The ACIT, Circle-5, Ahmedabad V. M/s. Neptune Textile Mills Ltd., Ahmedabad

ITA 2826/AHD/2013

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 3373 (ITAT-AHMEDABAD)
• Duration Of Justice: 5 year(s) 4 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-04-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 05-07-2017
• Assessment Year: 2002-2003
• Appeal Filed On: 03-12-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B L MEENA
• Assessee Lawyers: C N SHAH
• Keywords: Bonafide mistake; Set aside
• Section: 143(3); 142(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD C BENCH (BEFORE SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER & SHRI MAHAVIR PRASAD, JUDICIAL MEMBER) ITA. NO: 2826/AHD/2013 (ASSESSMENT YEAR: 2002-03) ACIT CIRCLE-5, AHMEDABAD V/S M/S NEPTUNE TEXTILE MILLS LTD. 128, NEWS CLOTH MARKET, OUTSIDE RAIPUR GATE, AHMEDABAD (APPELLANT) (RESPONDENT) PAN: AAACN5339G APPELLANT BY : SHRI B. L. MEENA, SR. D.R . RESPONDENT BY : SHRI C. N. SHAH ( )/ ORDER DATE OF HEARING : 08 -02-201 9 DATE OF PRONOUNCEMENT : 24 -04-2019 PER MAHAVIR PRASAD, JUDICIAL MEMBER 1. THIS APPEAL FILED BY THE REVENUE IS DIRECTED AGAINS T THE ORDER OF THE LD. CIT(A)-XI, AHMEDABAD DATED 05.09.2013 PERTAINING TO A.Y. 2002-03 AND FOLLOWING GROUNDS HAVE BEEN TAKEN: ITA NO. 2826 /AHD/2013 . A.Y. 2002-0 3 2 1. THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS. 73,77,700/- ON ACCOUNT OF VARIATION IN PURCHASE OF CLOTH NOT SHOWN IN THE AUDIT REPORT. 2. THE LD. CIT(A) HAS FURTHER ERRED IN IGNORING THE FACT THAT THE ASSESSEE FAILED TO COMPLY WITH THE DIRECTIONS GIVEN BY THE HONBLE ITA T FOR FURNISHING BILLS AND VOUCHERS IN SUPPORT OF THE CLAIM THAT THERE WAS A M ISTAKE TRANSFERRING THE QUANTITY FROM PURCHASE TO CONSUMPTION WITHOUT GIVIN G A MATCHING EFFECT N MONETARY AND HAS REVENUE NEUTRAL EFFECT. 3. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) OUGHT TO HAVE UPHELD THE ORDER OF THE ASSESSING OFFICER. 4. IT IS, THEREFORE, PRAYED THAT THE ORDER OF THE L D. CIT(A) MAY BE SET-ASIDE AND THAT OF THE ASSESSING OFFICER BE RESTORED. 2. THE ORIGINAL ASSESSMENT FOR A.Y. 2002-03 WAS COMPLE TED U/S 143(3) ON 22/03/2005 BY THEN ASST. COMMISSIONER OF INCOME, CI RCLE-5. AHMEDABAD. 