Assistant Commissioner of Income-Tax -1(1), RAIPUR (CG) V. Siyaram Rice Mill, RAIPUR

ITA 59/BIL/2011

• Counselvise Citation: 5924714 RSA 2011
• Duration Of Justice: 3 year(s) 8 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-12-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2007-2008
• Appeal Filed On: 08-04-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: S K MEENA
• Keywords: Principle of natural justice

Judgement Text

INCOME TAX APPELLATE TRIBUNAL,BENCH -RAIPUR . .. . . .. . , ,, , ! ! ! !, ,, , . .. . . .. . BEFORE S/SH.H.L.KARWA,PRESIDENT AN D RAJENDRA,ACCOUNTANT MEMBER ./ ITA NO.59/BPLR/2011- # # # # / // / ASSESSMENT YEAR -2007-08 ASSTT. COMMISSIONER OF INCOME TAX 1(1), RAIPUR PAN:AAWFS 2017 F V/S. SIYARAM RICE MILL, KHOLWA BHATAPARA, RAIPUR ( ) / // / APPELLANT ) ( *+) / RESPONDENT ) ASSESSEE BY : SH. S.K. MEENA, D.R. REVENUE BY : NONE - /DATE OF HEARING :17-12-2014 - /DATE OF PRONOUNCEMENT : 17-12-2014 # # # # , 1961 1961 1961 1961- - - - 254 254254 254( (( (1 11 1) )) ) ORDER U/S.254(1)OF THE INCOME-TAX ACT,1961(ACT) PER RAJENDRA,AM < << < = = = =, ,, , ! ! ! ! : CHALLENGING THE ORDER DT. 13.12.2010 OF THE CIT(A), RAIPUR,ASSESSING OFFICER(AO)HAS RAISED FOLLOWING GROUNDS OF APPEAL: 1.WHETHER IN LAW AND FACTS AND CIRCUMSTANCES OF THE CASE THE CIT(A)WAS JUSTIFIED IN DELETING THE ADDITION OF RS.67,73,700/-MADE BY THE AO ON ACCOUNT OF LOWER RICE YIELD SHOWN BY THE ASSESSEE. 2.THE ORDER OF THE LD.CIT(A)IS ERRONEOUS BOTH IN LA W AND ON FACTS. ASSESSEE,ENGAGED IN THE BUSINESS OF MANUFACTURING A ND TRADING OF RICE AND OTHER BY-PRODUCTS, FILED ITS RETURN OF INCOME ON 31.10.2207,DECLARING TOTAL INCOME OF RS.1,97,450/-.AO FINALISED THE ASSESSMENT ON 29.12.2009,U/S.143(3)OF THE ACT,DETER MINING THE INCOME HIS INCOME AT RS.74,92, 675/-. 2. EFFECTIVE GROUND OF APPEAL IS ABOUT ADDITION OF RS. 67,73,700/-.DURING THE ASSESSMENT PROCEEDINGS THE AO FOUND THAT THE %(PERCENTAGE)OF P RODUCTION OF RICE MILLING WAS SHOWN BY THE ASSESSEE AS UNDER RICE - 61 % BROKEN RICE - 6% BRAN MOTA - 7.43% THE AO HELD THAT AS PER THE GENERAL TREND AND THE A LSO AS PER THE GUIDELINES OF FCI IN CASE OF DRY RICE MILL PLANTS WAS THAT THERE SHOULD BE 66% TO 6 7% OF RICE YIELD AND 1% TO 2 % OF BROKEN RICE YIELD,THAT THE FIGURE OF BROKEN RICE HAD BEEN INFLA TED BY 5% RESULTING SHORT YIELD OF RICE WHICH CAME TO 5%(66%-61%),FOR WHICH THE QUANTITY WORKED OUT TO 6740 QTL,THAT THE ASSESSEE HAS DIVERTED THE 6740 QTL.OF RICE TO BROKEN RICE.THE AO CALCULATED THE DIFFERENCE BETWEEN THE RATES OF RICE AND BROKEN RICE AT RS.1005 PER QTL.AND MADE AN ADDITION OF RS.67.73 LAKHS. 3. AGGRIEVED BY THE ORDER OF THE AO THE ASSESSEE FILED AN APPEAL BEFORE THE FIRST APPELLATE AUTHORITY(FAA).BEFORE HIM IT WAS ARGUED THAT YIELD TAKEN BY THE AO WAS NOT CORRECT,THAT FCI HAD ALSO ACCEPTED 25% AS BROKEN RICE IN YIELD CHART,THA T INFORMATION WAS GATHERED FROM THE WEBSITE OF THE FCI,THAT ADDITION WAS BASED ON HYPOTHETICAL AND BASELESS MANNER MERELY ON PRESUMPTION AND WITHOUT PLACING SUBSTANTIAL MATERIAL ON RECORD,THAT THE ASSESSEE HAD FURNISHED CHART SHOWING YIELD OF PAST THREE YEARS,THAT AO IGNORED THE VITAL FACTS .AFTER