Income Tax Officer, Sirhind V. M/s Jorawar Engineering & Foundry Forge (P) Ltd., Mandi Gobindgarh

ITA 911/CHANDI/2017

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 6947 (ITAT-CHANDIGARH)
• Duration Of Justice: 2 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-08-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2012-2013
• Appeal Filed On: 02-06-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SANDEEP DAHIYA
• Keywords: Rejection of books of accounts; Unexplained investment; Rectification of order; Rule of consistency
• Section: 145; 154

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH, CHANDIGARH BEFORE SHRI SANJAY GARG, JUDICIAL MEMBER AND MS. ANNAPURNA GUPTA, ACCOUNTANT MEMBER ITA NO.911/CHD/2017 (ASSESSMENT YEAR : 2012-13) THE INCOME TAX OFFICER, VS. M/S JORAWAR ENGINEERING WARD-1, MANDI GOBINDGARH. & FOUNDRY FORGE (P) LTD., HQ. SIRHIND. MANDI GOBINDGARH. PAN: AABCJ4261A (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI SANDEEP DAHIYA, CIT DR RESPONDENT BY : NONE DATE OF HEARING : 25.07.2017 DATE OF PRONOUNCEMENT : 18.08.2017 O R D E R PER ANNAPURNA GUPTA, A.M . : THIS APPEAL HAS BEEN FILED BY THE REVENUE AGAINST THE ORDER OF LD.CIT(APPEALS), PATIALA DATED 31.3.20 17 RELATING TO ASSESSMENT YEAR 2012-13. 2. THE REVENUE HAS RAISED FOLLOWING GROUNDS: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE , THE LD.CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS.1,52,82,2547- MADE ON ACCOUNT OF UNACCOUNTED PROFIT IN UNACCOUNTED PRODUCTION BY THE ASSESSING OFFICER. 2. IT IS PRAYED THAT THE ORDER OF LD. CTT(A) BE SENT A SIDE AND THAT OF THE AO BE RESTORED. 3. THE APPELLANT CRAVES LEAVE TO ADD OR AMEND ANY GROUNDS OF APPEAL BEFORE THE APPEAL IS HEARD AND FINALLY DISPOSED OFF. 3. BRIEF FACTS LEADING TO THE PRESENT APPEAL ARE T HAT THE ASSESSEE COMPANY WAS ENGAGED IN THE BUSINESS OF MANUFACTURING OF STEEL INGOTS. DURING ASSESSMENT PROCEEDINGS FOR THE IMPUGNED ASSESSMENT YEAR THE 2 ASSESSING OFFICER NOTICED THAT THE ELECTRICITY CONS UMED IN RELATION TO THE FINISHED GOODS PRODUCED SHOWED VARI ATION THROUGHOUT THE YEAR. THE ASSESSING OFFICER GATHERED INFORMATION REGARDING CONSUMPTION OF ELECTRICITY FR OM ELECTRICITY BOARD AND CO-RELATED IT WITH THE QUANTI TY OF FINISHED GOODS PRODUCED ON A GIVEN DAY. THE ASSESS ING OFFICER OBSERVED THAT THE ELECTRICITY CONSUMPTION PMT OF FINISHED GOODS VARIED FROM 2.00 UNITS TO 896.667 UN ITS, WHILE THE AVERAGE FOR THE ENTIRE YEAR WAS 367.951 U NITS. WHEN CONFRONTED WITH THIS ISSUE, THE ASSESSEE SUBMI TTED THAT THE CONSUMPTION OF ELECTRICITY DEPENDED UPON V ARIOUS