SUPREME CYLINDERS LTD., Alwar V. ACIT, ALWAR

MA 127/JPR/2018

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 6020 (ITAT-JAIPUR)
• Duration Of Justice: 3 month(s) 24 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 21-01-2019
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2005-2006
• Appeal Filed On: 27-09-2018
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: RAN SINGH CIT DHK
• Keywords: Loose papers

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 FOT; IKY JKWO] U;KF;D LNL; ,OA JH FOE FLAG ;K NO ] YS[KK LNL; DS LE{K BEFORE: SHRI VIJAY PAL RAO, JM AND SHRI VIKRAM SING H YADAV, AM M.A. NO. 127/JP/2018 ( ARISING OUT OF VK;DJ VIHY LA-@ ITA NO. 525/JP/2014) FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2005-06. SUPREME CYLINDERS LTD., A-146K, 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 FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI HIMANSHU GOYAL (CA) JKTLO DH VKSJ LS@ REVENUE BY : SHRI RAN SINGH (ADDL. CIT) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 18.01.2019. ?KKS'K .KK DH RKJH[K@ DATE OF PRONOUNCEMENT : 21/01/2019. VKNS'K@ ORDER PER VIJAY PAL RAO, JM : BY WAY OF THIS MISCELLANEOUS APPLICATION, THE ASSES SEE IS SEEKING RECTIFICATION OF THE MISTAKE IN THE TRIBUNALS ORDER DATED 29 TH MAY, 2018. THE LD. A/R OF THE ASSESSEE HAS SUBMITTED THAT WHILE DECIDING THE GROU ND NO. 2 AND 4 OF THE REVENUES APPEAL, THE TRIBUNAL HAS REVERSED THE ORDER OF THE LD. CIT (A) WITHOUT CONSIDERING THE FACT AS RECORDED BY THE LD. CIT (A) THAT THE AO HAS NOT BROUGHT ON RECORD ANY OTHER MATERIAL AGAINST THE ASSESSEE TO PROVE THE RE CEIPT OF MONEY OUT OF BOOKS ON SALE OF SCRAP OR THE CASH RECEIVED BACK BY THE ASSE SSEE IN RESPECT OF THE FREIGHT CHARGES. THUS HE HAS PLEADED THAT THERE IS A MISTAK E APPARENT FROM RECORD WHICH MAY BE RECTIFIED BY PASSING AN APPROPRIATE ORDER. 2. THE LD. D/R HAS VEHEMENTLY OPPOSED THE MISCELLAN EOUS APPLICATION OF THE ASSESSEE AND SUBMITTED THAT THE IMPUGNED ORDER IS P ASSED ON MERIT AFTER ANALYZING 2 MA NO. 127/JP/2018 M/S. SUPREME CYLINDERS LTD., BHIWADI, ALWAR. THE RELEVANT FACTS AND RECORD AND, THEREFORE, THE D ECISION TAKEN BY THE TRIBUNAL ON MERIT CANNOT BE REVIEWED UNDER THE PROVISIONS OF SE CTION 254(2) OF THE IT ACT. 3 HAVING CONSIDERED THE RIVAL SUBMISSIONS AND CAREF UL PERUSAL OF THE RELEVANT RECORD, WE FIND THAT THE GRIEVANCE OF THE ASSESSEE IN THE MISCELLANEOUS APPLICATION IS SUMMARIZED IN PARA 4 TO 11 AS UNDER :- 4. GROUND NO. 2 RELATING TO THE SCRAP SALES HAS B EEN ADJUDICATED BY YOUR HONORS AT PARA 5 ONWARDS. 