ITO, Mandi Gobindgarh V. M/s Jai Gases (P) Ltd., Mandi Gobindgarh

MA 104/CHANDI/2007

• Counselvise Citation: [2012] 123 COUNSELVISE.COM (IT) 8606 (ITAT-CHANDIGARH)
• Duration Of Justice: 5 year(s) 3 month(s) 20 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 10-07-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 29-06-2012
• Assessment Year: 1999-2000
• Appeal Filed On: 21-03-2007
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: N K SAINI

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCHES B CHANDIGARH BEFORE SHRI H.L.KARWA, HON'BLE, VICE PRESIDENT AND SHRI T.R. SOOD, ACCOUNTANT MEMBER MA NOS. 103 & 104/CHD/2007 (IN ITA NOS. 23 & 24/CHANDI/2004) ASSESSMENT YEARS: 1998-99 & 1999-2000 THE ITO, WARD-1, VS M/S JAI GASES (P) LTD., MANDI GOBINDGARH MANDI GOBINDGARH (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI N.K. SAINI RESPONDENT BY : SHRI SUDHIR SEHGAL DATE OF HEARING : 06.07.2012 DATE OF PRONOUNCEMENT : 10.07.2012 ORDER PER H.L.KARWA, VP THESE TWO MISC. APPLICATIONS FILED BY THE REVENUE ARISE OUT OF THE COMMON ORDER OF THE TRIBUNAL DATED 11.08.2005 PASSE D IN ITA NOS. 23 & 24/CHANDI/2004 RELATING TO ASSESSMENT YEARS 1998-99 & 1999-2000.. 2. THE REVENUE HAS FILED SEPARATE MISC. APPLICATION S FOR ASSESSMENT YEARS 1998-99 AND 1999-2000. THE COMMON CONTENTION RAISED BY THE REVENUE IN THESE APPLICATIONS IS THAT THE TRIBUNAL WHILE DE CIDING THE APPEALS FOR THE ASSESSMENT YEARS 1999-99 AND 1999-2000 HELD THAT TH E AVERAGE CONSUMPTION 2 RATE OF ELECTRICITY PER CYLINDER AT 15 UNITS AS REA SONABLE WHEREAS WHILE DECIDING THE APPEAL FOR THE ASSESSMENT YEAR 1997-98 , THE CONSUMPTION OF 13.5 UNITS OF ELECTRICITY PER CYLINDER WAS HELD JUSTIFIE D. ACCORDINGLY, IT WAS SUBMITTED BY THE REVENUE THAT THE MISTAKE WHICH IS APPARENT FROM RECORDS, MAY BE RECTIFIED. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E IS ENGAGED IN THE BUSINESS OF MANUFACTURING AND SALE OF OXYGEN GAS CY LINDERS. WHILE FRAMING THE ASSESSMENT FOR THE ASSESSMENT YEARS 1998-99 AND 1999-2000, THE ASSESSING OFFICER MADE THE ADDITION OF RS. 13 LACS AND RS. 26,11,729/- ON ACCOUNT OF EXCESS PRODUCTION OF GAS CYLINDERS BY RA TE OF CONSUMPTION OF ELECTRICITY OF 13.5 UNITS PER CYLINDER ON THE BASIS OF CONSUMPTION OF ELECTRICITY SHOWN BY THE ASSESSEE ITSELF IN THE EAR LIER ASSESSMENT YEARS. THE ASSESSING OFFICER DURING ASSESSMENT PROCEEDINGS NOT ICED THAT THE AVERAGE CONSUMPTION OF ELECTRICITY PER GAS CYLINDER COMES T O 15.87 UNITS WHICH WAS CONSIDERED TOWARDS THE HIGHER SIDE. IN THIS REGARD , THE ASSESSEE SUBMITTED ITS EXPLANATION ON 6.12.2000 ALONGWITH A CHART SHOWING MONTH WISE CONSUMPTION AND PRODUCTION OF CYLINDERS BY CONTENDING THAT THE PLANT HAS TO BE KEPT OPERATIONAL IRRESPECTIVE OF PRODUCTION TO MAINTAIN A TEMPERATURE OF (-) 190 DEGREE C WHICH IS REQUIRED FOR PRODUCTION OF GAS. THE ASSESSING OFFICER DID NOT ACCEPT THE EXPLANATION OF THE ASSESSEE AND ADOP TED THE RATE OF CONSUMPTION OF ELECTRICITY OF 13.5 UNITS PER CYLIND ER AND MADE THE ADDITION OF RS. 13 LACS FOR ASSESSMENT YEAR 1998-99. SIMILARL Y FOR ASSESSMENT YEAR 1999-2000, THE ASSESSING OFFICER MADE AND ADDITION OF RS. 26,11,729/- TO THE INCOME OF THE ASSESSEE ON ACCOUNT OF SUPPRESSION O F PRODUCTION OF OXYGEN GAS CYLINDERS. ON APPEAL, THE CIT(A) REDUCED THE AD DITION TO RS. 5,46,287/- 3 FOR ASSESSMENT YEAR 1998-99 AND RS. 9,70,835/- FOR ASSESSMENT YEAR 1999- 2000. THE REVENUE FILED SEPARATE APPEALS FOR THE AS SESSMENT YEARS 1998-99 AND 1999-2000 BEFORE THE TRIBUNAL AGAINST THE ORDER S OF CIT(A) AND THE TRIBUNAL VIDE ITS ORDER DATED 11.8.2005 IN ITA NOS. 23 & 24/CHANDI/2004 RELATING TO ASSESSMENT YEARS 1998-99 AND 1999-2000 UPHELD THE ORDERS OF CIT(A). 