FACTORS NAMELY QUALITY OF MATERIAL, HOLDING PERIOD OF MOLTEN METAL FOR REMOVING THE SLAG AND DUE TO MIS-MATCH IN RECORDING CYCLE, METAL LEAKAGE, LABOUR DEFICIENCY, BREAK DOWN OF MACHINERY, ETC. THE ASSESSING OFFICER WAS N OT SATISFIED WITH THE ASSESSEES CONTENTION AND, THERE FORE, HE REJECTED THE BOOKS OF ACCOUNTS OF THE ASSESSEE. TH EREAFTER ADOPTING THE VALUE OF ELECTRICITY CONSUMED PMT ON T HE BASIS OF MINIMUM AVERAGE VALUE FOR A PERIOD OF 10 DAYS, WHICH WAS 385.33 UNITS PMT PERTAINING TO THE PERIOD 31.5. 2011 TO 9.6.2011, HE ESTIMATED THE UNACCOUNTED PRODUCTION. THE ASSESSING OFFICER COMPUTED THE QUANTUM OF ACTUAL FI NISHED GOODS PRODUCED AND THEREAFTER ASCERTAINED THE UNACC OUNTED PRODUCTION FOR EACH MONTH AFTER DEDUCTING FINISHED GOODS PRODUCED DURING THE MONTHS SHOWN IN THE BOOKS OF AC COUNT. THEREAFTER ON THE BASIS OF AVERAGE PURCHASE RATE, T OTAL UNACCOUNTED PRODUCTION WAS ESTIMATED IN MONETARY TE RMS AND ADOPTING THE GROSS PROFIT RATE SHOWN BY THE ASS ESSEE 3 THE UNACCOUNTED PROFIT OUT OF THE UNACCOUNTED PRODU CTION WAS WORKED OUT ON THE BASIS OF AVERAGE SALE RATE AT RS.2,82,97,072/-. SECONDLY, THE PEAK UNACCOUNTED PRODUCTION FOR THE RELEVANT MONTH WAS DETERMINED AN D BY MULTIPLYING WITH THE AVERAGE SALE RATE OF FINISHED GOODS THE UNACCOUNTED INVESTMENT WAS WORKED OUT AT RS.18,85,40,625/-. THUS, A TOTAL ADDITION OF RS.21,68,37,697/- WAS MADE TO THE INCOME OF THE ASS ESSEE. THEREAFTER A RECTIFICATION ORDER WAS PASSED U/S 154 DATED 13/05/2015 REDUCING THE GP ADDITION TO RS.1,52,82,2 54/- AND THE ADDITION ON ACCOUNT OF UNACCOUNTED INVESTME NT TO NIL. 4. THE MATTER WAS CARRIED IN APPEAL BEFORE THE LD.CIT (APPEALS) WHO ALLOWED THE ASSESSEES APPEAL. THE LD.CIT (APPEALS) SET ASIDE THE ACTION OF THE ASSESS ING OFFICER REJECTING BOOKS OF ACCOUNT OF THE ASSESSEE ON THE GROUND THAT THE BASIS OF CALCULATING THE AVERAGE CONSUMPTION OF ELECTRICITY PMT ON 10 DAYS BASIS WAS NOT APPLICABLE IN THE CASE OF THE ASSESSEE SINCE THE AS SESSEE HAD NOT WORKED FOR TEN DAYS IN ANY MONTH AND HAD IN FACT WORKED FOR JUST 52 DAYS IN THE FULL YEAR. LD CIT( A) ALSO HELD THAT OTHER THAN UNEVEN ELECTRICITY CONSUMPTION PMT NO OTHER INFIRMITY OR DEFECT WAS FOUND IN THE BOOKS OF THE ASSESSEE AND THOUGH THE ASSESSEE HAD POINTED OUT MULTIFARIOUS FACTORS LEADING TO THE PHENOMENA THE SAME WERE NOT REBUTTED BY THE ASSESSING OFFICER. THE LD.CIT (APPEALS) ALSO POINTED OUT THAT FROM THE ASSESSMENT YEAR 4 2013-14 ONWARDS, CONSEQUENT UPON THE RECOMMENDATION OF A COMMITTEE CONSTITUTED TO STUDY THE PRODUCTION PRO CESS OF THE FURNACES AND ROLLING MILLS OF THE AREA AND