M/s Vishwakarma Ispat Ltd., Ludhiana V. ACIT, Ludhiana

ITA 365/CHANDI/2014

• Counselvise Citation: 36521514 RSA 2014
• Duration Of Justice: 1 year(s) 7 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-12-2015
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 26-11-2015
• Assessment Year: 2003-2004
• Appeal Filed On: 07-04-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: MANJIT SINGH
• Assessee Lawyers: ASHWANI KUMAR
• Keywords: Reason to believe
• Section: 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH,CHANDIGARH BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND MS.RANO JAIN, ACCOUNTANT MEMBER ITA NO. 364 & 365/CHD/2014 A.Y.: 2002-03 & 2003-04 M/S VISHWAKARMA ISPAT LTD., VS THE ACIT, (NOW NAVDEEP ISPAT P.LTD.) CIRCLE IV, VILLAGE KANGANWAL LUDHIANA. LUDHIANA. PAN: AAAFV7579F (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI ASHWANI KUMAR RESPONDENT BY : SHRI MANJIT SINGH DATE OF HEARING : 26.11.2015 DATE OF PRONOUNCEMENT : 01.12.2015 O R D E R PER BHAVNESH SAINI,JM BOTH THE APPEALS BY ASSESSEE ARE DIRECTED AGAINST THE ORDER OF LD. CIT(APPEALS)-II LUDHIANA DATED 21.01.2014 FOR ASSESSMENT YEAR 2002-03 AND 2003-04. 2. WE HAVE HEARD LD. REPRESENTATIVES OF BOTH THE PARTIES, PERUSED THE FINDINGS OF AUTHORITIES BELOW AND CONSIDERED THE MATERIAL AVAILABLE ON RECORD. 2 3. IN BOTH THE APPEALS, LD. COUNSEL FOR THE ASSESSE E DID NOT PRESS GROUND NO. 1, CHALLENGING THE RE-OPENING OF THE ASSESSMENT UNDER SECTION 148 OF THE INCOME TAX ACT. ACCORDINGLY, GROUND NO. 1 IN BOTH THE APPEALS IS DI SMISSED AS NOT PRESSED. 4. THE REMAINING GROUNDS ARE DISPOSED OFF AS UNDER. 5. IN ASSESSMENT YEAR 2002-03, ASSESSEE CHALLENGED THE ADDITION OF RS. 94,02,712/- ON ACCOUNT OF EXCESS CONSUMPTION OF INGOTS (RAW MATERIAL) SHOWN IN THE T RADING ACCOUNT FILED WITH THE INCOME TAX DEPARTMENT AS COMPARED TO THE TRADING ACCOUNT FILED WITH THE EXCI SE DEPARTMENT. 6. BRIEFLY THE FACTS OF THE CASE ARE THAT THE ASSES SEE FILED ORIGINAL RETURN OF INCOME DECLARING INCOME OF RS. 49,412/-. THE RETURN WAS PROCESSED UNDER SECTION 1 43(1) OF THE ACT. SUBSEQUENTLY, THE INFORMATION WAS RECE IVED FROM THE EXCISE DEPARTMENT, LUDHIANA THROUGH ADDITI ONAL DIRECTOR OF INCOME TAX (INVESTIGATION) LUDHIANA. ACCORDINGLY, NOTICE UNDER SECTION 148 WAS ISSUED TO THE ASSESSEE AFTER RECORDING REASON WHICH IS REPRODUCED IN THE ASSESSMENT ORDER. THE ASSESSING OFFICER IN THE REA SONS BRIEFLY NOTED THAT INFORMATION WAS RECEIVED FROM TH E EXCISE DEPARTMENT, LUDHIANA FROM WHICH IT WAS NOTIC ED THAT DURING THE ACCOUNTING PERIOD 01.04.2001 TO 31.03.2002 RELEVANT TO THE ASSESSMENT YEAR UNDER AP PEAL I.E. 2002-03, ASSESSEE