5. ONE OF THE ARGUMENTS RAISED ON BEHALF OF THE ASS ESSEE WAS THAT WITH RESPECT TO RATE OF SCRAP SALES INDEPENDENT ENQ UIRIES WERE ALSO MADE BY THE AO, HOWEVER THE FINDINGS OF THESE ENQUIRIES AND INVESTIGATIONS CONDUCTED IN THIS ASPECT WERE NE VER PROVIDED TO THE ASSESSEE, INSPITE OF THE ASSESSEES SPECIFIC REQUESTS. 6. THE SAID CONTENTION WAS ALSO RAISED BEFORE THE C IT (A). THE LD. CIT (A) IN PARA 6.8 OF HIS ORDER DATED 6.5.2014 HAS HELD THAT :- .. FURTHER, AO HAS NOT BROUGHT ON RECORD ANY OTH ER MATERIAL OR CONDUCTED AN ENQUIRY TO ESTABLISH THE RECEIPT OF MONEY OUT OF THE BOOKS ON SALE OF SCRAP. 7. GROUND NO. 4 RELATING TO FREIGHT RECEIPTS HAS BE EN ADJUDICATED BY YOUR HONORS AT PARA 11 ONWARDS. 8. ONE OF THE ARGUMENTS RAISED ON BEHALF OF THE ASS ESSEE WAS THAT NO ENQUIRIES WERE MADE BY THE LD. AO, IN-SPITE OF A SSESSEES SPECIFIC REQUESTS, AND THE ADDITIONS WERE MADE SOLE LY ON THE BASIS OF SOME LOOSE PAPERS IMPLANTED BY DISGRUNTLED EMPLOYEES. NO EVIDENCE AGAINST THE RECORDS COULD BE PRODUCED. 9. THE SAID CONTENTION WAS ALSO RAISED BEFORE THE C IT (A). THE LD. CIT (A) IN PARA 7.5 OF HIS ORDER DATED 6.5.2014 HAS HELD THAT : I HAVE GONE THROUGH THE MATERIAL AVAILABLE ON REC ORD AND FIND THAT AO HAS NOT BROUGHT ON RECORD ANY OTHER MATERIA L AGAINST 3 MA NO. 127/JP/2018 M/S. SUPREME CYLINDERS LTD., BHIWADI, ALWAR. THE ASSESSEE TO PROVE THAT THE CASH WAS RECEIVED BA CK ON THE TOTAL FREIGHT CHARGES . 10. THE ABOVE ISSUES ON RECORD HAVE NOT BEEN DEALT WITH AND IN THIS WAY AN ERROR HAS CREPT IN THE ORDER PASSED BY YOUR HONORS. 11. SINCE IT IS A MISTAKE APPARENT FROM RECORD IT I S PRAYED THAT THE SAME MAY BE RECTIFIED BY YOUR HONORS BY PASSING APP ROPRIATE ORDER UNDER SECTION 254(2) OF THE INCOME TAX ACT. THUS THE ASSESSEE HAS CONTENDED IN THE MISCELLANEOU S APPLICATION THAT THE LD. CIT (A) HAS DELETED THE ADDITION MADE BY THE AO ON THE GROUND THAT THE AO HAS NOT BROUGHT ON RECORD ANY OTHER MATERIAL OR CONDUCTED A NY ENQUIRY TO ESTABLISH THE RECEIPT OF MONEY OUT OF BOOKS AND FURTHER TO ESTABL ISH THAT THE ASSESSEE HAS RECEIVED BACK THE CASH IN RESPECT OF FREIGHT CHARGE S. WE NOTE THAT WHILE DECIDING THESE TWO ISSUES IN GROUND NO. 2 AND 4, THE TRIBUNA L HAS GIVEN ITS FINDING IN PARA 7, 13 AND 13.1 AS UNDER :- 7. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AS WEL L AS RELEVANT MATERIAL ON RECORD. SO FAR AS THE UNDERSTATEMENT OF SCRAP SALE IN RESPECT OF THE BILLED AMOUNT OF RS. 19,13,089/- AGA INST THE ACTUAL RECEIPT OF RS. 30,02,650/- IS CONCERNED, THE SAID F ACT WAS DULY MANIFESTED IN THE IMPUGNED MATERIAL AND, THEREFORE, THE ASSESSEE HAS ACCEPTED THE SAID UNDERSTATEMENT OF SCRAP SALE. TH E AO APPLIED THE SAID RATE OF UNDERSTATEMENT BEING 56.95% ON THE ENT IRE SCRAP SALE MADE BY THE ASSESSEE DURING THE YEAR UNDER CONSIDER ATION. HOWEVER, WE NOTE THAT THE ASSESSEE HAS SOLD SCRAP DURING THE YEAR OF DIFFERENT MATERIALS AND AT DIFFERENT RATES. THE SCRAP SALE UP TO 5 TH MAY, 2004 IS SHOWN IN THE BOOKS @ RS. 8500/- PER MT AND THEREAFT ER @ RS. 4 MA NO. 127/JP/2018 M/S. SUPREME CYLINDERS LTD., BHIWADI, ALWAR. 