PATT ERN OF CONSUMPTION OF ELECTRICITY VIS--VIS PRODUCTION, TH E ASSESSING OFFICERS HAD BEEN ACCEPTING THE VARIATION IN THE CONSUMPTION OF ELECTRICITY PER MT OF FINISHED GOODS WITHIN THE RANGE OF 15% OF THE YEARLY AVERAGE CONSUMPTION OF THE ELECTRICITY PMT OF GOODS. THE LD.CIT (APPEALS) HEL D THAT ON THE SAME SET OF FACTS AND CIRCUMSTANCES, PARITY OF REASONING AND PRINCIPAL OF CONSISTENCY, THE BOOKS OF ACCOUNT OF THE ASSESSEE SHOULD BE ACCEPTED FOR THE IMPUGNED ASSESS MENT YEAR ALSO. THE RELEVANT FINDINGS OF THE LD.CIT (A PPEALS) AT PARA 6.3 OF THE ORDER ARE AS UNDER: 6.3 I HAVE CONSIDERED THE FACTS OF THE CASE AS ALSO THE SUBMISSIONS AND THE REPORT OF THE LD. AO. UNDOUBTED LY, THE ONLY REASON LEADING TO THE REJECTION OF THE BOOKS OF ACCOUNTS OF THE APPELLANT COMPANY, WHICH RUNS A FURN ACE UNIT, WAS DISPARATE CONSUMPTION OF ELECTRICITY VIS-A- VIS THE PRODUCTION OF FINISHED GOODS. THEREAFTER, AS DETAILE D EARLIER, THE AO, ON THE BASIS OF AVERAGE SALE RATE, WENT ON T O ESTIMATE UNACCOUNTED PRODUCTION IN MONETARY TERMS AND THEN ADOPTING THE GROSS PROFIT RATE SHOWN BY THE APP ELLANT WORKED OUT UNACCOUNTED PROFIT OUT OF UNACCOUNTED PRO DUCTION ON THE BASIS OF AVERAGE SALE RATE. BESIDES, THE PEAK UNACCOUNTED PRODUCTION FOR THE RELEVANT MONTH WAS DETERMINED AND BY MULTIPLYING WITH THE AVERAGE PURCH ASE RATE OF FINISHED GOODS THE UNACCOUNTED INVESTMENT W AS WORKED OUT. THIS RESULTED INTO ADDITIONS ON THE BAS IS OF GP AT RS. 2,82,97,072/- ON ACCOUNT OF THE UNACCOUNTED PRODUCTION WHICH WAS LATER ON REDUCED TO RS. 1,52,82,254/- BY RECTIFICATION ORDER PASSED U/S. 154 DATED 13.05.2015 AND THE UNACCOUNTED INVESTMENT WAS WORKED OUT AT RS.18,85,40,625/- AFTER GIVING TELESCOPIC' EFFECT OF A.Y. 2011-12 WHICH WAS LATER ON REDUCED TO RS.0 AFTER FURTH ER GIVING TELESCOPIC EFFECT OF A.Y. 2011-12 VIDE RECTIFICA TION ORDER PASSED U/S. 154 DATED 13.05.2015. IT IS AN ADMITTED FACT THAT THE APPELLANT RAN THE INGOT MANUFACTURING UNIT ONLY FOR 3-5 DAYS PER MONTH A ND THE TOTAL NUMBER OF WORKING DAY WERE JUST 52 IN FULL F.Y. 2011-12. THE APPELLANT CONTENDED THAT IT HAD RUN THE UN IT TO COVER UP MINIMUM CHARGES LEVIED BY ELECTRICITY DEPARTME NT 5 AND THE 10 DAY PRODUCTION CYCLES TAKEN BY THE AO TO CALCULATE UNACCOUNTED PRODUCTION AND UNDISCLOSED PROF IT ON UNACCOUNTED PRODUCTION HAS NO APPLICATION BECAUSE 1 0 DAY PRODUCTION CYCLE FALLS IN AN OVERALL PERIOD OF 50-60 DAY S, THERE IS NO LOGIC TO KEEP STOCK FOR SUCH A LONG TIME TO MAK E PRODUCTION FOR 3-4 DAYS IN SUCH A LONG PERIOD. THE APP ELLANT FURTHER CONTENDED THAT THE AO EXCEPT FOR DIFFERENTIA L ELECTRICAL