The ACIT, Circle-4, Ahmedabad V. M/S Ravji Oil Indus Ltd, Ahmedabad

ITA 3748/AHD/2002

• Counselvise Citation: 374820514 RSA 2002
• Duration Of Justice: 12 year(s) 5 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-05-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 16-04-2015
• Assessment Year: 1991-1992
• Appeal Filed On: 09-12-2002
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DINESH SINGH

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, AHMEDABAD BEFORE SHRI G.D. AGARWAL, VICE PRESIDENT(AZ) AND SHRI S.S. GODARA, JUDICIAL MEMBER ./ I.T.A. NO.3748/AHD/2002 ( / ASSESSMENT YEAR : 1991-92) THE ACIT CIRCLE-4 AHMEDABAD / VS. M/S.M.RAVJI OIL INDUSTRIES LTD. KALUPUR GHEE BAZAR, AHMEDABAD ./ ./ PAN/GIR NO. : 31-084-CQ-0332 ( / APPELLANT ) .. ( / RESPONDENT ) / APPELLANT BY : SHRI DINESH SINGH, SR.DR / RESPONDENT BY : - NONE - / DATE OF HEARING 16/04/2015 / DATE OF PRONOUNCEMENT 22/05/2015 / O R D E R PER S.S. GODARA, JUDICIAL MEMBER : THIS REVENUES APPEAL FOR ASSESSMENT YEAR 1991-92 ARISES FROM ORDER OF THE CIT(A)-VIII, AHMEDABAD DATED 03/09/2002 IN APPE AL NO.CITA-VIII/75/94- 95, DELETING ADDITIONS OF RS.7,46,604/- ON UNACCOU NTED SALE OF OIL, RS.9,50,912/- IN CASE OF CONSIGNMENT SALE, RS.29,26,000/- ON THE BASIS OF SEIZED BOOKS OF ACCOUNTS AND RS.4,62,421/- ON PROTECTIVE BASIS MADE DUE TO LOOSE-PAPER FILES SEIZED RESPECTIVELY, IN PROCEEDINGS U/S.143(3) OF T HE INCOME TAX ACT, 1961 (IN SHORT THE ACT). ITA NO.3748 /AH D/2002 ACIT VS. M/S.M. RAVJI OIL INDUSTRIES LTD. ASST.YEAR 1991-92 - 2 - 2. THE ASSESSEE RAN A MODERN OIL REFINERY. THE DEP ARTMENT CONDUCTED A SEARCH ON 17/08/1990 AT THE OFFICE, FACTORY AND RES IDENTIAL PREMISES OF THE ASSESSEES DIRECTORS/TRUSTED EMPLOYEES ALONG WITH O FFICE AND SHOPS OF ITS SISTER- CONCERN M/S.RAVJI & CO. AND AMAR SALES, ETC. I TS EMPTY TIN REGISTER REVEALED THAT 2010-TINS FOR REFILLING HAD NOT BEEN ACCOUNTED FOR AT THE TIME OF DESPATCH. THE ASSESSEE STATED THIS BALANCE OF TINS TO HAVE B EEN SOLD AS SCRAP. THE ASSESSING OFFICER NOTICED INVENTORY OF SCRAP SOLD STATING THE SAME TO BE 192 TINS HAVING CAPACITY OF 15KGS. AND 3 TINS OF 5KGS. EACH. THE A SSESSING OFFICER FURTHER OBSERVED THAT THE TINS PURCHASED WERE OF VERY HIGH PRICE AND SCRAP SALES HAD NOT BEEN ENTERED IN THE SCRAP INVENTORY. HE INFERRED IN ASSESSMENT ORDER DATED 30/03/1994 THAT THE ASSESSEE HAD SOLD 2010 TINS OF OIL OUTSIDE ITS BOOKS OF ACCOUNTS AND COMPUTED PRICE THEREOF AS RS.7,46,604/ - RESULTING IN CONSEQUENTIAL ADDITION. 