ACIT, Jaipur V. PPUSHP ENTERPRISES, Jaipur

ITA 965/JPR/2016

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 2191 (ITAT-JAIPUR)
• Duration Of Justice: 1 year(s) 2 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-01-2018
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 15-03-2017
• Assessment Year: 2013-2014
• Appeal Filed On: 07-11-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: R A VERMA
• Assessee Lawyers: S L PODDAR; ISHA KANUNGO ADV DH RK
• Keywords: Assessment record

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 FOT; IKWY JKO] U;KF;D LNL; ,OA JH FOE FLAG ;KNO] YS[KK LNL; DS LE{K BEFORE: SHRI VIJAY PAL RAO, JM & SHRI VIKRAM SINGH YADAV, AM VK;DJ VIHY LA -@ ITA. NO. 965/JP/2016 FU/KZKJ.K O'K Z@ ASSESSMENT YEARS : 2013-14 ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE -4, JAIPUR CUKE VS. M/S PUSHP ENTERPRISES H-780-A, ROAD NO. 13, VKI AREA, JAIPUR LFKK;H YS[KK LA -@THVKBZVKJ LA -@ PAN/GIR NO.: AABFP2279F VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT JKTLO DH VKSJ LS @ REVENUE BY : SHRI R. A. VERMA (ADDL.CIT) FU/KZKFJRH DH VKSJ L S@ ASSESSEE BY : SHRI S. L. PODDAR & SHRI ISHA KANUNGO (ADV.) LQUOKBZ DH RKJH[ K@ DATE OF HEARING : 04/01/2018 MN?KKS'K.KK DH RKJH[ K@ DATE OF PRONOUNCEMENT :11/01/2018 VKNS'K@ ORDER PER: VIKRAM SINGH YADAV, A.M. THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF LD. CIT(A)-II, JAIPUR DATED 25.08.2016 FOR ASSESSMENT YEAR 2013-14 WHEREIN THE REVENUE HAS TAKEN THE FOLLOWING GROUND OF APPEAL: WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, LD. CIT(APPEALS) HAS ERRED IN DELETING THE ADDITION OF RS. 2,10,69,009/- MADE ON ACCOUNT OF CONCEALED SALES OF SCRAP NOT EXPLAINED BY THE ASSESSEE. ITA NO. 965/JP/2016 THE ACIT, JAIPUR VS. M/S PUSHP ENTERPRISES, JAIPUR 2 2. AT THE OUTSET, THE LD. AR SUBMITTED THAT THE ISSUE IS SQUARELY COVERED BY THE DECISION OF HONBLE RAJASTHAN HIGH COURT IN ASSESSEES OWN CASE IN DB APPEAL NO. 12/2017 AND IN DB APPEAL NO. 110/2015 DATED 12.10.2017 WHEREIN THE HONBLE HIGH COURT HAS CONFIRMED THE ORDER PASSED BY THE CO-ORDINATE BENCHES FOR AY 2008-09 AND AY 2009-10. 3. PER CONTRA, THE LD. DR SUBMITTED THAT THE ORDER OF THE HONBLE RAJASTHAN HIGH COURT HAS BEEN GIVEN BASED ON FINDINGS RECORDED BY THE ASSESSING OFFICER WHICH IN TURN IS BASED ON APPRECIATION OF FACTS AND INFORMATION SUBMITTED BY THE ASSESSEE. HOWEVER, FOR THE YEAR UNDER CONSIDERATION, DURING THE COURSE OF ASSESSMENT PROCEEDING, IN SPITE OF REPEATED OPPORTUNITIES PROVIDED BY THE ASSESSING OFFICER AS APPARENT FROM THE ASSESSMENT ORDER, THE ASSESSEE HAS FAILED TO PRODUCE AND BRING ON RECORD THE NECESSARY INFORMATION AND DOCUMENTS WHICH WOULD UNABLE THE ASSESSING OFFICER TO EXAMINE THE MATTER. IT WAS FURTHER SUBMITTED THAT EVEN THE LD. CIT(A) HAS NOT EXAMINED THE RELEVANT FACTS AND HAS SUMMARILY FOLLOWED THE ORDER FOR AY 2009-10 PASSED BY THE CO- ORDINATE BENCH OF THE TRIBUNAL. 