ACIT, Jaipur V. BHARAT POTTERIES LTD., Jaipur

ITA 685/JPR/2013

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 5253 (ITAT-JAIPUR)
• Duration Of Justice: 2 year(s) 10 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-06-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2008-2009
• Appeal Filed On: 07-08-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ROSHANTA MEENA J
• Assessee Lawyers: VARUN BANSAL C A DHK
• Section: 43B; 133A

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES, JAIPUR JH DQY HKKJR] U;KF;D LNL; ,OA JH FOE FLAG ;KNO] Y S[KK LNL; DS LE{K BEFORE: SHRI KUL BHARAT, JM & SHRI VIKRAM SINGH YAD AV, AM VK;DJ VIHY LA-@ ITA NO. 685 & 891/JP/2013 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2008-09 & 2009-10 THE ACIT CIRCLE- 6, JAIPUR CUKE VS. M/S. BHARAT POTTERIES LTD. F-555 TO 559, ROAD NO. 6VKI AREA, JAIPUR LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO .: AAACB 9842 Q VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT VK;DJ VIHY LA-@ ITA NO. 769/JP/2014 & 770/JP/2014 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2010-11 & 2011-12 THE DCIT CIRCLE- 6,JAIPUR CUKE VS. M/S. BHARAT POTTERIES LTD. F-555 TO 559, ROAD NO. 6,VKI AREA, JAIPUR LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO .: AAACB 9842 Q VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT JKTLO DH VKSJ LS@ REVENUE BY : MS. ROSHANTA MEENA, JCIT-DR FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY :SHRI VARUN BANSAL,CA LQUOKBZ DH RKJH[K@ DATE OF HEARING : 12/05/2016 ?KKS'K .KK DH RKJH[K@ DATE OF PRONOUNCEMENT : 16 /06/2016 VKNS'K@ ORDER PER KUL BHARAT, JM THESE FOUR APPEALS HAVE BEEN FILED BY THE REVENUE AGAINST SEPARATE ORDERS OF THE LD. CIT(A)-II, JAIPUR DATED 15-05-201 3, 3-09-2013, 18-09- ITA NO. 685/JP/2013 ACIT, CIRCLE- 4, JAIPUR .VS M/S. BHARAT POTTERIES L TD., JAIPUR 2 2014 AND 30-09-2014 PERTAINING TO ASSESSMENT YEARS 2008-09, 2009-10, 2010-11 AND 2011-12. THE GROUNDS RAISED BY THE REVE NUE IN THE RESPECTIVE APPEALS ARE AS UNDER:- ITA NO. 685/JP/2013 A.Y. 2008-09 (I) WHETHER THE LD. CIT(A) HAS ERRED IN FACTS IN LA W IN DELETING TRADING ADDITION OF RS. 1,19,04,998/- MADE BY PERVERSELY AND ABRUPTLY CONCLUDING THAT THE FACTS A ND CIRCUMSTANCES IN A.Y. 2008-09 WERE AKIN TO THE FACT S AND CIRCUMSTANCES IN CASE OF ASSESSEE FOR A.Y. 2004-05 AND A.Y. 2007-08 (II) WHETHER THE LD. CIT(A) HAS ERRED IN FACTS IN L AW IN IGNORING THE SPECIFIC FACTS UNEARTHED DURING SURVEY U/S 133A ON 16-01-2004 IN CASE OF AND THEREBY IN FAILING TO DIFFERENTIATE AND APPRECIATE THE MATERIAL FACT SPEC IFIC TO A.Y. 2008-09 (III) WHETHER THE LD. CIT(A) HAS ERRED IN FACTS IN LAW IN IGNORING THE OPINION/ EVIDENCE OF AN EXPERT I.E. CE NTRAL GLASS & CERAMIC INSTITUTE, KOLKATA REGARDING THE CLAIM OF WASTAGE BY THE ASSESSEE. ITA NO. 891/JP/2013 A.Y. 2009-10 (I) WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES O F THE CASE AND IN LAW THE LD. CIT(A) HAS ACTED PERVERSELY AND HAS ERRED IN DELETING THE TRADING ADDITION OF RS. 1,01, 08,390/- ON ACCOUNT OF EXCESSIVE WASTAGE WHICH WAS RIGHTLY AND ON THE BASIS OF RECORD RESTRICTED TO 20% BY THE AO. (II) WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT(A) HAS