CONSUMPTION ON DAY-TO-DAY BASIS HAS FAILED TO POINT OUT ANY SPECIFIC DEFECT IN THE BOOKS OF ACCOUNT. THE COUNSE L OF THE APPELLANT HAS RELIED ON A NUMBER OF CITATIONS DELIVE RED BY VARIOUS AUTHORITIES IN SUPPORT OF ITS CONTENTION. HE ALSO QUESTIONED THE CALCULATION OF PROFIT WORKED OUT BY THE ASSESSING OFFICER AND CLAIMED CERTAIN NON OPERATING INCOMES SUCH AS COMMISSION ETC. ON PERUSAL OF ASSESSMENT ORDER DATED 27.03.2015, IT IS OBSERVED THAT THE MINIMUM SPC DURING THE 10 DAY PERIOD FROM 31.05.2011 TO 09.06.2011 WAS 385.33 UNITS PER METRIC TON AND AS PER RECTIFICATION ORDER U/S 154 D T 22.04.2015 MINIMUM SPC DURING THE 10 DAY PERIOD FROM 17.04.201 1 TO 26.05.2011 WAS 50.24 UNITS PER METRIC TON. THUS, MI NIMUM SPC FORMULA APPLIED BY THE ASSESSING OFFICER HAS NO APP LICATION IN CASE THE UNIT HAS WORKED ONLY FOR A PART OF MONTH AND TH E OUTCOME IS NOT ASCERTAINABLE AND UNIFORM. THE BOOKS OF ACCOUNT ARE REJECTED BY THE A.O. BUT T HE FIGURES FROM THE SAME BOOKS ARE TAKEN FOR THE PURPO SE OF COMPARISON AND DETERMINATION OF CONSUMPTION OF ELEC TRICITY P.M.T. OF PRODUCTION. THE AO EXCEPT FOR FINDING UNEVEN ELE CTRICITY CONSUMPTION PER METRIC TON OF PRODUCTION, HAS FAILE D TO PUT FORTH STRONG REBUTTAL OF THE APPELLANT'S CLAIM OF MULTIFA RIOUS FACTORS LEADING TO THIS PHENOMENON. THE AO ADMITTED THAT TH E UNIT HAS WORKED FOR JUST 52 DAYS ONLY IN FULL YEAR. THUS, TH E MINIMUM SPC CALCULATED BY THE AO HAS NO APPLICATION. THE SEC. 145(3) CONTEMPLATES THAT THE AO MUST ASCERTAIN THAT THE BOOKS OF ACCOUNT ARE PROPERLY MA INTAINED BY FOLLOWING REGULAR METHOD OF ACCOUNTING, THE ANNUAL PROFITS CAN BE PROPERLY DEDUCED BY APPLYING SUCH METHOD AND THERE IS NO SIGNIFICANT OMISSION IN THE MAINTENANCE OF ACCOUNTS . IT IS AN ADMITTED FACT THAT EXCEPT FOR DISPARATE CONSUMPTION OF ELECTRICITY THERE IS NO OTHER MAJOR DISCREPANCY NOTICED BY THE AO, WHICH LEADS TO CONCLUSION THAT NO PROPER PROFIT CAN BE WORKED O UT FROM RECORDS PRODUCED BY APPELLANT. IN INCOME TAX LAW, UNLESS OT HER WERE .SPECIFIED, THERE IS NO REQUIREMENT TO MAINTAIN REC ORDS IN A PARTICULAR MANNER AND THE AO HAS FAILED TO PUT FORT H ANY POSITIVE EVIDENCE TO PROVE THAT THE APPELLANT IS ACTUALLY EN GAGED IN UNACCOUNTED PRODUCTION, UNACCOUNTED PURCHASES OR SA LES OR HAS INCURRED EXPENSES OUTSIDE THE BOOKS OR HAS CHANGED A SIGNIFICANT ACCOUNTING POLICY OR METHOD OF ACCOUNTING. THE JURI SDICTIONAL HIGH COURT IN THE CASE OF OM OVERSEAS VS. CIT 315 ITR 18 5 HAS HELD THAT WITHOUT ANY MATERIAL DEFECT, REJECTION OF BOOK S IS NOT TENABLE AND MERE VARIATION IN ELECTRICITY CONSUMPTION IS NO T A GROUND TO