3. THE ASST. COMMISSIONER CIRCLE-5 REDUCED LOSS OF RS. 7377700/- AS PER PARA NO 6 OF THE ASSESSMENT ORDER U/S 143(3) ON 22/ 03/2005 AS THERE WAS SOME DISCREPANCY IN PRESENTATION OF SCHEDULE 'P' OF AUDIT REPORT AS THE QUANTITY OF CLOTH PURCHASES (TRADING) WAS SHOWN AT 152911 MTRS VALUED AT RS. 111395957-. HOWEVER IN COURSE OF ASSESSMENT PROCEED INGS U/S 143(3) , THE QUANTITY OF CLOTH PURCHASED WAS SHOWN AS AT 424S79/ - AND THE CORRESPONDING VALUE WAS SHOWN AT RS. 111395957-HENCE ACCORDING TO A.O. QUANTITY OF PURCHASE OF GREY CLOTH OF RS. 2719687- METRES REPRE SENTING THE VALUE OF RS. 7377700/- HAS NOT BEEN SHOWN IN THE AUDIT REPORT WH ILE FINALISING THE SAME. THUS A.O. ISSUED SHOW-CAUSE NOTICE DATED 18/03/2005 READING AS UNDER: 'ON GOING THROUGH THE CASE RECORDS AND DETAILS FILE D DURING THE COURSE OF ASSESSMENT PROCEEDINGS IT IS NOTICED THAT THE POINT NUMBER-13 OF SCHEDULE-P OF AUDIT REPORT, THE TOTAL CLOTH PURCHASE HAS BEEN SHO WN AT 152911 METRES VALUING AT RS. 111395957- WHEREAS WHILE FURNISHING THE DETAILS OF TRADING SALES ITA NO. 2826 /AHD/2013 . A.Y. 2002-0 3 3 AND PURCHASES DURING THE FINANCIAL YEAR 2001-02 THE TRADING SALES AND PURCHASES ARE SHOWN AS UNDER: PURCHASE SALES MTS. AMOUNT MTS. AMOUNT 152911 3761895 152911 3945064 VALUE OF GOODS VALUE OF GOODS TRANSFERRED TO TRANSFERRED TO GREY PURCHASES 271968 7377700 GREY PURCHASES 5 44173 14074249 424879 11139595 699084 18019313 IN THIS CONNECTION, YOU ARE REQUIRED TO RECONCILE T HE ABOVE DISCREPANCIES POINTED ALONG WITH RELEVANT DOCUMENTARY EVIDENCES, BILLS, VOUCHERS ETC AT 3.00 P.M. ON 22-03-2005. PLEASE NOTE THAT IF YOU FAIL TO RECONCILE THE ABOVE DISCREPANCIES THE APPROPRIATE ADDITIONS WILL BE MAD E WITHOUT FURTHER REFERENCE TO YOU AS THIS IS TIME BARRING ASSESSMENT. A FORMAL NOTICE U/S 142(1) IS ENCLOSED HEREWITH.' 4. THE APPELLANT COMPANY REPLIED TO THE SAID SHOW CAUS E NOTICE DATED 18/03/2005 VIDE LETTER DATED 22/03/2005 READING AS UNDER: SOME OF THE BILLS OF TRADING PURCHASES TO THE EXTEN T OF 271968 MTRS. WHICH WAS CONSUMED FOR MANUFACTURING PURPOSE WAS WRONGLY TAKE N IN TRADING ACCOUNT WAS CORRECTED BY TRANSFERRING 271968 MTRS VALUING R S. 7377700/- FROM TRADING ACCOUNT PURCHASE TO GREY PURCHASE ACCOUNT. LIST OF SUCH BILLS ARE FILED. HOWEVER TRANSFER WAS MADE IN QUANTITY ACCOUNT BUT I N PRESENTATION EFFECT OF SUCH TRANSFER IN VALUE WAS NOT GIVEN. BUT IT WOULD NOT HAVE ANY EFFECT ON FINANCIAL RESULTS I.E. ON PROFIT/ LOSS ACCOUNT. IF YOU REFER SCHEDULE 'K' OF THE AUDITED ACCOUNTS, IF THE EFFECT WOULD HAVE BEEN GIV EN IN VALUE, THE RAW MATERIAL CONSUMPTION WOULD HAVE BEEN RS. 1869013621- + RS. 7 377700 = RS. ITA NO. 2826 /AHD/2013 . A.Y. 2002-0 3 4 194279062/- AND TRADING PURCHASES WOULD IN SCHEDULE 'L' WOULD BE REDUCED BY RS. 7377700/- I.E. TRADING PURCHASES WOULD . HAV E BEEN RS. 11139595/- - RS. 7377700/- = RS. 