ACTED PERVERSELY AND WAS JUSTIFIED IN NOT CONSIDERING THAT THE ESTIMATION OF WASTAGE MADE BY THE AO WAS ON THE BASIS OF REPORT OF CENTRA L GLASS ITA NO. 685/JP/2013 ACIT, CIRCLE- 4, JAIPUR .VS M/S. BHARAT POTTERIES L TD., JAIPUR 3 & CERAMIC INSTITUTE KOLKATA WHICH IS AN INDEPENDENT AGENCY HAVING EXPERTISE IN THE RELATED FIELD. ITA NO. 769/JP/2014 A.Y. 2010-11 (I) WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES O F THE CASE AND IN LAW THE ERRED IN DELETING TRADING ADDIT ION OF RS. 1,69,81,473/ ON ACCOUNT OF EXCESSIVE WASTAGE WHICH WAS RIGHTLY AND ON THE BASIS OF RECORD RESTRICTED TO 20 % BY THE AO. (II) WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT(A) WAS JUSTIFIED IN NOT CONSIDERING THAT THE ESTIMATION OF WASTAGE MADE BY THE AO ON THE BASIS OF REPORT OF CENTRAL GLASS & CERAMIC I NSTITUTE KOLKATA WHICH IS AN INDEPENDENT AGENCY HAVING EXPER TISE IN THE RELATED FIELD. (III) (A) WHETHER ON THE FACTS AND IN THE CIRCUMSTA NCES OF THE CASE AND IN LAW THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS. 4,29,345/- MADE FOR DEPOSITING THE EMPLOYEES CONTRIBUTION TO PF AND ESI BEYOND THE PRESCRIBED TIME LIMIT PROVIDED IN THE RESPECTIVE AC TS. (B) WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT(A) HAS ERRED IN HOLDING THAT THE EMPLOYEES CONTRIBUTION TO PF AND ESI ARE G OVERNED BY THE PROVISION OF SECTION 43B AND NOT BE SECTION 36(1)(VA) R.W.S. 2(24)(X) OF THE I.T. ACT ITA NO. 770/JP/2014 A.Y. 2011-12 (I) WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES O F THE CASE AND IN LAW THE ERRED IN DELETING TRADING ADDIT ION OF RS. 2,77,30,981/- ON ACCOUNT OF EXCESSIVE WASTAGE WHIC H WAS RIGHTLY AND ON THE BASIS OF RECORD RESTRICTED TO 20 % BY THE AO. ITA NO. 685/JP/2013 ACIT, CIRCLE- 4, JAIPUR .VS M/S. BHARAT POTTERIES L TD., JAIPUR 4 (II) WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT(A) WAS JUSTIFIED IN NOT CONSIDERING THAT THE ESTIMATION OF WASTAGE MADE BY THE AO ON THE BASIS OF REPORT OF CENTRAL GLASS & CERAMIC I NSTITUTE KOLKATA WHICH IS AN INDEPENDENT AGENCY HAVING EXPER TISE IN THE RELATED FIELD. 2.1 FIRST OF ALL, WE TAKE UP THE APPEAL OF THE REVE NUE IN ITA NO. 685/JP/2013 FOR THE ASSESSMENT YEAR 2008-09 WHEREIN REVENUE HAS RAISED FOLLOWING GROUNDS OF APPEAL. (I) WHETHER THE LD. CIT(A) HAS ERRED IN FACTS IN LA W IN DELETING TRADING ADDITION OF RS. 1,19,04,998/- MADE BY PERVERSELY AND ABRUPTLY CONCLUDING THAT THE FACTS A ND CIRCUMSTANCES IN A.Y. 2008-09 WERE AKIN TO THE FACT S AND CIRCUMSTANCES IN CASE OF ASSESSEE FOR A.Y. 2004-05 AND 2007-08 (II) WHETHER THE LD. CIT(A) HAS ERRED IN FACTS IN L AW IN IGNORING THE SPECIFIC FACTS UNEARTHED DURING SURVEY U/S 133A ON 16-01-2004 IN CASE OF AND THEREBY IN FAILING TO DIFFERENTIATE AND APPRECIATE THE MATERIAL FACT SPEC IFIC TO A.Y. 2008-09 (III) WHETHER THE LD. CIT(A) HAS ERRED IN FACTS IN LAW IN IGNORING THE OPINION/ EVIDENCE OF AN EXPERT I.E. CE NTRAL GLASS & CERAMIC INSTITUTE, KOLKATA REGARDING THE CLAIM OF WASTAGE BY THE ASSESSEE. 