ACIT, Alwar V. SUPREME CYLINDERS PVT. LTD., Alwar

ITA 717/JPR/2016

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 2040 (ITAT-JAIPUR)
• Duration Of Justice: 1 year(s) 2 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-09-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2000-2001
• Appeal Filed On: 18-07-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAJENDRA SINGH
• Assessee Lawyers: HIMANSHU GOYAL CA DHK
• Keywords: Bogus purchase; Loose papers; Opportunity of being heard; Tangible material; Competent authority; Onus to prove; Revised return; Reassessment proceedings
• Section: 143(3); 133A; 148

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHE S, JAIPUR JH HKKXPUN] YS[KK LNL; ,OA JH DQY HKKJR] U;KF;D LNL; DS LE{K BEFORE: SHRI BHAGCHAND, AM AND SHRI KUL BHARAT, JM VK;DJ VIHY LA-@ ITA NO. 716 & 717/JP/2016 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 1998-99 & 2000-01 THE ACIT, CIRCLE-2, ALWAR. CUKE VS. M/S. SUPREME CYLINDERS PVT. LTD., A-146, INDUSTRIAL AREA, BHIWADI, ALWAR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN NO. AACCS 9200 M VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT VK;DJ VIHY LA-@ C.O. NO. 31 & 32/JP/2016 ( ARISING OUT OF ITA NO. 716 & 717/JP/2016 ) FU/KZKJ.K O'K Z@ ASSESSMENT YEARS : 1998-99 & 2000-01. M/S. SUPREME CYLINDERS PVT. LTD., A-146, INDUSTRIAL AREA, BHIWADI, ALWAR. CUKE VS. THE ACIT, CIRCLE-2, ALWAR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN NO. AACCS 9200 M VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT JKTLO DH VKSJ LS@ REVENUE BY : SHRI RAJENDRA SINGH (JCIT) FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI HIMANSHU GOYAL (C.A) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 13.09.2017. ?KKS'K .KK DH RKJH[K@ DATE OF PRONOUNCEMENT : 27/09/2017. VKNS'K@ ORDER PER SHRI KUL BHARAT, JM. THESE ARE TWO APPEALS BY THE BY THE REVENUE FILED A GAINST TWO SEPARATE ORDERS OF LD. CIT (APPEALS), ALWAR DATED 30.05.2016 PERTAINING TO ASSESSMENT YEARS 1988-99 AND 2000-01 WHEREAS THE ASSESSEE HAS FILED THE CROSS OBJECTIONS. IDENTICAL GROUNDS ARE RAISED IN THESE APPEALS, THEREFORE, BOT H THE APPEALS ARE TAKEN UP TOGETHER AND ARE BEING DISPOSED OFF BY WAY OF A CON SOLIDATED ORDER, FOR THE SAKE OF 2 ITA NO. 716 & 717 AND CO NO. 31 & 32/JP/2016 M/S. SUPREME CYLINDERS PVT. LTD., ALWAR. CONVENIENCE. FIRST, WE TAKE UP THE APPEAL OF THE RE VENUE IN ITA NO. 716/JP/2016 PERTAINING TO ASSESSMENT YEAR 1998-99. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL : 1. THAT THE LD. CIT (A) HAS ERRED ON THE FACTS & CIRCU MSTANCES OF THE CASE IN DELETING THE ADDITION MADE BY THE AO ON ACC OUNT OF INFLATION OF PURCHASES FOR RS. 79,82,382/-. 2. THAT THE LD. CIT (A) HAS ERRED ON THE FACTS & CIRCU MSTANCES OF THE CASE IN DELETING THE DISALLOWANCE MADE BY THE AO ON ACCOUNT OF SUPPRESSION OF SCRAP SALES FOR RS. 60,70,056/-. 3. THAT THE LD. CIT (A) HAS ERRED ON THE FACTS & CIRCU MSTANCES OF THE CASE IN DELETING THE DISALLOWANCE MADE BY THE AO ON ACCOUNT OF BOGUS PAYMENT OF COMMISSION FOR RS. 1,23,879/-. THAT THE APPELLANT CRAVES LEAVE TO ADD, AMEND OR AL TER THE GROUNDS OF APPEAL ON OR BEFORE THE DATE THE APPEAL IS FINALLY HEARD FOR DISPOSAL. 