REJECT BOOKS OF ACCOUNTS IN THE ABSENCE OF ANY OTHE R CORROBORATIVE EVIDENCE. HENCE, I AM INCLINED TO AGREE WITH THE CO NTENTION OF THE APPELLANT. TO REITERATE, THE AO HAS NOT POINTED OUT ANY SPECIFIC DISCREPANCY OR DEFECT IN THE BOOKS. VARIOUS REASONS HAVE BEEN 6 CITED BY THE APPELLANT WHICH APPARENTLY LEAD TO DISPARATE OR UNEVEN CONSUMPTION OF ELECTRICITY PER METRIC TON OF F INISHED GOODS. AS MENTIONED EARLIER, THE AO HAS NOT POINTED OUT ANY SPECIFIC DISCREPANCY OR DEFECTS IN THE BOOKS OF A CCOUNTS REGULARLY MAINTAINED BY THE APPELLANT COMPANY. IT MAY ALSO NOT BE OUT OF PLACE TO MENTION HERE THAT FROM ASSESSMENT YEAR 2013-14 ONWARDS, CONSEQUE NT UPON THE RECOMMENDATION OF A COMMITTEE CONSTITUTED T O STUDY THE PRODUCTION PROCESS OF THE FURNACES AND RO LLING MILLS OF THE AREA AND THE PATTERN OF CONSUMPTION OF ELECTRI CITY VIS-A- VIS PRODUCTION, THE AOS HAVE BEEN ACCEPTING THE VARI ATION IN THE CONSUMPTION OF ELECTRICITY PER METRIC TON OF FINIS HED GOODS WITHIN THE RANGE OF 15% OF THE YEARLY AVERAGE CONSUMPTION OF ELECTRICITY PER METRIC TON OF FINISH ED GOODS. ON SAME SET OF FACTS AND CIRCUMSTANCES, PARITY OF REASONING AND PRINCIPLE OF CONSISTENCY, DEMAND THAT THE BOOKS OF ACCOUNT OF THE ASSESSEE SHOULD ALSO BE ACC EPTED FOR A.Y. 2012-13 ALSO. THE HON'BLE ITAT IN ACIT V KHAMBHATTA FAMILY TRUST [1998] 67 ITD 411 (AHMEDABAD) HELD THAT VARIA TION IN CONSUMPTION OF ELECTRICITY AND PACKING MATERIAL DOES NOT MEAN SUPPRESSION OF STOCKS AND THERE IS NO GROUND FOR REJECTION OF BOOK RESULTS AS THERE IS NO OTHER EVIDENC E OF UNRECORDED PURCHASES OR SALES. THAT THERE CANNOT BE A TAILOR MADE FORMULAE AS MANY PROCESSES ARE INVOLVED IN PRODUCTION. FURTHER, THE HON'BLE ITAT, GAUHATI IN ITO V SATYA NARAIN PAREEK 71 TTJ 971 HELD THAT NO ADDITION ON AC COUNT OF SUPPRESSION OF MILLING OF PADDY COULD BE MADE ON THE GROUND THAT THERE WAS INCONSISTENCY BETWEEN MONTHLY CONSUM PTION OF ELECTRICAL ENERGY AND QUANTITY OF MILLING SHOWN BY THE ASSESSEE SINCE THERE WAS NO SUPPORTING MATERIAL TO IND ICATE SUPPRESSION OF MILLING AS NO UNRECORDED PURCHASES OR SALES WERE DETECTED. THAT UNDER THE CIRCUMSTANCES THERE W AS NO REASON OR JUSTIFICATION FOR REJECTING THE ACCOUNTS A ND MAKING ESTIMATE OF SUPPRESSING MILLING. THUS, UNDER THE FACTS AND CIRCUMSTANCES OF THE PRESENT APPEAL, THE RATIOS OF THE ABOVE CITED CASE LA WS ARE APPLICABLE. RESPECTFULLY FOLLOWING THE SAME, IT IS HELD THAT THE LD. AO WAS NOT JUSTIFIED IN REJECTING THE DULY AUDI TED BOOKS OF ACCOUNT MAINTAINED BY THE APPELLANT IN REGULAR C OURSE OF BUSINESS SOLELY ON THE GROUND OF UNEVEN CONSUMPT ION OF