ITO, SRIGANGANAGAR V. M/s. Narayan Dal & Oil Mill, SADULSHAHAR

ITA 351/JODH/2011

• Counselvise Citation: [2012] 119 COUNSELVISE.COM (IT) 7978 (ITAT-JODHPUR)
• Duration Of Justice: 1 year(s) 2 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-12-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 22-11-2012
• Assessment Year: 2008-2009
• Appeal Filed On: 14-10-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: G R KOKANI
• Assessee Lawyers: R N JANGID
• Section: 145

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL JODHPUR BENCH, JODHPUR BEFORE SHRI HARI OM MARATHA, JUDICIAL MEMBER AND SHRI N.K.SAINI, ACCOUNTANT MEMBER ITA NO. 351/JU/2011 [ASSESSMENT YEAR - 2008-09] THE I.T.O. VS M/S NARAYAN DAL & OIL MILL WARD 2 25 A, UDHYOG VIHAR SRIGANGANAGAR SADULSHAHAR PAN NO. AAAFN 3915 B (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI R.N. JANGID DEPARTMENT BY : SHRI G.R. KOKANI DATE OF HEARING : 22.11.2012 DATE OF PRONOUNCEMENT : 18.12.2012 ORDER PER HARI OM MARATHA, J.M. THIS APPEAL OF THE ASSESSEE FOR ASSESSMENT YEAR 200 8-09 IS DIRECTED AGAINST THE ORDER OF THE LD. CIT(A), BI KANER DATED 26.8.2011. 2 2. FIRST GROUND RAISED IN THIS APPEAL BY THE REVENU E IS WITH REGARD T THE DELETION OF ADDITION OF RS. 26,01,459/ -. 3. THE FACTS APROPOS OF THIS GROUND ARE THAT THE AS SESSEE CONTINUED ITS BUSINESS OF PRODUCING OIL AND JOB WOR K. ON EXAMINATION OF GINNING ACCOUNT OF SARSON [MUSTARD A CCOUNT] IT WAS NOTICED THAT THE ASSESSEE HAS SHOWN YIELD OF OIL AT 32.30%, KHAL AT 66.2% AND SHORTAGE AT 1.4%. HE HAS COMPARED ASSESSEES CASE WITH A SIMILAR CASE OF M/S KADWASARA UDHYOG WHO HAS SHOWN OIL YIELD AT 35.6%, KHAL AT 64.4% AND SHORTAGE AT NIL%. AS AGAINST WHICH, THE ASSESSEE HAS CITED THE EXAMPLES OF OTHER SIMILAR ASSESSEES W HICH ARE AS UNDER: AGGARWAL INDUSTRY, SGNR 32.48% 66.60% 0.92% KRISHANA EDIBLE, SGNR 31.29% 67.66% 1.05% SUN AGRO ENTERPRISES,SANGRIA, 31.38% 66.32% 2.31% 3 4. THE ASSESSEE FURTHER SUPPORTED ITS CLAIM FROM TH E YIELD PRESCRIBED BY THE NAFED, FOR WHOM THE ASSESSEE HAD DONE JOB-WORK. THIS PRESCRIPTION IS STATED TO BE AS UND ER: 1 ST CONTRACT 31.83% 65.76% 2.41% 2 ND CONTRACT 31.51% 66.23% 2.26% 3 RD CONTRACT 32.16% 64.15% 2.31% BUT, STILL, THE A.O. COMPARED THE RESULT OF THE ASS ESSEE WITH M/S KADWASARA UDHYOG AND EVEN WITHOUT REJECTING THE BOOKS OF ACCOUNT, HAS MADE THE IMPUGNED ADDITION ON ACCOU NT OF LESS OIL YIELD, BY RS. 26,01,459/-. AS AGAINST WHI CH THE LD. CIT(A) HAS FOUND THE YIELD OF OIL WITH REFERENCE TO THE CASES RELIED ON BY IT AND HAS DELETED THE ENTIRE ADDITION . BEFORE US, IT WAS ARGUED BY THE LD. A.R., IN SUPPORT OF TH E IMPUGNED DELETION THAT, ON LEGAL GROUND, ALSO THIS ADDITION IS UNCALLED FOR. THE LD. D.R. HAS SUPPORTED THE ORDER OF THE A .O. 4 5. WE HAVE HEARD THE RIVAL SUBMISSIONS AND HAVE CAR EFULLY PERUSED THE ENTIRE MATERIAL ON RECORD. FROM THE AS SESSMENT ORDER, IT IS FOUND THAT THE A.O. HAD MADE THIS TRAD ING ADDITION