M/s. Nilo Plast, Baroda V. The Income tax Officer,Ward-2(2), Baroda

ITA 613/AHD/2012

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 1677 (ITAT-AHMEDABAD)
• Duration Of Justice: 4 year(s) 2 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-05-2016
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 10-05-2016
• Assessment Year: 2003-2004
• Appeal Filed On: 12-03-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: SONIA KUMAR
• Keywords: Depreciation; Rectification of order; Unabsorbed depreciation
• Section: 143(3); 154

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD D BENCH (BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER & SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER) ITA. NO: 613/AHD/2012 (ASSESSMENT YEAR: 2003-04) M/S. NILO PLAST 243, GIDC MAKARPURA, BARODA- 390010 V/S INCOME TAX OFFICER, WARD- 2 (2), BARODA (APPELLANT) (RESPONDENT) PAN: AABFN5987C APPELLANT BY : SMT. ARTI N. SHAH, AR RESPONDENT BY : SMT. SONIA KUMAR, SR. D.R. ( )/ ORDER DATE OF HEARING : 10 -05-201 6 DATE OF PRONOUNCEMENT : 12 -05-2016 PER N.K. BILLAIYA, ACCOUNTANT MEMBER: 1. THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST THE ORDER OF LD. CIT(A)-III, BARODA DATED 19.12.2011 PERTAINING TO A .Y. 2003-04. 2. THE GRIEVANCE OF THE ASSESSEE READ AS UNDER:- ITA NO. 613/ AHD/2012 . A.Y. 2003-0 4 2 1. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-II I, BARODA HAS ERRED IN LAW AND ON FACTS OF THE CASE IN NOT TAKING INTO CONSIDERATION THE HIGHER CONSUMPTION OF POWER REQUIRED FOR THE PRODUCTION ON ACCOUNT OF JOB WORK. 2. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-II I, BARODA HAS ERRED IN LAW AND ON FACTS OF THE CASE IN NOT GIVING FULL RELIEF FOR ADDITION ON ACCOUNT OF SUPPRESSED SALE OF RS. 15,92,461/- COMPU TED ON THE BASIS OF WRONG POWER CONSUMPTION RATIO BY THE ASSESSING OFFI CER. 3. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-II I, BARODA HAS ERRED IN LAW AND ON FACTS OF THE CASE CONFIRMING ACTION O F ASSESSING OFFICER, IN NOT ADJUSTING BROUGHT FORWARD UNABSORBED DEPRECIATI ON OF RS.2,02,656/-OF ASST. YEAR 2002-03 FROM TOTAL INCOME FOR ASST. YEAR 2003-04. 3. ASSESSEE IS A MANUFACTURER OF DRIP SPRINKLER, LLDP AND HPPE PIPES. THE RETURN OF INCOME WAS FILED FOR THE YEAR UNDER C ONSIDERATION ON 17.11.2003 DECLARING A LOSS OF RS. 97,520/-. THE RE TURN WAS SELECTED FOR SCRUTINY ASSESSMENT AND AFTER THOROUGH SCRUTINY OF THE ACCOUNTS, THE A.O COMPUTED THE ASSESSED INCOME AS UNDER:- NET LOSS AS PER RETURN () 97520 + (A) SALES MADE OUT OF UNDISCLOSED PRODUCTION RS. 1592461/- (B) DISALLOWANCE ON ACCOUNT OF INTEREST OTHER THAN BUSINESS PURPOSES RS. 16800/- (C) UNEXPLAINED INTRODUCTION OF CREDIT RS. RS. 23,000/- NET TAXABLE INCOME RS. 1534740/- AND ACCORDINGLY THE ASSESSMENT WAS MADE U/S. 143(3) OF THE ACT VIDE ORDER DATED 29.03.2006. ITA NO. 613/ AHD/2012 . A.Y. 2003-0 4 3 4. ASSESSEE STRONGLY AGITATED THE ASSESSMENT BEFORE TH E LD. CIT(A) AND AFTER CONSIDERING THE FACTS AND THE SUBMISSIONS, TH E LD. CIT(A) DIRECTED THE A.O TO RE-COMPUTE THE DISALLOWANCE IN THE LIGHT OF THE RATIO LAID DOWN BY THE HONBLE PUNJAB AND HARYANA HIGH COURT I N THE CASE OF ABHISHEK INDUSTRIES LTD. IN TAX APPEAL NO. 110 OF 2 005. THE RELEVANT FINDINGS OF THE CIT(A) READ AS UNDER:- 4.3.7. AS REGARDS ESTIMATION OF