3. THE CIT(A) HAS ACCEPTED THE ASSESSEES CONTENTIO NS FOR DELETING THE IMPUGNED ADDITION. HE HOLDS THAT THERE IS NO ONE-T O-ONE TALLYING OF THE TINS ISSUED AND DISPATCHED. HE NOTICED SIMILAR DIFFERENCE IN THE MONTH OF APRIL ITSELF. THE ASSESSEES EXPLANATION OF HAVING BROUGHT FORWARD EM PTY TINS IN THE FACTORY TO BE FILLED UP HAS BEEN ACCEPTED. THE CIT(A) OBSERVES I N THESE CIRCUMSTANCES THAT THERE HAS BEEN A DIFFERENCE OF EXCESSIVE TINS TO TH E EXTENT OF 5000 PIECES AS IN ASSESSEES CASE. HE OBSERVES THAT THE ASSESSING OF FICER HAS NOT STATED ANY BASIS FOR ADOPTING A CUT OFF DATE QUA THE DIFFERENCE IN E MPTY AND DESPATCHED OIL TINS. THE ASSESSEE HAS SUCCEEDED IN THE LOWER APPELLATE P ROCEEDINGS. 4. THE REVENUE STRONGLY ARGUES FOR RESTORATION OF T HE IMPUGNED ADDITION. THE ASSESSEE DOES NOT APPEAR DESPITE SERVICE OF NOT ICE. THE REVENUE HAS FILED A SERVICE REPORT ATTESTED BY TWO PANCHAS DATED 09/04/ 2015 REPORTING ITS PREMISES TO ITA NO.3748 /AH D/2002 ACIT VS. M/S.M. RAVJI OIL INDUSTRIES LTD. ASST.YEAR 1991-92 - 3 - HAVE BEEN CLOSED. AN AFFIXATION REPORT IS ALSO THE RE ON RECORD. THE ASSESSEE IS ACCORDINGLY PROCEEDED EX-PARTE . 5. WE HAVE HEARD THE REVENUE AND GONE THROUGH THE C ASE FILE. THE SOUL BASIS OF THE IMPUGNED ADDITION BEING MADE IN THE COURSE O F ASSESSMENT IS ONLY DIFFERENCE IN EMPTY AND DISPATCHED TINS AMOUNTING T O 2010 UNITS. THE REVENUE FAILS TO POINT OUT ANY EVIDENCE OF UNACCOUNTED SALE S OF OILS APART FROM QUOTING THIS DIFFERENTIAL FIGURE. THE LOWER APPELLATE AUTHORITY HOLDS THE ASSESSEE TO HAVE BEEN BRINGING FORWARD EMPTY TINS. OTHER SIMILAR INSTANC ES ARE ALSO QUOTED DURING THE RELEVANT PREVIOUS YEAR ITSELF. WE OBSERVE IN THESE CIRCUMSTANCES THAT THE ASSESSING OFFICER OUGHT NOT TO HAVE DRAWN A PRESUMP TION OF UNACCOUNTED SALE OF OIL MERELY ON THE BASIS OF DIFFERENCE IN THE COUNT OF EMPTY AND DISPATCHED TINS AS NO IRREGULARITY IS BEING NOTICED IN THE CONCERNED R AW-MATERIAL CONSUMPTION AS WELL. WE AFFIRM THE CIT(A)S FINDING ACCORDINGLY. THE REVENUES FIRST GROUND IS REJECTED. 6. THE REVENUES SECOND GROUND SEEKS RESTORATION OF ADDITION AMOUNTING TO RS.9,50,912/- ON ACCOUNT OF CONSIGNMENT SALE. THE ASSESSEE HAD SHOWN TOTAL CONSIGNMENT SALES OF RS.24,69,338/-. ITS GOODS SEN T ON CONSIGNMENT AS ON 31/03/1991 READ RS.71,13,009/-. THE ASSESSING OFFI CER SOUGHT TO VERIFY THE CONSIGNEE PARTIES. THE ASSESSEE PLEADED CHANGE IN THEIR ADDRESSES. THE ASSESSING OFFICER ISSUED LETTERS OF ENQUIRY. THE SAME WERE R ETURNED UNSERVED. HE ACCORDINGLY