ACIT, Bangalore V. M/s Kodandara Foller Flour Mills Pvt. Ltd., Bangalore

ITA 832/BANG/2011

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 63722 (ITAT-BANGALORE)
• Duration Of Justice: 1 year(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-10-2012
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2007-2008
• Appeal Filed On: 22-09-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: A SUNDAR RAJAN JT
• Assessee Lawyers: G SURENDRANATH RAO
• Section: 260A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH : BANGALORE BEFORE SHRI N. BARATHVAJA SANKAR, VICE PRESIDENT AND SHRI N.V. VASUDEVAN, JUDICIAL MEMBER ITA NO.832/BANG/2011 ASSESSMENT YEAR : 2007-08 THE ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE 11(5), BANGALORE. VS. M/S. KODANDANDARAMA ROLLER FLOUR MILLS PVT. LTD., NO.83, SILVER JUBILEE PARK ROAD, BANGALORE 560 002. PAN: AACCK 1272H APPELLANT RESPONDENT APPELLANT BY : SHRI A. SUNDAR RAJAN, JT.CIT(DR) RESPONDENT BY : SHRI G. SURENDRANATH RAO, C.A. DATE OF HEARING : 27.09.2012 DATE OF PRONOUNCEMENT : 05.10.2012 O R D E R PER N.V. VASUDEVAN, JUDICIAL MEMBER THIS APPEAL BY THE REVENUE IS AGAINST THE ORDER D ATED 28.7.2011 OF THE CIT(APPEALS)-I, BANGALORE RELATING TO ASSESSMEN T YEAR 2007-08. 2. THE ONLY ISSUE THAT ARISES FOR CONSIDERATION IN THIS APPEAL IS AS TO WHETHER THE CIT(APPEALS) WAS JUSTIFIED IN DELETING THE ADDITION OF Q 22 ITA NO.832/BANG/2011 PAGE 2 OF 4 LAKHS MADE BY THE AO ON ACCOUNT OF VALUE OF EXCESS WASTAGE CLAIMED BY THE ASSESSEE. 3. THE ASSESSEE IS A COMPANY. IT IS ENGAGED IN TH E BUSINESS OF MANUFACTURE OF WHEAT PRODUCTS AND TRADING IN EDIBLE OIL. IN THE BUSINESS OF MANUFACTURE OF WHEAT PRODUCTS, THE PROCESS INVOLVE S REMOVAL OF DUST AND STONE PARTICLES BEFORE PUTTING THE WHEAT INTO THE G RINDING MACHINE. THEREAFTER, ATTA/MAIDA IS OBTAINED AS AN END-PRODUC T. THE ASSESSEE CLAIMED WASTAGE IN THE PROCESS OF MANUFACTURE AT 2. 5%. THE ASSESSING OFFICER WAS OF THE VIEW THAT THE WASTAGE HAS TO BE ONLY AT 1.57% AND IN DOING SO, THE AO RELIED ON THE FINDINGS OF THE CFTR I, MYSORE. BY ADOPTING THE WASTAGE AT 1.57%, THE AO ADDED A SUM OF Q 22 LAKHS TO THE TOTAL INCOME OF THE ASSESSEE. 4. ON APPEAL BY THE ASSESSEE, IT WAS POINTED OUT TH AT BEFORE THE CIT(APPEALS) THAT IN ASSESSEES OWN CASE FOR THE A. Y. 2000-01 TO 2004-05, THE COCHIN BENCH OF THE ITAT HAD HELD THAT WASTAGE SHOULD BE ALLOWED AT 2.42%, 2.13% AND 2.42% FOR THE AYS 2001-02, 2002-03 & 2004-05 RESPECTIVELY. THE CIT(A) WAS OF THE VIEW THAT THE AVERAGE WASTAGE FOR THE AFORESAID 3 ASSESSMENT YEARS WOULD BE 2.32%. ADOPT ING THE AFORESAID PERCENTAGE, THE CIT(A) REDUCED THE ADDITION MADE BY THE AO FROM Q 22 LAKHS TO Q 2,93,100. 