2.2 AT THE OUTSET OF THE HEARING, THE LD. AR OF THE ASSESSEE PRAYED AS TO GROUND NO. 1 TO 3 OF THE REVENUE THAT ON SIMILAR IS SUE THE ITAT COORDINATE BENCH HAS DECIDED THE ISSUE IN QUESTION FAVOUR OF THE ITA NO. 685/JP/2013 ACIT, CIRCLE- 4, JAIPUR .VS M/S. BHARAT POTTERIES L TD., JAIPUR 5 ASSESSEE VIDE ITS ORDER DATED 15-02-2007 (ITA NO. 257/JP/2005 ASSESSEE AND ITA NO. 368/JP/2005 REVENUE FOR A.Y . 2001-02). 2.3 THE LD. DR RELIED ON THE ORDER OF THE AO. 2.4 WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. IT EMERGES FROM THE RECORD THA T ON SIMILAR ISSUES THE COORDINATE BENCH IN ASSESSEE'S OWN CASE (SUPRA) HAS DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE'S AND AGAINST THE REVENUE BY FOLLOWING OBSERVATION. 7. WE ACCEPT THE CONTENTION AND EXPLANATION GIVEN B Y THE ASSESSEE BEFORE THE AUTHORITIES BELOW AND THE ARGUMENTS PLAC ED BY THE LD COUNSEL FOR THE ASSESSEE SHRI H.M. SINGHVI, C.A. THAT THE ASSES SEE HAS PRODUCED ALL THE RELEVANT RECORDS WHICH ARE SUBJECT TO VERIFICATION BY CENTRAL EXCISE AND ARE ALSO STATUTORILY AUDITED UNDER THE COMPANIES ACT AN D STOCK REGISTER IS MAINTAINED ON DAILY BASIS AND NO SPECIFIC DEFECT H AS BEEN POINTED OUT BY THE AO IN THE PURCHASES, SALES AND STOCK MAINTAINED BY THE ASSESSEE. THERE IS NO CHANGE IN THE ACCOUNTING POLICY OF THE ASSESSEE COM PANY WHICH IS BEING EMPLOYED REGULARLY AS STATED. THE VARIATION IN THE CONSUMPTION AND PRODUCTION RATIOS HAS BEEN EXPLAINED BY THE ASSESSEE AND IS AC CEPTED BY US. THE MINOR FALL IN GROSS PROFIT IN THE IMPUGNED YEAR BY 0.15% IS NE GLIGIBLE AND THE ASSESSEE HAS ALSO EXPLAINED THE SAME BY PRODUCING THE BILLS AND VOUCHERS OF REPAIRS AND MAINTENANCE WHICH WERE MORE DURING THE YEAR AS COMP ARED TO THE IMMEDIATELY PRECEDING YEAR. THE REPORTS OF THE CENTRAL GLASS & CERAMIC RESEARCH INSTITUTE SUBMITTED BY THE ASSESSEE CANNOT BE IGNORED WHERE T HE WASTAGE OF 24 TO 38% IN THE CASE OF STONEWARE CROCKERY AND 28.3 TO 38.7% IN THE CASE OF BONE CHINA CROCKERY HAS BEEN REPORTED. THE REPORT OF THE SAID INSTITUTE OF DIFFERENT PLACE I.E. AT CALCUTTA WHERE GENERAL PERCENTAGE OF 15 TO 20% OF REJECTION HAS BEEN MENTIONED AS COMMON IN SUCH INDUSTRIES, CANNOT BE T AKEN AS BASIS FOR ESTIMATION OF REJECTION DECLARED BY THE ASSESSEE . MOREOVER, THE DIFFERENCE IN THE VARIOUS PERCENTAGES WITH REGARD TO THE CONSUMPT ION , PRODUCTION ETC. HAS BEEN EXPLAINED BY THE ASSESSEE BUT THE AO HAS NOT ACCEPTED THE SAME WITHOUT GIVING ANY REASONS. IN SUCH CIRCUMSTANCES AND FACTS OF THE CASE, THE AO IS NOT JUSTIFIED IN REJECTING THE BOOKS OF ACCOUNT OF THE ASSESSEE AND NO TRADING ITA NO. 685/JP/2013 ACIT, CIRCLE- 4, JAIPUR .VS M/S. BHARAT POTTERIES L TD., JAIPUR 6 ADDITION CAN BE MADE ON THIS ACCOUNT . THUS GROUND 1 OF THE REVENUE IS DISMISSED AND GROUND NO.1 OF THE ASSESSEE IS ALLOWE D. IT IS ALSO OBSERVED THAT THE LD. CIT(A) HAS ALSO AL LOWED THE GROUNDS OF APPEAL OF THE ASSESSEE (SUPRA) IN FAVOUR OF THE ASS ESSEE BY CONSIDERING THE JUDGEMENTS OF ITAT JAIPUR BENCH IN ITA NO. 966/JP/2 007 FOR THE ASSESSMENT YEAR 2004-05 AND ITA NO. 660/JP/2010 FOR THE ASSESSMENT YEAR 2007-08. IN VIEW OF THE SIMILAR FACTS AND CIRC UMSTANCES OF THE CASE AND RESPECTFULLY FOLLOWING THE DECISIONS OF COORDIN ATE BENCH IN ASSESSEE'S OWN CASE (SUPRA), THE GROUND NO. 1 TO 3 OF THE REVENUE ARE DISMISSED. 