COMPANY HAS SHOWN SALES TO T HE 3 EXCISE DEPARTMENT TO THE EXTENT OF RS. 15,76,50,912 /- WHEREAS SALES REFLECTED IN THE RETURN OF INCOME FIL ED WITH THE INCOME TAX DEPARTMENT FOR ASSESSMENT YEAR 2002- 03 WAS AT RS. 24,80,48,877/-. AGAINST THE SALES SHOWN TO THE EXCISE DEPARTMENT, CONSUMPTION OF INGOTS HAVE BEEN SHOWN AT RS. 14,31,49,316/- WHEREAS CONSUMPTION OF INGOTS REFLECTED IN THE PROFIT & LOSS ACCOUNT ATTAC HED WITH THE RETURN OF INCOME FILED WITH THE INCOME TAX DEPA RTMENT FOR THE ASSESSMENT YEAR UNDER APPEAL WAS RS. 23,46,31,092/-. THE PERCENTAGE OF CONSUMPTION OF IN GOTS WHICH IS USED AS MAIN MATERIAL, OVER THE SALES SHOW N TO THE EXCISE DEPARTMENT COMES TO 90.8% WHEREAS THE CONSUMPTION OF INGOTS OVER THE SALES SHOWN IN THE R ELEVANT YEAR TO THE INCOME TAX DEPARTMENT REFERRED TO ABOVE COMES TO 90.8%. THE ASSESSEE HAS SHOWN EXCESS CONSUMPTION OF INGOTS VIS--VIS THE CONSUMPTION OF INGOTS REFLECTED TO THE EXCISE DEPARTMENT. AS THE UNIT IS EXCISABLE UNIT AND EXCISE DEPARTMENT LOOKS AFTER TH E PRODUCTION VIS--VIS CONSUMPTION PERIODICALLY, WITH A VIEW TO WATCH THE PAYMENT OF EXCISE DUTY. QUANTITY OF CONSUMPTION OF INGOTS SHOWN IN THE BALANCE SHEET FI LED WITH THE EXCISE DEPARTMENT IS ADOPTED AS CORRECT FI GURE OF CONSUMPTION OF RAW MATERIAL. ACCORDINGLY, THE SAME WAS ADOPTED ON PRO-RATA BASIS TO FIND OUT CONSUMPTION O F INGOTS IN TURN OF ITS VALUE AGAINST THE SALES REFLE CTED IN THE PROFIT & LOSS ACCOUNT FILED WITH THE RETURN OF INCOME. BY ADOPTING CONSUMPTION OF INGOTS AT 90.8% AGAINST THE SALES OF RS. 24.80 CR, THE CONSUMPTION OF INGOTS CO MES TO 4 RS. 22.52 CR AGAINST RS. 23.46 CR SHOWN IN THE INCO ME TAX RETURN. THE EXCESS CONSUMPTION OF INGOTS ( RAW MATERIAL) THUS COMES TO RS. 94,02,712/-. THE ASSES SING OFFICER, THEREFORE, HAD A REASON TO BELIEVE THAT IN COME TAX CHARGEABLE TO TAX TO THAT EXTENT HAS ESCAPED ASSESS MENT. THE STATUTORY NOTICES WERE ISSUED TO THE ASSESSEE A ND THE ASSESSEE FILED REPLY BEFORE ASSESSING OFFICER EXPLA INING THEREIN THAT ALL THE RECORDS ARE LYING WITH THE EXC ISE DEPARTMENT INCLUDING BOOKS OF ACCOUNT, THEREFORE, ASSESSEE WAS HANDICAPPED IN FILING REQUISITE REPLY. HOWEVER, IT WAS SUBMITTED THAT AS FAR AS THE DIFFER ENCE IN SALES AND PURCHASES AS REFLECTED IN THE AUDITED BAL ANCE SHEET FILED WITH THE INCOME TAX RETURN AND BALANCE SHEET FILED WITH THE EXCISE DEPARTMENT IS CONCERNED, IT M AY BE STATED THAT IN THE FIGURES COMMUNICATED TO THE EXCI SE DEPARTMENT, NON DUTY PAID PURCHASES AND SALES HAVE NOT BEEN REFLECTED AND THEREFORE, THERE IS A DIFFERENCE IN THE FIGURES. THIS FIGURE IS BECAUSE OF THE FACT THAT S UCH PURCHASES AND SALES ON WHICH NO DUTY IS PAYABLE HAV E NO RELEVANCE WITH THE EXCISE DEPARTMENT AND THEREFORE, THE FIGURE OF PURCHASES AND SALES ARE LESS. THEREFORE, ON THIS ACCOUNT, THERE IS A DIFFERENCE IN CONSUMPTION RATIO WHICH CANNOT BE APPLIED ON ACCOUNT OF THE ABOVESAID EXPLANATION. 