3761895/-. HENCE YOUR HONOUR WO ULD APPRECIATE THAT THERE IS NO IMPACT ON PROFIT & LOSS ACCOUNT. SIMILA RLY SOME OF THE SALES BILLS OF MANUFACTURING WERE POSTED IN TRADING SALES. HENCE C ORRECTING ENTRY IS PASSED IN TRANSFERRING 544173 MTRS VALUING RS. 14074249/-. IN SALES BOTH TRADING SALES AND MANUFACTURING SALES ARE PRESENTED IN A CONSOLID ATED FIGURE. HENCE SUCH DISCREPANCY IS NOT MANIFESTED. LIST OF SUCH 544173 MTRS VALUING RS. 14074249/- IS FILED. PLEASE NOTE THAT TRANSFER OF PURCHASE MTR S OF TRADING AND SALES MTRS OF TRADING HAS NO RELEVANCE. WE HOPE THE ABOVE RECONCILIATION WILL MEET WITH YOU R REQUIREMENT. 5. HOWEVER WITHOUT APPRECIATING THE SUBSTANCE OF THE R EPLY DATED 22/03/2005 THAT EVEN IF THE VALUE OF RS. 7377700/- IS NOT TRAN SFERRED FROM TRADING ACCOUNT TO MANUFACTURING ACCOUNT THERE WOULD NOT HAVE ANY E FFECT ON FINANCIAL RESULTS I.E. ON PROFIT AND LOSS ACCOUNT, HE REDUCED THE LOS S BY RS. 7377700/-. EVEN IF THE EFFECT HAVE BEEN GIVEN SCHEDULE 'K' OF THE AUDI TED ACCOUNTS RAW MATERIAL CONSUMPTION WOULD HAVE BEEN RS. 1869013627- + RS. 7 377700A AGGREGATING RS. 194279062/-AND TRADING PURCHASE IN SCHEDULE 'L' WOULD BE REDUCED BY RS. 7377700/- I.E. TRADING PURCHASE WOULD HAVE BEEN RS. 11139595 - RS. 7377700/- = RS. 3761895/-. HENCE IT WOULD BE REVENU E NEUTRAL. 6. THE ADDITION WAS MADE MERELY ON THE GROUND THAT THE AUDIT REPORT DOES NOT MENTION OF SUCH TRANSFER OF RS. 271968 MTRS OF CLOT H VALUING RS. 7377700/- AND FURTHER THE ASSESSEE HAS NOT PRODUCED THE RELEV ANT BILLS/ CONCRETE EVIDENCE/ DOCUMENTS/ PROOF OF PASSING TRANSFER ENTR IES OF SUCH GOODS. AS A MATTER OF FACT LIST WITH BILL NUMBERS DATE AND AMOU NT WAS PRODUCED. ITA NO. 2826 /AHD/2013 . A.Y. 2002-0 3 5 7. THE ASSESSING OFFICER DID NOT REALIZE THAT IF THE E NTRIES OF 271968 MTRS VALUING RS. 7377700/- WOULD HAVE BEEN PASSED THE QUESTION W OULD NOT HAVE ARISEN OF SUCH BONAFIDE MISTAKES. HOWEVER SAME WAS EXPLAINED IN COURSE OF ASSESSMENT PROCEEDINGS U/S 143(3). 8. THE ASSESSING OFFICER OUGHT TO HAVE GIVEN SUBSTANCE OF SUCH ADDITIONS BY POINTING OUT ANY SOURCE OF GENERATION OF INCOME IN A EXCIABLE GOODS. 9. THE APPELLANT FILED APPEAL BEFORE COMMISSIONER OF I NCOME TAX (APPEAL) XI ON SAID ADDITIONS OF RS. 7377700/- ON THE GROUNDS THAT NON TRANSFER OF ENTRIES IN RESPECT OF 271968 MTRS IN VALUE WOULD BE REVENUE NE UTRAL AND IT WOULD NOT EFFECT PROFIT AND LOSS ACCOUNT AS EVEN IF THE ENTRI ES WOULD HAVE BEEN PASSED BY RS. 7377700/- THE VALUE OF RAW MATERIAL CONSUMPTION WOULD HAVE INCREASED IN SCHEDULE 'K' OF THE AUDITED ACCOUNTS AND THE VALUE OF TRADING PURCHASED IN SCHEDULE 'L' WOULD HAVE BEEN REDUCED BY RS. 7377700 /-. 