ELECTRICITY VIS-A-VIS THE PRODUCTION AND CONSEQUENTLY E STIMATE PROFIT ON THE UNACCOUNTED PRODUCTION AND INVESTMENT THEREIN. IN VIEW OF THE ABOVE FACTUAL MATRIX AND THE APPLICABLE LEGAL POSITION, IT IS HELD THAT THE AO WAS NO T JUSTIFIED IN INVOKING THE PROVISIONS OF SECTION 145 (3) AND REJECTING THE BOOKS OF ACCOUNTS. HIS ACTION IN THIS RE GARD CANNOT BE UPHELD. THEREFORE, IT IS DIRECTED THAT THE BOOK RESULTS OF THE APPELLANT BE ACCEPTED. CONSEQUENTLY, THE ADDITIONS MADE ON ACCOUNT OF PROFIT ON UNACCOUNTED PRODUCTION AND INVESTMENT THEREIN ARE DIRECTED TO BE D ELETED. 5. AGGRIEVED BY THE SAME THE REVENUE HAS COME UP 7 IN APPEAL BEFORE US. DURING THE COURSE OF HEARING BEFORE US THE LD. COUNSEL FOR THE ASSESSEE RELIED UPON THE OR DER OF THE LD.CIT (APPEALS) AND FURTHER POINTED OUT THAT IN A NUMBER OF DECISIONS OF THE I.T.A.T. THE AFORESAID ADDITION MADE ON ACCOUNT OF DISPARATE CONSUMPTION OF ELECTRICITY HAS BEEN DELETED FOLLOWING THE RECOMMENDATION OF THE COMMITT EE CONSTITUTED TO STUDY THE PRODUCTION PROCESS OF FURN ACES AND WHICH HAD RECOMMENDED THE ACCEPTANCE OF VARIATION WITHIN 15% RANGE OF THE YEARLY CONSUMPTION OF ELECT RICITY. THE LD. COUNSEL FOR THE ASSESSEE SPECIFICALLY DREW OUR ATTENTION TO THE DECISION OF THE I.T.A.T. CHANDIGAR H BENCH, IN THE CASE OF ITO WARD,1 VS M/S DHIMAN STEEL ROLL ING MILLS IN ITA NO.392/CHD/2017 DATED 28.04.2017. 6. THE LD. D.R. ON THE OTHER HAND RELIED UPON THE O RDER OF THE ASSESSING OFFICER AND CONTENDED THAT THE UNE VEN PATTERN OF CONSUMPTION OF ELECTRICITY JUSTIFIED THE REJECTION OF BOOKS OF ACCOUNTS OF THE ASSESSEE AND THE ADDITI ON MADE ON ACCOUNT OF UNACCOUNTED PROFIT ON UNACCOUNTED PRODUCTION. 7. WE HAVE HEARD THE CONTENTIONS OF BOTH THE PARTIES. WE FIND NO INFIRMITY IN THE ORDER OF THE LD.CIT (APPEALS). THE ISSUE IN THE PRESENT CASE PERTAINS T O REJECTION OF BOOKS OF ACCOUNTS ON ACCOUNT OF THE DI SPARATE CONSUMPTION OF ELECTRICITY VIS--VIS PRODUCTION OF FINISHED GOODS AND ADDITION MADE OF UNACCOUNTED PROFIT ON UNACCOUNTED PRODUCTION. THE UNACCOUNTED PRODUCTION HAS BEEN WORKED OUT BY FIRST CALCULATING THE AVERAGE 8 CONSUMPTION OF ELECTRICITY PMT OF PRODUCTION, BASED ON 10 DAYS CONSUMPTION PATTERN. ON THIS BASIS THE ACTUAL PRODUCTION WAS ASCERTAINED FROM THE UNITS OF ELECTR ICITY CONSUMED. REDUCING THEREFROM THE PRODUCTION SHOWN B Y THE ASSESSEE, THE UNACCOUNTED PRODUCTION WAS WORKED OUT . THE LD.CIT(A) HAS GIVEN A CATEGORICAL FINDING THAT THE ASSESSEE UNIT RAN FOR ONLY 3-5 DAYS PER MONTH WITH TOTAL WO RKING DAYS OF ONLY 52 IN THE IMPUGNED YEAR. FURTHER, LD.C IT(A) HAS POINTED OUT THAT