3.1 NOW WE TAKE UP THE REVENUES APPEAL IN ITA NO. 891/JP/2013 FOR THE ASSESSMENT YEAR 2009-10 WHEREIN REVENUE HAS RAI SED FOLLOWING GROUNDS OF APPEAL. (I) WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT(A) HAS ACTED PER VERSELY AND HAS ERRED IN DELETING THE TRADING ADDITION OF R S. 1,01,08,390/- ON ACCOUNT OF EXCESSIVE WASTAGE WHIC H WAS RIGHTLY AND ON THE BASIS OF RECORD RESTRICTED TO 20 % BY THE AO. (II) WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT(A) HAS ACTED PERVERSELY AND WAS JUSTIFIED IN NOT CONSIDERING THAT THE ESTIMATION OF WASTAGE MADE BY THE AO WAS ON THE BASIS OF REPORT OF CENTRA L GLASS ITA NO. 685/JP/2013 ACIT, CIRCLE- 4, JAIPUR .VS M/S. BHARAT POTTERIES L TD., JAIPUR 7 & CERAMIC INSTITUTE KOLKATA WHICH IS AN INDEPENDENT AGENCY HAVING EXPERTISE IN THE RELATED FIELD. 3.2 AT THE OUTSET OF THE HEARING, THE LD. AR OF THE ASSESSEE PRAYED AS TO GROUND NO. 1 & 2 OF THE REVENUE THAT ON SIMILAR ISS UE THE ITAT COORDINATE BENCH HAS DECIDED THE ISSUE IN QUESTION FAVOUR OF THE ASSESSEE VIDE ITS ORDER DATED 15-02-2007 (ITA NO. 257/JP/2005 ASSESSEE AND ITA NO. 368/JP/2005 REVENUE FOR A.Y . 2001-02). 3.3 THE LD. DR RELIED ON THE ORDER OF THE AO. 3.4 WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. IT EMERGES FROM THE RECORD THA T ON SIMILAR ISSUES THE COORDINATE BENCH IN ASSESSEE'S OWN CASE (SUPRA) HAS DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE'S AND AGAINST THE REVENUE BY FOLLOWING OBSERVATION. 7. WE ACCEPT THE CONTENTION AND EXPLANATION GIVEN B Y THE ASSESSEE BEFORE THE AUTHORITIES BELOW AND THE ARGUMENTS PLAC ED BY THE LD COUNSEL FOR THE ASSESSEE SHRI H.M. SINGHVI, C.A. THAT THE ASSES SEE HAS PRODUCED ALL THE RELEVANT RECORDS WHICH ARE SUBJECT TO VERIFICATION BY CENTRAL EXCISE AND ARE ALSO STATUTORILY AUDITED UNDER THE COMPANIES ACT AN D STOCK REGISTER IS MAINTAINED ON DAILY BASIS AND NO SPECIFIC DEFECT H AS BEEN POINTED OUT BY THE AO IN THE PURCHASES, SALES AND STOCK MAINTAINED BY THE ASSESSEE. THERE IS NO CHANGE IN THE ACCOUNTING POLICY OF THE ASSESSEE COM PANY WHICH IS BEING EMPLOYED REGULARLY AS STATED. THE VARIATION IN THE CONSUMPTION AND PRODUCTION RATIOS HAS BEEN EXPLAINED BY THE ASSESSEE AND IS AC CEPTED BY US. THE MINOR FALL IN GROSS PROFIT IN THE IMPUGNED YEAR BY 0.15% IS NE GLIGIBLE AND THE ASSESSEE HAS ALSO EXPLAINED THE SAME BY PRODUCING THE BILLS AND VOUCHERS OF REPAIRS AND MAINTENANCE WHICH WERE MORE DURING THE YEAR AS COMP ARED TO THE IMMEDIATELY PRECEDING YEAR. THE REPORTS OF THE CENTRAL GLASS & CERAMIC RESEARCH INSTITUTE SUBMITTED BY THE ASSESSEE CANNOT BE IGNORED WHERE T HE WASTAGE OF 24 TO 38% ITA NO. 685/JP/2013 ACIT, CIRCLE- 4, JAIPUR .VS M/S. BHARAT POTTERIES L TD., JAIPUR 8 IN THE CASE OF STONEWARE CROCKERY AND 28.3 TO 38.7% IN THE CASE OF BONE CHINA CROCKERY HAS BEEN REPORTED. THE REPORT OF THE SAID INSTITUTE OF DIFFERENT PLACE I.E. AT CALCUTTA WHERE GENERAL PERCENTAGE OF 15 TO 20% OF REJECTION HAS BEEN MENTIONED AS COMMON IN SUCH INDUSTRIES, CANNOT BE T AKEN AS BASIS FOR ESTIMATION OF REJECTION DECLARED BY THE ASSESSEE . MOREOVER, THE DIFFERENCE IN THE VARIOUS PERCENTAGES WITH REGARD TO THE CONSUMPT ION , PRODUCTION ETC. HAS BEEN EXPLAINED BY THE ASSESSEE BUT THE AO HAS