10. THE LEARNED CIT (APPEALS) XI WHILE ADJUDICATING THE APPEAL OF THE APPELLANT APPRECIATED THE GROUNDS OF APPEAL NO 5 VIDE PARA 3. 1.5 OF HIS ORDER DATED 09/11/2005 IN APPEAL NO. CIT (A) XI / 2005-06 BY WH ICH APPELLANT ESTABLISHED THAT WHAT IS STATED AGAINST 152911 MTRS AT RS. 11139595/- IN AUDIT REPORT IS MERELY A MISTAKE AND GAVE HIS FINDING IN PARA 3.2 AS UNDER: 'I HAVE PERUSED THE SUBMISSIONS AND DETAILS PRODUCE D BEFORE ME BY THE A.R. OF THE APPELLANT. I HAVE ALSO PERUSED THE OBSERVATIONS OF THE ASSESSING OFFICER IN THE ASSESSMENT ORDER. AFTER VERIFYING THE TRADING A CCOUNT AND P & L A/C. I ARN OF THE VIEW THAT THE VALUE OF THE GREY CLOTH PURCHA SED IS VERY MUCH IN STOCK OF RS. 11646747/- WHICH IS RAW MATERIAL. HOWEVER, IT I S VERY MUCH IN SCHEDULE 'K' IN PURCHASE OF FINISHED GOODS. IT IS ALSO SEEN THAT BECAUSE OF ABOVE ITA NO. 2826 /AHD/2013 . A.Y. 2002-0 3 6 MISTAKE, THERE IS NO IMPACT ON PROFIT & LOSS ACCOUN T. THEREFORE, THE ADDITION MADE IS DELETED.' 11. THE DEPARTMENT FILED APPEAL BEFORE INCOME TAX APPEL LATE TRIBUNAL AGAINST THE ORDER OF CIT (APPEALS) XL'S ORDER DATED 09/11/2005 IN APPEAL NO. CIT (A) XI/ 737 2005-06 ON FOLLOWING GROUNDS' 'LD CIT (A) XI AHMEDABAD HAS ERRED IN LAW AND ON FA CTS IN DELETING ADDITION OF RS. 7377700/- BEING MADE BY THE A.O. ON ACCOUNT OF CLOSING STOCK' 12. HON'BLE AHMEDABAD BENCH 'D' OF INCOME TAX APPELLATE TRIBUNAL IN APPEAL NO. ITA269/AHD/2006 ADJUDICATED THE APPEAL OF THE R EVENUE ON 20/11/2009 NARRATING THE CONTENTS OF THE ORDER OF A SSESSING OFFICER CIRCLE-5 DATED 22/03/2005 AND HELD VIDE PARA 11 AS UNDER: HAVING HEARD BOTH THE SIDES, WE HAVE CAREFULLY GONE THROUGH THE ORDERS OF AUTHORITIES BELOW AND THE RELEVANT MATERIAL PLACED ON RECORD, IT IS PERTINENT TO NOTE THAT THE BILLS AND VOUCHERS WHICH THE A.O. IS STATED IN THE ASSESSMENT ORDER WERE NOT EXAMINED BY THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS), IT IS ALSO NOT KNOWN WHETHER BEFORE THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) THE 'ASSESSEE HAS PRODUCED COP IES OF ACCOUNTS SHOWING TRANSFER ENTRIES OF THE GOODS SO THAT ONE EXAMINE W HETHER IT WAS A CASE OF BONAFIDE MISTAKE. KEEPING IN VIEW THE FACTS AND CIR CUMSTANCES OF THE CASE. WE FOUND CONSIDERABLE FORCE IN THE SUBMISSION MADE BY THE ID. D.R. THAT THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) OUGHT TO HAVE CALLED THE REMAND REPORT BEFORE ADJUDICATING THE ADDITION OF