4. WE HAVE HEARD THE RIVAL SUBMISSIONS AND HAVE ALS O PERUSED THE MATERIALS AVAILABLE ON RECORD. THE TRIBUNAL HAS DI SCUSSED THIS ISSUE IN PARAS 9 TO 17 OF ITS ORDER DATED 11.8.2005. IN PARA 12 O F THE ORDER, THE TRIBUNAL HAS CATEGORICALLY STATED THAT THE ASSESSING OFFICER HAS ADOPTED THE RATE OF CONSUMPTION OF ELECTRICITY OF 13.5 UNITS PER CYLIND ER ON THE BASIS OF ASSESSMENT YEAR 1997-98, WHEREAS THE FACTS OF ASSE SSMENT YEAR 1997-98 ARE DIFFERENT AS COMPARED TO THE FACTS OF ASSESSMENT YE AR UNDER CONSIDERATION. THE TRIBUNAL FURTHER HELD THAT FOR THE ASSESSMENT Y EAR 1997-98, AS PER THE WORKING, THE ELECTRIC METER WAS DEFECTIVE AND AVERA GE WAS ADOPTED. THE TRIBUNAL FURTHER HELD DURING THE ASSESSMENT YEARS U NDER CONSIDERATION, NO EVIDENCE OF SALE WAS FOUND ON THE BASIS OF WHICH TH E CONSUMPTION CAN BE ESTIMATED. THE TRIBUNAL FURTHER HELD THAT NO DEFE CT WAS FOUND IN THE STOCK REGISTER. THERE ARE NO SALES OUTSIDE THE BOOKS OF ACCOUNT, THE PRODUCTION IS REGULARLY CHECKED BY CENTRAL EXCISE DEPARTMENT. AC CORDINGLY, THE TRIBUNAL CONCLUDED THAT ADOPTION OF ADHOC UNITS IS NOT JUSTI FIED. IN VIEW OF THE CATEGORICAL FINDINGS OF THE TRIBUNAL GIVEN IN ORDER DATED 11.8.2005, WE DO NOT SEE ANY MERIT IN THE MISC. APPLICATIONS FILED B Y THE REVENUE. THE TRIBUNAL HAS CATEGORICALLY STATED THAT THE FACTS OF THE ASSESSMENT YEAR 1997- 98 ARE NOT SIMILAR TO THE FACTS OF ASSESSMENT YEARS 1998-99 AND 1999-2000. 4 FOR THE SAME, THE TRIBUNAL HAS GIVEN THE REASONS IN PARA 12 OF THE ORDER DATED 11.8.2005. WE MAY ALSO ADD HERE THAT THERE IS NO M ATERIAL ON RECORD TO CONTROVERT THE FINDINGS OF THE TRIBUNAL GIVEN IN PA RA 9 OF THE ORDER. EVEN OTHERWISE ALSO MERELY BECAUSE THE ELECTRICITY CONSU MPTION IS HIGHER, ADDITION CANNOT BE MADE TO THE INCOME OF THE ASSESSEE WITHOU T BRINGING INTO RECORD THE CORROBORATIVE EVIDENCE. IN PARA 17 OF THE ORDER, T HE TRIBUNAL HAS STATED THAT HIGHER CONSUMPTION OF ELECTRICITY MAY BE DUE TO AGE OF THE PLANT, AGEING PROCESS OF THE MACHINERY, EMERGING COMPUTATION, SHA RING WORK LOAD, FREQUENT BREAK DOWN IN THE ELECTRICITY, LABOUR PROBLEM, AVAI LABILITY OF RAW MATERIAL ETC. CONSIDERING THE ENTIRE FACTS AND CIRCUMSTANC ES OF THE PRESENT CASE, WE ARE OF THE VIEW, THAT BOTH THE MISC. APPLICATIONS F ILED BY THE REVENUE DESERVE TO BE DISMISSED PARTICULARLY IN ABSENCE OF ANY MISTAKE APPARENT FROM THE RECORDS.. ACCORDINGLY, WE DISMISS BOTH THE MIS C. APPLICATIONS. 5. IN THE RESULT, BOTH THE MISC. APPLICATIONS ARE D ISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 10 TH DAY OF JULY, 2012 SD/- SD/- (T.R.SOOD) (H.L.KARWA) ACCOUNTANT MEMBER VICE PRESIDENT DATED : 10 TH JULY, 2012 RKK COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5 THE DR TRUE COPY BY ORDER ASSISTANT REGISTRAR 5