NOT ACCEPTED THE SAME WITHOUT GIVING ANY REASONS. IN SUCH CIRCUMSTANCES AND FACTS OF THE CASE, THE AO IS NOT JUSTIFIED IN REJECTING THE BOOKS OF ACCOUNT OF THE ASSESSEE AND NO TRADING ADDITION CAN BE MADE ON THIS ACCOUNT . THUS GROUND 1 OF THE REVENUE IS DISMISSED AND GROUND NO.1 OF THE ASSESSEE IS ALLOWE D. IT IS ALSO OBSERVED THAT THE LD. CIT(A) HAS ALSO AL LOWED THE GROUNDS OF APPEAL OF THE ASSESSEE (SUPRA) IN FAVOUR OF THE ASS ESSEE BY CONSIDERING HIS PREDECESSORS JUDGEMENTS IN ALL THE EARLIER YEARS UP TO ASSESSMENT YEAR 2008-09 FOLLOWING THE ORDERS OF ITAT AND GRANTED R ELIEF BY DELETING THE ADDITION. IN VIEW OF THE SIMILAR FACTS AND CIRCUMST ANCES OF THE CASE AND RESPECTFULLY FOLLOWING THE DECISIONS OF COORDINATE BENCH IN ASSESSEE'S OWN CASE (SUPRA), THE GROUND NO. 1 & 2 OF THE REVE NUE ARE DISMISSED. 4.1 FURTHER WE TAKE UP THE REVENUES APPEAL IN ITA NO. 769/JP/2014 FOR THE ASSESSMENT YEAR 2010-11 WHEREIN REVENUE HAS RAISED FOLLOWING GROUNDS OF APPEAL. (I) WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES O F THE CASE AND IN LAW THE ERRED IN DELETING TRADING ADDIT ION OF RS. 1,69,81,473/ ON ACCOUNT OF EXCESSIVE WASTAGE WHICH WAS RIGHTLY AND ON THE BASIS OF RECORD RESTRICTED TO 20 % BY THE AO. ITA NO. 685/JP/2013 ACIT, CIRCLE- 4, JAIPUR .VS M/S. BHARAT POTTERIES L TD., JAIPUR 9 (II) WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT(A) WAS JUSTIFIED IN NOT CONSIDERING THAT THE ESTIMATION OF WASTAGE MADE BY THE AO ON THE BASIS OF REPORT OF CENTRAL GLASS & CERAMIC I NSTITUTE KOLKATA WHICH IS AN INDEPENDENT AGENCY HAVING EXPER TISE IN THE RELATED FIELD. (III) (A) WHETHER ON THE FACTS AND IN THE CIRCUMSTA NCES OF THE CASE AND IN LAW THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS. 4,29,345/- MADE FOR DEPOSITING THE EMPLOYEES CONTRIBUTION TO PF AND ESI BEYOND THE PRESCRIBED TIME LIMIT PROVIDED IN THE RESPECTIVE AC TS. (B) WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT(A) HAS ERRED IN HOLDING THAT THE EMPLOYEES CONTRIBUTION TO PF AND ESI ARE G OVERNED BY THE PROVISION OF SECTION 43B AND NOT BE SECTION 36(1)(VA) R.W.S. 2(24)(X) OF THE I.T. ACT 4.2 AT THE OUTSET OF THE HEARING, THE LD. AR OF THE ASSESSEE PRAYED AS TO GROUND NO. 1 TO 2 OF THE REVENUE THAT ON SIMILAR IS SUE THE ITAT COORDINATE BENCH HAS DECIDED THE ISSUE IN QUESTION FAVOUR OF THE ASSESSEE VIDE ITS ORDER DATED 15-02-2007 (ITA NO. 257/JP/2005 ASSESSEE AND ITA NO. 368/JP/2005 REVENUE FOR A.Y . 2001-02). 4.3 THE LD. DR RELIED ON THE ORDER OF THE AO. 4.4 WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. IT EMERGES FROM THE RECORD THA T ON SIMILAR ISSUES THE COORDINATE BENCH IN ASSESSEE'S OWN CASE (SUPRA) HAS DECIDED THE ISSUE IN ITA NO. 685/JP/2013 ACIT, CIRCLE- 4, JAIPUR .VS M/S. BHARAT POTTERIES L TD., JAIPUR 10 FAVOUR OF THE ASSESSEE'S AND AGAINST THE REVENUE BY FOLLOWING OBSERVATION. 