7. THE ASSESSING OFFICER, HOWEVER, DID NOT ACCEPT EXPLANATION OF THE ASSESSEE AND NOTED THAT THE ACCO UNTS ARE AUDITED AND THERE IS A DIFFERENCE IN THE FIGURE S 5 SHOWN IN THE RETURN OF INCOME AND FIGURES REPORTED TO THE EXCISE DEPARTMENT, DETAILS OF WHICH ARE REPRODU CED IN THE ASSESSMENT ORDER, HOWEVER, THE PROFIT SHOWN TO BOTH AUTHORITIES IS SAME. THE ASSESSING OFFICER DI D NOT ACCEPT CONTENTION OF THE ASSESSEE BECAUSE FIGURES G IVEN TO BOTH AUTHORITIES ARE DIFFERENT AND ACCORDINGLY F OUND THAT EXCESS CONSUMPTION OF INGOTS ( RAW MATERIAL) T HUS, COMES TO RS. 94,02,712/- AS IS NOTED IN THE REASONS RECORDED FOR RE-OPENING OF THE ASSESSMENT AND MADE THE ADDITION TO THE EXTENT OF RS. 94,02,712/-, WHICH WA S FOUND TO BE SUPPRESSED PROFIT. FURTHER ADDITION OF RS. 3,14,990/- WAS MADE ON ACCOUNT OF HIGHER GP WHICH H AS BEEN DELETED BY THE LD. CIT(APPEALS), THEREFORE, D ETAIL OF THE SAME IS NOT CONSIDERED HERE. 8. THE ASSESSEE CHALLENGED THE ADDITION BEFORE LD. CIT(APPEALS), HOWEVER, LD. CIT(APPEALS) ON THE SAME REASONING AS GIVEN BY THE ASSESSING OFFICER, CONFIR MED THE ADDITION OF RS. 94,02,712/- ON ACCOUNT OF EXCES S CONSUMPTION OF INGOTS AND DISMISSED THIS GROUND OF APPEAL OF THE ASSESSEE. 9. THE LD. COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE AUTHORITIES BELOW AND REFER RED TO VARIOUS DOCUMENTS IN THE PAPER BOOK TO SHOW THAT THERE IS NO DIFFERENCE ACTUALLY REPORTED TO THE EXC ISE OR INCOME TAX DEPARTMENT. HE HAS FILED COPY OF THE COMPLETE AUDIT REPORT. HE HAS SUBMITTED THAT SEARC H WAS CONDUCTED IN THE CASE OF THE ASSESSEE IN APRIL, 2006. 6 PB-13 IS THE NOTICE ISSUED BY THE EXCISE DEPARTMENT ON THE MATTER IN ISSUE AND SPECIAL AUDIT UNDER EXCISE ACT WAS ALSO CONDUCTED WITH REGARD TO DIFFERENCE IN THE FIGURES REPORTED BUT NO ACTION HAVE BEEN TAKEN BY T HE EXCISE DEPARTMENT. NO ADDITIONAL DUTY HAVE BEEN IMPOSED BY EXCISE DEPARTMENT TILL DATE. THE BOOKS OF ACCOUNT HAVE BEEN IMPOUNDED BY THE EXCISE DEPARTMENT. PB-6 AND 8 ARE THE REPLIES FILED BEFOR E ASSESSING OFFICER TO EXPLAIN THAT THERE IS NO EFFEC T ON REVENUE OF THE ASSESSEE COMPANY BECAUSE PROFIT IS S AME AS PER DATA SUBMITTED TO THE EXCISE DEPARTMENT AND INCOME TAX DEPARTMENT. THE DIFFERENCE IS EXPLAINED DUE TO NOT COMMUNICATING TO THE EXCISE DEPARTMENT THE N ON DUTY PAID PURCHASES AND SALES. ALL THE FIGURES WER E EXPLAINED, ALL THE EXPENSES WERE ALSO EXPLAINED AND ULTIMATELY, THERE