WHILE IN THE ASSESSMENT ORDER THE MINIMUM SPC FOR 10 DAYS PERIOD WAS WORKED OUT AT 38 5.33 UNITS ,IN THE ORDER PASSED U/S 154 IT WAS WORKED OU T AT 50.24 UNITS PMT. THIS FACT IS NOT DISPUTED BY THE R EVENUE. IN THIS FACTUAL BACKDROP, WE COMPLETELY CONCUR WITH THE LD.CIT(A) THAT THE FORMULA USED BY THE AO FOR CALCU LATING UNACCOUNTED PRODUCTION IS NOT APPLICABLE. EVEN BEFO RE US THE REVENUE HAS NOT BEEN ABLE TO POINT OUT ANY INFI RMITY IN THIS FINDING OF THE LD.CIT(A). 8. MOREOVER WE ALSO ARE IN AGREEMENT WITH THE LD.CIT(A) THAT THE BOOKS OF ACCOUNTS COULD NOT HAVE BEEN REJECTED MERELY ON ACCOUNT OF DISPARATE CONSUMPTION OF ELECTRICITY THAT TOO WITHOUT REBUTTING THE ASSESSEE S EXPLANATION OF MULTIFARIOUS FACTORS LEADING TO THE UNEVEN CONSUMPTION OF ELECTRICITY AND WITHOUT POINTING OU T ANY OTHER DEFECT WHICH COULD LEAD TO THE CONCLUSION THA T PROPER PROFITS COULD NOT BE WORKED OUT FROM THE RECORDS OF THE ASSESSEE. EVEN BEFORE US LD.DR HAS FAILED TO REBUT THE ASSESSEES EXPLANATION OF DISPARATE CONSUM PTION OF 9 ELECTRICITY AND HAS ALSO NOT POINTED OUT ANY OTHER DEFECT IN THE BOOKS OF ACCOUNTS OF THE ASSESSEE SO AS TO JUST IFY THEIR REJECTION. 9. FURTHER WE FIND THAT THE LD.CIT(A) HAS ALSO REL IED UPON THE RECOMMENDATION OF THE COMMITTEE FORMED B Y THE PR.COMMISSIONER OF INCOME TAX, PATIALA, FOR STUDYIN G THE PRODUCTION PROCESS OF FURNACES AND ROLLING MILLS OF THE AREA AND THE PATTERN OF CONSUMPTION OF ELECTRICITY VIS- -VIS PRODUCTION, WHICH HAD RECOMMENDED THE ACCEPTANCE OF VARIATION IN CONSUMPTION OF ELECTRICITY PMT WITHIN THE RANGE OF 15% OF THE YEARLY CONSUMPTION OF ELECTRICITY. WE HAVE ALSO GONE THROUGH THE ORDER OF THE ITAT IN THE CASE OF M/S DHIMAN STEEL ROLLING MILLS(SUPRA) WHEREIN THE ITAT UPHELD THE ORDER OF THE CIT(A) ACCEPTING THE BOOKS OF ACCO UNTS ON FINDING THE VARIATION IN CONSUMPTION OF ELECTRICITY WITHIN THE 15% RECOMMENDED RANGE. THE RELEVANT FINDINGS OF THE ITAT IN THE CASE OF M/S DHIMAN STEEL ROLLING MILLS( SUPRA) ARE AS UNDER: 8. AT THE OUTSET, THE LD. COUNSEL FOR THE ASSESSEE HAS BROUGHT TO OUR KNOWLEDGE THAT ON IDENTICAL ISSUES, WHEREIN THE ADDITIONS MADE BY THE ASSESSING OFFICER ON ESTIMATION BASIS AS DISCUSSED ABOVE WERE UPHELD BY THE CONCERNED CIT(A), THE ASSESSEES PREFERRED APPEALS BEFORE THIS TRIBUNAL AND THIS TRIBUNAL VIDE ITS COMMON ORDER DATED 14.2.2017, PASSED IN A BUNCH OF ABOUT 85 APPEALS IN THE CASE OF M/S MODI OIL & GENERAL MILL, MANDI GOBINDGRH AND OTHERS IN ITA NO. 149/CHD/2016 AND OTHERS WHILE OBSERVING THAT CONSEQUENT TO THE REPORT OF THE COMMITTEE CONSTITUTED BY THE PRINCIPAL, COMMISSIONER OF