DESPITE THE FACT THAT NO DEFECT, MUCH LESS ANY MATERIAL DEFECT WAS POINTED OUT BY HIM IN THE BOOKS OF ACCOUNT OF THE ASSESSEE. THE TRADING ADDITION HAS BEEN MADE WITHOUT REJECTING THE BOOKS OF ACCOUNT. THE LD. CI T(A) WAS ANNOYED ON THIS COURSE ADOPTED BY THE A.O, BUT ON F ACTS, HE HAS FOUND THE YIELD OF OIL TO BE COMPARABLE WITH TH E RESULT OF OTHER ENTITIES ON WHICH THE ASSESSEE HAS RELIED. B UT BY FOLLOWING THE DECISIONS OF THE TRIBUNAL IN THE CASE OF PRADEEP KUMAR VS. ITO 27 TW 393 AND THAT OF RAJ TUBE MANUFA CTURING WORKS VS. DCIT 29 TW 272, IN WHICH IT HAS BEEN HELD THAT TRADING ADDITION CANNOT BE MADE WITHOUT REJECTING T HE BOOKS OF ACCOUNT, THE LD. CIT(A) HAS DELETED THE IMPUGNED TRADING ADDITION. WE ARE ALSO OF SAME VIEW AND HAVE FOUND THAT BOOKS OF ACCOUNT WERE NOT REJECTED BY THE A.O. WITH OUT REJECTING THE BOOKS OF ACCOUNT THE A.O. HAS MADE TR ADING ADDITION. THIS ACTION IS NOT PERMITTED IN LAW. EST IMATION OF INCOME CAN BE MADE U/S 145 ONLY AFTER REJECTING THE BOOKS OF 5 ACCOUNT. ACCORDINGLY, WE UPHOLD THE DELETION MADE B Y THE LD. CIT(A) AND DISMISS GROUND NO. 1. 4. SECOND ISSUE IS REGARDING DELETION OF ADDITION O F RS. 5,42,764/- MADE BY THE A.O. ON ACCOUNT OF IGNORING THE VALUE OF EXCESS KHAL. FACTS OF THIS ISSUE ARE THAT THE A .O., ON EXAMINATION OF BOOKS OF ACCOUNT OF NAFED, HAS FOUND THAT THE ASSESSEE HAD RAISED A DEBIT-NOTE OF RS. 31,33,6 10/- BUT THIS AMOUNT WAS NOT CREDITED TO ITS INCOME. ACCORD ING TO THE ASSESSEE, THIS DEBIT NOTE WAS RAISED AS PER THE AGR EEMENT ENTERED INTO BY THE ASSESSEE WITH NAFED. IT WAS EX PLAINED THAT AS PER THE TERMS OF THE SAID AGREEMENT, THE AS SESSEE WAS NOT ELIGIBLE TO RECEIVE THE CREDIT FOR EXCESS K HAL. THE ASSESSEE ALSO RELIED ON THE DECISION OF THE HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF MADIRA KRA Y VIKRAY SANGH VS. CIT REPORTED IN 203 ITR 530. HOWEVER, TH E A.O. DID NOT ACCEPT THE SAID EXPLANATION OF THE ASSESSEE ON THE GROUND THAT THE ASSESSEE HAD CLAIMED LESSER YIELD O F OIL IN ITS BOOKS OF ACCOUNT BUT THE EXCESS KHAL REFLECTED IN T HE ACCOUNT 6 OF NAFED WAS NOT OFFERED FOR TAXATION. THE LD. CIT (A) HAS DELETED THIS ADDITION. 5. AFTER CONSIDERING THE RIVAL SUBMISSIONS, WE HAVE FOUND THAT THE ACTION OF THE A.O. IS NOT CORRECT AS CONSO LIDATED RESULT, AT THE END OF THE YEAR HAS TO BE SEEN AND N OT THE LOT - WISE YIELD. IN THE CONSOLIDATED RESULT, NO CREDIT NOTE HAS BEEN GIVEN BY NAFED TO THE ASSESSEE. IN THE ABSENC E OF THE SAME, THE ADDITION MADE BY THE A.O. CANNOT BE SUSTA INED. ACCORDINGLY, WE DISMISS THE SECOND GROUND RAISED BY THE REVENUE. 6. IN THE RESULT, THE APPEAL FILED BY THE REVENUE S TANDS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 18 TH DECEMBER, 2012. SD/- SD/- (N.K.SAINI) [HARI OM MARATHA] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 18 TH DECEMBER , 2012 VL/- 7 COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) BY ORDER 5. THE DR ASSISTANT REGISTRAR ITAT, JODHPUR