Assistant Commissioner of Income-tax, Jalna Circle, Jalna V. M/s. Saptashrungi Alloys Private Limited, Jalna

ITA 586/PUN/2018

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 6282 (ITAT-PUNE)
• Duration Of Justice: 3 year(s) 5 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-09-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 13-09-2021
• Assessment Year: 2011-2012
• Appeal Filed On: 02-04-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: IS DIRECTED AGAINS T PASSED
• Section: 13

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH, A PUNE BEFORE SHRI R.S. SYAL, VICE PRESIDENT AND SHRI S.S. VISWANETHRA RAVI, JUDICIAL MEMBER . / ITA NO.586/PUN/2018 / ASSESSMENT YEAR : 2011-12 ACIT, JALNA CIRCLE, JALNA V S. M/S.SAPTASHRUNGI ALLOYS PVT. LTD., PLOT NO.C -3/1, ADDL. MIDC AREA, JALNA 431 203 PAN : AAICS2970E APPELLANT RESPONDENT / ORDER PER R.S.SYAL, VP : THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER PAS SED BY THE LD. CIT(A)-1, AURANGABAD ON 10-01-2018 IN RELATIO N TO THE ASSESSMENT YEAR 2011-12. 2. THE ONLY ISSUED RAISED HEREIN IS AGAINST RESTRICTING THE A DDITION BY THE CIT(A) ON ACCOUNT OF SUPPRESSED PRODUCTION FROM RS.5,05,56,718 TO RS.22,54,480. 3. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT THE ASSESS EE IS ENGAGED IN MANUFACTURING OF MS BILLETS FROM SPONGE IRON AND MS SCRAP. THE ASSESSEE FILED E-RETURN DECLARING LOSS OF RS. 3,73,611/-. THE ASSESSING OFFICER COMPLETED ASSESSMENT AT TOTAL INCOME O F ASSESSEE BY NONE REVENUE BY SHRI A.M. MAHADEVAN KRISHNAN DATE OF HEARING 13-09-2021 DATE OF PRONOUNCEMENT 13-09-2021 ITA NO.586/PUN/2018 M/S. SAPTASHRUNGI ALLOYS PVT. LTD., 2 RS.4,28,960. THEREAFTER, THE PR. CIT, VIDE HIS ORDER U/S .263 DATED 31- 03-2016, HELD THE ASSESSMENT ORDER TO BE ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE. THE AO, IN THE CONSEQUENTIAL PROCEEDINGS, FOUND THAT THE ASSESSEE WAS INVOLVED IN CLANDE STINE REMOVAL OF GOODS WITHOUT PAYMENT OF EXCISE DUTY TO THE TUNE OF RS.58,05,287 ON THE VALUE OF GOODS AMOUNTING TO RS.5,63 ,62,005/. AFTER DEDUCTING SUCH AMOUNT OF EXCISE DUTY PAID BY THE ASSE SSEE, THE AO MADE AN ADDITION OF RS.5,05,56,718/- ON ACCOUNT OF U NACCOUNTED SALES. THE LD. CIT(A), RELYING ON THE PUNE TRIBUNAL ORDE RS IN M/S. RAJURI STEEL PVT. LTD. AND M/S. META ROLLS & COMMODITIES PVT. LTD., HELD THAT THE ADDITION SHOULD BE MADE ONLY FOR THE PROFIT ELEM ENT EMBEDDED IN SUCH SALES AND NOT THE ENTIRE AMOUNT OF SALES. TAKING COGNIZANCE OF THE TRIBUNAL VIEW IN IDENTICAL CIRCUMSTANCES, HE RESTRICTED THE ADDITION TO 4% OF SUCH SALES. AGGRIEVED THEREB Y, THE REVENUE HAS APPROACHED THE TRIBUNAL. 4. WE HAVE HEARD THE LD. DR AND GONE THROUGH THE RELEVA NT MATERIAL ON RECORD. THERE IS NO APPEARANCE FROM THE SID E OF THE ASSESSEE DESPITE NOTICE. IT IS SEEN THAT THE AO FOUND THE A SSESSEE TO BE INVOLVED IN MAKING UNACCOUNTED SALES WITHOUT PAYMENT OF EX CISE DUTY ON SUCH GOODS MANUFACTURED BY IT. THIS FACTUAL MATRIX IS NOT CONTROVERTED. FOR SELLING GOODS OUTSIDE THE BOOKS OF ACCOUN T, ONE ITA NO.586/PUN/2018 M/S. SAPTASHRUNGI ALLOYS PVT. LTD., 3 NEEDS TO MANUFACTURE THE SAME, WHICH ENTAILS COSTS. IN SUCH CIRCUMSTANCES, IT IS THE PROFIT ELEMENT PLUS BASIC INVESTMENT, WH ICH CAN BE TAXED. IT IS DISCERNIBLE FROM THE IMPUGNED ORDER TH AT THE PUNE TRIBUNAL IN IDENTICAL FACTS AND CIRCUMSTANCES HAS RESTRICTED THE ADDITION TO 4%. THE LD. DR COULD NOT POINT OUT THAT THE VIEW TAK EN BY THE TRIBUNAL IN SUCH ORDERS, AS TAKEN NOTE OF BY THE LD. F IRST APPELLATE AUTHORITY IN THE IMPUGNED ORDER, HAS BEEN MODIFIED OR OVER TURNED BY THE HONBLE HIGH COURT. IN THAT VIEW OF THE MATTER, NO INFIRMITY CAN BE TRACED IN THE IMPUGNED ORDER RESTRICTING THE ADDITION TO THIS LEVEL. WE, THEREFORE, UPHOLD THE SAME. 5. IN THE RESULT, THE APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 13 TH SEPTEMBER, 2021. SD/- SD/- ( S.S. VISWANETHRA RAVI ) (R.S.SYAL) JUDICIAL MEMBER VIC E PRESIDENT PUNE; DATED : 13 TH SEPTEMBER, 2021 ITA NO.586/PUN/2018 M/S. SAPTASHRUNGI ALLOYS PVT. LTD., 4 / COPY OF THE ORDER IS FORWARDED TO : 1. / THE APPELLANT; 2. / THE CIT(A)-1, AURANGABAD 3. THE PR.CIT-1, AURANGABAD 4. 5. DR, ITAT, A BENCH, PUNE / GUARD FILE. / BY ORDER, // TRUE COPY // SENIOR P RIVATE SECRETARY , / ITAT, PUNE DATE 1. DRAFT DICTATED ON 13-09-2021 SR.PS 2. DRAFT PLACED BEFORE AUTHOR 13-09-2021 SR.PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. JM 5. APPROVED DRAFT COMES TO THE SR.PS/PS SR.PS 6. KEPT FOR PRONOUNCEMENT ON SR.PS 7. DATE OF UPLOADING ORDER SR.PS 8. FILE SENT TO THE BENCH CLERK SR.PS 9. DATE ON WHICH FILE GOES TO THE HEAD CLERK 10. DATE ON WHICH FILE GOES TO THE A.R. 11. DATE OF DISPATCH OF ORDER. *