WERE NO DIFFERENCE BETWEEN THE PR OFIT REPORTED TO THE EXCISE DEPARTMENT AS WELL AS INCOME TAX DEPARTMENT. PB-9 IS EXPLANATION FILED BEFORE LD. CIT(APPEALS). HE HAS SUBMITTED THAT SINCE BOOKS OF ACCOUNT WERE IMPOUNDED BY EXCISE DEPARTMENT WHICH WERE NOT RETURNED TO THE ASSESSEE TILL DATE AND WHA TEVER DIFFERENCE WAS THERE, WAS EXPLAINED THROUGH SALE BI LL BOOK WHICH CLEARLY SHOWS THAT ASSESSEE HAS A TRADIN G UNIT AND CONSUMPTION WAS TOTALLY EXPLAINED. THE TRADING DETAILS WERE NOT INTIMATED TO THE EXCISE DEPARTMENT AS THESE WERE NOT CONCERNED TO THE EXCIS E DEPARTMENT OTHERWISE, THERE WERE NO DIFFERENCE FOUN D IN THE BOOKS OF ACCOUNT OF THE ASSESSEE. THE SALES AND 7 PURCHASES REPORTED TO THE INCOME TAX DEPARTMENT WER E HIGHER AS COMPARED TO THE SAME REPORTED TO THE EXCI SE DEPARTMENT IN WHICH NO DEFECTS HAVE BEEN POINTED OU T BY THE ASSESSING OFFICER. THE CONSUMPTION FIGURES EXPLAINED BY ASSESSEE HAVE NOT BEEN DOUBTED BY THE ASSESSING OFFICER. THE MANUFACTURING EXPENSES TO T HE INCOME TAX DEPARTMENT WERE LOWER AS REPORTED TO THE EXCISE DEPARTMENT. THE LD. COUNSEL FOR THE ASSESSE E, THEREFORE, SUBMITTED THAT THE ADDITION IS MADE WITH OUT ANY BASIS IN RESPECT OF EXCESS CONSUMPTION OF INGOT S. 10. ON THE OTHER HAND, LD. DR RELIED UPON ORDERS OF THE AUTHORITIES BELOW. 11. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD AND DO NOT FIND ANY JUSTIFICATION TO SUSTAIN THE ADDITION OF RS. 94,02, 712/- ON ACCOUNT OF EXCESS CONSUMPTION OF INGOTS ( RAW MATERIAL). THE ADIT (INVESTIGATION) LUDHIANA INTIMA TED THE ASSESSING OFFICER ABOUT INFORMATION RECEIVED FR OM EXCISE DEPARTMENT, LUDHIANA WITH REGARD TO DIFFEREN CE IN FIGURES REPORTED TO THE EXCISE DEPARTMENT AS WEL L AS INCOME TAX DEPARTMENT. THE ASSESSING OFFICER IN TH E REASONS RECORDED ON THE BASIS OF ALL SUCH INFORMATI ON FOUND THAT THE SALES TO THE EXCISE DEPARTMENT HAVE BEEN REPORTED TO THE EXTENT OF RS. 15.76 CR WHEREAS SALE S REPORTED TO THE INCOME TAX DEPARTMENT IN THE RETURN OF INCOME HAS BEEN RS. 24.80 CR. THE ASSESSING OFFICE R CONSIDERED THE CONSUMPTION OF INGOTS ON THE BASIS O F 8 THESE FIGURES AND FOUND THAT ASSESSEE HAS SHOWN EXC ESS CONSUMPTION OF INGOTS IN THE FIGURES REPORTED TO TH E INCOME TAX DEPARTMENT AS COMPARED TO THE FIGURES REPORTED TO THE EXCISE DEPARTMENT. IT IS, THEREFOR E, NOT IN DISPUTE THAT THE PROCEEDINGS HAVE STARTED AGAINS T THE ASSESSEE COMPANY ON THE BASIS OF INFORMATION RECEIV ED FROM CENTRAL EXCISE DEPARTMENT AND DURING THE COURS E OF THEIR SEARCH, THE BOOKS OF ACCOUNT OF THE ASSESS EE HAVE BEEN IMPOUNDED. COPY OF THE SHOW CAUSE NOTICE ISSUED BY EXCISE DEPARTMENT S FILED AT PAGE 13 OF T HE PAPER