ACIT, Jaipur V. M/S PUSHP ENTERPRISES, Jaipur

ITA 376/JPR/2015

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 5094 (ITAT-JAIPUR)
• Duration Of Justice: 1 year(s) 3 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-07-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2008-2009
• Appeal Filed On: 21-04-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R S DAGUR CIT DHK
• Assessee Lawyers: S L PODDAR
• Keywords: Business expenditure
• Section: 143(3); 148; 2

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHE S, JAIPUR JH DQY HKKJR] U;KF;D LNL; ,OA JH FOE FLAG ;KNO] YS [KK LNL; DS LE{K BEFORE: SHRI KUL BHARAT, JM & SHRI VIKRAM SINGH YAD AV, AM VK;DJ VIHY LA-@ ITA NO. 376/JP/15 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2008-09 THE ACIT, CIRCLE-4, JAIPUR CUKE VS. M/S PUSHP ENTERPRISES, H- 780-A, ROAD NO.13, VKI AREA, JAIPUR LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN NO. AABFP 2279 F VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI S.L. PODDAR (ADV.) JKTLO DH VKSJ LS@ REVENUE BY :SHRI R.S. DAGUR (ADDL. CIT) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 20.07.2016 ?KKS'K .KK DH RKJH[K @ DATE OF PRONOUNCEMENT : 21/07/2016. VKNS'K@ ORDER PER SHRI VIKRAM SINGH YADAV, A.M. THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF LD. CIT(A)-II, JAIPUR DATED 24.02.2015 WHEREIN THE REVENUE HAS TA KEN FOLLOWING GROUNDS OF APPEAL: (1) WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES O F THE CASE AND IN LAW THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS .63,82,690/- WHICH WAS MADE ON ACCOUNT OF SUPPRESSION OF SCRAP SALES. (2) WHETHER ON THE FACTS AND IN THE CIRCUM STANCES OF THE CASE AND IN LAW THE LD. CIT(A) HAS ERRED IN DELETING THE DISALLOWANCE O F RS. 38,81,736/- ON ACCOUNT OF EXCISE DUTY PAID ON UNRETURNABLE SCRAP. ITA NO. 376/JP/15 THE ACIT, CIRCLE-4, JAIPUR VS. M/S PUSHP ENTERPRISE S, JAIPUR 2 2. AT THE OUTSET, THE LD AR SUBMITTED THAT BOTH THE ISSUES ARE COVERED IN FAVOUR OF THE ASSESSEE BY THE HONBLE ITAT DECISION IN ASSESSEES OWN CASE IN ITA NO.659/JP/2012 FOR AY 2009-10 VIDE ITS ORDER DA TED 13.2.2015. 3. THE RELEVANT FINDING OF THE COORDINATE BENCH IN ITA NO.659/JP/2012 ARE REPRODUCED HEREUNDER: (8) WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH TH E PARTIES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. APROPOS THE FIRST GROUND I.E. THE ADDITION ON ACCOUNT OF ALLEGED SALE OF SCRAP, W E FIND NO INFIRMITY IN THE ORDER OF THE LD. CIT(A) IN AS MUCH AS NOTHING HAS BEEN BROUGHT ON RECORD BY AO THAT THE ASSESSEES JOB WORKERS RETURN ED ANY SCRAP TO ASSESSEE. NOTHING HAS ALSO BEEN BROUGHT ON RECORD T O DEMONSTRATE IN ANY WAY THAT ASSESSEE INDULGED IN ANY SALE OF SCRAP OUTSIDE THE BOOKS OF ACCOUNT. THIS IS FURTHER INDICATED BY NEW CENVAT CR EDIT RULES, WHICH HOLDS THAT THE SCRAP WAS NOT REQUIRED TO BE RETURNED TO T HE ASSSSEE. THE SAME IS REFERRED TO BY THE JUDGEMENT IN THE CASE OF M/S ROCKET ENGINEERING CORPORATION VS. CCE (SUPRA). THE ASSESSEE FURTHER PROVIDED EVIDENCE FROM M/S NOBLE INDUSTRIES, WHICH HAS DONE A JOB WOR K OF 3.56 CRORES AND HAS SHOWN THE INCOME ATTRIBUTABLE TO SALES OF SCRAP O RS. 747109/- IN ITS BOOKS. THESE FACTS AND OBSERVATION DEMONSTRATE