CALLED THE ASSESSEE TO PROVE GENUINENES S OF ITS CONSIGNMENTS. THE ASSESSEE REFUSED TO COMPLY FOR THE REASON THAT ITS CONSIGNEES WOULD NOT BE PRODUCED FOR WANT OF BEING TRACED. THE ASSESSING OFFICER CONSIDERED CENTRAL SALES TAX @ 4% TO OBSERVE THAT THE IMPUGNED CONSIGN MENTS WERE AN EFFORT TO BYE-PASS THE SAID LEVY DUE TO INTER-STATE OIL SALE. HE ALSO INFERRED THAT 90% OF THE CONSIDERATION MONEY IN THESE CONSIGNMENT IS COLLECT ED IMMEDIATELY AND THE ITA NO.3748 /AH D/2002 ACIT VS. M/S.M. RAVJI OIL INDUSTRIES LTD. ASST.YEAR 1991-92 - 4 - BALANCE 10% COMES AT LATER STAGE. THE ASSESSING O FFICER FURTHER QUOTED FACTS OF ASST.YEAR 1990-91 AND HELD THAT THE ASSESSEE HAD NO T CONDUCTED ANY CONSIGNMENT SALE. AND ALSO THAT THE IMPUGNED CONSIGNMENTS HAD BEEN ACTUALLY SOLD IN THE PREVIOUS YEAR. HE TREATED ADVANCE MONEY OF RS.71, 13,009/- AS 90% OF THE CONSIGNMENT PRICE. THE GROSS SALE PRICE STOOD COMP UTED TO RS.78,24,309/-. THIS FURTHER LED TO CALCULATION OF CLOSING STOCK OF RS.6 9,73,397/- TO REPLACED BY VALUE OF SALE AT THE RATE OF 100% CONSIGNMENT PRICE STATE D HEREINABOVE. THE SAME RESULTED IN PROFIT OF RS.9,50,912/-. THE SAID AMOU NT STOOD ADDED AS PROFITS IN THE ASSESSEES INCOME. 7. THE CIT(A) HAS PARTLY ACCEPTED THE ASSESSE ES GROUND AND DIRECTS THE ASSESSING OFFICER TO FOLLOW DIRECTIONS OF HIS PREDE CESSOR IN ASST.YEAR 1990-91 REGARDING PROFIT ON CONSIGNMENT SALES, ALLOWABILITY OF EXPENDITURE ON THE SAID SALES, ETC. HIS FURTHER DIRECTION READS THAT THE A SSESSEE IS TO BE ALLOWED DEDUCTION OF PROFIT TAXED IN THE SAID ASSESSMENT YEAR AFTER C ONSIDERING/VERIFYING CONSIGNMENT SALES OF THE SAID ASSESSMENT YEAR ARE I NCLUDED IN THE SALE CONSIDERATION OF THE IMPUGNED ASSESSMENT YEAR. THE ASSESSEES RELEVANT GROUND HAS BEEN ACCEPTED FOR STATISTICAL PURPOSES IN VIEW OF THE EARLIER DIRECTION OF THE CIT(A) IN RELATION TO ASSTT.YEAR 1990-91. 8. WE HAVE HEARD THE REVENUE AND PERUSED THE RELEVA NT FINDINGS. IT FAILS TO REBUT THE CIT(A)S CONCLUSION THAT THE IMPUGNED CON SIGNMENT SALES NEED TO BE VERIFIED QUA SIMILAR TRANSACTIONS IN ASST.YEAR 1990 -91. WE REITERATE THAT THE IMPUGNED ASSESSMENT YEAR IS 1991-92. MUCH WATER HA S FLOWN SINCE THE IMPUGNED ASSESSMENT YEAR. WE ARE IN THE YEAR 2015 AS OF NOW . THE REVENUE FAILS TO POINT OUT OR PLACE ON RECORD ANY CONSEQUENTIAL ORDER PASS ED BY THE ASSESSING OFFICER IN TUNE WITH THAT IN ASST.YEAR 1990-91. WE FIND THAT THE CIT(A) HAS ACCEPTED THE ASSESSEES GROUND ONLY FOR FACTUAL VERIFICATION. WE DO NOT FIND ANY REASON TO ITA NO.3748 /AH D/2002 ACIT VS. M/S.M. RAVJI OIL INDUSTRIES LTD. ASST.YEAR 1991-92 - 5 - INTERFERE WITH THE SAME IN THESE PECULIAR CIRCUMSTA NCES. THE REVENUES SECOND GROUND ALSO FAILS. 