BOOK DATED 03.09.2007 IN WHICH IT WAS ALSO NO TED THAT IT IS A CASE OF SPECIAL AUDIT. THUS, THE BOOK S OF ACCOUNT WERE WITH THE EXCISE AUTHORITIES AS PER CONTENTION OF THE ASSESSEE AS WELL. IF THE ASSESSI NG OFFICER HAD ANY DOUBT ABOUT THE DIFFERENCE IN THE F IGURES REPORTED TO THE EXCISE DEPARTMENT AND THE INCOME TA X DEPARTMENT, ASSESSING OFFICER COULD HAVE CALL FOR T HE BOOKS OF ACCOUNT FROM THE EXCISE DEPARTMENT IN ORDE R TO VERIFY THE FIGURES. HOWEVER, ASSESSING OFFICER DID NOT MAKE ANY ATTEMPT AND DID NOT CALL FOR THE BOOKS OF ACCOUNT OF THE ASSESSEE FROM THE EXCISE DEPARTMENT AND DID NOT EXAMIN THE FIGURES. 11(I) THE ASSESSEE HAS SUBMITTED BEFORE ASSESSING OFFICER THAT SINCE RECORD AND BOOKS OF ACCOUNT HAVE BEEN IMPOUNDED FROM THE EXCISE DEPARTMENT, THEREFOR E, NO REQUISITE REPLY COULD BE FILED. HOWEVER, IT WAS EXPLAINED THAT DIFFERENCE IN THE SALES AND PURCHASE S AS 9 REFLECTED IN THE AUDITED BALANCE SHEET FILED WITH T HE RETURN OF INCOME AND BALANCE SHEET WITH THE EXCISE DEPARTMENT IS CONCERNED, THE FIGURES COMMUNICATED T O THE EXCISE DEPARTMENT, NON DUTY PAID PURCHASES AND SALES HAVE NOT BEEN REFLECTED, THEREFORE, THERE IS A DIFFERENCE IN FIGURE. SINCE NON DUTY FIGURES HAVE NO RELEVANCE WITH THE EXCISE DEPARTMENT, THEREFORE, FI GURES OF THE PURCHASES AND SALES WERE LESS SHOWN TO EXCIS E DEPTT. THE EXPLANATION OF ASSESSEE IS CORRECT TO T HE EXTENT THAT EXCISE DEPARTMENT HAS NO CONCERN WITH N ON DUTY PAYABLE ON SUCH ITEMS. THE EXCISE DEPARTMENT H AS INITIATED THE PROCEEDINGS AGAINST THE ASSESSEE BUT ACCORDING TO THE SUBMISSIONS OF THE ASSESSEE TILL D ATE, NO ACTION HAVE BEEN TAKEN AGAINST THE ASSESSEE. IT WOULD MEAN THAT THE FIGURE SHOWN IN THE BOOKS OF ACCOUNT AND AUDITED REPORT SUBMITTED TO THE INCOME TAX DEPARTMENT AS WELL AS EXCISE DEPARTMENT WERE CORREC T. NO OTHER MATERIAL WAS AVAILABLE WITH THE ASSESSING OFFICER TO DISTURB THE FIGURES OF THE ASSESSEE SHOW N IN THE AUDITED ACCOUNTS. ULTIMATELY, THE FIGURES REPO RTED TO THE INCOME TAX DEPARTMENT AND EXCISE DEPARTMENT CONTAINS THE SAME PROFIT SHOWN TO BOTH THE AUTHORIT IES. THE INCOME TAX DEPARTMENT IS CONCERNED WITH THE TAX ON THE PROFIT SHOWN BY ASSESSEE IN WHICH NO ADVERSE FINDING HAVE BEEN GIVEN BY THE ASSESSING OFFICER. IF THE ASSESSING OFFICER HAD ANY DOUBT ABOUT THE EXPLANATI ON OF THE ASSESSEE WITH REGARD TO NON-REPORTING OF NON DUTY PAID PURCHASES AND SALES TO THE EXCISE DEPARTMENT, 10 THEN FACT COULD HAVE BEEN VERIFIED FROM THE EXCISE DEPARTMENT. MAY BE IN THIS WAY, THE ASSESSEE MIGHT HAVE COMMITTED SOME IRREGULARITIES UNDER THE EXCISE ACT, BUT EXCISE DEPARTMENT HAS NOT TAKEN ANY ACTION AGAINST THE ASSESSEE. THE