TH AT THE ASSESSEE DID NOT WHATSOEVER SUGGESTING ANY UNACCOUNTED SALES BY THE ASSESSEE, THE ORDER OF LD. CIT(A) OF THESE ISSUES IS UPHELD. THI S GROUND OF REVENUES APPEAL IS DISMISSED. (8.1) APROPOS THE SECOND GROUND, WHICH INCLUDES THE ADDITION AMOUNT OF RS. 1,35,56,787/- RELATING TO CONCEALED SALE OF SCR AP, THE BALANCE AMOUNT TO DIFFERENCE SHOWN BY THE ASSESSEE AS RECEIVABLE FROM SKF AND THE PAYABLE AMOUNT IN THE BOOKS OF SKF, THE ASSESSEE HA S DEMONSTRATED THAT ITA NO. 376/JP/15 THE ACIT, CIRCLE-4, JAIPUR VS. M/S PUSHP ENTERPRISE S, JAIPUR 3 THE DIFFERENCE WAS DUE TO THE DISPUTES PERTAINING T O DEFECTIVE AND INFERIOR QUALITY OF GOODS. THE ASSESSEE USED TO ACC OUNT FOR THE ACTUAL INVOICE VALUE WHEREAS THE PURCHASES WERE ACCOUNTED BY SKF NOT ON THE BASIS OF THE SALES BILLS BUT ON THE BASIS OF SETTLE D AMOUNTS QUA THESE INVOICES. ALL THESE ISSUES HAVE BEEN DISCUSSED IN DETAILS BY THE LD. CIT(A) AS MENTIONED ABOVE. IN VIEW THEREOF, WE SEE NO INF IRMITY IN THE ORDER OF THE LD. CIT(A) ON THIS ISSUE ALSO, WHICH IS UPHELD. THE SECOND GROUND OF REVENUE APPEAL IS DISMISSED. (8.2) APROPOS THE THIRD GROUND THE ASSESSEE DEMONS TRATED THAT AS PER RULE 4(6) OF THE CENTRAL EXCISE RULES, THE ASSESSEE WAS LIABLE FOR EXCISE DUTY ON THE NOTIONAL VALUE OF NONRETURNABLE SCRAP. THUS, THE ASESSEE HAS TO FACE THE SITUATION WHERE THE SCRAPE WAS NOT RETURNABLE TO IT AND ON TOP OF THAT THE EXCISE DUTY ON SUCH SCRAPE WAS A LSO PAYABLE BY THE ASSESSEE AS PER EXCISE DUTY RULES. IN VIEW THEREOF , THE EXCISE DUTY IN RESPECT OF UNRETURNED SCRAP BECOMES A STATUTORY/LEG AL LIABILITY OF THE ASSESSEE WHICH IS ALLOWABLE BUSINESS EXPENDITURE. THE LD. CIT(A) HAS CONSIDERED THE ISSUE IN RIGHT PERSPECTIVE AND WE SE E NO INFIRMITY IN ITS ORDER ON THIS GROUND, THE SAME IS UPHELD. 4. WE HAVE HEARD THE RIVAL CONTENTIONS AND PURSUED THE MATERIAL AVAILABLE ON RECORD. IT IS NOTED THAT SIMILAR ISSUE AROSE IN AY 2009-10 AND THE COORDINATE BENCH IN ITS DECISION (SUPRA) HAS DECIDED THE MATTE R IN FAVOUR OF THE ASSESSEE. IN THE SUBJECT YEAR, THE ASSESSMENT WAS REOPENED ON THE SAME GROUNDS AND ORDER PASSED UNDER SECTION 143(3) R/W SECTION 148 S UBSEQUENT TO PASSING OF THE ASSESSMENT ORDER FOR AY 2009-10. GIVEN THE SIMI LARITY OF FACTS AND CIRCUMSTANCES OF THE CASE, RESPECTFULLY FOLLOWING T HE DECISION OF THE COORDINATE BENCH (SUPRA), WE SEE NO REASON TO INTERFERE WITH T HE ORDER OF THE LD CIT(A). HENCE, GROUNDS TAKEN BY REVENUE ARE DISMISSED. ITA NO. 376/JP/15 THE ACIT, CIRCLE-4, JAIPUR VS. M/S PUSHP ENTERPRISE S, JAIPUR 4 IN THE RESULT THE APPEAL FILED BY THE REVENUE IS DI SMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 21/07 /2016. SD/- SD/- ( KUL BHARAT ) (VIKRAM SINGH YADAV) U;KF;D LNL;@ JUDICIAL MEMBER YS[KK LNL;@ ACCOUNTANT MEMBER JAIPUR DATED:- 21/ 07/2016 ` PILLAI VKNS'K DH IZFRFYFI VXZSF'KR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- THE ACIT, CIRCLE-4, JAIPUR 2. IZR;FKHZ@ THE RESPONDENT- M/S PUSHP ENTERPRISES, JAIPUR 3. VK;DJ VK;QDR@ CIT 2, JAIPUR 4. VK;DJ VK;QDRVIHY@ THE CIT(A)-2, JAIPUR 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR 6. XKMZ QKBZY@ GUARD FILE (ITA NO. 376/JP/2015) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASSISTANT. REGISTRAR