9. THE REVENUES THIRD GROUND CHALLENGES THE CIT(A) S ORDER DELETING ADDITION OF RS.29.26 LACS MADE ON THE BASIS OF SEIZ ED BOOKS OF ACCOUNTS. THE CIT(A) HOLDS WITH REFERENCE TO HIS ORDER IN ASST.YE AR 1990-91 THAT THE IMPUGNED ENTRIES IN THE SEIZED BOOKS PERTAINED TO THE ASST.Y EAR 1988-89. THE REVENUE FAILS TO PLACE ON RECORD ANY COGENT EVIDENCE REBUTTING TH E SAME. WE UPHOLD THE CIT(A)S FINDING IN THESE CIRCUMSTANCES. THE REVEN UES CORRESPONDING GROUND FAILS. 10. THIS LEAVES US WITH THE REVENUES LAST GROUND S EEKING TO RESTORE ADDITION OF RS.4,62,421/- MADE ON PROTECTIVE BASIS IN THE AS SESSEES HANDS BASED ON LOOSE- PAPER OF FILE SEIZED FROM THE RESIDENCE OF SHRI NAS EEM RAVJI. THE LOWER APPELLATE ORDER HOLDS THAT THE VERY ADDITION ON SUB STANTIVE BASIS STANDS UPHELD IN CASE OF M/S.RAVJI & CO. IN THESE CIRCUMSTANCES, T HE REVENUE CAN HARDLY HAVE ANY GRIEVANCE ONCE THE SUBSTANTIVE ADDITION IN CASE OF ASSESSEES GROUP-CONCERN HAS BEEN CONFIRMED. THERE IS NO REBUTTAL COMING F ROM THE REVENUES SIDE. WE UPHOLD THE CIT(A)S FINDING UNDER CHALLENGE IN THIS BACKGROUND OF FACTS. THE REVENUES LAST GROUND IS ALSO REJECTED. 11. THE REVENUES APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE COURT ON 22 ND MAY, 2015 AT AHMEDABAD. SD/- SD/- ( G.D. AGARWAL) ( S.S. GODARA ) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD; DATED 22/ 05 /2015 &.., .(../ T.C. NAIR, SR. PS ITA NO.3748 /AH D/2002 ACIT VS. M/S.M. RAVJI OIL INDUSTRIES LTD. ASST.YEAR 1991-92 - 6 - !'#$%$' / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. )*+ , / CONCERNED CIT 4. , ( ) / THE CIT(A)-VIII, AHMEDABAD 5. /01 ((*+ , *+ , ) / DR, ITAT, AHMEDABAD 6. 145 6 / GUARD FILE. / BY ORDER, / ( //TRUE COPY// / ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD 1. DATE OF DICTATION .. 21.5.2015 (DIRECT ON COMPUT ER) 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER ..21.5.2015 3. OTHER MEMBER... 4. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S.. 5. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 6. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR. P.S./P.S.22.5.15 7. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 22.5.15 8. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK ... 9. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER.. 10. DATE OF DESPATCH OF THE ORDER