Vimal Alloys Pvt. Ltd., Mandi Gobindgarh V. ACIT, Circle, Mandi Gobindgarh

ITA 586/CHANDI/2019

• Counselvise Citation: [2022] 105 COUNSELVISE.COM (IT) 1421 (ITAT-CHANDIGARH)
• Duration Of Justice: 3 year(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-05-2022
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2013-2014
• Appeal Filed On: 29-04-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Unexplained investment; Opportunity of being heard; Set aside

Judgement Text

आयकर अपील य अ धकरण,च डीगढ़ यायपीठ “बी” , च डीगढ़ IN THE INCOME TAX APPELLATE TRIBUNAL, CHANDIGARH BENCH “B”, CHANDIGARH ी एन.के .सैनी, उपा य! एवं ी स ु धांश ु ीवा&तव, या(यक सद&य BEFORE: SHRI. N.K.SAINI, VP & SHRI. SUDHANSHU SRIVASTAVA, JM ITA NO. 586/Chd/2019 Assessment Year : 2013-14 Vimal Alloys Pvt, Ltd. Village Saunti, Amloh Road, Mandi Gobindgarh The ACIT, Circle Mandi Gobindgarh Hq. Sirhind PAN NO: AAACV7801M Appellant Respondent ITA NO. 275/Chd/2019 Assessment Year : 2014-15 Vimal Alloys Pvt, Ltd. Village Saunti, Amloh Road, Mandi Gobindgarh The DCIT, Circle Mandi Gobindgarh Hq. Sirhind PAN NO: AAACV7801M Appellant Respondent ! " Assessee by : Shri Vipen Sethi, Advocate # ! " Revenue by : Dr. Ranjeet Kaur, Sr. DR $ % ! & Date of Hearing : 24/05/2022 '()* ! & Date of Pronouncement : 24/05/2022 आदेश/Order PER N.K. SAINI, VICE PRESIDENT These two appeals by the assessee are directed against the separate orders dt. 22/03/2019 and 28/12/2018 for the assessment years 2013-14 and 2014- 15 respectively. 2. Since the issues involved are common in these appeals which were heard together, so these are being disposed off by this consolidated order for the sake of convenience and brevity. 3. The grounds raised in ITA No. 586/Chd/2019 read as under: 2 1. That the Id. CIT(A) is not justified in upholding the rejection of books of account only on the basis of alleged variation in production without finding any fault. 2. That without prejudice to above the Id CIT (Appeal) is not justified in upholding the addition on account of alleged variation of consumption of electricity. 3. (a) That the consumption of electricity and production there from recorded in the books of accounts on the basis of working from 8AM to 8 PM. whereas the Id A.O has taken the figures from 00 hours to 00 hours. (b) That the Id AO failed to appreciate that the assessee is engaged in making Kulfi (Steel Ingots) and as also customized casting and the consumption of electricity is very high which was explained during the course of assessment proceedings but no notice has been taken by Id A.O . (c) That the Id A.O failed to appreciate that the production recorded in the books of accounts on final output whereas the material is supplied to the furnace right from the start of process which was brought to the notice during the course of proceedings. 4. Identical grounds have been raised for the A.Y. 2014-15 in ITA No. 275/Chd/2019. 5. The main grievance of the assessee in both these appeals relates to the sustenance of addition made by the AO on account of alleged variation of consumption of electricity. 6. During the course of hearing the Ld. Counsel for the assessee at the very outset stated that the issue under consideration is squarely covered vide common order dt. 14/02/2017 in cross appeals in assesee’s own case in ITA No. 261/Chd/2016 and 247/Chd/2016 for the A.Y 2012-13 which were decided alongwith other cross appeals of the various assessee’s, copy of the said order was furnished which is placed on record. 7. The Ld. Sr. DR in her rival submissions submitted that the facts for the year under consideration are distinguishable from the facts involved in the earlier 3 year i.e; A.Y. 2012-13 and that the res-judicata is not applicable in the Income tax matters. 8. After considering the submissions of both the parties and the material available on the record, it is noticed that an identical issue having similar facts was a subject matter of the cross appeals by the assessee and the Department for the A.Y. 2012-13 in assessee’s own case wherein the issue has been remanded back to the file of the AO for fresh adjudication. The relevant findings has been given in para 10 of the aforesaid order dated 14/02/2017 which read as under: “10. Considering the facts and circumstances of the case in the light of the internal guidelines issued by the Pr. Commissioner of Income Tax, Patiala by forming a Committee to consider the grievance of the tax payers, it is clear that Revenue Department has taken some reasonable basis to compute the income of the assessee on the basis of the power consumption. It is admitted fact that in subsequent years, some favourable view have been taken in favour of the assessees by following the same guidelines. It may be noted here that the assessee in this appeal has challenged the rejection of the books of account under section 145(3)/144 of Income Tax Act alongwith upholding of the addition of Rs. 55,78,521/- on account of unaccounted investment against addition of Rs. 1,29,13,563/-. In the ground of appeal also, assessee has stated that ld. CIT(Appeals) has erred in not giving any finding against addition of Rs. 60,88,005/- made by Assessing Officer on account of unaccounted profit out of unaccounted production. The Revenue Department in their appeal has challenged the order of ld. CIT(Appeals) in restricting the addition of Rs. 1,90,01,568/- to the extent of Rs. 1,16,66,526/-. Since all the respective grounds of appeal in cross appeals are connected with estimation of the unaccounted production based upon power consumption by estimating unaccounted investment and unaccounted profit out of unaccounted production and on the same, Revenue Department has constituted the Committee to consider the grievances of the assessees/tax payers and ld. Pr. Commissioner of Income Tax issued the above guidelines by modifying the basis of estimation of unaccounted production and same guidelines have been adopted in subsequent years by the respective Assessing Officers, therefore, in our considered view, entire matter requires re-consideration at the level of the Assessing Officer. In this view of the matter, we set aside the orders of authorities below and restore the entire issue to the file of Assessing Officer i.e. rejection of the books of account under section 145(3)/144, unaccounted production of finished goods, unaccounted profit and unaccounted investment out of unaccounted production with reference to consumption of electricity units per metric ton production of finished goods with direction to re-decide the entire issue in accordance with law in the light of the internal guidelines issued by the ld. Pr. Commissioner of Income Tax, Patiala. The Assessing Officer shall give reasonable sufficient opportunity of being heard to 4 the assessee and assessee shall be at liberty to raise any contention before Assessing Officer for completion of the assessment in accordance with law.” So respectfully following the aforesaid referred to order dt. 14/02/2017 the issue raised by the assessee is set aside to the file of the AO for fresh adjudication after providing due and reasonable opportunity of being heard to the assessee. 9. In the result, appeals are allowed for statistical purposes. (Order pronounced in the open Court on 24/05/2022 ) Sd/- Sd/- स ु धांश ु ीवा&तव एन.के .सैनी, (SUDHANSHU SRIVASTAVA) ( N.K. SAINI) या(यक सद&य/ JUDICIAL MEMBER उपा य! / VICE PRESIDENT AG Date: 24/05/2022 ( + ! , - . - Copy of the order forwarded to : 1. The Appellant 2. The Respondent 3. $ / CIT 4. $ / 0 1 The CIT(A) 5. - 2 ग 4 5 & 4 5 678 ग9 DR, ITAT, CHANDIGARH 6. ग 8 : % Guard File ( + $ By order, ; # Assistant Registrar