ACIT, New Delhi V. Sh. Rajender Prasal Bansal, New Delhi

ITA 4231/DEL/2012

• Counselvise Citation: 423120114 RSA 2012
• Duration Of Justice: 1 year(s) 3 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-11-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: F
• Next Hearing Date: 17-10-2013
• Assessment Year: 2009-2010
• Appeal Filed On: 06-08-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SATPAL SINGH

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH F: NEW DELHI) BEFORE SHRI A. D. JAIN, JUDICIAL MEMBER AND SHRI T. S. KAPOOR, ACCOUNTANT MEMBER ITA NO.4231/DEL/ 2012 (ASSESSMENT YEAR : 2009-10) ACIT VS. RAJENDER PRASAD BANSAL CIRCLE-29(1), ROOM NO.107, 4099, 2 ND FLOOR, DRUM SHAPED BUILDING, I. P. ESTATE NAYA BAZAR, NEW DELHI. NEW DELHI. PAN:AEYPB4371B ASSESSEE BY : SHRI GURJEET SINGH, CA, REVENUE BY :SHRI SATPAL SINGH, SR.DR ORDER PER T.S. KAPOOR, AM: THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-XXV, NEW DELHI DATED 07.05. 2012 FOR THE ASSESSMENT YEAR 2009-10. THE GROUNDS OF APPEAL TAKE N BY REVENUE ARE AS UNDER: 1. THE LD. CIT (A) HAS ERRED IN DELETING THE ADDIT ION OF RS.1,96,950/- MADE BY THE ASSESSING OFFICER UNDER T HE HEAD G.P. ON THE GROUND THAT THERE HAD BEEN SUPPRESSION OF PRODUCTION CONSIDERING THE CONSUMPTION OF ELECTRICI TY. 2. THE LD. CIT (A) HAS ERRED IN DELETING THE ADDITI ON OF RS.8,52,623/- MADE BY THE ASSESSING OFFICER UNDER T HE HEAD MILLING GAIN ON THE GROUND THAT THERE WAS SUPPRESSI ON OF PRODUCTION WHICH WAS NOT DECLARED BY THE ASSESSEE. ITA NO.4231/DEL/2012 2 2. THE BRIEF FACTS OF THE CASE ARE THAT RETURN OF I NCOME DECLARING TOTAL INCOME OF RS.17,43,040/- WAS FILED ON 30.09.2009. T HE ASSESSEE WAS ENGAGED IN THE MANUFACTURING AND TRADING OF ATTA, M AIDA, SUJI ETC. THE CASE WAS SELECTED FOR SCRUTINY. 3. DURING ASSESSMENT PROCEEDINGS THE ASSESSEE WAS A SKED TO FURNISH MONTH WISE CONSUMPTION OF ELECTRICITY AND PRODUCTIO N, WHICH WAS DULY FILED AND ON THE BASIS OF SUCH INFORMATION THE ASSESSING OFFICER ARRIVED AT THE CONCLUSION THAT IN THE MONTH OF MARCH THE PRODUCTIO N TO ELECTRIC CONSUMPTION WAS HIGHER AS COMPARED TO PRECEDING MON THS. THEREFORE, ASSESSEE WAS FURTHER REQUIRED TO FURNISH INFORMATIO N REGARDING MONTH WISE PRODUCTION, DETAILS OF PURCHASES CONSUMPTION OF VAR IOUS PACKING MATERIALS, INVENTORY REGISTER OF PURCHASES ETC. HOWEVER, THE A SSESSEE DID NOT FURNISH THE DETAILS ASKED FOR BY THE ASSESSING OFFICER. THE REFORE, ASSESSING OFFICER ON THE BASIS OF THE INFORMATION AVAILABLE HELD THAT PRODUCTION SHOULD BE INCREASED BY 2% FROM APRIL TO FEBRUARY TO ARRIVE AT THE CORRECT INCOME OF THE ASSESSEE. THEREFORE, HE ARRIVED AT THE FIGURE O F 2646 QUINTAL OF PRODUCTION WITH A PRODUCTION FIGURE OF RS.32,02,450 /- AND APPLYING A GP RATIO OF 6.15% MADE AN ADDITION OF RS.1,96,950/-. 4. THE ASSESSING OFFICER FURTHER OBSERVED THAT IN T HE CASE OF MILLING OF WHEAT THE ADDITION DUE TO MOISTURE GAIN HAS TO BE M ADE AS THE WHEAT GAINS ITA NO.4231/DEL/2012 3 WEIGHT BY 2 TO 3% THEREFORE, VIDE LETTER DATED 01.1 1.2011, THE ASSESSEE WAS ASKED TO EXPLAIN THE SAME AND VIDE LETTER DATED 09. 12.2011 THE ASSESSEE SUBMITTED THAT THE THEORY OF GAIN IN WHEAT DUE TO M OISTURE IS ONLY ACADEMIC AND MOREOVER IT WAS SUBMITTED THAT MOISTURE WAS DUL Y CONTROLLED AND QUALITY WAS MAINTAINED AND, THEREFORE, NO MOISTURE GAIN HAD OCCURRED TO THE WEIGHT OF THE WHEAT. HOWEVER, THE ASSESSING OFFICER DID NO T AGREE WITH THE CONTENTIONS OF ASSESSEE AND MADE AN ADDITION OF RS. 8,52,623/- AS MILLING GAIN ON ACCOUNT OF MOISTURE GAIN. 5. AGGRIEVED, THE ASSESSEE FILED APPEAL BEFORE CIT (A) AND LD. CIT (A) ON THE BASIS OF VARIOUS SUBMISSIONS FILED BY ASSESS EE DELETED THE ADDITION MADE BY ASSESSING OFFICER BY HOLDING AS UNDER: WITH REGARD TO THE FIRST ADDITION 4.1 THE FACTS EMANATING FROM THE ORDER OF THE ASSES SING OFFICER AND THE SUBMISSIONS OF THE ASSESSEE IS THAT THE ASSESSEE IS THE PROPRIETOR OF M/S SHREE BALAJI FOOD PRODUCTS AND IS ENGAGED IN THE BUSINESS OF MANUFACTURING/ MILLING O F ATTA & MAIDA ETC. THE ASSESSEE HAS DECLARED THE TURNOVER O F RS.16,03,61,859/-, THE GP OF RS.1,02,02,893/-, THE NP OF RS.19,87,601/- AND JOB WORK OF RS.54,75,841/- AND H AS FILED THE RETURN INCOME OF RS.17,43,040/-. THE ASSESSEE IS AL SO DOING THE JOB WORK FOR BRITANNIA INDUSTRIES LTD. THE ASSESSIN G OFFICER HAS MADE THE ESTIMATED GP ADDITION OF RS.1,96,950/- ON THE GROUND THAT THERE HAS BEEN SUPPRESSION OF PRODUCTIO N IN THE MONTHS FROM APRIL TO FEBRUARY AS THERE HAS BEEN LOW PRODUCTION IN THESE MONTHS COMPARED TO THE HIGHER P RODUCTION IN THE MONTH OF MARCH CONSIDERING THE HIGHER CONSUM PTION OF ELECTRICITY VIDE THE ORDER OF THE ASSESSING OFFICER . ITA NO.4231/DEL/2012 4 4.2 THE ASSESSEE IS IN APPEAL AGAINST THE ORDER OF THE ASSESSING OFFICER AND IT IS SUBMITTED THAT THE ASSE SSING OFFICER IS NOT JUSTIFIED TO MAKE THE ADDITION WITHOUT ANY V ALID AND PROPER REASONS AND IT IS SUBMITTED THAT THE ASSESSI NG OFFICER HAS MADE THE ESTIMATED GP ADDITION IN AN AD-HOC MANNER. IT IS SUBMITTED THAT THE ASSESSING OFFICER HAS NOT GIVEN ANY COMPARABLE CASE AND THERE IS NO MATERIAL EVIDENCE O F ANY SUPPRESSION OF PRODUCTION. IT IS ALSO SUBMITTED THA T THE ASSESSEE IS MAINTAINING BOOKS OF ACCOUNTS AND THE SAME ARE A UDITED U/S 44AB AND THE ASSESSING OFFICER HAS NOT FOUND ANY DE FECT IN THE BOOKS OF ACCOUNTS OF THE ASSESSEE. IT IS ALSO SUBMI TTED THAT THERE WAS SCRUTINY ASSESSMENT IN THE PRECEDING AY 2008-09 AND THERE IS NO SUCH ADDITION IN THE EARLIER YEAR. 4.3 I HAVE CONSIDERED THE ORDER OF THE ASSESSING OFFICE R AND THE SUBMISSIONS OF THE ASSESSEE AND I FIND CONSIDER ABLE MERIT IN THE SUBMISSION OF THE ASSESSEE. IT IS APPA RENT FROM THE ORDER OF THE ASSESSING OFFICER THAT THE ASSESSING OFFICER HAS NOT BROUGHT ANY MATERIAL EVID ENCE AGAINST THE ASSESSEE REGARDING THE SUPPRESSION OF PRODUCTION AND IT IS ALSO APPARENT THAT THE GP HAS BEEN ESTIMATED AND THE ADDITION HAS BEEN MADE WITHOUT AN Y VALID REASONS. AFTER CONSIDERING ALL THE FACTS AND CIRCUMSTANCES OF THE CASE, I AM OF THE VIEW THAT TH ERE IS NO PROPER JUSTIFICATION FOR THE ESTIMATED ADDITION MADE BY THE ASSESSING OFFICER AND ACCORDINGLY, THE SAME IS DELETED. WITH REGARD TO SECOND ADDITION 5.1 THE FACTS EMANATING FROM THE ORDER OF THE ASSES SING OFFICER AND THE SUBMISSIONS OF THE ASSESSEE IS THAT THE ASSESSING OFFICER HAS MADE THE ESTIMATED ADDITION O F RS.8,52,623/- ON THE GROUND THAT THERE HAS BEEN MIL LING GAIN OR PRODUCTION GAIN OF MATERIALS WHICH HAS NOT BEEN DEC LARED BY THE ASSESSEE AND AS SUCH THERE IS SUPPRESSION OF PRODUC TION VIDE THE ORDER OF THE ASSESSING OFFICER. 5.2 THE ASSESSEE IS IN APPEAL AGAINST THE ORDER OF THE ASSESSING OFFICER AND IT IS SUBMITTED THAT THE ASSE SSING OFFICER ITA NO.4231/DEL/2012 5 IS NOT JUSTIFIED TO MAKE THE ADDITION WITHOUT ANY V ALID AND PROPER REASONS AND IT IS SUBMITTED THAT THE ASSESSI NG OFFICER HAS MADE THE ESTIMATED ADDITION UNDER THE HEAD MILLING GAIN OR OVER PRODUCTION IN AN AD-HOC MANNER. IT IS SUBMITTED THA T THE ASSESSING OFFICER HAS NOT GIVEN ANY COMPARABLE CASE AND THERE IS NO MATERIAL EVIDENCE OF ANY MILLING GAIN OR SUPP RESSION OF PRODUCTION. IT IS ALSO SUBMITTED THAT THE ASSESSEE IS MAINTAINING BOOKS OF ACCOUNTS AND THE SAME AS AUDITED U/S 44AB AND THE ASSESSING OFFICER HAS NOT FOUND ANY DEFECT IN THE B OOKS OF ACCOUNTS OF THE ASSESSEE. IT IS ALSO SUBMITTED THAT THERE WAS SCRUTINY ASSESSMENT IN THE PRECEDING AY 2008-09 AND THERE IS NO SUCH ADDITION IN THE EARLIER YEAR. 5.3 I HAVE CONSIDERED THE ORDER OF THE ASSESSING O FFICER AND THE SUBMISSIONS OF THE ASSESSEE AND I FIND CONSIDER ABLE MERIT IN THE SUBMISSION OF THE ASSESSEE. IT IS APPARENT FROM THE ORDER OF THE ASSESSING OFFICER THAT THE ASSESSING OFFICER HA S NOT BROUGHT ANY MATERIAL EVIDENCE AGAINST THE ASSESSEE REGARDIN G ANY MILLING GAIN OR OVER PRODUCTION OR ANY SUPPRESSION OF PRODUCTION AND IT IS ALSO APPARENT THAT THE ESTIMAT ED ADDITION HAS BEEN MADE WITHOUT ANY VALID REASONS. AFTER CONS IDERING ALL THE FACTS AND CIRCUMSTANCES OF THE CASE, I AM OF TH E VIEW THAT THERE IS NO PROPER JUSTIFICATION FOR THE ESTIMATED ADDITION MADE BY THE ASSESSING OFFICER AND ACCORDINGLY, THE SAME IS DELETED. 6. AGGRIEVED WITH THE ORDER OF CIT (A), THE REVENUE IS IN APPEAL BEFORE US. AT THE OUTSET THE LD. DEPARTMENTAL REPRESENTATI VE INVITED OUR ATTENTION TO PAGE 2 OF ASSESSMENT ORDER AND HIGHLIGHTED THAT THE RE IS ALWAYS A NEXUS BETWEEN ELECTRICITY CONSUMPTION AND PRODUCTION IN A MANUFACTURING UNIT AND THE CONSUMPTION OF ELECTRICITY IN A MONTH AS COMPAR ED TO ANOTHER MONTH GIVES A FAIR IDEA OF PRODUCTION IN RESPECTIVE MONTH S. CITING THE DATA OF MONTHLY CONSUMPTION OF ELECTRICITY AND PRODUCTION A S CONTAINED ON PAGE 2 OF ASSESSMENT ORDER, THE LD. DEPARTMENTAL REPRESENTATI VE ARGUED THAT THE ITA NO.4231/DEL/2012 6 PRODUCTION RATIO AS COMPARED WITH THE ELECTRICITY E XPENSES WAS HIGHEST IN THE MONTH OF MARCH WHICH CLEARLY ESTABLISHES THAT IN TH E EARLIER MONTHS FROM APRIL TO FEBRUARY, THE ASSESSEE HAD SUPPRESSED PROD UCTION AND, THEREFORE, ASSESSING OFFICER HAD RIGHTLY MADE THE ADDITION ON ACCOUNT OF SUPPRESSION OF PRODUCTION. SIMILARLY IT WAS ARGUED THAT ASSESSI NG OFFICER HAD RIGHTLY MADE THE ADDITION ON ACCOUNT OF MOISTURE GAIN AS IT IS AN ESTABLISHED FACT THAT WHEAT GAINS MOISTURE DURING STORAGE. IN VIEW OF TH E ABOVE, IT WAS SUBMITTED THAT THE ORDER OF ASSESSING OFFICER BE RESTORED. 7. THE LD. AR ON THE OTHER HAND INVITED OUR ATTENTION TO PAGE 10 OF PAPER BOOK WHERE AUDITED FIGURES OF OPENING STOCKS, FINISHED GOODS AND MANUFACTURED GOODS WERE PLACED AND IT WAS SUBMITTED THAT IS CERTIFIED BY THE AUDITORS THERE WAS NIL SHORTAGE IN THE QUANTITATIVE RECORDS. HE FURTHER ARGUED THAT IN 11 MONTHS FROM APRIL TO FEBRUARY THE CONSUM PTION OF ELECTRICITY WAS CONSISTENT AND ASSESSING OFFICER DID NOT HAVE ANY M ATERIAL AND HE JUST ESTIMATED THE PRODUCTION ON HYPOTHETICAL BASIS. HE FURTHER ARGUED THAT IN THE PRECEDING YEARS NO SUCH ADDITION WAS MADE AND NP RA TIO IN THE CURRENT YEAR WAS SAME WHEREAS TURNOVER HAD DOUBLED. 8. AS REGARDS SECOND GROUND OF APPEAL, THE LD. AR A RGUED THAT ASSESSING OFFICER WITHOUT ANY BASIS HELD THAT THERE WAS A MOISTURE GAIN IN WHEAT AND WITHOUT ANY CORROBORATING MATERIAL MADE T HE ADDITION WHICH LD. ITA NO.4231/DEL/2012 7 CIT (A) HAS RIGHTLY DELETED. THE LD. AR RELIED UPON THE CASE LAW OF CIT VS. POONAM RANI DECIDED BY HONBLE DELHI HIGH COURT WI TH THE PROPOSITION THAT WHERE ASSESSING OFFICER DID NOT POINT OUT ANY DISCREPANCY IN THE ACCOUNT BOOKS MAINTAINED BY ASSESSEE, THE ADDITION CANNOT BE MADE ON ESTIMATED BASIS. 9. WE HAVE HEARD THE RIVAL SUBMISSIONS OF BOTH THE PARTIES AND HAVE GONE THROUGH THE MATERIAL PLACED ON RECORD. WE FIND THAT ASSESSING OFFICER HAD MADE ADDITIONS ON THE BASIS OF HYPOTHESIS ONLY AND THERE WAS NO MATERIAL AVAILABLE WITH THE ASSESSING OFFICER TO PROVE THAT THERE WAS SUPPRESSION OF PRODUCTION OR THERE WAS ACTUAL GAIN OF WEIGHT OF WH EAT DUE TO MOISTURE. THEREFORE, IN OUR OPINION LD. CIT (A) HAS RIGHTLY D ELETED THE ADDITIONS. IN VIEW OF THE ABOVE THE APPEAL FILED BY REVENUE IS DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON 8 TH /11/ 2013 SD/- SD/- (A. D. JAIN) (T. S. KAPOOR) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED THE 8 TH DAY OF NOVEMBER, 2013 S.SINHA COPY FORWARDED TO 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT (A) ITA NO.4231/DEL/2012 8 5. CIT(ITAT), NEW DELHI. AR,ITAT NEW DELHI.