4. THE LD. DR TOOK US THROUGH THE ASSESSMENT ORDER WHEREIN AT PARA 3, IT WAS OBSERVED BY THE ASSESSING OFFICER THAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS, IT WAS FOUND THAT AS PER RG-1 REGISTER, SALE OF SCRAP WAS SHOWN AT RS. 2,44,25,000/- WHEREAS THE ASSESSEE HAS SHOWN SALE OF SCRAP IN ITS BOOKS OF ACCOUNTS AT RS. 33,55,991/- AND ACCORDINGLY ASSESSEE HAS SHOWN SALE OF SCRAP LESS BY RS. 2,10,69,009/-. THE ASSESSEE WAS ACCORDINGLY ASKED TO SUBMIT COMPLETE CHALLANS FOR ISSUE RAW MATERIAL TO THE JOB WORKERS AND RECEIPT OF FINISHED GOODS FROM THE JOB WORKERS BUT TILL DATE ASSESSEE HAS FAILED TO PRODUCE COMPLETE BOOKS ITA NO. 965/JP/2016 THE ACIT, JAIPUR VS. M/S PUSHP ENTERPRISES, JAIPUR 3 OF ACCOUNTS OR CHALLANS FOR ISSUE AND RECEIPT OF GOODS. FURTHER, REGARDING THE FINDINGS OF THE LD. CIT(A) AND ITAT IN THE EARLIER YEARS, OUR REFERENCE WAS DRAWN TO PARA 3.1 OF THE ASSESSMENT ORDER WHEREIN THE AO HAS STATED THAT IN THOSE YEARS, THE RELIEF WAS ALLOWED ONLY ON THE BASIS THAT AO HAD NOT VERIFIED WHETHER THE SCRAP WAS SOLD BY THE VENDERS OR NOT. IN PARA 3.2, THE AO HAS STATED THAT IN THIS YEAR, THE ASSESSEE WAS SPECIFICALLY ASKED TO PROVE THAT THE SCRAP ALLEGED TO BE DETAINED BY THE VENDORS WAS ACTUALLY SOLD BY THEM AND SHOWN IN THE INCOME. IN PARA 3.4, THE AO STATED THAT EVEN THE LIST OF THE VENDORS WAS NOT SUBMITTED BY THE ASSESSEE SO THAT NECESSARY ENQUIRY ABOUT GENERATION OF SCRAP AND SALE OF SCRAP CAN BE MADE AND IN THIS WAY, THE ASSESSEE STOPPED THE DEPARTMENT FROM CONDUCTING THE NECESSARY ENQUIRIES. BASED ON THE ABOVE, THE AO OBSERVED THAT THE ASSESSEE WAS NOT SERIOUS IN GETTING VERIFICATION DONE AND THE FOLLOWING DETAILS WERE NOT SUBMITTED- DETAILS OF WORK DONE BY THE VENDORS, DETAILS OF SCRAP GENERATED AND SALE BY VENDORS AND NAME AND ADDRESS OF THE VENDORS. IT WAS ACCORDINGLY SUBMITTED BY THE LD DR THAT GIVEN THAT THE ASSESSEE FAILED TO PRODUCE THE NECESSARY INFORMATION AND DOCUMENTS FOR VERIFICATION BY THE ASSESSING OFFICER, THE ASSESSING OFFICER WAS NOT IN A POSITION TO FOLLOW THE EARLIER DECISIONS OF THE CO-ORDINATE BENCHES. 5. OUR REFERENCE WAS FURTHER DRAWN BY THE LD DR TO PARA 2 OF THE CO-ORDINATE BENCH DECISION DATED 13.02.2015 IN ITA NO. 659/JP/2012 FOR AY 2009-10 WHEREIN THE CO-ORDINATE BENCH HAS CONSIDERED THE FACTS WHEREIN IT WAS STATED CLEARLY THAT THE JOB WORKER CHARGES ARE FIXED KEEPING IN VIEW THE BENEFIT OF SCRAP VALUE AVAILED BY SUCH JOB WORKERS AND FURTHER THE CONFIRMATION FROM JOB WORKERS WERE ALSO PRODUCED. IT WAS SUBMITTED BY THE LD DR THAT IN THE INSTANT CASE, NO SUCH ITA NO. 965/JP/2016 THE ACIT, JAIPUR VS. M/S PUSHP ENTERPRISES, JAIPUR 4 CONFIRMATIONS HAVE BEEN FURNISHED FROM THE JOB WORKERS BY THE ASSESSEE. 