD NOT BE A REASON FOR ESTIMATING HIGHER TURNOVER AS THE PRODUCTION DEPENDS UPON VARIOUS FACTORS. THE ESTIMATION OF PRODUCTION, AS MADE BY THE ASSESSING OFFICER (AO), DID NOT LEND ITSELF TO BE A SCIENTIFIC BASIS, SO THAT THE ADDITION TO INCOME WORKED WITH REFERENCE TO SUCH HIGHER TURNOVER, STOOD DELETED. THE TRIBUNAL HAS DISCUSSED THIS ASPECT IN THE CASE OF BOON INDUSTRIES VIDE PARAS 24 & 25 (PAGES 13 - 15) OF ITS ORDER DATED 15.07.2010 (IN ITA NO.4059 TO 4063/MUM/2009 FOR A.YS. 2000 - 01 TO 2004 - 05/PB PGS. 13 - 28), THE LATTER PA RA, CONTAINING ITS DECISION, READING AS UNDER: 25. AS RIGHTLY POINTED OUT, THE JUDICIAL PRECEDENTS (CITED SUPRA) LEND SUPPORT TO THE CONTENTION OF THE ASSESSEE THAT MERE ALLEGED DISPARITY IN CONSUMPTION 3 OF ELECTRICITY CANNOT BE A REASON FOR ESTIMATING TH E TURNOVER SINCE PRODUCTION DEPENDS UPON VARIOUS FACTORS AND ANY ADDITION MADE TO ESTIMATE SUPPRESSED SALES, ON THE BASIS OF CONSUMPTION OF ELECTRICITY, DESERVES TO BE DELETED SINCE IT HAS NO SCIENTIFIC BASIS. ON A CONSPECTUS OF THE MATTER WE ARE OF THE VI EW THAT THE ADDITION MADE BY THE ASSESSING OFFICER, AS SUSTAINED BY THE CIT(A), DESERVES TO BE SET ASIDE. 3.2 THE FIRST APPELLATE AUTHORITY IN THE INSTANT CASE HAS DELETED THE IMPUGNED ADDITION, I.E., BY ESTIMATION SIMILARLY OF INCOME BY RECKONING A HIGHER TURNOVER ON ACCOUNT OF HIGHER CONSUMPTION OF POWER BY THE ASSESSEE, BY FOLLOWING THE TRIBUNALS DECISION IN THE CASE OF BOON INDUSTRIES (SUPRA), THE ASSESSEES SISTER CONCERN, WHEREIN SIMILAR ADDITIONS WERE MADE. IN FACT, SIMILAR ADDITIONS IN THE ASSESSEES OWN CASE FOR A.Y. 1998 - 99 AND 1999 - 2000 STOOD DELETED BY THE TRIBUNAL VIDE ITS ORDER DATED 18.01.2013 ( IN ITA NOS.6869 AND 6871/MUM/2011/COPY ON RECORD), BY HOLDING AS UNDER: - 5. AS BOTH, ASSESSMENT AND THE APPELLATE ORDER, ARE BASED ON THE FINDINGS IN THE CASE OF THE SISTER CONCERN M/S. BOON INDUSTRIES AND AS THE TRIBUNAL HAS DECIDED THE ISSUE IN THE CAS E OF M/S. BOON INDUSTRIES IN FAVOUR OF THE ASSESSEE AS DISCUSSED BY THE LD. CIT(A) IN HIS ORDER AND AS NO DISTINGUISHING FACTS HAVE BEEN BROUGHT ON RECORD BY THE LD. DEPARTMENTAL REPRESENTATIVE, WE DO NOT FIND ANY REASON TO INTERFERE WITH THE FINDINGS OF T HE LD. CIT(A). 3.3 AS AFORE - STATED, FOR THE CURRENT YEAR ALSO NO DISTINGUISHING FEATURE HAS BEEN BROUGHT ON RECORD BY THE REVENUE OR OTHERWISE BROUGHT TO OUR NOTICE BY THE LD. DR, SO AS TO IMPUGN THE RELIANCE BY THE LD. CIT (A) ON THE DECISION BY THE TRI BUNAL IN THE CASE OF BOON INDUSTRIES (SUPRA), OR OTHERWISE SHOW US AS TO HOW THE SAME IS NOT APPLICABLE TO THE ASSESSEES CASE AS WELL, I.E., THE SAME BASIS WHICH FOUND FAVOUR WITH THE TRIBUNAL IN THE ASSESSEES OWN CASE FOR THE EARLIER YEARS, BEING A.YS. 1998 - 99 AND 1999 - 2000. IN FACT, THE TRIBUNALS DECISION IN THE CASE OF BOON INDUSTRIES (SUPRA) IS FOR THE A.YS. 2000 - 01 TO 2004 - 05, WHILE THAT BEFORE THE TRIBUNAL IN THE ASSESSEES CASE WERE FOR YEARS PRIOR THERETO. THE ORDER UNDER REFERENCE IN THE INSTANT CASE IS FOR A.Y. 2002 - 03 AND, AS SUCH, AMONG THE YEARS DECIDED BY THE TRIBUNAL IN THE CA SE OF BOON INDUSTRIES (SUPRA). 4. FROM THE ABOVE, IT IS EVIDENT THAT THE ISSUE NOW STANDS COVERED BY VARIOUS DECISIONS OF THE TRIBUNAL BOTH IN THE ASSESSEES OWN CASE AS WELL AS ITS SISTER CONCERN M/S. BOON INDUSTRIES (SUPRA). NOTHING IS BROUGHT BY THE REVENUE TO STATE THAT THE SAID DECISIONS ARE NOT APPLICABLE TO THE PRESENT APPEAL UNDER CONSIDERATION. THEREFORE, IN OUR OPINION, THE ORDER OF THE CIT (A) DOES NOT CALL FOR ANY AMENDMENT AND WE CONFIRM THE SAME. ACCORDINGLY, GROUNDS RAISED BY THE REVENUE ARE DISMISSED. 5. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOU NCED IN THE OPEN COURT ON 28 TH OCTOBER, 2014. SD/ - SD/ - ( SANJAY GARG ) (D. KARUNAKARA RAO ) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI ; 28 /10/2014 . . ./ OKK , SR. PS 4 / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE . //TRUE COPY// / BY ORDER, / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI