ITO, Mandi Gobindgarh V. M/s Sardar Steel Rolling Mills, Mandi Gobindgarh

ITA 711/CHANDI/2012

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 80984 (ITAT-CHANDIGARH)
• Duration Of Justice: 2 year(s) 4 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-10-2014
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 07-10-2014
• Assessment Year: 2005-2006
• Appeal Filed On: 27-06-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: MANJIT SINGH
• Keywords: Corroborative evidences
• Section: 263

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCHES A CHANDIGARH BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND SHRI T.R. SOOD, ACCOUNTANT MEMBER ITA NO. 711/CHD/2012 ASSESSMENT YEAR: 2005-06 THE ITO, VS M/S SARDAR STEEL ROLLING MILLS, WARD-1, MANDI GOBINDGARH, MANDI GOBINDGARH PAN NO. AADFB600H & ITA NO. 691/CHD/2012 ASSESSMENT YEAR: 2005-06 M/S SARDAR STEEL ROLLING MILLS, VS THE ITO, WARD-1, MANDI GOBINDGARH, MANDI GOBINDGARH PAN NO. AADFB600H (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI MANJIT SINGH RESPONDENT BY : SHRI RAJIV SALDI DATE OF HEARING : 07/10/2104 DATE OF PRONOUNCEMENT : 28/10/2014 ORDER PER T.R.SOOD, A.M. BOTH THE APPEALS FILED BY THE REVENUE AND ASSESSEE ARE DIRECTED AGAINST THE ORDER DATED 27.4.2014 OF CIT(A), PATIALA. 2. THE REVENUE IN ITA NO. 711/CHD/2012 HAS RAISED T HE FOLLOWING GROUNDS:- 1. IN THE FACTS AND CIRCUMSTANCES OF THE CASE, LD. CIT(A) HAS ERRED IN NOT SUSTAINING THE ADDITION OF RS. 28,19,2 40/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF SUPPRESSED P RODUCTION WITHOUT APPRECIATING THE FACT THAT ASSESSEE HAD FAI LED TO 2 PRODUCE SUPPORTING EVIDENCE IN RESPECT OF ITS CLAIM AND, THEREFORE, DID NOT DISCHARGE THE ONUS CAST ON IT. H ENCE, THE ASSESSING OFFICER WAS JUSTIFIED IN TAKING AN ADVERS E VIEW AS PER SECTION 114 OF THE INDIAN EVIDENCE ACT. 2. IT IS PRAYED THAT ORDER OF LD. CIT(A) BE SET ASI DE AND THAT OF ASSESSING OFFICER RESTORED. 3. THE ASSESSEE IN ITA NO. 691/CHD/2012 HAS RAISED THE FOLLOWING GROUNDS:- 1. THAT THE DL CIT(A) PATIALA HAS WRONGLY AND ARBIT RARILY SUSTAINED THE ADDITION OF RS. 12,15,088/- WHICH IS ILLEGAL AN D AGAINST THE FACTS OF THE CASE. HENCE IS LIABLE TO BE DELETED. 2. THAT THE LD. CIT(A) HAS WRONGLY DISTURBED THE DE CLARED RESULTS ALTHOUGH NO DEFECT WAS FOUND IN THE BOOKS. THE APPE LLANT HAVE DECLARED THE GP AT 2.5% BUT THE LD. CIT(A) APPLIED 4.5% WITHOUT ANY BASIS AND MATERIAL ON RECORD, AS SUCH THE DECLA RED GP BE DIRECTED TO BE APPLIED. 4. THE BRIEF FACTS OF THE CASE ARE THAT ORIGINALLY ASSESSMENT WAS MADE AT RS. 11,50,204/- AND LATER ON ORDER U/S 263 WAS PASSED A ND THE PRESENT ASSESSMENT AT RS. 29,44,026/- HAS BEEN MADE IN PURSUANCE OF THE O RDER PASSED U/S 263. IT SEEMS THAT DURING ORIGINAL ASSESSMENT PROCEEDINGS T HE ASSESSING OFFICER HAD VISITED THE FACTORY AND NOTED THE ELECTRICITY CONSU MPTION FOR ONE PARTICULAR HOUR. ULTIMATELY, THE ASSESSMENT HAS BEEN MADE ON THE BAS IS OF SUPPRESSED PRODUCTION BECAUSE OF HIGH CONSUMPTION OF ELECTRICITY PER UNIT WAS SHOWN BY THE ASSESSEE. 5. ON APPEAL BEFORE CIT(A) VARIOUS SUBMISSIONS WERE MADE AND ULTIMATELY THE LD. CIT(A) OBSERVED THAT IN SUCH CASES ONLY PR OFIT CAN BE ESTIMATED AND AFTER CONSIDERING THE FACTS OF THE CASE REACHED TO A CONCLUSION THAT GP RATE OF 4.5% WAS REASONABLE AND, THEREFORE, APPLIED THIS R ATE. THE ADDITION OF RS. 27,97,316/- WAS RESTRICTED BY THE LD. CIT(A) TO RS. 12,15,088/- 3 6. BOTH THE PARTIES MADE DETAILED ARGUMENTS. 7. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS CAREFUL LY AND FIND FORCE IN THE SUBMISSIONS OF LD. DR THAT IN THESE TYPE OF CASES T HE TRIBUNAL HAS ALREADY UPHELD THE GP RATE OF 5%. FOR EXAMPLE IN THE CASE OF M/S SINGH STEEL & ALLIED INDUSTRIES, MANDI GOBINDGARH VS. ITO, IN ITA NO. 6 88/ CHD/2012 & ITA NO. 710/CHD/2012 WHERE ADDITION WAS MADE ON THE BASIS O F SUPPRESSED PRODUCTION ON THE BASS OF ELECTRICITY CONSUMPTION, ULTIMATELY THE TRIBUNAL UPHELD THE GP RATE OF 5%. IN THE CASE, BEFORE US THE LD. CIT(A) HAS ALREADY ESTIMATED THE GP RATE OF 4.5%, THEREFORE, FOLLOWING OUR EARLIER ORD ER HE ESTIMATED THE GP AT 5%. ACCORDINGLY, THE APPEAL OF THE REVENUE IS PARTLY AL LOWED AND THE APPEAL OF THE ASSESSEE IS DISMISSED. 8. IN THE RESULT, APPEAL OF THE REVENUE IS PARTLY A LLOWED AND THE APPEAL OF THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 28.10.2014 SD/- SD/- (BHAVNESH SAINI) (T.R. SOOD) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 28.10..2014 RKK COPY TO: THE APPELLANT, THE RESPONDENT, THE CIT, TH E CIT(A), THE DR 4