2. BRIEFLY STATED THE FACTS OF THE CASE ARE THAT TH E CASE OF THE ASSESSEE WAS RE- OPENED AFTER RECORDING REASONS AND TAKING NECESSARY APPROVAL FROM THE COMPETENT AUTHORITY BY ISSUING NOTICE UNDER SECTION 148 OF TH E INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) AND ASSESSMENT WAS COMPLETED UNDER SECTION 143(3) READ WITH SECTION 147/148 OF THE ACT, 1961 V IDE ORDER DATED 29.05.2014. ORIGINALLY THE ASSESSMENT WAS COMPLETED ON 29.06.20 00 UNDER SECTION 143(3) OF THE ACT BY DETERMINING THE INCOME AT RS. 2,16,15,282/- AGAINST THE INCOME RETURNED BY THE ASSESSEE IN THE REVISED RETURN AT RS. 2,14,86,3 91/-. WHILE FRAMING THE ASSESSMENT, THE AO MADE THE ADDITION OF RS. 79,82,3 82/- ON ACCOUNT OF INFLATION OF PURCHASES, RS. 60,70,056/- ON ACCOUNT OF SUPPRESSIO N OF SCRAP SALE AND RS. 1,23,879/- ON ACCOUNT OF BOGUS PAYMENTS OF COMMISSI ON. AGGRIEVED BY THE ORDER, 3 ITA NO. 716 & 717 AND CO NO. 31 & 32/JP/2016 M/S. SUPREME CYLINDERS PVT. LTD., ALWAR. THE ASSESSEE PREFERRED AN APPEAL BEFORE LD. CIT (A) , WHO AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE, PARTLY ALLOWED THE APP EAL OF THE ASSESSEE. NOW, THE REVENUE IS IN APPEAL BEFORE THIS TRIBUNAL. 3. GROUND NO. 1 OF THE REVENUE RELATES TO DELETING THE ADDITION MADE BY THE AO ON ACCOUNT OF INFLATION OF PURCHASES FOR RS. 79,82, 382/-. 3.1. THE LD. D/R SUPPORTED THE ORDER OF THE AO AND SUBMITTED THAT THE LD. CIT (A) WAS NOT JUSTIFIED IN DELETING THE ADDITION. 3.2. ON THE CONTRARY, THE LD. COUNSEL FOR THE ASSES SEE REITERATED THE SUBMISSIONS AS MADE IN THE WRITTEN BRIEF. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ASSESSEE MADE PURCHASES FROM M/S. AGARWAL BROTHERS, DELHI, M/S. R.K. STEEL TRADING CO., AND M/S. SAURABH STEEL SYNDICATE, DELHI DURING THE YEAR UNDER CONSIDERATION. COPIES OF VARIOUS BILLS ALONG WITH RELEVANT DETAILS WERE FILED BEFORE THE AO. THE PAYMENT WAS MADE TO THE SAID PARTY THROUGH ACCOUNT PAYEE CHEQUES. THE ASSESSEE HAS BEEN REGULARLY MAKING PURCHASES FROM THE SAID P ARTY. HE SUBMITTED THAT THE PURCHASES FROM THE SAID PARTIES WERE DOUBTED BY THE DEPARTMENT AND ADDITIONS WERE MADE WHILE PASSING THE ORDERS FOR VARIOUS ASSESSMEN T YEARS BETWEEN 1999-2000 TO 2004-05. IN ALL THESE CASES THE ASSESSEE REPRESENTE D ITS CASE BEFORE COMMISSIONER (APPEALS)/ITAT WHICH VIDE THEIR ORDERS HAVE DELETED THE ADDITIONS MADE BY THE ASSESSING OFFICER. IT WAS HELD THAT THE APPELLANT D ISCHARGED ITS ONUS TO PROVE THE GENUINENESS OF ITS TRANSACTION AND THE DEPARTMENT D ID NOT HAVE ANY CORROBORATIVE MATERIAL IN ITS HAND TO PROVE THE ASSESSEE AS GUILT Y OF HAVING BOOKED BOGUS PURCHASES. COPIES OF THESE ORDERS ARE ENCLOSED IN T HE PAPER BOOK. FURTHER, THE LD. COUNSEL SUBMITTED THAT THE AO HIMSELF HAS AGREED TH AT THE TRANSACTION WITH THE SAID PARTY HAVE BEEN PROPERLY RECORDED IN THE BOOKS OF A CCOUNTS WHEREAS THE SAME IS NOT 4 ITA NO. 716 & 717 AND CO NO. 31 & 32/JP/2016 M/S. SUPREME CYLINDERS PVT. LTD., ALWAR. ENTERED IN MATERIAL INWARD REGISTER AND OTHER PERSO NAL RECORDS WHICH ARE MAINTAINED BY THE ASSESSEE. IN THIS RESPECT, HE SUBMITTED THA T THESE REGISTERS ARE PERSONAL RECORDS MAINTAINED FOR INTERNAL CONTROL PURPOSES. M ERELY BECAUSE A TRANSACTION WAS NOT ENTERED IN THE SAME, CANNOT LEAD TO A CONCLUSIO N THAT THE SAID TRANSACTION IS SHAM. THE KNOWLEDGE AND WORKING CAPACITY OF STAFF I S LIMITED AND MISTAKES ARE BOUND TO HAPPEN. IT IS NOT THE CASE THAT SOME UNSCR UPULOUS ACTIVITY HAS BEEN DONE BY THE ASSESSEE. THE ASSESSEE IS MANUFACTURING A HI GHLY REGULATED PRODUCT WHICH IS MONITORED BY VARIOUS GOVERNMENT ENTITIES. ITS METHO D OF PRODUCTION AND OUT IS FIXED. THE YIELD OF PRODUCTION IN THE YEAR UNDER CONSIDERA TION IS SIMILAR TO THAT IN EARLIER AND LATER YEARS, AND THUS BY NO MEANS IT CAN BE CON CLUDED THAT THE ASSESSEE HAS INFLATED PURCHASES. IN RESPECT OF THE AOS MAKING ENQUIRIES THAT THE S AID CONCERN HAS BEEN FOUND TO BE BOGUS, THE ASSESSEE REQUESTED THE AO TO PROVI DE COPY OF THE REPORT RECEIVED. BUT THE AO FAILED TO PROVIDE ANY DETAILS IN THIS RE GARD. IT IS ONCE AGAIN IMPORTANT TO MENTION THAT THE PUR CHASES FROM THE SAID PARTY HAVE BEEN DULY ACCEPTED BY THE ITAT IN ITS ORDER, W HICH IS THE LAST FACT FINDING AUTHORITY. ITAT HAVING ACCEPTED THE SAME IT CANNOT