ASSESSING OFFICER MERELY ON THE BASIS OF DIFFERENT FIGURES OF SALES/PURCHASE SH OWN TO THE INCOME TAX DEPARTMENT AND EXCISE DEPARTMENT FOUND THAT THERE IS EXCESS CONSUMPTION OF INGOTS WH ICH FINDING ITSELF IS NOT SUPPORTED BY ANY EVIDENCE OR MATERIAL ON RECORD. THE ASSESSING OFFICER HAS NOT REPORTED ANY DEFECT IN THE SALES AND PURCHASES SHOW N BY THE ASSESSEE TO THE INCOME TAX DEPARTMENT. SINCE ENTIRE RECORD AND BOOKS OF ACCOUNT WERE WITH EXCISE DEPARTMENT, THEREFORE, AUTHORITIES BELOW CANNOT PUT NEGATIVE ONUS ON ASSESSEE TO PRODUCE BOOKS OF ACCOU NT AND RECORD. ASSESSEE CANNOT BE ASKED TO DO IMPOSSI BLE ACT. NO ADVERSE INFERENCE CAN BE DRAWN AGAINST ASSESSEE IN THIS REGARD. 11(II) FURTHER, THE SALES TO THE INCOME TAX DEPAR TMENT HAVE BEEN ADMITTEDLY SHOWN AT HIGHER FIGURE AND PRO FIT IS SHOWN SAME TO BOTH THE AUTHORITIES WOULD CLEARLY INDICATE THAT FIGURES SHOWN TO THE INCOME TAX DEPARTMENT WERE HIGHER AND AS SUCH THERE IS NO QUESTION OF SUPPRESSION OF THE PROFIT TO THE INCOME TAX DEPARTMENT BY THE ASSESSEE COMPANY. THE ASSESSING OFFICER, WITHOUT ANY JUSTIFICATION HAD CONSIDERED E XCESS CONSUMPTION OF INGOTS WITHOUT BRINGING ANY EVIDENCE OR 11 MATERIAL AGAINST THE ASSESSEE. THE LD. COUNSEL FOR THE ASSESSEE ALSO DEMONSTRATED DURING THE COURSE OF ARGUMENTS THAT MANUFACTURING EXPENSES TO THE INCOME TAX DEPARTMENT HAVE BEEN SHOWN AT LESSER FIGURE WHI CH CLEARLY NULLIFY THE FINDINGS OF ASSESSING OFFICER F OR THE PURPOSE OF MAKING THE ADDITION. WHEN THE SAME FACT S WERE ALSO PLEADED BEFORE LD. CIT(APPEALS) CLEARLY, IT WAS THE DUTY OF THE LD. CIT(APPEALS) TO CALL FOR THE RE CORD FROM THE EXCISE DEPARTMENT ALONGWITH BOOKS OF ACCOU NT SO IMPOUNDED BY THEM IN ORDER TO ASCERTAIN THE EXPLANATION GIVEN BY THE ASSESSEE. BUT AGAIN, NO ATTEMPT HAVE BEEN MADE EVEN AT THE APPELLATE STAGE TO VERIFY THE FACTS. SINCE NO MATERIAL HAVE BEEN BROU GHT ON RECORD IF EXCISE DEPARTMENT HAS TAKEN ANY ACTION AGAINST THE ASSESSEE EVEN ON IMPOUNDING OF THE BOOK S OF ACCOUNT DURING THE COURSE OF SEARCH, CLEARLY SUGGES T THAT THE ENTIRE CASE OF THE REVENUE WAS DEPENDING U PON THE INFORMATION RECEIVED FROM THE EXCISE AUTHORITIE S BUT IN THE ABSENCE OF ANY ADVERSE FINDING GIVEN BY THE EXCISE DEPARTMENT AGAINST THE ASSESSEE, THERE WAS N O JUSTIFICATION FOR THE REVENUE AUTHORITIES TO MAKE H UGE ADDITION AGAINST THE ASSESSEE ONLY ON THE BASIS OF INFORMATION RECEIVED FROM THE EXCISE DEPARTMENT, LUDHIANA. WHATEVER INFORMATION WAS GIVEN BY THE EXCISE DEPARTMENT TO INCOME TAX DEPARTMENT, SHOULD HAVE BEEN VERIFIED BY THE INCOME TAX AUTHORITIES ON THE BASIS OF THE MATERIAL IMPOUNDED BY THE EXCISE DEPARTMENT. SINCE THE ASSESSING OFFICER DID NOT CA LL FOR 12 ANY FURTHER INFORMATION FROM THE EXCISE DEPARTMENT AND EVEN DID NOT TRY TO VERIFY THE FACTS AND FIGURES FR OM THE BOOKS OF ACCOUNT SO IMPOUNDED BY THE EXCISE DEPARTMENT, THEREFORE, ENTIRE ADDITION MADE BY THE ASSESSING OFFICER WAS UNJUSTIFIED. THUS, THERE IS NO BASIS OF FINDINGS OF EXCESS CONSUMPTION OF INGOTS B Y THE AUTHORITIES BELOW. 