INCOME TAX, PATIALA SOME INTERNAL GUIDELINES REGARDING ACCEPTABILITY OF VARIATION UPTO 10 15% HAVE BEEN ISSUED AND FURTHER THAT NO ADDITIONS HAVE BEEN MADE ON SIMILAR ISSUE IN SUBSEQUENT YEARS BY THE ASSESSING OFFICER, HAS REMANDED THE MATTER TO THE ASSESSING OFFICER WITH A DIRECTION TO DECIDE THE ISSUE AFRESH IN ACCORDANCE WITH LAW IN T HE LIGHT OF THE INTERNAL GUIDELINES ISSUED BY THE PRINCIPAL, COMMISSIONER OF INCOME TAX, PATIALA. 9. THE LD. COUNSEL HAS STATED THAT THIS MATTER NEED NOT TO BE RESTORED IN THE PRESENT APPEALS AS T HE LD. CIT(A) WHILE DECIDING THE ABOVE APPEALS IN FAVO UR OF THE ASSESSEE HAS ALREADY FOLLOWED THE INTERNAL GUIDELINES OF THE COMMITTEE CONSTITUTED BY THE PRINCIPAL COMMISSIONER OF INCOME TAX, PATIALA. THAT THE COMMITTEE SO CONSTITUTED WAS A BROAD BASED MULTI MEMBER BODY HAVING ADDITIONAL COMMISSIONER OF INCOME TAX, MANDI GOBINDGARH AS ITS HEAD AND ALL THE ASSESSING OFFICERS OF THE RANGE AS ITS MEMBERS. IT WAS ALSO ASSISTED BY THE EXPERTS OF THE NATIONAL INSTITUTE OF THE SECONDARY STEEL TECHNOLOGY (NISST) AND THE INDUSTRY REPRESENTATIVES. THE LD. CIT(A) HA S ACCEPTED THE VARIATION OF 15% IN CONSUMPTION OF ELECTRICITY PER METRIC TON OF FINISHED GOODS AS PER THE REPORT OF THE COMMITTEE. THE SAME HAS ALREADY BEEN FOLLOWED BY THE ASSESSING OFFICER IN SUBSEQUENT ASSESSMENT YEAR. CONSIDERING THE ABOVE FACTS AND CIRCUMSTANCES, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE CIT(A) WHILE DIRECTING THE ASSESSING OFFICER TO ACCEPT THE BOOKS RESULTS SHOWN BY THE ASSESSEE AND TO DELETE THE ADDITIONS MADE BY THE ASSESSING OFFICER ON ACCOUNT OF UNACCOUNTED PROFITS / UNACCOUNTED INVESTMENT MADE ON ESTIMATION BASIS AS DISCUSSED ABOVE. THE ORDER OF THE CIT(A) IS, THEREFORE, UPHELD. 10. SINCE THE FACTS AND ISSUE INVOLVED IN ALL THE OTHER CAPTIONED APPEALS ARE IDENTICAL, HENCE, IN VI EW OF OUR FINDINGS GIVEN ABOVE, WE DO NOT FIND ANY MER IT IN ALL THE APPEALS OF THE REVENUE AND THE SAME ARE ACCORDINGLY DISMISSED. 10. SINCE NO DIFFERENTIATING FACTS HAVE BEEN BROUG HT TO OUR NOTICE IN THE PRESENT CASE, WE FIND NO REASO N TO INTERFERE IN THE ORDER OF THE LD.CIT (APPEALS). 11. WE, THEREFORE, UPHOLD THE ORDER OF THE LD.CIT (APPEALS) AND DISMISS THE GROUND OF APPEAL RAISED B Y THE 11 REVENUE. 12. IN EFFECT, THE APPEAL OF THE REVENUE IS DISMIS SED. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- (SANJAY GARG) (ANNAPURNA GUPTA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 18 TH AUGUST, 2017 *RATI* COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) 4. THE CIT 5. THE DR ASSISTANT REGISTRAR, ITAT, CHANDIGARH