BE ALLEGED THAT THE SAID PARTY IS BOGUS. THE LD. COUNSEL SUBMITTED THAT SIMILAR SUBMISSION AS STATED ABOVE HAVE BEEN MADE IN THE CASE OF R.K. STEEL TRADING CORP. AND SA URABH STEEL SYNDICATE. HE FURTHER WISH TO REQUEST THAT A SIMILAR ISSUE AROSE IN VARIOUS OTHER ASSESSMENT YEARS AS UNDER :- AGARWAL BROTHERS - PURCHASES ACCEPTED BY ITAT IN O RDER FOR A.Y.1999-2000 SAURABH STEELS - PURCHASES ACCEPTED BY ITAT IN ORDE R FOR A.Y. 2001-02 5 ITA NO. 716 & 717 AND CO NO. 31 & 32/JP/2016 M/S. SUPREME CYLINDERS PVT. LTD., ALWAR. R.K. STEELS - PURCHASES ACCEPTED BY ITAT IN ORDER FOR A.Y. 2001-02. THE LD. COUNSEL SUBMITTED THAT SINCE PURCHASES FRO M ALL THESE PARTIES HAVE BEEN CONSIDERED AS GENUINE BY HONOURABLE ITAT, IT I S PRAYED THAT THE SUBMISSIONS MAY KINDLY BE ACCEPTED. THE LD. COUNSEL SUBMITTED THAT IT IS IMPORTANT TO MENTION THAT THE FACTS OF THE PRESENT CASE ARE TRULY IDENTICAL TO THOSE OF THE YE AR 1999-2000 AND 2001-02 WHICH HAVE BEEN DECIDED BY HONOURABLE CIT (A) AND ITAT IN FAVOUR OF THE APPELLANT. THE LD. COUNSEL, THEREFORE PRAYED THAT THE ADDITIO N DELETED BY THE LD. CIT (A) MAY PLEASE BE CONFIRMED. 3.3. WE HAVE HEARD RIVAL CONTENTIONS, PERUSED THE M ATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE LOWER AUTHORITIE S. WE FIND THAT THE LD. CIT (A) WHILE DELETING THE ADDITION, HAS DISCUSSED THE MATT ER IN DETAIL AND IN PARA 6.5 TO 6.13 HAS OBSERVED AS UNDER :- 6.5. I HAVE PERUSED THE ASSESSMENT ORDER AS WELL AS REMAND REPORT OF THE AO, SUBMISSIONS MADE INCLUDING JUDICIAL CITA TIONS GIVEN THEREIN AND CROSS REPLY OF THE APPELLANT AND FIND THAT AN A DDITION OF RS. 79,82,382/- HAS BEEN MADE BY THE AO ON ACCOUNT OF UNEXPLAINED/INFLATED PURCHASES. AO HAS STATED IN TH E ORDER THAT PURCHASE BILLS FOR PURCHASES OF HR SHEET AND LPG SH EETS FROM FOLLOWING PARTIES WERE FOUND TO BE NOT CONTAINING ANY STAMP O F SALES TAX CHECK POST, WEIGHMENT SLIPS, ENTRIES IN THE MATERIAL INWA RD REGISTER AT FACTORY GATE AND GOODS RECEIPTS REGISTER :- M/S. AGGARWAL BROTHERS; M/S. R.K. STEEL TRADING CORP; M/S. SAURABH STEEL SYNDICATE. 6.6. THE QUANTUM OF PURCHASES MADE FROM THESE THREE PARTIES DURING THE PERIOD UNDER CONSIDERATION TOTAL UPTO RS . 79,82,382. DURING 6 ITA NO. 716 & 717 AND CO NO. 31 & 32/JP/2016 M/S. SUPREME CYLINDERS PVT. LTD., ALWAR. THE COURSE OF SURVEY OPERATION U/S 133A OF THE IT A CT AT THE BUSINESS PREMISES ON 22.11.2004, THESE DISCREPANCIES WERE NO TED AND A STATEMENT OF THE DIRECTOR OF THE COMPANY WAS ALSO R ECORDED IN WHICH HE COULD NOT SATISFACTORILY EXPLAIN THE REASONS FOR THE SAME. AO HAS ACCORDINGLY HELD THAT ALL THE PURCHASES MADE FROM T HESE THREE PARTIES DURING THE YEAR UNDER CONSIDERATION ARE BOGUS AND I NFLATED. 6.7. THE APPELLANT HAS STATED THAT ISSUE OF INFLATI ON OF PURCHASES FROM THESE PARTIES ALONGWITH CERTAIN OTHER PARTIES HAS ALREADY BEEN CONSIDERED IN CASE OF THE APPELLANT BY THE CIT (A) & HONBLE ITAT FOR VARIOUS YEARS BETWEEN 1999-2000 TO 2005-06. IT IS S UBMITTED THAT HONBLE ITAT HAS ALREADY ACCEPTED THE PURCHASES MAD E FROM TWO PARTIES AS GENUINE PURCHASES, WHILE PASSING THE ORD ER IN THE CASE OF THE APPELLANT FOR AY 1999-2000 & 2001-02. A COPY OF THE ORDERS HAS BEEN FILED ON RECORD. IT IS SUBMITTED THAT IN THE C ASE OF M/S. SAURABH STEEL SYNDICATE, PURCHASES HAVE BEEN MADE IN FY 199 7-98 ONLY AND ALL THE PAYMENTS HAVE BEEN MADE THROUGH ACCOUNT PAYEE C HEQUES. 