6. IN HIS REJOINDER, THE LD. AR SUBMITTED THAT COMPLETE BOOKS OF ACCOUNTS WERE PRODUCED BEFORE THE AO AND NECESSARY DETAILS IN TERMS OF EXCISE DUTY RETURNS (FORM ER-1) WERE SUBMITTED BEFORE THE ASSESSING OFFICER AND BASED ON THAT, THE ASSESSING OFFICER HAS WORKED OUT THE DIFFERENCE BETWEEN THE ASSESSABLE VALUE SHOWN IN THE EXCISE RETURNS AND IN THE BOOKS OF ACCOUNTS. IT WAS FURTHER SUBMITTED THAT THE ASSESSMENT RECORDS MAY BE CALLED FOR NECESSARY VERIFICATION. REGARDING CONFIRMATION FROM JOB WORKERS, THE LD AR SUBMITTED CERTAIN CONFIRMATIONS DURING THE COURSE OF HEARING. 7. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, IT WAS OBSERVED BY THE AO THAT AS PER RG-1 REGISTER, SALE OF SCRAP WAS SHOWN AT RS. 2,44,25,000/- WHEREAS THE ASSESSEE HAS SHOWN SALE OF SCRAP IN ITS BOOKS OF ACCOUNTS AT RS. 33,55,991/- AND ACCORDINGLY ASSESSEE HAS SHOWN SALE OF SCRAP LESS BY RS. 2,10,69,009/-. BASIS SUCH INFORMATION, THE AO HAS ASKED THE ASSESSEE TO EXPLAIN THE SAID DIFFERENCE IN THE SALES FIGURE OF SCRAP AS PER THE RG-1 REGISTER AND THE BOOKS OF ACCOUNTS AND PRODUCE NECESSARY EVIDENCES WHICH CAN BE VERIFIED AND EXAMINED BY HIM. IN RESPONSE, THE ASSESSEE SUBMITTED ITS EXPLANATION WHICH IS REPRODUCED AS UNDER: 1) IN THE BUSINESS OF MANUFACTURING OF BEARINGS THERE ARE CERTAIN PERCENTAGE OF WASTAGE WHICH IS CALCULATED ON ENGINEERING STANDARDS AND PARAMETERS AND EXCISE DUTY ALSO CHARGEABLE ON SUCH SCRAP OR WASTE. WHETHER ANY AMOUNT IS REALIZED OR NOT REALIZED FOR SCRAP OR WASTE MATERIAL. IN OUR CASE WE SUBLET SOME ITA NO. 965/JP/2016 THE ACIT, JAIPUR VS. M/S PUSHP ENTERPRISES, JAIPUR 5 OF OUR MANUFACTURING PROCESS TO SUB-VENDORS AND IN THAT CASES THE WASTE MATERIAL/SCRAP IS NOT RETURNABLE DUE TO HEAVY COSTING ON COLLECTION OF SUCH SCRAP BUT AS PER NORMS AND PROVISIONS OF CENTRAL EXCISE ACT WE HAVE TO CALCULATE THE EXCISE DUTY ON SUCH KIND OF WASTAGE/SCRAP ON THE BASIS OF STANDARD AND ALSO TO PAY TO THE EXCISE DEPARTMENT. WE ARE REMOVING SCRAP GENERATED ON IN HOUSE PROCESS THROUGH EXCISABLE INVOICES AND VENDORS REMOVE SCRAP GENERATED WITH THEM. DIFFERENCE BETWEEN TOTAL SCRAP AS PER OUR CALCULATION AND SCRAP GENERATED IN HOUSE IS ASSUMED AS SCRAP REMOVED AT VENDOR END. DUTY AS PER AVERAGE RATE ON ACTUAL SCRAP REMOVED FROM IN HOUSE WILL TAKEN AS PRICE OF VENDER. WE DEPOSIT THE DUTY ON THIS FINAL FIGURE AS OTHER PAYMENT. THIS TYPE OF EXCISE DUTY IS PAYABLE BY THE MANUFACTURER OUT OF HIS POCKET AND CHARGED IN PROFIT & LOSS ACCOUNT UNDER THE HEAD OF EXCISE & CESS DUTY ON SCRAP (NON RETURNABLE) AND THE SAME TREATMENT OF EXCISE DUTY ALSO ACCEPTABLE BY LEARNED CIT(A) AND HONBLE ITAT BENCH IN VARIOUS DECISIONS. 