12. CONSIDERING THE TOTALITY OF THE FACTS AND CIRCUMSTANCES AND THE FACT THAT THERE IS NO DIFFERE NCE IN THE PROFIT ULTIMATELY REPORTED IN BOTH THE DATA PRO VIDED TO THE INCOME TAX DEPARTMENT AND EXCISE DEPARTMENT AND THAT SALES AND PURCHASES TO THE INCOME TAX DEPARTMENT HAVE BEEN SHOWN AT HIGHER FIGURE WOULD PROVE THAT CONTENTION OF THE ASSESSEE WAS JUSTIFIED THAT THE FIGURES COMMUNICATED TO THE EXCISE DEPARTMENT ABOUT NON DUTY PAID PURCHASES AND SALES HAVE NOT BE EN REFLECTED APPEARS TO BE CORRECT AND AS SUCH, NO ADD ITION COULD BE MADE IN THE HANDS OF THE ASSESSEE ON THE B ASIS OF HALF WAY FIGURES PROVIDED BY THE ASSESSING OFFIC ER IN THE ASSESSMENT ORDER. IN THE ABSENCE OF EXAMINATIO N OF THE SEIZED MATERIAL AND BOOKS OF ACCOUNT SEIZED BY THE EXCISE DEPARTMENT DURING THE COURSE OF SEARCH, IT I S DIFFICULT TO SUSTAIN THE ADDITION OF THIS NATURE AG AINST THE ASSESSEE. WE, ACCORDINGLY, SET ASIDE THE ORDER S OF AUTHORITIES BELOW AND DELETE THE ADDITION OF RS. 94,02,712/- ON ACCOUNT OF EXCESS CONSUMPTION OF 13 INGOTS. THE GROUND NO. 2 OF APPEAL OF THE ASSESSEE IS ACCORDINGLY ALLOWED. 13. IN THE RESULT, ITA NO. 364/2014 IS PARTLY ALLOW ED. 14. IN ASSESSMENT YEAR 2003-04, THE ASSESSEE SIMILARLY RAISED GROUND NO. 2 CHALLENGING THE ADDIT ION OF RS. 26,31,634/- ON ACCOUNT OF EXCESS CONSUMPTION OF INGOTS ( RAW MATERIAL). THE ASSESSING OFFICER, ON THE BASIS OF THE SAME REASONS AS RECORDED IN ASSESSMENT YEAR 2002-03, SIMILARLY RECORDED THE REASONS FOR RE - OPENING OF THE ASSESSMENT AND MADE ADDITION OF RS. 26,31,638/- ON ACCOUNT OF EXCESS CONSUMPTION OF INGOTS. THE LD. REPRESENTATIVES OF BOTH THE PARTIE S SUBMITTED THAT THIS ISSUE IS SAME AS HAVE BEEN CONSIDERED IN ASSESSMENT YEAR 2002-03. FOLLOWING T HE SAME REASONS FOR DECISION FOR ASSESSMENT YEAR 2002- 03, WE SET ASIDE THE ORDERS OF AUTHORITIES BELOW AND DE LETE THE ADDITION OF RS. 26,31,634/-. THE GROUND NO. 2 OF APPEAL OF ASSESSEE IS ACCORDINGLY, ALLOWED. 