R S. 7377700/-. SINCE THIS WAS NOT DONE, WE SET ASIDE THE ORDER OF LEARNED COM MISSIONER OF INCOME TAX (APPEALS) AND RESTORE THE MATTER TO THE FILE OF A.O . WITH THE DIRECTION THAT THE ASSESSEE SHOULD FURNISH RELEVANT BILLS/ VOUCHERS IN RESPECT OF LIST, WHICH WERE ITA NO. 2826 /AHD/2013 . A.Y. 2002-0 3 7 NOT FURNISHED BEFORE THE A.O. THE ASSESSEE IS ALSO DIRECTED TO FURNISH THE COPIES OF ACCOUNTS SHOWING THE TRANSFER ENTRIES AND ALSO A CERTIFICATE FROM THE CONCERNED CHARTERED ACCOUNTANT, WHO HAD AUDITED THE ACCOUNTS, CERTIFYING THAT THIS BONAFIDE MISTAKE WHICH WAS CREPT IN THE BOOKS OF 'ACCOUNTS, AND HOW THIS MISTAKE COULD NOT BE DETECTED WHILE CONDUCTING THE AUDIT / TAX AUDIT OF THE ASSESSEE'S ACCOUNTS. ON RECEIPT OF THESE DOCUMENTS, THE A.O. WILL RE-ADJUDICATE THE ADDITION OF RS. 7377700/- AFRESH IN ACCORDANCE WITH LAW. 13. IN ORDER TO GIVE EFFECT TO ITAT'S DIRECTION AS ABOV E THE THE DEPUTY COMMISSIONER OF INCOME-TAX, CIRCLE 5 ISSUED TO NOTI CE VIDE LETTER NO. DCIT/ CIR-5/142 (1) NMM/10-11 DATED 12/10/2010 TO FURNISH FOLLOWING INFORMATION / DETAILS/ DOCUMENTS SO AS TO COMPLETE SET- ASIDE A SSESSMENT FOR THE ASST. YEAR 2002-03:] 1. FURNISH ALL THE BILLS VOUCHERS AND COPIES OF ACCOUNTS SHOWING TRANSFERRED ENTRIES AND A CERTIFICATE FROM THE CHARTERED ACCOUN TANT, AS REFERRED TO IN PARA 11 OF THE AFORESAID APPELLATE ORDER OF HON'BLE ITAT . 14. ACCORDINGLY THE APPELLANT FILED THE FOLLOWING BEFOR E DCIT CIRCLE-5, AHMEDABAD 1. THE ORIGINAL BILLS AS PER LIST SHOWING QUA NTITY OF 271968 MTRS VALUING RS. 7377700/- WHICH WERE VERIFIED BY DCIT WITH THE LIST 2. COPIES OF ACCOUNTS SHOWING TRANSFER ENTRI ES IN QUANTITY BOTH IN TRADING ACCOUNT AND GREY PURCHASE ACCOUNT WAS ALSO FILED BE FORE DCIT SHOWING THAT QUANTITY OF 271968 MTRS WAS REDUCED FROM TRADI NG ACCOUNT ('F' PURCHASE) DURING THE YEAR 2001-02 AND SAME WAS ADDE D IN GREY PURCHASE DURING THE YEAR 2001-02 ITA NO. 2826 /AHD/2013 . A.Y. 2002-0 3 8 3. TOTAL QUANTITY ACCOUNT OF CLOTH IN MTRS WA S ALSO FILED AND SAME WAS SHOWN TALLIED AS SHOWN IN AUDIT REPORT IN SCHEDULE 'P' FOR F.Y. 2001-02 4. A CERTIFICATE FROM CONCERNED CHARTERED ACCOUNTANT WHO AUDITED THE ACCOUNTS, CERTIFYING THAT THIS BONAFIDE MISTAKE WHI CH WAS CREPT IN THE BOOKS OF ACCOUNTS AND HOW THIS MISTAKE COULD NOT BE DETECTED WHILE CONDUCTING THE AUDIT/ TAX AUDIT OF THE ASSESSEE'S ACCOUNTS. ON REC EIPT OF THE ABOVE THE A.O. WAS DIRECTED TO RE-ADJUDICATE THE ADDITIONS OF RS. 7377700/- AFRESH IN ACCORDANCE WITH LAW. 15. HOWEVER, DESPITE FURNISHING THE DETAILS AS DIRECTED