8. IN ORDER TO VERIFY THE VERACITY OF THE ABOVE EXPLANATION SO FURNISHED BY THE ASSESSEE, THE AO HAS ASKED THE ASSESSEE TO FURNISH THE DETAILS OF WORK WHICH HAS BEEN SUBLET TO ITS VARIOUS JOB WORKERS, THE MOVEMENT OF RAW MATERIAL AND FINISHED GOODS AND DETAILS OF PRICING ARRANGEMENT WITH THE JOB WORKERS. THE WHOLE IDEA IS TO DETERMINE THE QUANTUM OF WORK WHICH HAS BEEN SUBLET AND ESTIMATED SCRAP WHICH MAY GET GENERATED THROUGH SUCH SUB-LETTING AND WHAT HAS BEEN SHOWN AS SCRAP THROUGH SUB-LETTTING IN THE EXCISE RETURNS. SECONDLY, THE ARRANGEMENT WITH THE JOB WORKERS NEEDS TO BE EXAMINED TO DETERMINE ITA NO. 965/JP/2016 THE ACIT, JAIPUR VS. M/S PUSHP ENTERPRISES, JAIPUR 6 THE PRICING WHETHER INCLUSIVE OF SCRAP GENERATION WHICH IS RETAINED AT THEIR END AND NOT RETURNED TO THE ASSESSEE. HOWEVER, NO DETAILS OR INFORMATION HAS BEEN FURNISHED BY THE ASSESSEE DURING THE ASSESSMENT PROCEEDINGS. EVEN DURING THE APPELLATE PROCEEDINGS, WE DONOT FIND ANYTHING ON RECORD AS EMERGING FROM THE ORDER OF THE LD CIT(A) THAT THE DETAILS SO REQUIRED WERE FURNISHED BY THE ASSESSEE. CERTAIN CONFIRMATIONS FROM THE JOB WORKERS HOWEVER, HAVE BEEN FILED BY THE LD AR DURING THE COURSE OF HEARING WHICH WOULD AGAIN REQUIRE VERIFICATION. 9. FURTHER, WE FIND THAT IN THE EARLIER YEARS, THE ASSESSEE HAS FURNISHED THE NECESSARY DETAILS AS CALLED FOR TO EXPLAIN THE DIFFERENCE IN THE SCRAP VALUE AS PER EXCISE RETURNS AND BOOKS OF ACCOUNTS, AND BASED ON APPRECIATION OF THE FACTS SO BROUGHT ON RECORD, THE CO-ORDINATE BENCHES HAVE DELETED THE ADDITION WHICH HAS RECENTLY BEEN AFFIRMED BY THE HONBLE RAJASTHAN HIGH COURT. HOWEVER, IN ABSENCE OF RELEVANT FACTS ON RECORD AND THE FINDINGS OF THE LOWER AUTHORITIES, WE ARE SETTING ASIDE THE MATTER TO THE FILE OF THE AO TO BRING ON RECORD THE RELEVANT FACTS AND EXAMINE THE SAME AFRESH. NEEDLESS TO SAY, THE REASONABLE OPPORTUNITY SHALL BE PROVIDED TO THE ASSESSEE AND THE ASSESSEE, IN TURN, SHALL FULLY COOPERATE IN THE TIMELY COMPLETION OF THE PROCEEDINGS AND FURNISH NECESSARY INFORMATION/DOCUMENTS AS SO DESIRED BY THE AO. IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 11/01/2018. SD/- SD/- ITA NO. 965/JP/2016 THE ACIT, JAIPUR VS. M/S PUSHP ENTERPRISES, JAIPUR 7 FOT; IKWY JKO FOE FLAG ;KNO (VIJAY PAL RAO) (VIKRAM SINGH YADAV) U;KF;D LNL;@ JUDICIAL MEMBER YS[KK LNL;@ ACCOUNTANT MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 11/01/2018 * GANESH KR. VKNS'K DH IZFRFYFI VXZSFKR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- ACIT, JAIPUR 2. IZR;FKHZ@ THE RESPONDENT- M/S PUSHP ENTERPRISES, JAIPUR 3. VK;DJ VK;QDR@ CIT 4. VK;DJ VK;QDR@ CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR. 6. XKMZ QKBZY@ GUARD FILE { ITA NO. 965/JP/2016} VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASST. REGISTRAR