6.8. IT IS SUBMITTED THAT THE EMPLOYEES OF THE ASSE SSEE HAVE CATEGORICALLY STATED THAT THEY DO NOT REMEMBER EXAC TLY AND CAN CONFIRM ONLY AFTER SEEING THE RECORDS WHETHER PURCHASES HAV E BEEN MADE FROM THESE PARTIES OR NOT. FURTHER COPY OF LEDGER ACCOUN TS OF THESE PARTIES WILL CLEARLY REVEAL THAT PAYMENTS HAVE BEEN MADE TO THESE PARTIES AGAINST PURCHASES. IN THIS RESPECT, IT IS FURTHER S UBMITTED THAT DURING THE COURSE OF PROCEEDINGS FOR AY 2001-02 TO 2004-05 REPRESENTATIVES OF THESE PARTIES APPEARED BEFORE THE AO AND HAVE C ONFIRMED THE TRANSACTIONS. AS REGARDS THE DOCUMENTARY LAPSES NOT ED BY AO THAT CERTAIN WEIGHMENT SLIPS, BUILTIES ETC ARE MISSING T HESE ARE MATTERS OF INTERNAL CONTROL AND DO NOT PROVE THAT THE PURCHASE S MADE ARE BAD. THE DOCUMENTS DO NOT FORM PART OF THE BOOKS OF ACCO UNTS AND THUS NON AVAILABILITY OF THE SAME, THAT TOO IN FEW CASES /FEW INSTANCES CANNOT CONCLUDE THE PURCHASES TO BE BOGUS. 7 ITA NO. 716 & 717 AND CO NO. 31 & 32/JP/2016 M/S. SUPREME CYLINDERS PVT. LTD., ALWAR. 6.9. THE APPELLANT HAS SUBMITTED THE DETAILS OF BAN KS THROUGH WHICH THE PAYMENTS HAVE BEEN MADE/ENCASHED TO/BY THESE PA RTIES. THE APPELLANT HAS FURTHER REQUESTED THE AO TO ISSUE THE SUMMONS TO THESE PARTIES, IF ANY FURTHER INVESTIGATION FROM THESE PA RTIES IS REQUIRED. IT IS SUBMITTED THAT IT DID NOT HAVE DEALINGS WITH THESE PARTIES SINCE LAST 4-5 YEARS AND WITHOUT PURCHASES & CONSUMPTION OF MATERI AL, IT WAS NOT FEASIBLE FOR THE COMPANY TO PRODUCE THE DESIRED QUA NTITY OF CYLINDERS. IT IS SUBMITTED THAT COPIES OF BILLS OF AGARWAL BRO S. IMPOUNDED WITH AO MAY KINDLY BE SEEN AND IT WOULD BE FOUND THAT EACH BILL IS SUPPORTED WITH STORES RECEIPT CUM INSPECTION REPORT. EACH BIL L HAS THE STAMP OF GATE ENTRY WITH PROPER GATE ENTRY NUMBER AND STAMP OF STORES DEPARTMENT WITH PROPER SERIAL NUMBER OF ENTRY IN GR R. EACH VOUCHER HAS BEEN SUPPORTED WITH THE SIGNATURE OF PERSON WHO VERIFIED THE INSPECTION REPORT, STORING IN-CHARGE, SIGNATURE OF PERSON WHO HAS PREPARED STORES RECEIPT CUM INSPECTION REPORT. EACH BILL CONTAINS SALES TAX NUMBER AND TRUCK NUMBER, BY WHICH THE GOO DS WERE DISPATCHED. THERE IS NO INFIRMITY OF ANY KIND IN TH ESE BILLS. 6.10. IT IS SUBMITTED THAT COPIES OF PURCHASE BILLS ALONG WITH RELEVANT DETAILS WERE FILED BEFORE THE AO. THE PAYMENTS FOR ALL THE PURCHASES MADE FROM THESE PARTIES WERE MADE THROUGH ACCOUNT P AYEE CHEQUES. THESE FACTS HAVE BEEN CONFIRMED BY THE AO IN THE OR DER BUT ADDITION HAS BEEN MADE BY FOLLOWING THE ORDERS PASSED IN THE LATER YEARS. THE PURCHASES FROM THE SAID PARTY HAS BEEN DOUBTED BY S TATING THAT THOUGH PURCHASES HAVE BEEN RECORDED IN BOOKS OF ACCOUNTS B UT THE SAME ARE NOT FOUND TO BE ENTERED IN MATERIAL INWARD REGISTER AND GOODS RECEIPT REGISTER AND THE WEIGHMENT SLIP IS NOT ATTACHED. IT IS SUBMITTED THAT A SIMILAR ISSUE AROSE IN OTHER ASSESSMENT YEARS :- AGARWAL BROTHERS PURCHASES ACCEPTED BY ITAT IN OR DER FOR A.Y. 1999-00 M/S. R.K. STEEL TRADING CORP. PURCHASES ACCEPTED BY ITAT IN ORDER FOR A.Y. 2001-02. 8 ITA NO. 716 & 717 AND CO NO. 31 & 32/JP/2016 M/S. SUPREME CYLINDERS PVT. LTD., ALWAR. 6.11. THE APPELLANT HAS STATED THAT SINCE PURCHASES FROM ALL THESE PARTIES HAVE BEEN CONSIDERED AS GENUINE BY HONBLE ITAT IT IS REQUESTED THAT ADDITION MADE BY THE AO MAY BE DELET ED. IT IS FURTHER STATED THAT APPELLANT IS MANUFACTURING A HIGHLY REG ULATED PRODUCT WHICH IS MONITORED BY VARIOUS GOVERNMENT ENTITIES. THE YI ELD OF PRODUCTION IN THE YEAR UNDER CONSIDERATION IS SIMILAR TO THAT IN EARLIER AND LATER YEARS, AND THUS BY NO MEANS IT CAN BE CONCLUDED THAT THE A SSESSEE HAS INFLATED PURCHASES. 