7. WE ACCEPT THE CONTENTION AND EXPLANATION GIVEN B Y THE ASSESSEE BEFORE THE AUTHORITIES BELOW AND THE ARGUMENTS PLAC ED BY THE LD COUNSEL FOR THE ASSESSEE SHRI H.M. SINGHVI, C.A. THAT THE ASSES SEE HAS PRODUCED ALL THE RELEVANT RECORDS WHICH ARE SUBJECT TO VERIFICATION BY CENTRAL EXCISE AND ARE ALSO STATUTORILY AUDITED UNDER THE COMPANIES ACT AN D STOCK REGISTER IS MAINTAINED ON DAILY BASIS AND NO SPECIFIC DEFECT H AS BEEN POINTED OUT BY THE AO IN THE PURCHASES, SALES AND STOCK MAINTAINED BY THE ASSESSEE. THERE IS NO CHANGE IN THE ACCOUNTING POLICY OF THE ASSESSEE COM PANY WHICH IS BEING EMPLOYED REGULARLY AS STATED. THE VARIATION IN THE CONSUMPTION AND PRODUCTION RATIOS HAS BEEN EXPLAINED BY THE ASSESSEE AND IS AC CEPTED BY US. THE MINOR FALL IN GROSS PROFIT IN THE IMPUGNED YEAR BY 0.15% IS NE GLIGIBLE AND THE ASSESSEE HAS ALSO EXPLAINED THE SAME BY PRODUCING THE BILLS AND VOUCHERS OF REPAIRS AND MAINTENANCE WHICH WERE MORE DURING THE YEAR AS COMP ARED TO THE IMMEDIATELY PRECEDING YEAR. THE REPORTS OF THE CENTRAL GLASS & CERAMIC RESEARCH INSTITUTE SUBMITTED BY THE ASSESSEE CANNOT BE IGNORED WHERE T HE WASTAGE OF 24 TO 38% IN THE CASE OF STONEWARE CROCKERY AND 28.3 TO 38.7% IN THE CASE OF BONE CHINA CROCKERY HAS BEEN REPORTED. THE REPORT OF THE SAID INSTITUTE OF DIFFERENT PLACE I.E. AT CALCUTTA WHERE GENERAL PERCENTAGE OF 15 TO 20% OF REJECTION HAS BEEN MENTIONED AS COMMON IN SUCH INDUSTRIES, CANNOT BE T AKEN AS BASIS FOR ESTIMATION OF REJECTION DECLARED BY THE ASSESSEE . MOREOVER, THE DIFFERENCE IN THE VARIOUS PERCENTAGES WITH REGARD TO THE CONSUMPT ION , PRODUCTION ETC. HAS BEEN EXPLAINED BY THE ASSESSEE BUT THE AO HAS NOT ACCEPTED THE SAME WITHOUT GIVING ANY REASONS. IN SUCH CIRCUMSTANCES AND FACTS OF THE CASE, THE AO IS NOT JUSTIFIED IN REJECTING THE BOOKS OF ACCOUNT OF THE ASSESSEE AND NO TRADING ADDITION CAN BE MADE ON THIS ACCOUNT . THUS GROUND 1 OF THE REVENUE IS DISMISSED AND GROUND NO.1 OF THE ASSESSEE IS ALLOWE D. IT IS ALSO OBSERVED THAT THE LD. CIT(A) HAS ALSO AL LOWED THE GROUNDS OF APPEAL OF THE ASSESSEE (SUPRA) IN FAVOUR OF THE ASS ESSEE BY CONSIDERING THE JUDGEMENTS OF ITAT JAIPUR BENCH IN A.Y. 2001-02, 20 04-05, 2007-08, 2008-09 AND 2009-10 BY HOLDING THAT THE IS SUE IN QUESTION IS COVERED IN FAVOUR OF THE ASSESSEE BY THE ORDERS OF ITAT. IN VIEW OF THE ITA NO. 685/JP/2013 ACIT, CIRCLE- 4, JAIPUR .VS M/S. BHARAT POTTERIES L TD., JAIPUR 11 SIMILAR FACTS AND CIRCUMSTANCES OF THE CASE AND RES PECTFULLY FOLLOWING THE DECISIONS OF COORDINATE BENCH IN ASSESSEE'S OWN CAS E (SUPRA), THE GROUND NO. 1 AND 2 OF THE REVENUE ARE DISMISSED. 4.5 THE NEXT GROUND OF THE REVENUE I.E. GROUND NO. 3(A) & (B) IS AS UNDER:- (III) (A) WHETHER ON THE FACTS AND IN THE CIRCUMSTA NCES OF THE CASE AND IN LAW THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS. 4,29,345/- MADE FOR DEPOSITING THE EMPLOYEES CONTRIBUTION TO PF AND ESI BEYOND THE PRESCRIBED TIME LIMIT PROVIDED IN THE RESPECTIVE AC TS. (B) WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT(A) HAS ERRED IN HOLDING THAT THE EMPLOYEES CONTRIBUTION TO PF AND ESI ARE G OVERNED BY THE PROVISION OF SECTION 43B AND NOT BE SECTION 36(1)(VA) R.W.S. 2(24)(X) OF THE I.T. ACT 4.6 AT THE OUTSET OF THE HEARING THE LD. AR OF THE ASSESSEE PRAYED THAT THE ISSUE IN QUESTION HAS BEEN DECIDED BY THE LD. C IT(A) VIDE HIS ORDER DATED 18-09-2014 IN FAVOUR OF THE ASSESSEE BY OBSER VING AS UNDER:- 3.3 I HAVE PERUSED THE FACTS OF THE CASE, THE ASSESSMENT ORDER AND THE SUBMISSIONS