BY HON'BLE ITAT BENCH 'D' THE LEARNED DCIT, CIRCLE-5 REDUCED THE LOSS OF RS. 7377700/- FROM THE LOSS RETURNED BY THE ASSESSEE AT RS. 1,85,06,246/- WITHOUT APPRECIATING THE FOLLOWING FACTS ON RECORD MENTIONED IN THE ORDER OF CIT (APPEALS) XVI DATED 09/11/2005 COPY FILED VIDE ANNEXURE. I. PARA TOTAL QUANTITY RS. RATE P ER MTRS. RS. 3.1.5 PURCHASED ON TRADING A/C IN MTR TOTAL QUANTITY 424879 MTRS RS. 1113959 5 RS. 26.22 OF GREY CLOTH IN TRADING A/C LESS: TRANSFERRED TO MFG A/C ENTRY PASSED IN QUANTITY BUT NOT IN VALUE 271968 MTRS. RS. 73777000 RS. 27.12 BALANCE LEFT IN 152911 MTRS. RS. 3761895 RS. 24.60 TRADING A/C IN ACCOUNTS ONLY GROSS VALUE SHOWN BUT IN QUANTITY NET VALUE SHOWN 152911 MTRS. RS. 11139595/- RS/72.98 PER (X) WHICH IS IMPOSSIBLE AS GREY CLOTH CANNOT BE OF RS. 72.98 PER MTRS. TOTAL QUANTITY MTRS RS. RS. SOLD ON TRADING A/C 699084 18019313 25.77 P ER MTR ITA NO. 2826 /AHD/2013 . A.Y. 2002-0 3 9 SOLD 152911 3945064 25.79 PER MTR TRANSFERRED TO MFG 54417 14074249 25.86 PER MTR SALES 3.1.6. ULTIMATLY THERE IS NO IMPACT ON P& L A/C. IT IS ALSO POINTED OUT THAT THE CLOTH RATE WAS ARRIVED AT RS. 72.98 WAS WRONG. THE QUANTITY OF CLOTH OF 271968, IF INCLUDED TO 152911 MTRS THE VALUE PER METRE WOUL D BE RS. 26.22 PS. 3.2 'I HAVE PERUSED THE SUBMISSION AND THE DETA ILS PRODUCED BEFORE ME BY THE A.R. OF THE APPELLANT. I HAVE ALSO PERUSED THE OBSERVATIONS OF THE ASSESSING OFFICER IN THE ASSESSMENT ORDER. AFTER VERIFYING TH E TRADING ACCOUNT AND P & L A/C. I AM OF THE VIEW THAT THE VALUE OF THE GREY C LOTH PURCHASED IS VERY MUCH IN STOCK OF RS. 11646747/- INSTEAD OF PURCHASES. TH E CLOTH VALUE OF RS. 73777001- SHOULD HAVE BEEN ADDED TO RS. 185542976/- WHICH IS RAW MATERIAL. HOWEVER, IT IS VERY MUCH IN SCHEDULE 'K' IN FINISHE D GOODS. IT IS ALSO SEEN THAT BECAUSE OF ABOVE MISTAKE, THERE IS NO IMPACT ON PRO FIT & LOSS ACCOUNT. BUT LD. A.O. WAS NOT AGREED WITH THE CONTENTION OF THE ASSE SSEE AND MADE ADDITION OF RS. 73,77,700/- ON ACCOUNT OF VARIATION IN PURCHASE OF CLOTH. 16. AGAINST THE SAID ORDER, ASSESSEE PREFERRED FIRST ST ATUTORY APPEAL BEFORE THE LD. CIT(A) AND LD. CIT(A) GRANTED RELIEF TO THE APPELLA NT. 17. NOW REVENUE HAS COME BEFORE US AGAINST THE ORDER OF LD. CIT(A). 