6.12. HAVING CONSIDERED THE DETAILED SUBMISSIONS MA DE IN THIS REGARD, I FIND THAT AO HAS IN THE REMAND REPORT REITERATED THE REASONS GIVEN IN THE ASSESSMENT ORDER AND HAS NOT BEEN ABLE TO BRING ON RECORD ANY EVIDENCE TO HOLD THAT PURCHASES MADE FROM THESE PAR TIES ARE INFLATED & BOGUS. THE FACT THAT ALL THE PAYMENTS FOR THE MATER IAL PURCHASED HAVE BEEN MADE THROUGH THE BANKING CHANNEL AGAINST THE R ECEIPT OF BILLS, THE YIELD IN THE PRODUCTION PROCESS, NO. OF CYLINDE RS MANUFACTURED, ETC. HAVE NOT BEEN DISPUTED BY THE AO. FURTHER, I FIND T HAT PURCHASES MADE BY THE APPELLANT FROM TWO PARTIES NAMELY M/S. AGA RWAL BROTHERS AND M/S. R.K. STEEL TRADING CORP. IN THE PRECEDING YEAR AND SUCCEEDING YEAR FROM THESE PARTIES HAVE BEEN HELD TO BE GENUIN E BY THE HONBLE ITAT FOR AY 2001-02 VIDE ORDER DATED 09.09.2011 IN ITA NO. 9/JP/2011 & FOR AY 1999-2000 VIDE ORDER DATED 26.10.2007 IN I TA NO. 560/JP/2007 & ITA NO. 513/JP/2007. HOWEVER, AS REGA RDS THE PURCHASES MADE FROM M/S. SAURABH STEEL SYNDICATE AR E CONCERNED, THE SAME FACTS ARE PREVAILING IN THIS CASE ALSO AS THE PAYMENTS WERE DULY MADE THROUGH THE BANK ACCOUNT AFTER RECEIPT OF BILL S AND A COPY OF THE LEDGER ACCOUNT SHOWING ALL THESE DETAILS HAS BEEN F ILED ON RECORD. THEREFORE, THE CONTENTION OF THE APPELLANT WITH REG ARD TO PURCHASES OF RS. 30,85,511/- MADE FROM THIS PARTY DURING THE PER IOD UNDER CONSIDERATION, IS FOUND TO BE IN ORDER, IN THE ABSE NCE OF ANY MATERIAL TO THE CONTRARY AVAILABLE ON RECORD. 9 ITA NO. 716 & 717 AND CO NO. 31 & 32/JP/2016 M/S. SUPREME CYLINDERS PVT. LTD., ALWAR. 6.13. THUS, IN VIEW OF THE ABOVE DISCUSSION AND IN THE ABSENCE OF ANY MATERIAL/EVIDENCE TO THE CONTRARY AVAILABLE ON RECO RD, I HOLD THAT THERE IS NO JUSTIFICATION ON THE PART OF THE AO TO TREAT THE PURCHASES FROM THESE PARTIES AS INFLATED/NOT GENUINE. ACCORDINGLY, I DELETE THE ADDITION OF RS. 79,82,382/- MADE BY THE AO UNDER THIS HEAD. AFTER GOING THROUGH THE ABOVE OBSERVATIONS OF THE L D. CIT (A), WE FIND NO INFIRMITY IN THE ORDER OF LD. CIT (A), WHO FOLLOWING THE DECISIO NS OF THE TRIBUNAL, HAD DELETED THE ADDITION. THE ORDER OF LD. CIT (A) IS UPHELD. THE GROUND OF THE REVENUE IS REJECTED. 4. GROUND NOS. 2 & 3 OF THE REVENUE RELATE TO DELET ION OF ADDITION OF RS. 60,70,056/- ON ACCOUNT OF SUPPRESSION OF SALE OF SC RAP AND OF RS. 1,23,879/- ON ACCOUNT OF COMMISSION EXPENSES. 5. THE LD. D/R SUPPORTED THE ORDER OF THE ASSESSING OFFICER AND SUBMITTED THAT THE LD. CIT (A) WAS NOT JUSTIFIED IN DELETION THE A DDITION. 5.1. ON THE CONTRARY, LD. COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS AS MADE IN THE WRITTEN BRIEF. HE SUPPORTED THE ORDER O F LD. CIT (A). HE SUBMITTED THAT IDENTICAL GROUNDS HAVE BEEN ADJUDICATED BY THE COOR DINATE BENCH OF THE TRIBUNAL IN THE ASSESSEES OWN CASE IN ITA NO. 560/JP/2007 AND ITA NO. 513/JP/2007 PERTAINING TO ASSESSMENT YEAR 1999-2000 IN FAVOUR O F THE ASSESSEE. THE TRIBUNAL HAS ALSO DEALT WITH THE SIMILAR ISSUE IN THE ORDER OF THE TRIBUNAL FOR VARIOUS OTHER YEARS. HE, THEREFORE, SUBMITTED THAT THE ORDER OF L D. CIT (A) DELETING THE ADDITIONS MAY BE CONFIRMED. 5.2. WE HAVE HEARD RIVAL CONTENTIONS, PERUSED THE M ATERIAL ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. WE FI ND THAT THE LD. CIT (A) HAD DELETED THE ADDITIONS BY OBSERVING IN PARA 7.5 TO 7 .12 OF HIS ORDER AS UNDER :- 10 ITA NO. 716 & 717 AND CO NO. 31 & 32/JP/2016 M/S. SUPREME CYLINDERS PVT. LTD., ALWAR. 7.5. I HAVE PERUSED THE ASSESSMENT ORDER AS WELL AS REMAND REPORT OF THE AO, SUBMISSIONS MADE INCLUDING JUDICIAL CITA TIONS GIVEN THEREIN AND CROSS REPLY OF THE APPELLANT AND FIND THAT AN A DDITION OF RS.60,70,056/- HAS BEEN MADE BY THE AO ON ACCOUNT O F SUPPRESSION OF SALE OF SCRAP. DURING THE COURSE OF SURVEY CONDUCTE D ON 22.11.2004 AT THE PREMISES OF THE APPELLANT, LOOSE PAPERS WERE FO UND WHICH REVEALED THAT SCRAP WAS BEING SOLD BY THE APPELLANT @ RS.580 0 PER MT AS PER THE BILLS RAISED AS AGAINST THE MARKET RATE OF RS.1 0,700 PER MT AND EXCESS CASH WAS RECEIVED OUT OF THE BOOKS. FOLLOWIN G THE SAME LOGIC, AO HAS WORKED OUT 45% OF CONCEALMENT OVER THE BILLE D AMOUNT DECLARED BY THE APPELLANT. AO HAS ACCORDINGLY WORKE D OUT THE GROSS AMOUNT OF SCRAP SALES GENERATED OUT OF THE BOOKS BY EXTRAPOLATING THE FIGURE SHOWN IN THE BOOKS OF ACCOUNTS ON ACCOUNT OF SCRAP SALE. AO HAS ON THE SAME BASIS WORKED OUT THE EXCESS CASH RE CEIVED OUT OF THE BOOKS WOULD BE RS.60,70,056 ON ACCOUNT OF SCRAP SAL ES OF 1238.787 MT DURING THE YEAR UNDER CONSIDERATION. 