OF THE APPELLA NT. SINCE THE EMPLOYEES CONTRIBUTION TO THE PROVIDENT FUND AND E SI HAS BEEN PAID BY THE 20 TH OF THE SUCCEEDING MONTH IN ALL INSTANCES AND IN AN Y CASE, BEFORE THE DUE DATE OF FILING OF THE RETURN O F INCOME U/S 139(1) OF THE I.T. ACT, THE DISALLOWANCE MADE BY TH E ASSESSING OFFICER ON ACCOUNT OF DELAY IN DEPOSIT OF PF, IS D ELETED, IN VIEW OF THE ABOVE CASE LAWS OF THE HON'BLE JURISDICTIONAL H IGH COURT CITED BY THE APPELLANT. IN CIT VS. STATE BANK OF BIKANE R & JAIPUR ITA NO. 685/JP/2013 ACIT, CIRCLE- 4, JAIPUR .VS M/S. BHARAT POTTERIES L TD., JAIPUR 12 (SUPRA), IT HAS BEEN STATED THAT SUCH AN EXPENDITUR E CANNOT BE DISALLOWED U/S 43B OR 36(1)(VA). GROUND NO. 4 IS AL LOWED. 4.7 THE LD. AR OF THE ASSESSEE ALSO RELIED ON FOLLO WING CASE LAWS TO THIS EFFECT. (I) CIT VS. STATE BANK OF BIKANER & JAIPUR (2014) 3 63 ITR 70 (RAJ.) HC (II) CIT VS. JAIPUR VIDYUT VITRAN NIGAM LTD.(2014) 363 ITR 307 (RAJ.) (HON'BLE HIGH COURT) (III) CIT VS. UDAIPUR DUGDH UTPADAK SAHAKARI SANGH LTD. (2014) 366 ITR 163 (HC) 4.8 THE LD. DR RELIED ON THE ORDER OF THE AO BUT HE COULD NOT CONTROVERT THE ARGUMENTS OF THE ASSESSEE ON THIS IS SUE. 4.9 WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. WE FIND MERIT IN THE ORDER OF THE LD. CIT(A) WHO HAS RIGHTLY ALLOWED THE GROUND NO. 3 (A) & (B) OF THE A SSESSEE IN VIEW OF THE DECISIONS OF HON'BLE JURISDICTIONAL HIGH COURT (SUP RA). THUS GROUND NOS. 3 (A) & (B) OF THE REVENUE ARE DISMISSED. 5.1 FINALLY, WE TAKE UP THE REVENUES APPEAL IN IT A NO. 770/JP/2014 FOR THE ASSESSMENT YEAR 2011-12 WHEREIN REVENUE HAS RAISED FOLLOWING GROUNDS OF APPEAL. ITA NO. 685/JP/2013 ACIT, CIRCLE- 4, JAIPUR .VS M/S. BHARAT POTTERIES L TD., JAIPUR 13 (I) WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES O F THE CASE AND IN LAW THE ERRED IN DELETING TRADING ADDIT ION OF RS. 2,77,30,981/- ON ACCOUNT OF EXCESSIVE WASTAGE WHIC H WAS RIGHTLY AND ON THE BASIS OF RECORD RESTRICTED TO 20 % BY THE AO. (II) WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT(A) WAS JUSTIFIED IN NOT CONSIDERING THAT THE ESTIMATION OF WASTAGE MADE BY THE AO ON THE BASIS OF REPORT OF CENTRAL GLASS & CERAMIC I NSTITUTE KOLKATA WHICH IS AN INDEPENDENT AGENCY HAVING EXPER TISE IN THE RELATED FIELD. 5.2 AT THE OUTSET OF THE HEARING, THE LD. AR OF THE ASSESSEE PRAYED AS TO GROUND NO. 1 & 2 OF THE REVENUE THAT ON SIMILAR IS SUE THE ITAT COORDINATE BENCH HAS DECIDED THE ISSUE IN QUESTION FAVOUR OF THE ASSESSEE VIDE ITS ORDER DATED 15-02-2007 (ITA NO. 257/JP/2005 ASSESSEE AND ITA NO. 368/JP/2005 REVENUE FOR A.Y . 2001-02). 5.3 THE LD. DR RELIED ON THE ORDER OF THE AO. 5.4 WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. IT EMERGES FROM THE RECORD THA T ON SIMILAR ISSUES THE COORDINATE BENCH IN ASSESSEE'S OWN CASE (SUPRA) HAS DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE'S AND AGAINST THE REVENUE BY FOLLOWING OBSERVATION. 