ACIT, Muzaffarnagar V. M/s. Sikka Papers Ltd., Muzaffarnagar

ITA 377/DEL/2013

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 3572 (ITAT-DELHI)
• Duration Of Justice: 4 year(s) 9 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-11-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: G
• Next Hearing Date: 15-06-2017
• Assessment Year: 2009-2010
• Appeal Filed On: 21-01-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: KAUSHLENDRA TIWARI
• Assessee Lawyers: V RAJ KUMAR; SK SAMPATH
• Section: 37(1)

Judgement Text

, , , , IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES G, DELHI .. , , , ! BEFORE SHRI N.K. SAINI, ACCOUNTANT MEMBER AND SHRI JOGINDER SINGH, JUDICIAL MEMBER, ITA NO.377/DEL/2013 ASSESSMENT YEAR: 2009-10 ACIT, CIRCLE-1, AAYAKAR BHAVAN MUZAFFARNAGAR / VS. SIKKA PAPERS LTD., SUBHASH CHOWK, SHAMLI, DIST._MUZAFFARNAGAR ( / REVENUE) ( &' /ASSESSEE) PAN. NO. AAECS 3643J ITA NO.1385/DEL/2013 ASSESSMENT YEAR: 2009-10 SIKKA PAPERS LTD., SUBHASH CHOWK, SHAMLI, DIST._MUZAFFARNAGAR / VS. ACIT, CIRCLE-1, AAYAKAR BHAVAN MUZAFFARNAGAR ( &' /ASSESSEE) ( / REVENUE) PAN. NO. AAECS3643J + / DATE OF HEARING : 08/11/2017 + / DATE OF ORDER: 08/11/2017 / REVENUE BY SHRI KAUSHLENDRA TIWARI DR &' / ASSESSEE BY SHRI S.K. SAMPATH & SHRI V. RAJKUMAR ITA NOS.377 & 1385/DEL./2013 SIKKA PAPERS LTD. 2 / O R D E R PER JOGINDER SINGH (JUDICIAL MEMBER) THE REVENUE AS WELL AS THE ASSESSEE IS IN CROSS APP EAL AGAINST THE IMPUGNED ORDER 02/11/2012 OF THE LD. FI RST APPELLATE AUTHORITY, MUZAFFARNAGAR FOR ASSESSMENT Y EAR 2009-10. FIRST, WE SHALL TAKE UP THE APPEAL OF THE REVENUE (ITA NO.377/DEL./2013), WHEREIN, THE GROUND RAISED PERTAINS TO DELETING THE ADDITION OF RS.96,83,000/- MADE ON ACCOUNT OF LOW YIELD OF BAGGASSEE BY THE LD. AO. 2. DURING HEARING, THE CRUX OF ARGUMENT ADVANCED BY LD. DR, SHRI KAUSHLENDRA TIWARI, IS IDENTICAL TO THE GR OUND RAISED BY CONTENDING THAT THERE IS HUGE VARIATION I N THE YIELD AND THE ASSESSEE HAS NOT ADDUCED ANY JUSTIFIED REAS ONING FOR SUCH A LOW YIELD DURING THE TIME. ON THE OTHER HAND , THE LD. COUNSEL FOR THE ASSESSEE, SHRI K. SHAMPAT, DEFENDED THE IMPUGNED ORDER BY INVITING OUR ATTENTION TO THE FAC TUAL FINDING RECORDED BY LD. CIT(A). 2.1. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE FACTS , IN BRIEF, ITA NOS.377 & 1385/DEL./2013 SIKKA PAPERS LTD. 3 ARE THAT THE ASSESSEE IS A LIMITED COMPANY ENGAGED IN THE BUSINESS OF MANUFACTURE AND SALE OF WRITING & NEWSP RINT PAPER. DURING ASSESSMENT PROCEEDINGS, THE ASSESSEE WAS ASKED TO PRODUCE THE DETAILS OF PRODUCTION OF VARIO US YEARS. AS PER THE ASSESSEE, THE NECESSARY DETAILS WERE FUR NISHED BY THE ASSESSEE. THE LD. AO OBSERVED THAT THE PERCENTA GE OF YIELD IS LESS, WHEREAS, THE RAW MATERIAL CONSUMED W ITH RESPECT TO BAGGASSEE IS THE SAME BUT ADMITTED THAT THERE IS A VARIATION IN DIFFERENT ASSESSMENT YEAR. HE WORKED OUT THE DISALLOWANCE TO 34.13% AGAINST 30% SHOWN BY THE ASS ESSEE. IN THE ABSENCE OF SATISFACTION OF THE AO, THE DIFFE RENCE IN PRODUCTION WAS WORKED OUT RS.96,83,000/- AND ADDED TO THE INCOME OF THE ASSESSEE. ON APPEAL, THE LD. CIT(A) C ONSIDERED THE FACTUAL MATRIX AND GRANTED RELIEF TO THE ASSESS EE, WHICH IS UNDER CHALLENGE BEFORE THIS TRIBUNAL. IF THE OBSERVATION MADE IN THE ASSESSMENT ORDER, CONCLUSION DRAWN IN THE IMPUGNED ORDER AND THE MATE RIAL FACTS AVAILABLE ON RECORD ARE KEPT IN JUXTAPOSITION AND ANALYZED, WE FIND THAT WHILE MAKING THE ADDITION, T HE LD. AO WAS NOT SATISFIED WITH THE DETAILS OF PRODUCTION AN D THE RAW ITA NOS.377 & 1385/DEL./2013 SIKKA PAPERS LTD. 4 MATERIAL CONSUMED BY THE ASSESSEE AS HAS BEEN TABUL ATED IN THE ASSESSMENT ORDER ITSELF AND ALSO BY THE LD. CIT (A). THE TOTAL PRODUCTION FOR AY 2005-06 IS 25001 AND FOR AY 2006- 07, IT IS 32272. FOR AY 2007-08, THE PRODUCTION IS 36719 AND FOR AY 2008-09, IT IS 35888. THE ASSESSEE PROVIDED THE DETAILS OF CONSUMPTION OF MAJOR RAW MATERIAL FOR TH E AFORESAID PRODUCTION AND THE DETAILS OF WHICH HAS B EEN SUMMARIZED IN ASSESSMENT ORDER ITSELF. THE VARIATIO N IN THE PRODUCTION HAS BEEN ACCEPTED BY THE LD. AO ALSO WHI CH DEPENDS UPON VARIOUS FACTORS. THE MAIN REASON OF AD DITION BY THE AO IS THAT THE PRODUCTION CHART FURNISHED BY THE ASSESSEE IS THAT THERE WAS A VARIATION AND THUS HE ADOPTED THE AVERAGE YIELD OF LAST THREE YEARS. UNDISPUTEDL Y, THE ASSESSEE PRODUCED ALL THE DETAILS OF PURCHASES/SALE S, WHICH WERE VERIFIABLE FROM THE RECORD. THE STOCK REGISTE R (FORM IV) FOR RAW MATERIAL RECEIPT AND CONSUMPTION AND ANOTHE R REGISTER (RG-1) FOR PRODUCTION AND DISPATCH OF FINI SH GOODS WERE MAINTAINED BY THE ASSESSEE, IN WHICH NO MAJOR DEFECT WAS POINTED OUT BY THE AO. DURING REMAND REPORT ALS O, IT HAS BEEN MENTIONED BY THE AO THAT THE FRESH RECOVERY CH ART COULD NOT BE CONSIDERED AT THE APPELLATE STAGE AS THE ASS ESSEE ITA NOS.377 & 1385/DEL./2013 SIKKA PAPERS LTD. 5 COULD HAVE REVISED THE CALCULATION BY WAY OF REVISE D RETURN. THIS CLAIM OF THE AO AS WELL AS THE REPLY OF THE AS SESSEE HAS BEEN DULY CONSIDERED BY THE LD. CIT(A) AND ADMITTED LY THE BOOKS OF ACCOUNTS HAS NOT BEEN REJECTED TO THE JUST IFY THE ESTIMATION OF YIELD BY THE LD. AO. IN THE REMAND R EPORT THE AO HAS NOT POINTED OUT ANY DEFECT IN THE DETAILS AN D EVIDENCES FURNISHED BY THE ASSESSEE. ADMITTEDLY, AS MENTIONED EARLIER, THE PRODUCTION/YIELD DEPENDS UPO N MANY FACTORS LIKE QUALITY OF RAW MATERIAL, WEATHER CONDI TIONS, ETC, THEREFORE, IN THE ABSENCE OF DEFECT IN THE BOOKS OF ACCOUNTS, WE ALSO FIND NO JUSTIFICATION TO MAKE THE ADDITION. THUS, ON THIS COUNT, WE AFFIRM THE STAND OF THE LD. CIT(A), RESULTANTLY, THE APPEAL OF THE REVENUE IS DISMISSED. 3. SO FAR AS, THE APPEAL OF THE ASSESSEE (ITA NO.1385/DEL/2013) IS CONCERNED, THE ASSESSEE IS AGG RIEVED WITH THE SUSTENANCE OF DISALLOWANCE OF RS.75,000/- OUT OF PROFIT & LOSS ACCOUNT EXPENSES UNDER THE HEAD ADMINISTRATIVE AND SELLING EXPENSES. THE LD. COUN SEL FOR THE ASSESSEE CONTENDED THAT IT MAY BE REDUCED SUBSTANTI ALLY, WHEREAS, THE LD. DR DEFENDED THE ORDER OF THE LD. C IT(A). ITA NOS.377 & 1385/DEL./2013 SIKKA PAPERS LTD. 6 3.1. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. WE FIND T HAT THE LD. CIT(A) SUSTAINED THE PART ADDITION AS ON VERIFICATI ON OF THE ACCOUNTS. IT WAS FOUND THAT SOME OF THE EXPENSES W ERE FOUND UNVERIFIABLE FOR WANT OF COMPLETE BILLS AND VOUCHER S. THE LD. CIT(A) CONSIDERED THE FACTUAL MATRIX ALONG WITH SEC TION 37(1) OF THE ACT AND NOTED THAT THE LD. AO MADE LUMP SUM ADDITION OF RS.1,50,000/-. WE NOTE THAT THERE WERE CERTAIN SELF MADE VOUCHERS AND SOME WERE DULY AUTHENTICATED , THEREFORE, WE DONT FIND INFIRMITY IN GRANTING PART RELIEF TO THE EXTENT OF RS.75,000/-, BY THE LD. CIT(A), RESULTANT LY, THE APPEAL OF THE ASSESSEE IS ALSO DISMISSED. FINALLY, THE APPEAL OF THE REVENUE AS WELL AS OF TH E ASSESSEE IS DISMISSED. THIS ORDER WAS PRONOUNCED IN THE OPEN COURT IN TH E PRESENCE OF THE LD. REPRESENTATIVES FROM BOTH SIDES AT THE CONCLUSION OF THE HEARING ON 08/11/2017. SD/- SD/- (N. K. SAINI) (JOGINDER SINGH) ' / ACCOUNTANT MEMBER # ' /JUDICIAL MEMBER DELHI; DATED : 08/11/2017 ITA NOS.377 & 1385/DEL./2013 SIKKA PAPERS LTD. 7 F{X~{T? P.S/. .. $#&' (' / COPY OF THE ORDER FORWARDED TO : 1. / / THE APPELLANT 2. 01/ / THE RESPONDENT. 3. 3 ( ) / THE CIT, NEW DELHI. 4. 3 / CIT(A)- , DELHI 5. 5 0 , , / DR, ITAT, DELHI 6. & / GUARD FILE. / BY ORDER, 15 0 //TRUE COPY// / (DY./ASSTT. REGISTRAR) , / ITAT, DELHI