7.6. AO HAS ALSO MADE AN ADDITION OF RS.123879 ON A CCOUNT OF COMMISSION PAYMENTS ON SALE OF SCRAP DEBITED TO THE P&L A/C. THIS PAYMENT OF COMMISSION WAS CLAIMED BY THE APPELLANT AS HAVING PAID @ RS.100 PER MT TO THE BROKER. AO HAS HELD THAT ALL THE SCRAP SALE WAS MADE DIRECTLY TO THE BUYERS AND THEREFORE DISAL LOWANCE OF RS.123879 ON ACCOUNT OF COMMISSION ON SCRAP SALE HA S BEEN MADE. 7.7. THE APPELLANT HAS STATED THAT CERTAIN PAPERS P ERTAINING TO AY 2004-05 & 2005-06 ON ACCOUNT OF SALE OF SCRAP WERE FOUND AND THE INCOME STATED THEREIN WAS SURRENDERED AND OFFERED F OR TAXATION. HOWEVER, NO SUCH PAPERS OR OTHER EVIDENCE PERTAININ G TO RECEIPT OF SCRAP VALUE OUTSIDE THE BOOKS OF ACCOUNTS WERE FOUN D AND ALSO NO EVIDENCE HAS BEEN PLACED ON RECORD BY THE AO BEFORE MAKING THE ADDITION. THE ADDITION MADE ON THIS ACCOUNT IS NOT JUSTIFIED AS COMPLETE PRODUCTION RECORDS RELATING TO RECEIPT OF RAW MATER IAL, NUMBER OF 11 ITA NO. 716 & 717 AND CO NO. 31 & 32/JP/2016 M/S. SUPREME CYLINDERS PVT. LTD., ALWAR. CYLINDERS MANUFACTURED, GENERATION OF SCRAP, ETC. A RE UNDER THE SUPERVISION OF EXCISE AUTHORITIES. 7.8. IT IS FURTHER STATED THAT AO WAS NOT JUSTIFIED IN MAKING AN ADDITION ON THIS ACCOUNT AFTER EXTRAPOLATING THE FIGURES OF SCRAP GENERATION AND AO HAS ADOPTED THE SAME RATE OF SALE OF SCRAP WHICH HAS BEEN USED IN AY 2004-05. THEREFORE, THE ADDITION MADE ON THIS AC COUNT MAY BY DELETED IN THE ABSENCE OF ANY EVIDENCE. THE APPELLA NT HAS PLACED RELIANCE ON A NUMBER OF DECISIONS OF VARIOUS COURTS TO SUBSTANTIATE ITS ARGUMENTS. 7.9. I HAVE GONE THROUGH THE MATERIAL AVAILABLE ON RECORD AND FIND THAT ADDITION HAS BEEN MADE BY THE AO ON THE BASIS OF EXTRAPOLATION OF THE FIGURES QUANTIFIED ON ACCOUNT OF PAPERS FOUND P ERTAINING TO SOME OTHER PERIOD DURING THE COURSE OF SURVEY OPERATION AT THE PREMISES OF THE APPELLANT. THE ADDITIONS MADE BY THE AO ON ACCO UNT OF SCRAP SALE WERE BASED ON THE PAPERS FOUND WHICH PERTAIN TO AY 2004-05 & 2005- 06. AO HAS NOT BROUGHT ON RECORD ANY OTHER MATERIAL OR CONDUCTED ANY ENQUIRY TO ESTABLISH THE RECEIPT OF MONEY OUT OF TH E BOOKS ON ACCOUNT OF SALE OF SCRAP IN THIS YEAR. 7.10. THEREFORE, CONSIDERING ALL THESE FACTS AND IN THE ABSENCE OF ANY EVIDENCE OF SCRAP GENERATION HAVING BEEN SOLD OUT O F THE BOOKS AT HIGHER RATES, I HOLD THAT THERE IS NO JUSTIFICATION ON THE PART OF THE AO IN MAKING AN ADDITION ON IMAGINATIVE BASIS. ACCORDINGL Y, I DELETE THE ADDITION OF RS.60,70,056 MADE BY THE AO UNDER THIS HEAD. 7.11. HOWEVER, AS REGARDS THE CLAIM OF COMMISSION P AID ON SCRAP SALES @RS.100 PMT IS CONCERNED, THE APPELLANT HAS I N THE COURSE OF APPELLATE PROCEEDINGS STATED THAT ALLEGATION OF BOG US PAYMENT IS BASED ON PRESUMPTIONS. THE COMPLETE DETAILS OF PAYMENT MA DE BY CHEQUES WERE FILED BEFORE THE AO. IT IS FURTHER STATED THAT SIMILAR ADDITION HAS BEEN DELETED BY THE HONBLE ITAT IN THE OTHER YEARS . 12 ITA NO. 716 & 717 AND CO NO. 31 & 32/JP/2016 M/S. SUPREME CYLINDERS PVT. LTD., ALWAR. 