18. WE HAVE GONE THROUGH THE RELEVANT RECORD AND IMPUGN ED ORDER. IN THIS CASE, DURING THE CURRENT YEAR THE APPELLANT HAD TRANSFERR ED THE STOCK OF 271968 MTR OF GREY CLOTH FROM TRADING ACCOUNT TO MANUFACTURING ACCOUNT OF RAW MATERIALS FOR CONSUMPTION. THE MISTAKE THAT HAS OCCURRED IS T HAT WHILE TRANSFERRING THE GREY CLOTH FROM TRADING PURCHASE ACCOUNT TO RAW MAT ERIALS CONSUMPTION ACCOUNT, THE VALUE IN MONETARY TERMS WAS NOT TRANSF ERRED. IN EFFECT THE RAW ITA NO. 2826 /AHD/2013 . A.Y. 2002-0 3 10 MATERIALS FOR REAL CONSUMPTION ACCOUNT WAS UNDERSTA TED IN MONETARY TERMS BY A FIGURE OF RS. 73,77,7007-WHEREAS THE PURCHASE OF FI NISHED GOODS, WHILE CORRECT QUANTITATIVELY, WAS OVERSTATED IN MONETARY TERMS BY AN AMOUNT OF RS.73,77,700/-. THE RAW MATERIAL CONSUMPTION PURCHA SES HAVE BEEN GROUPED UNDER SCHEDULE K AND THE PURCHASE OF FINISHED GOODS UNDER TRADING PURCHASES HAVE BEEN GROUPED UNDER SCHEDULE L. BOTH THESE SCHE DULES FIND PLACE ON THE DEBIT SIDE OF THE PROFIT AND LOSS ACCOUNT. THEREFOR E, OVERSTATING ONE SCHEDULE BY CERTAIN AMOUNT AND UNDERSTATING ANOTHER SCHEDULE BY THE MATCHING AMOUNT WILL NOT ALTER THE FIGURE OF TOTAL EXPENSES CLAIMED OR DEBITED IN THE PROFIT AND LOSS ACCOUNT. IT IS NOT THE CASE OF THE ASSESSING O FFICER THAT THE PURCHASES BOOKED BY THE APPELLANT UNDER TRADING PURCHASE ARE BOGUS OR THAT THE RAW MATERIAL CONSUMPTION FOR MANUFACTURING IS EXCESSIVE WHEN CONSIDERED QUANTITATIVELY. 19. THE MISTAKE OF TRANSFERRING THE QUANTITY FROM PURCH ASE TO CONSUMPTION WITHOUT GIVING A MATCHING EFFECT IN MONETARY TERMS IS A BONA FIDE MISTAKE. SINCE INCREASE IN TRADING PURCHASES AND THE REDUCTI ON IN AMOUNT OF RAW MATERIALS CONSUMPTION IS OCCURRING ON THE DEBIT SID E OF THE PROFIT AND LOSS ACCOUNT THEREFORE IT DOES NOT HAVE ANY CASCADING EF FECT ON THE OVERALL EXPENSES CLAIMED OR DEBITED IN PROFIT AND LOSS ACCOUNT AND T HEREFORE THIS MISTAKE, IN OUR CONSIDERED OPINION, IS A BONA FIDE AND THERE IS NO LOSS TO THE REVENUE. 20. IN A CASE, IF ANY BONA FIDE MISTAKE IS BEING COMMIT TED BY AN ASSESSEE AND THERE IS NO LOSS TO THE REVENUE . IN THAT CASE, IN OUR CO NSIDERED OPINION, ADDITION CANNOT BE MADE. THEREFORE, WE HOLD THAT LD. CIT(A) HAS PASSED REASONED AND DETAILED ORDER AND IT DOES NOT REQUIRE ANY KIND OF INTERFERENCE AT OUR END. THEREFORE, APPEAL OF THE REVENUE IS DISMISSED. ITA NO. 2826 /AHD/2013 . A.Y. 2002-0 3 11 21. IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS D ISMISSED. ORDER PRONOUNCED IN OPEN COURT ON 24- 04- 2019 SD/- SD/- (PRADIP KUMAR KEDIA) (MAHAVIR PRASAD) ACCOUNTANT MEMBER TRUE COPY JUDICIAL MEMBER AHMEDABAD: DATED 24/04/2019 RAJESH COPY OF THE ORDER FORWARDED TO: - 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT (APPEALS) 4. THE CIT CONCERNED. 5. THE DR., ITAT, AHMEDABAD. 6. GUARD FILE. BY ORDER DEPUTY/ASSTT.REGISTRAR ITAT,AHME DABAD