7. WE ACCEPT THE CONTENTION AND EXPLANATION GIVEN B Y THE ASSESSEE BEFORE THE AUTHORITIES BELOW AND THE ARGUMENTS PLAC ED BY THE LD COUNSEL FOR THE ASSESSEE SHRI H.M. SINGHVI, C.A. THAT THE ASSES SEE HAS PRODUCED ALL THE ITA NO. 685/JP/2013 ACIT, CIRCLE- 4, JAIPUR .VS M/S. BHARAT POTTERIES L TD., JAIPUR 14 RELEVANT RECORDS WHICH ARE SUBJECT TO VERIFICATION BY CENTRAL EXCISE AND ARE ALSO STATUTORILY AUDITED UNDER THE COMPANIES ACT AN D STOCK REGISTER IS MAINTAINED ON DAILY BASIS AND NO SPECIFIC DEFECT H AS BEEN POINTED OUT BY THE AO IN THE PURCHASES, SALES AND STOCK MAINTAINED BY THE ASSESSEE. THERE IS NO CHANGE IN THE ACCOUNTING POLICY OF THE ASSESSEE COM PANY WHICH IS BEING EMPLOYED REGULARLY AS STATED. THE VARIATION IN THE CONSUMPTION AND PRODUCTION RATIOS HAS BEEN EXPLAINED BY THE ASSESSEE AND IS AC CEPTED BY US. THE MINOR FALL IN GROSS PROFIT IN THE IMPUGNED YEAR BY 0.15% IS NE GLIGIBLE AND THE ASSESSEE HAS ALSO EXPLAINED THE SAME BY PRODUCING THE BILLS AND VOUCHERS OF REPAIRS AND MAINTENANCE WHICH WERE MORE DURING THE YEAR AS COMP ARED TO THE IMMEDIATELY PRECEDING YEAR. THE REPORTS OF THE CENTRAL GLASS & CERAMIC RESEARCH INSTITUTE SUBMITTED BY THE ASSESSEE CANNOT BE IGNORED WHERE T HE WASTAGE OF 24 TO 38% IN THE CASE OF STONEWARE CROCKERY AND 28.3 TO 38.7% IN THE CASE OF BONE CHINA CROCKERY HAS BEEN REPORTED. THE REPORT OF THE SAID INSTITUTE OF DIFFERENT PLACE I.E. AT CALCUTTA WHERE GENERAL PERCENTAGE OF 15 TO 20% OF REJECTION HAS BEEN MENTIONED AS COMMON IN SUCH INDUSTRIES, CANNOT BE T AKEN AS BASIS FOR ESTIMATION OF REJECTION DECLARED BY THE ASSESSEE . MOREOVER, THE DIFFERENCE IN THE VARIOUS PERCENTAGES WITH REGARD TO THE CONSUMPT ION , PRODUCTION ETC. HAS BEEN EXPLAINED BY THE ASSESSEE BUT THE AO HAS NOT ACCEPTED THE SAME WITHOUT GIVING ANY REASONS. IN SUCH CIRCUMSTANCES AND FACTS OF THE CASE, THE AO IS NOT JUSTIFIED IN REJECTING THE BOOKS OF ACCOUNT OF THE ASSESSEE AND NO TRADING ADDITION CAN BE MADE ON THIS ACCOUNT . THUS GROUND 1 OF THE REVENUE IS DISMISSED AND GROUND NO.1 OF THE ASSESSEE IS ALLOWE D. IT IS ALSO OBSERVED THAT THE LD. CIT(A) HAS ALSO AL LOWED THE GROUNDS OF APPEAL OF THE ASSESSEE (SUPRA) IN FAVOUR OF THE ASS ESSEE BY CONSIDERING THE JUDGEMENTS OF ITAT JAIPUR BENCH IN A.Y. 2001-02, 20 04-05, 2007-08, 2008-09 AND 2009-10 BY HOLDING THAT THE IS SUE IN QUESTION IS COVERED IN FAVOUR OF THE ASSESSEE BY THE ORDERS OF ITAT. IN VIEW OF THE SIMILAR FACTS AND CIRCUMSTANCES OF THE CASE AND RES PECTFULLY FOLLOWING THE DECISIONS OF COORDINATE BENCH IN ASSESSEE'S OWN CAS E (SUPRA), THE GROUND NO. 1 AND 2 OF THE REVENUE ARE DISMISSED. ITA NO. 685/JP/2013 ACIT, CIRCLE- 4, JAIPUR .VS M/S. BHARAT POTTERIES L TD., JAIPUR 15 6.0 IN THE RESULT, THE APPEALS OF THE REVENUE ARE D ISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 16/06/20 16. SD/- SD/- FOE FLAG ;KNO DQY HKKJR (VIKRAM SINGH YADAV) (KUL BHARAT) YS[KK LNL;@ ACCOUNTANT MEMBER U;KF;D LNL;@ JUDICIAL MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 16 /6/ 2016 *MISHRA VKNS'K DH IZFRFYFI VXZSFKR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- THE ACIT, CIRCLE- 4, JAIPUR / DCIT , CIRCLE- 6, JAIPUR 2. IZR;FKHZ@ THE RESPONDENT- M/S. BHARAT POTTERIES LTD. , JAIPU R 3. VK;DJ VK;QDRVIHY ) @ CIT(A), 4. VK;DJ VK;QDR@ CIT, 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR 6. XKMZ QKBZY@ GUARD FILE (ITA NO.685/JP/2013) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASSISTANT. REGISTRAR