7.12. HAVING CONSIDERED THE SUBMISSIONS MADE ON THI S ISSUE, I FIND THAT THIS ISSUE HAS BEEN CONSIDERED BY THE HONBLE ITAT IN THE CASE OF THE APPELLANT FOR AY 1999-2000, WHEREIN THE DISALLO WANCE MADE BY THE AO ON THIS ACCOUNT WAS DELETED BY ORDER DATED 26.10 .2007 IN ITA NO.560/JP/2007. RESPECTFULLY FOLLOWING THE SAME, AS THERE IS NO CHANGE IN THE FACTS IN THIS YEAR AND AO HAS NOT BRO UGHT ON RECORD ANY OTHER ADVERSE MATERIAL ON THIS ISSUE, I DELETE THE ADDITION OF RS.1,23,879/- MADE BY THE AO ON THIS ACCOUNT. WE FIND THAT THE LD. CIT (A) AFTER TAKING INTO CONS IDERATION VARIOUS ASPECTS OF THE MATTER AND ALSO FOLLOWING THE DECISION OF THE TRIBU NAL IN THE ASSESSEES OWN CASE FOR THE ASSESSMENT YEAR 1999-2000, DELETED THE ADDITION . WE FIND NO REASON TO INTERFERE INTO THE ORDER OF LD. CIT (A), THE SAME I S HEREBY AFFIRMED. THE GROUNDS OF THE REVENUE ARE REJECTED. 6. NOW, TAKE UP THE APPEAL OF THE REVENUE IN ITA NO. 717/JP/2016 PERTAINING TO ASSESSMENT YEAR 2000-01. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS : 1. THAT THE LD. CIT (A) HAS ERRED ON THE FACTS & CIRCU MSTANCES OF THE CASE IN DELETING THE ADDITION MADE BY THE AO ON ACC OUNT OF INFLATION OF PURCHASES FOR RS. 1,67,07,740/-. 2. THAT THE LD. CIT (A) HAS ERRED ON THE FACTS & CIRCU MSTANCES OF THE CASE IN DELETING THE DISALLOWANCE MADE BY THE AO ON ACCOUNT OF SUPPRESSION OF SCRAP SALES FOR RS. 1,12,58,527/-. 7. WE HAVE HEARD RIVAL CONTENTIONS, PERUSED THE MAT ERIAL ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. BOTH THE PARTIES HAVE ADVANCED THE SIMILAR ARGUMENTS AS MADE FOR THE ASSESSMENT YEAR 1 998-99. WE HAVE ADJUDICATED 13 ITA NO. 716 & 717 AND CO NO. 31 & 32/JP/2016 M/S. SUPREME CYLINDERS PVT. LTD., ALWAR. THE IDENTICAL GROUNDS IN THE APPEAL OF THE REVENUE IN ITA NO. 716/JP/2016 HEREIN ABOVE. SINCE THERE IS NO CHANGE IN THE FACTS AND C IRCUMSTANCES FOR THE ASSESSMENT YEAR UNDER CONSIDERATION, WE AFFIRM THE ORDER OF LD . CIT (APPEALS) WHO HAD RIGHTLY DELETED THE ADDITIONS BY FOLLOWING THE DECISIONS OF THE TRIBUNAL IN THE ASSESSEES OWN CASE FOR THE A.Y. 1999-2000. THE GROUNDS OF THE RE VENUE ARE REJECTED. 8. IN THE RESULT, BOTH THE APPEALS OF THE REVENUE A RE DISMISSED. 9. NOW, WE TAKE UP THE CROSS OBJECTIONS NO. 31 AND 32/JP/2016 OF THE ASSESSEE. THE ASSESSEE HAS CHALLENGED THE ORDER OF THE LD. CIT (A) IN CONFIRMING THE ACTION OF THE AO IN REOPENING OF THE ASSESSMENT UND ER SECTION 148 OF THE ACT. 10. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. THE LD. CIT (A) HAS CONFIRMED THE REOPENING OF THE ASSESSMENT BY OBSERVING IN 4.5 TO 4.10 OF HIS ORDER AS UNDER :- 4.5. I HAVE PERUSED THE ASSESSMENT ORDER AS WELL AS REMAND REPORT OF THE AO, SUBMISSIONS MADE INCLUDING JUDICIAL CITA TIONS GIVEN THEREIN AND CROSS REPLY OF THE APPELLANT AND FIND THAT AO H AS ISSUED NOTICE TO THE APPELLANT BEFORE INITIATING RE-ASSESSMENT PROCE EDINGS. RE- ASSESSMENT PROCEEDINGS WERE STARTED AFTER CONSIDERI NG THE OBJECTIONS RAISED BY THE APPELLANT AND ON THE BASIS OF MATERIA L AVAILABLE ON RECORD. I FIND THAT AO HAD ISSUED THE NOTICE U/S 14 8 BASED ON THE MATERIAL FOUND DURING THE COURSE OF SURVEY AND DISC REPANCIES NOTICED IN THE INCOME DECLARED BY THE APPELLANT. THE AO HAS GI VEN REASONABLE OPPORTUNITY OF BEING HEARD TO THE APPELLANT BEFORE INITIATING THE RE- ASSESSMENT PROCEEDINGS. HONBLE SUPREME COURT HAS L AID DOWN IN THE CASE OF KELVINATOR INDIA 320 ITR 561 THAT AO HAS PO WER TO RE-ASSESS, ONLY IF THERE IS A TANGIBLE MATERIAL AND THE PROCED URE LAID DOWN IN THE 14 ITA NO. 716 & 717 AND CO NO. 31 & 32/JP/2016 M/S. SUPREME CYLINDERS PVT. LTD., ALWAR. CASE OF G.K.N. DRIVESHAFT HAS BEEN FOLLOWED BY THE AO. THE AO HAS DISCHARGED THE DUTY WHICH LAY UPON HIM BEFORE INITI ATING THE REASSESSMENT PROCEEDINGS. 