CONSIDERING THE ORDER OF THE AO AND THE SUBMISSIONS OF THE ASSESSEE,HELD THAT THE AO HAD NO T BROUGHT ANY MATERIAL TO SUBSTANTIATE THE ALLEGED ADDITION,THAT THE AO HAD NOT EVEN SUBMITTED A COMPARABLE CASE FROM WHERE THE YIELD OF RICE COULD BE COMPARED,THAT HE HAD ALSO NOT CONSIDE RED THE REPLY OF THE ASSESSEE FILED DURING THE ITA NO.59/BPLR/2011/SRM/- AY-2007-08 2 ASSESSMENT PROCEEDINGS ABOUT YIELD,THAT HE ALSO DID NOT CONSIDERED THE PERCENTAGE OF YIELD OF PAST THREE YEARS SUBMITTED BY THE ASSESSEE,THAT THE PAST RECORDS OF THE ASSESSEE WERE BEST GUIDE TO KNOW GROSS PROFIT,THAT THE AO ONLY PRESUMED THE PERCENTA GE YIELD ON SURMISE AND CONJUCTURE,THAT ADDITION WAS RESULT OF WILD GUESS WORK.FINALLY,HE D ELETED THE ADDITION. 4. BEFORE US,DEPARTMENTAL REPRESENTATIVE(DR)SUPPORTED THE ORDER OF THE AO.THE AUTHORISED REPRESENTATIVE(AR)SUBMITTED THAT THERE WAS NO JUSTI FICATION FOR MAKING ADDITION,THAT THE AO HAD IGNORED THE EXPLANATION FILED BY THE ASSESSEE. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL BEFORE US.WE FIND THAT WHILE MAKING THE ADDITION OF RS.67.73 LAKHS THE AO HAD AP PLIED A MATHEMATICAL FORMULA CLAIMED TO HAVE BEEN ADOPTED FROM FCI GUIDELINES.IT IS VERY ST RANGE THAT BEFORE FASTENING TAX LIABILITY TO THE ASSESSEE HE DID NOT CONSIDER IT NECESSARY TO INCORP ORATE THE REPLY OF THE ASSESSEE AND REBUT IT. PRINCIPLES OF NATURAL JUSTICE DEMAND THAT THE ASSES SEE IS ENTITLED TO GET A REASONED AND SPEAKING ORDER.A REASONED ORDER CANNOT BE PASSED WITHOUT CON SIDERING THE REPLY OF THE ASSESSEE FILED BY THE ASSESSEE AND WITHOUT GIVING REASONS AS TO WHY THE R EPLY WAS NOT ACCEPTABLE.ONCE THE ASSESSEE HAD MADE SUBMISSION ABOUT THE FCI WEB SITE IT WAS DUTY OF THE AO TO GIVE A CLEAR FINDING ABOUT IT,BUT HE CHOSE TO REMAIN SILENT ABOUT IT.HE HAD THE CASE RECORDS OF THE ASSESSEE OF EARLIER ASSESSMENT YEARS AND HE COULD HAVE EASILY FOUND AS WHAT WAS TH E YIELD FOR THOSE YEARS.WITHOUT REFERRING TO THE STATISTICS AVAILABLE WITH HIM,THE AO MADE THE A DDITION.HE HAS NOT REFERRED TO ANY COMPARABLE CASE THAT COULD PROVE THAT THE STAND TAKEN BY HIM A BOUT THE YIELD OF BROKEN-RICE AND RICE WAS BASED ON ANY SCIENTIFIC OR LOGICAL BASIS.IN SHORT,T HERE WAS NO JUSTIFICATION OF ANY KIND TO HOLD THAT THE YIELD SHOWN BY THE ASSESSEE ABOUT BROKEN RICE A ND RICE WAS LOWER AS COMPARED TO OTHER COMPARABLE CASES OR YIELD SHOWN IN EARLIER YEARS.CO NSIDERING THE FACTS AND CIRCUMSTANCES OF THE CASE,WE HOLD THAT THE ORDER OF THE FAA DOES NOT SUF FER FROM ANY INFIRMITY.SO,CONFIRMING HIS ORDER WE DECIDE EFFECTIVE GROUND OF APPEAL AGAINST THE AO . AS A RESULT,APPEAL FILED BY T HE AO STANDS DISMISSED. > #>< @ A - . ORDER PRONOUNCED IN THE OPEN COURT ON 17 TH ,DECEMBER,2014. - E 17 F ,2014 - . SD/- SD/- (H.L.KARWA/ . .. . . .. . ) ( ! ! ! ! / RAJENDRA) PRESIDENT/ = = = = /ACCOUNTANT MEMBER /RAIPUR. F DATE:17.12.2014 - -- - *#GH *#GH *#GH *#GH IH IH IH IH / COPY OF THE ORDER FORWARDED TO : 1. ASSESSEE / ) 2. RESPONDENT / *+) 3. THE CONCERNED CIT(A)/ J K , 4. THE CONCERNED CIT / J K 5. DR ITAT,RAIPUR BENCH/ H *## , . . . , 6. GUARD FILE/ . +H *# //TRUE COPY// / BY ORDER, / DY./ASST. REGISTRAR , /ITAT, RAIPUR.