5. AGGRIEVED BY THE ORDER OF THE LD. CIT(A), THE RE VENUE HAS PREFERRED THE PRESENT APPEAL BEFORE THE TRIBUNAL. THE MAIN T HRUST OF THE ARGUMENT OF THE LD. DR WAS GROUND NOS. 4 & 5 TAKEN IN THE GROUN DS OF APPEAL BY THE REVENUE, WHICH READ AS UNDER:- ITA NO.832/BANG/2011 PAGE 3 OF 4 4. THE LD. CIT(A) ERRED IN ALLOWING THE RELIEF, RE LYING ON THE ORDER DT. 24.3.2008 OF THE HONBLE ITAT, COCHIN BEN CH IN THE ASSESSEES OWN CASE FOR THE AYS 2000-01 TO 2004-05, WHICH HAS NOT BEEN ACCEPTED BY THE DEPARTMENT AND APPEALS HAV E BEEN FILED BEFORE THE HIGH COURT U/S. 260A OF THE I T ACT, 196 1 AGAINST SUCH ORDER. 5. THE LEARNED CIT(A) WAS NOT JUSTIFIED IN DELETING THE ADDITION RELYING ON THE ORDER DT. 24.3.2008 OF THE HONBLE ITAT, COCHIN BENCH IN THE ASSESSEES OWN CASE FOR PREVIOU S YEARS, WITH APPRECIATING THAT SUBSEQUENTLY, THE SAME ITAT BENCH , RELYING ON ITS SUBSEQUENT ORDER DT. 13.3.2009 IN ITA NOS. 672, 673, 674, 685 AND 686/COCH/2006 IN THE CASE OF A SISTER CONCERN O F THE ASSESSEE, M/S. YENKEY ROLLER FLOUR MILLS, HAS REVERSED ITS FI NDINGS ON THE ISSUE AND BASED ON THE SAID ORDER DT. 13.3.2009 OF THE ITAT, THE CIT(A)-I, KOCHI HAS DISMISSED THE ASSESSEES APPEAL ON THE SAME ISSUE FOR THE AY 2006-07. 6. AT THE TIME OF HEARING, THE LD. COUNSEL FOR THE ASSESSEE BROUGHT TO OUR NOTICE THAT THE HONBLE KERALA HIGH COURT HAS A LREADY CONFIRMED THE ORDERS OF THE TRIBUNAL IN ASSESSEES OWN CASE AND T HE HONBLE HIGH COURT HAS DIRECTED THAT THE PERCENTAGE OF WASTAGE TO BE A LLOWED IS 2%. SINCE THE HONBLE KERALA HIGH COURT HAS ALREADY DECIDED A SIM ILAR ISSUE ON IDENTICAL FACTS & CIRCUMSTANCES IN ASSESSEES OWN CASE, WE AR E OF THE VIEW THAT THE LOSS ON ACCOUNT OF WASTAGE SHOULD BE ALLOWED AT 2%. WE ORDER ACCORDINGLY. THE DECISION IN THE CASE OF THE ASSES SEES SISTER CONCERN IS BY THE ITAT. IN VIEW OF THE FACT THAT THE HONBLE HIGH COURT HAS TAKEN A PARTICULAR VIEW IN ASSESSEES OWN CASE, THE DECISIO N RENDERED BY THE TRIBUNAL IN THE CASE OF THE ASSESSEES SISTER CONCE RN, IN OUR VIEW, WOULD NOT BE RELEVANT NOR BINDING. THEREFORE THE GRIEVAN CE PROJECTED BY THE REVENUE IN GR.NO.5, IN OUR VIEW, CANNOT BE ACCEPTED . ITA NO.832/BANG/2011 PAGE 4 OF 4 7. THE APPEAL OF THE REVENUE IS THUS PARTLY ALLOWED . PRONOUNCED IN THE OPEN COURT ON THIS 5 TH DAY OF OCTOBER, 2012. SD/- SD/- ( N. BARATHVAJA SANKAR ) ( N.V. VASU DEVAN ) VICE PRESIDENT JUDICIAL MEMBER BANGALORE, DATED, THE 5 TH OCTOBER , 2012. DS/- COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, BANGALORE. 6. GUARD FILE BY ORDER SENIOR PRIVATE SECRETARY ITAT, BANGALORE.