4.6. HOWEVER, THE CASE LAWS RELIED UPON BY THE APPE LLANT DOES NOT HAVE APPLICABILITY TO THE FACTS OF THE PRESENT CASE . THE FUNCTION OF THE ASSESSING OFFICER IS TO ADMINISTER THE STATUTE WITH SOLICITUDE FOR THE PUBLIC EXCHEQUER WITH AN IN-BUILT IDEA OF FAIRNESS TO TAXPAYER (ASST. CIT V. RAJESH JHAVERI STOCK BROKERS (P) LTD. (2007) 291 ITR 500 (SC). IN DETERMINING WHETHER COMMENCEMENT OF REASSESSMENT PR OCEEDINGS IS VALID, THE COURT HAS ONLY TO SEE WHETHER THERE IS P RIMA FACIE SOME MATERIAL ON THE BASIS OF WHICH THE DEPARTMENT OPENE D THE CASE. THE SUFFICIENCY OR CORRECTNESS OF THE MATERIAL IS NOT A THING TO BE CONSIDERED AT THIS STAGE AS HELD BY THE SUPREME COU RT IN THE CASE OF RAYMOND WOOLLEN MILLS LTD. V. ITO (1999) 236 ITR 34 (SC), GREAT ARTS (P) LTD. V. ITO (2002) 257 ITR 639 (DELHNI). THE AS SESSEE CANNOT CHALLENGE SUFFICIENCY OF BELIEF ITO V. LAKHMANI MEW AL DAS (1976) 103 ITR 437 (SC). 4.7. IT HAS BEEN HELD BY VARIOUS COURTS THAT IT IS THE DUTY OF THE ASSESSEE TO DISCLOSE PRIMARY FACTS FULLY AND TRULY. RELIANCE IN THIS REGARD IS PLACED UPON THE FOLLOWING :- (A) ZOHAR SIRAJ LOKHANDWALA V. M.G. KAMAT (1994) 21 0 ITR 956 (BOM) ASSESSEE PRIMARILY MUST DISCLOSE PARTICULAR PORTIONS OF DOCUMENTS WHICH ARE MATERIAL. (F) PARASHURAM POTTERY WORKS CO. LTD. V. ITO (1977) 106 ITR 1 (SC) (G) INDIAN OIL CORPORATION V. ITO (1986) 159 ITR 956 (SC) (H) CALCUTTA DISCOUNT CO. LTD. V. ITO (1961) 41 I TR 191 (SC) (I) ITO V. LAKHMANI MEWAL DAS (1976) 103 ITR 437 (SC) 4.8. IN THE ABOVE QUOTED CASES, MAINLY IT WAS HELD THAT THE ASSESSEE MUST DISCLOSE ALL PRIMARY FACTS FULLY AND TRULY. TH E WORDS OMISSION OR FAILURE TO DISCLOSE FULLY AND TRULY ALL MATERIAL FA CTS NECESSARY FOR HIS ASSESSMENT FOR THE YEAR, POSTULATE A DUTY ON EVERY ASSESSEE TO 15 ITA NO. 716 & 717 AND CO NO. 31 & 32/JP/2016 M/S. SUPREME CYLINDERS PVT. LTD., ALWAR. DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS NECESSA RY FOR HIS ASSESSMENT. WHAT FACTS ARE MATERIAL AND NECESSARY FOR ASSESSMEN T WILL DIFFER FROM CASE TO CASE. THERE CAN BE NO DOUBT THAT THE DUTY O F DISCLOSING ALL THE PRIMARY FACTS RELEVANT TO THE DECISION OR THE QUEST ION BEFORE THE ASSESSING AUTHORITY, LIES ON THE ASSESSEE. 4.9. FURTHER IN THE CASE OF A G GROUP CORPORATION V S. HARSH PRAKASH 353 ITR 158 HONBLE GUJARAT HIGH COURT HAS UPHELD THE ISSUE OF NOTICE U/S 148 AS THERE WAS ALLEGED SUPPRESSION OF STOCK ON THE PART OF THE ASSESSEE. ALSO IN THE CASE OF AQUAGEL CHEMICALS P. LTD. VS. ACIT 353 ITR 0131, HONBLE GUJARAT HIGH COURT HAS UPHELD THE INITIATION OF REASSESSMENT PROCEEDINGS ON THE GROUND OF FAILURE O N THE PART OF ASSESSEE TO DISCLOSE FACTS NECESSARY FOR ASSESSMENT . 4.10. THUS, IN VIEW OF THESE FACTS, I HOLD THAT AO HAD RIGHTLY INITIATED THE PROCEEDINGS U/S 147/148 OF THE IT ACT. IN VIEW OF THE ABOVE FINDING OF LD. CIT (A), WE DO NOT FIND ANY REASON TO INTERFERE INTO THE ORDER OF LD. CIT (A) IN RESPECT OF THIS GR OUND, THE SAME IS HEREBY UPHELD, AS THE LD. COUNSEL FOR THE ASSESSEE COULD NOT POINT OU T ANY ILLEGALITY INTO THE RE-OPENING OF ASSESSMENT BY FURNISHING ANY CONTRARY MATERIAL O N RECORD. THE GROUND OF THE ASSESSEE IS REJECTED. 11. IN THE RESULT, THE CROSS OBJECTIONS OF THE ASSE SSEE ARE DISMISSED. 12. IN TOTALITY, APPEALS OF THE REVENUE AS WELL AS CROSS OBJECTIONS OF THE ASSESSEE ARE DISMISSED. ORDER IS PRONOUNCED IN THE OPEN COURT ON 27.09. 2017. SD/- SD/- ( HKKXPUN ( DQY HKKJR ) ( BHAGCHAND) ( KUL BHARAT ) YS[KK LNL;@ ACCOUNTANT MEMBER U;KF;D LNL;@ JUDICIAL MEMBER JAIPUR DATED:- 27/09/2017. DAS/ 16 ITA NO. 716 & 717 AND CO NO. 31 & 32/JP/2016 M/S. SUPREME CYLINDERS PVT. LTD., ALWAR. VKNS'K DH IZFRFYFI VXZSF'KR@ COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT- THE ACIT, CIRCLE-2, ALWAR. 2. THE RESPONDENT M/S. SUPREME CYLINDERS P. LTD., ALWAR. 3. THE CIT(A). 4. THE CIT, 5. THE DR, ITAT, JAIPUR 6. GUARD FILE (ITA NO. 716 & 717/JP/2016 & CO 31 & 32/JP/2016) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASSISTANT. REGISTRAR 17 ITA NO. 716 & 717 AND CO NO. 31 & 32/JP/2016 M/S. SUPREME CYLINDERS PVT. LTD., ALWAR.