15. IN ASSESSMENT YEAR 2003-04, ASSESSEE RAISED GROUND NO. 3 UPHOLDING THE ADDITION OF RS. 11,51,48 4/- ON ACCOUNT OF ALLEGED EXCESS AMOUNT OF OTHER HEAD EXPENSES SHOWN TO THE INCOME TAX DEPARTMENT AS COMPARED TO FILED WITH THE EXCISE DEPARTMENT. THE ASSESSING OFFICER ON COMPARISON OF THE PROFIT & LOS S ACCOUNT FOR THE ACCOUNTING PERIOD 2002-03 FILED WIT H THE EXCISE DEPARTMENT AND THAT OF THE INCOME TAX 14 DEPARTMENT FOUND THAT EXCESS AMOUNT OF RS. 11,51,484/- UNDER THE HEAD OTHER EXPENSES HAVE BE EN DEBITED TO THE PROFIT & LOSS ACCOUNT AND ACCORDINGL Y, MADE THE ADDITION. THE ASSESSEE SUBMITTED BEFORE L D. CIT(APPEALS) THAT THE AMOUNT OF RS. 11,51,484/- IS THE EXACT AMOUNT OF PROFIT ON TRADING OF MATERIAL WHICH IS ADJUSTED IN OTHER EXPENSES SHOWN TO THE EXCISE DEPARTMENT. IT WAS ALSO SUBMITTED THAT DIFFERENT TREATMENT IS GIVEN IN THIS YEAR WHILE PASSING THE O RDER IN ASSESSMENT YEAR 2002-03. THE LD. CIT(APPEALS), HOWEVER, DID NOT ACCEPT THE CONTENTION AND CONFIRME D THE ADDITION BECAUSE OF THE DIFFERENT FIGURES FILED TO THE EXCISE DEPARTMENT AND THE INCOME TAX DEPARTMENT. THE LD. COUNSEL FOR THE ASSESSEE REFERRED TO PB-8 W HICH IS DULY SUBMITTED FOR ASSESSMENT YEAR UNDER APPEAL TO SHOW THAT ULTIMATELY PROFIT IS SAME AS REPORTED TO THE INCOME TAX DEPARTMENT AND THE EXCISE DEPARTMENT AND PROFIT ON SALE HAVE BEEN ADJUSTED BY THE EXPENDITUR E. 16. THE LD. REPRESENTATIVES OF BOTH THE PARTIES SUBMITTED THAT THIS ISSUE IS ALSO SAME AS IS CONSID ERED ON OTHER ISSUES OF EXCESS CONSUMPTION. 17. AFTER CONSIDERING RIVAL SUBMISSIONS, WE DO NOT FIND ANY JUSTIFICATION TO SUSTAIN THE ADDITION. THE ENT IRE CASE IS DEPENDING UPON THE ENTRIES MADE IN THE BOOK S OF ACCOUNT WHICH WERE IMPOUNDED BY THE EXCISE AUTHORITIES WHICH HAVE NOT BEEN EXAMINED BY THE INCOME TAX AUTHORITIES DESPITE THE INFORMATION FOR RE- 15 OPENING OF THE ASSESSMENT WAS RECEIVED FROM THE EXC ISE DEPARTMENT. THE ASSESSEE CLAIMED THAT AMOUNT IS EXACTLY SAME WHICH IS SHOWN IN THE TRADING OF MATER IAL WHICH IS ADJUSTED IN OTHER EXPENSES SHOWN TO THE EXCISE DEPARTMENT. IN ASSESSMENT YEAR 2002-03, THE ASSESSING OFFICER DID NOT MAKE SIMILAR ADDITION AND ACCEPTED THE CONTENTION OF THE ASSESSEE. HOWEVER, ASSESSING OFFICER HAS TAKEN A DIFFERENT VIEW IN ASSESSMENT YEAR UNDER APPEAL. ULTIMATELY PROFIT IS SAME. THIS ISSUE IS SAME AS IS CONSIDERED IN GROUN D NO. 2 ABOVE. THEREFORE, FOLLOWING THE REASONS FOR DECI SION ON THE SAME, WE SET ASIDE ORDERS OF AUTHORITIES BEL OW AND DELETE THE ADDITION OF RS. 11,51,484/-. IN THE RESULT, GROUND NO. 3 OF APPEAL OF ASSESSEE IS ALLOW ED. 18. IN THE RESULT, APPEAL OF THE ASSESSEE IN ITA NO . 365/2014 IS ALSO PARTLY ALLOWED. 19. IN THE RESULT, BOTH APPEALS OF THE ASSESSEE ARE PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- (RANO JAIN) (BHAVNES H SAINI) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 1 ST DECEMBER,2015. POONAM COPY TO: THE APPELLANT, THE RESPONDENT, THE CIT(A), THE CIT, DR ASSISTANT REGISTRAR, ITAT/CHD