SUPPRESSED SALES TH E ASSESSING OFFICER HAS GIVEN CREDIT TO THE APPELLANT @ 40% FOR CERTAIN FACTORS A S MENTIONED AT PAGE NO, 9 OF THE ASSESSMENT ORDER. HOWEVER, I INTEND TO THE AGRE E WITH THE ID. COUNSEL THAT CREDIT FOR CONSUMPTION OF ELECTRICITY FOR PRODUCTIO N IN RESPECT OF JOB WORK CARRIED- OUT BY THE APPELLANT HAS NOT BEEN GIVEN. THE ASSESS ING OFFICER IS, THEREFORE, DIRECTED TO RE-COMPUTE THE FIGURE OF SUPPRESSED SAL ES AFTER DUE CREDIT FOR PRODUCTION ON ACCOUNT OF JOB WORK AFTER VERIFICATIO N. THE ADDITION, SUBJECT TO RE- COMPUTATION AS STATED ABOVE, IS THEREFORE, CONFIRME D,' 5. PURSUANT TO THE DIRECTIONS OF THE LD. CIT(A), THE A .O PASSED THE FOLLOWING RECTIFICATION ORDER. IN THIS CASE, ASSESSEE VIDE ITS APPLICATION FOR RE CTIFICATION DATED 11-06-2007 HAS STATED THAT THERE IS A MISTAKE IN THE ORDER U/S . 154 DATED 07-06-2007 GIVING EFFECT TO THE ORDER OF LD. CIT (A)-II, BAROD A IN COMPUTING THE UNITS OF POWER CONSUMED FOR THE PRODUCTION OF 6955 KGS ON AC COUNT OF JOB WORK. IT IS FURTHER STATED BY THE ASSESSEE THAT RATIO OF 1 UNIT / 1.75 KG ADOPTED IS IN FACT FOR ASSESSEE'S OWN PRODUCTION FROM RAW MATERIALS IN VOLVING SINGLE PROCESS, WHEREAS PRODUCTION ON ACCOUNT OF JOB WORK INVOLVES DOUBLE PROCESS. ON VERIFICATION OF CASE RECORDS, THE ABOVE CONTENTION OF THE ASSESSEE IS FOUND TO BE INCORRECT. THEREFORE, THE ASSESSEE'S APPLICATION FOR RECTIFICATION IS HEREBY REJECTED AND FILED. 6. AGAINST THIS ORDER, THE ASSESSEE ONCE AGAIN AGITATE D THE MATTER BEFORE THE LD. CIT(A) AND MADE FRESH SUBMISSIONS BEFORE TH E LD. CIT(A) EXPLAINING THE PROCESS OF JOB WORK VIS--VIS ASSESS EES OWN PRODUCTION ITA NO. 613/ AHD/2012 . A.Y. 2003-0 4 4 PROCESS IN SUPPORT OF ITS CLAIM. THE ASSESSEE SUBMI TTED A CERTIFICATE OF CHARTERED ENGINEER. 7. THE APPELLANTS SUBMISSIONS WERE FORWARDED TO THE A .O FOR HIS COMMENTS BY THE LD. CIT(A). THE A.O SUBMITTED A DE TAILED REMAND REPORT WHICH WAS FORWARDED TO THE ASSESSEE FOR ITS COMMENTS. AFTER CONSIDERING THE FACTS, SUBMISSIONS AND THE REMAND R EPORT, THE LD. CIT(A) OBSERVED THAT THE PRESENT APPEAL IS AGAINST THE ORDER GIVING EFFECT TO THE APPELLATE ORDER. THE LD. CIT(A) CONCL UDED BY OBSERVING SINCE, THE LD. CIT(A) HAS GOT NO POWER TO SET ASID E ANY ISSUE INVOLVED IN THE ASSESSMENT, HENCE ONLY THE DOCUMENTS SUBMITTED BEF ORE THE LD. CIT(A) OR THE A.O DURING THE COURSE OF ASSESSMENT PROCEEDINGS CAN BE CONSIDERED FOR GIVING EFFECT OF THE APPELLATE ORDER. IN SUCH CIRCU MSTANCES, IT HAS TO BE HELD THAT THE DIRECTION OF THE LD. CIT(A) WAS TO CONSID ER THE RATE OF CONSUMPTION OF ELECTRICITY FOR GRANTING DEDUCTION ON ACCOUNT OF JOB WORK AS 1.75 KG. PER UNIT. THE APPELLANT CANNOT ARGUE TO CHANGE THIS RAT E BY INTRODUCING FRESH EVIDENCES AND MAKING FRESH ARGUMENTS DURING THE COU RSE OF PROCEEDINGS FOR, GIVING EFFECT TO THE APPELLATE ORDER, AS IT WOULD A MOUNT TO SETTING ASIDE OF THE ASSESSMENT ORDER BY LD. CIT(A) WHICH IS NOT PERMITT ED BY LAW. HENCE, IT IS HELD THAT A.O HAS NOT MADE ANY MISTAKE IN GIVING EF FECT TO THE APPELLATE ORDER. 8. AGGRIEVED BY THIS FINDING, THE ASSESSEE IS BEFORE U S. THE LD. COUNSEL FOR THE ASSESSEE REITERATED WHAT HAS BEEN STATED BEFORE THE LOWER AUTHORITIES. PER CONTRA, THE LD. D.R. STRONGLY SUPP ORTED THE FINDINGS OF THE REVENUE AUTHORITIES. 9. WE HAVE GIVEN A THOUGHTFUL CONSIDERATION TO THE ORD ERS OF THE AUTHORITIES BELOW. WE HAVE ALSO CAREFULLY PERUSED T HE ORIGINAL ASSESSMENT ORDER AND THE ORDER OF THE LD. CIT(A) DA TED 01.03.2007, WE FIND THAT THE ASSESSEE DID NOT PREFER ANY APPEAL AGAINST THIS ORDER ITA NO. 613/ AHD/2012 . A.Y. 2003-0 4 5 OF THE LD. CIT(A) WHICH MEANS THAT THE ORDER OF THE FIRST APPELLATE AUTHORITY DATED 01.03.2007 HAS ATTAINED FINALITY. 10. IT IS ALSO AN ADMITTED FACT THAT THE LD. CIT(A) HAS SIMPLY DIRECTED THE A.O TO RE-COMPUTE THE DISALLOWANCE, IF ANY, IN THE LIGHT OF THE RATIO LAID DOWN BY THE HONBLE PUNJAB AND HARYANA HIGH CO URT IN THE CASE OF ABHISHEK INDUSTRIES LTD. (SUPRA). 11. THE A.O HAS SIMPLY CARRIED OUT THE DIRECTIONS OF TH E FIRST APPELLATE AUTHORITY AND IT IS A SETTLED PROPOSITION OF LAW THAT WHILE GIVING APPEAL EFFECT THE A.O CANNOT ADMIT/ACCEPT AN Y NEW EVIDENCES IN SUPPORT OF THE CLAIM OF THE ASSESSEE. IF THE ASSESS EE WAS AGGRIEVED, HE SHOULD HAVE CARRIED THE MATTER BEFORE THE HIGHER JUDICIAL FORUM. 12. SINCE THE PRESENT APPEAL IS ONLY IN RESPECT OF ORDE R MADE U/S. 154, WE DO NOT FIND ANY REASON TO INTERFERE WITH TH E FINDINGS OF THE FIRST APPELLATE AUTHORITY. GROUND NOS.1 & 2 ARE ACC ORDINGLY DISMISSED. 13. GROUND NO. 3 RELATES TO NON ADJUSTMENT OF BROUGHT F ORWARD UNABSORBED DEPRECIATION OF RS. 2,02,656/-. 14. A PERUSAL OF THE ORDER OF THE LOWER AUTHORITY SHOWS THAT THE ASSESSEE HAD FILED AN ADDITIONAL GROUND DURING THE COURSE OF THE APPELLATE PROCEEDINGS BEFORE THE FIRST APPELLATE AU THORITY, THE LD. CIT(A) DECLINED TO ADMIT THE ADDITIONAL GROUND, SIN CE THE A.O HAS ALREADY REJECTED ASSESSEES CLAIM MADE U/S. 154 OF THE ACT. THE RELEVANT OBSERVATIONS READ AS UNDER:- IN THIS REGARD, THE A.O. VIDE LETTER DATED 16.12.2 010 HAS SUBMITTED AS FOLLOWS: ITA NO. 613/ AHD/2012 . A.Y. 2003-0 4 6 'IN THIS REGARD, IT IS SUBMITTED THAT THE ASSESSEE HAD ALREADY MADE AN APPLICATION U/S 154 IN THIS REGARD VIDE ITS LETTER DATED 09.10.2010 SUBMITTED ON 12.10.2010. THE RECTIFICATION APPLICATION OF THE ASSESSEE HAS BEEN DISPOSED OFF ON 02.12.2010 BY REJECTING THE SAME AS PER THE PROVISION OF SECTION 154(7) OF THE I T ACT. SINCE, THE ISSUE HAS ALREADY BEEN DISPOSED OFF VIDE THIS OFFICE ORDER DATED 02.12.2010 BY REJECTING THE APPLICATION OF THE ASSE SSEE MADE U/S 154, IT IS PRAYED THAT ADDITIONAL GROUND TAKEN BY THE ASSESSEE ON THE SAME ISSUE MAY NOT BE ADMITTED. IF THE SAME ISSUE IS TO BE CONTEND ED BY THE ASSESSEE, THE APPEAL LIES AGAINST THE ORDER DARTED 02.12.2010 AND NOT IN THE ORIGINAL APPEAL.' 6.1 I HAVE CONSIDERED THE AO'S SUBMISSION. SINCE ALREADY AO HAS REJECTED APPELLANT'S APPLICATION U/S 154 IN THIS REGARD, HEN CE THE APPELLANT IS REQUIRED TO FILE APPEAL AGAINST THIS ORDER OF REJECTION. MO REOVER, THE APPELLANT HAS NOT FILED ANY DETAILS OF SUCH BROUGHT FORWARD UNABSORBE D DEPRECIATION DURING THE COURSE OF APPELLATE PROCEEDINGS. HENCE THE ADDITION AL GROUND OF APPEAL IS DISMISSED. 15. THE AFOREMENTIONED OBSERVATIONS OF THE LD. CIT(A) S PEAK FOR THEMSELVES, THE ASSESSEE CANNOT AGITATE THIS ISSUE NOW. ACCORDINGLY, THIS GROUND IS ALSO DISMISSED. 16. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON 12 - 05 - 2016. SD/- SD/- (RAJPAL YADAV) (N. K. BILLAIYA) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD: TRUE COPY RAJESH COPY OF THE ORDER FORWARDED TO: -