11,500/- PER MT. THIS SALE WAS MADE ONLY TO THE SEL ECTED PARTIES AND, THEREFORE, A PARTICULAR SCRAP WAS SOLD BY THE ASSES SEE DURING THE YEAR TO THE SELECTED PARTIES. APART FROM THIS PARTICULAR METAL SOLD AS SCRAP @ RS.11,500/- PER MT WHICH CONSIST OF THE MAJOR AMOUN T OF SCRAP SALE DURING THE YEAR, THE ASSESSEE HAS ALSO SHOWN THE SC RAP SALE OF OTHER ITEMS @ RS. 25/- PER KG. THUS IT APPEARS THAT ONLY 3 RATES ARE RECORDED IN THE BOOKS. FIRST RATE IS RS. 8,500/- P ER MT I.E. ONLY AFTER 8 TH MAY, 2004 AND THEREAFTER THE SAID PARTICULAR ITEM OF SCRAP WAS SOLD @ RS. 11,500/- PER MT. SOME OTHER ITEMS LIKE EMPTY CONTAINERS, V.P. RINGS, ZINC DUST ETC. WERE SOLD BY THE ASSESSEE @ R S. 25/- PER KG. THUS THE DETAILS OF THE VARIOUS ITEMS OF SCRAP IS V ERY WELL CLEAR FROM THE RECORD AND BOOKS OF ACCOUNT AND, THEREFORE, THE SCRAP SALE OF A PARTICULAR ITEM WHICH IS FOUND IN THE LOOSE PAPERS SHOWING THE ACTUAL RECEIPT IS MORE THAN THE BILLED AMOUNT CAN BE EXTRA POLATED IN RESPECT OF THE SCRAP SALE OF THE SAME ITEM AND NOT TO THE O THER ITEMS. FURTHER THE DATE OF SCRAP SALE AS FOUND IN THE LOOSE PAPERS IS ALSO A RELEVANT FACTOR TO ASCERTAIN THE SAID TRANSACTION BELONGS TO THE LOT OF THE SCRAP SALE AND RATE PREVAILING DURING THE SAID PERIOD. T HEREFORE, THE RATE OF A PARTICULAR ITEM OF SCRAP SALE AS FOUND IN THE LOO SE PAPERS AND THE RATE AS RECORDED IN THE BILLS AND BOOKS OF ACCOUNTS CAN BE VERIFIED AND THEN ONLY TO THE EXTENT OF THE SAME RATE AND SAME I TEM OF SCRAP SALE WILL BE CONSIDERED FOR MAKING THE ADDITION ON ACCOU NT OF UNDER BILLING. HENCE, IN VIEW OF THE FACTS AND CIRCUMSTANCES OF TH E CASE, WE SET ASIDE THIS ISSUE TO THE RECORD OF THE AO FOR PROPER VERIF ICATION OF THE FACTS AND IDENTIFY THE PARTICULAR ITEM OF SCRAP SALE FOUN D RECORDED IN THE LOOSE PAPERS IMPOUNDED DURING THE COURSE OF SURVEY AND THEN APPLY THE SAME RATE IN RESPECT OF THE SCRAP SALE OF THE S AME ITEM WHICH IS SHOWN BY THE ASSESSEE SOLD AT THE RATE AS MENTIONED IN THE CORRESPONDING BILL. NEEDLESS TO SAY, THE ASSESSEE BE GIVEN AN OPPORTUNITY OF HEARING BEFORE PASSING A FRESH ORDER ON THIS ISSUE. 5 MA NO. 127/JP/2018 M/S. SUPREME CYLINDERS LTD., BHIWADI, ALWAR. 13. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AS WEL L AS THE RELEVANT MATERIAL ON RECORD. THE AO HAS NOTED FROM ANNEXURE-A-22 OF THE LOOSE PAPERS THAT THE BILLS OF HARYANA RAJASTHA N ROADLINES WERE IMPOUNDED DURING SURVEY. THE DETAILS OF THE LEDGER ACCOUNT AND THE BILL AMOUNT AS PER THE LOOSE PAPER IS GIVEN BY THE AO AS UNDER :- MONTH EXPENSES CLAIMED BY COMPANY BILL AMOUNT AS PER LOOSE PAPER DIFFERENCE APRIL, 04 78338 55000 23338 MAY, 04 243901 165900 7800 JUNE, 04 127463 96800 30663 JULY, 04 48104 19400 28704 AUG, 04 122097 74700 47397 TOTAL 619903 411800 137902 ACCORDINGLY THE AO COMPUTED THE DIFFERENCE BETWEEN THE BILLED AMOUNT AND ACTUAL FREIGHT AMOUNT MUTUALLY DETERMINED BETWE EN THE PARTIES @ 22.25%. THIS RATE OF DIFFERENCE WAS APPLIED BY THE AO ON THE TOTAL FREIGHT CHARGES OF RS. 32,50,451/- AND ARRIVED AT T OTAL DIFFERENCE AMOUNT OF RS. 7,23,225/-. SINCE AN AMOUNT OF RS. 1 ,37,902/- IS FOUND FROM THE LOOSE PAPERS BEING DIFFERENCE BETWEEN THE AGREED RATE AND THE EXPENSES CLAIMED IN THE BOOKS WAS ALREADY SURRE NDERED BY THE ASSESSEE, THEREFORE, THE AO HAS MADE THE ADDITION O F RS. 5,85,323/-. THE ASSESSEE HAS OBJECTED TO THE EXTRAPOLATING OF T HIS DIFFERENCE TO THE ENTIRE FREIGHT CHARGES WHICH IS ACCEPTED BY THE LD. CIT (A) AND DELETED THE SAID ADDITION. 13.1. HAVING CONSIDERED THE FACTS AND CIRCUMSTANCES OF THE CASE, WHEN THE ASSESSEE HAS ADMITTED THE OVER-INFLATED CL AIM OF FREIGHT CHARGES AS FOUND IN THE LOOSE PAPERS FOR THE MONTHS OF APRIL TO AUGUST IN RESPECT OF THE PAYMENT MADE TO ONE TRANSPORTER, NAMELY, HARYANA RAJASTHAN ROADLINES, THE SAID RATE OF INFLATED EXPE NSES ON ACCOUNT OF FREIGHT CHARGES CAN BE APPLIED IN RESPECT OF THE FR EIGHT CHARGES CLAIMED BY THE ASSESSEE PAID TO HARYANA RAJASTHAN ROADLINES . THEREFORE, TO THE EXTENT OF FREIGHT PAID TO THE SAID TRANSPORTER, THE INFLATED RATE AS 6 MA NO. 127/JP/2018 M/S. SUPREME CYLINDERS LTD., BHIWADI, ALWAR. APPLIED BY THE ASSESSEE IS JUSTIFIED BUT NOT IN RES PECT OF THE OTHER TRANSPORTER WHEN THERE IS NO MATERIAL OR OTHER RECO RD TO SHOW SUCH AN ARRANGEMENT BETWEEN THE ASSESSEE AND OTHER TRANSPOR TER. ACCORDINGLY, WE SET ASIDE THIS ISSUE TO THE RECORD OF THE AO TO VERIFY THE OTHER FREIGHT CHARGES AND ONLY TO THE EXTENT OF FREIGHT CHARGES TO HARYANA RAJASTHAN ROADLINES THIS DIFFERENCE RATE CA N BE APPLIED. THUS IT IS CLEAR THAT THE TRIBUNAL HAS CONSIDERED T HE RELEVANT FACTS AS WELL AS THE RECORD WHICH WAS FOUND DURING THE SURVEY AND IMPOUN DED. THE ASSESSEE HAS NOT DISPUTED THE MATERIAL IMPOUNDED DURING THE SURVEY A ND ALSO DISCLOSED THE INCOME AS PER THE IMPOUNDED RECORD. THE AO WHILE PASSING THE ASSESSMENT APPLIED AND EXTRAPOLATED THE INCRIMINATING MATERIAL FOR ALL OTH ER TRANSACTIONS OF SCRAP SALES AS WELL AS FREIGHT CHARGES. THE LD. CIT (A) DELETED T HOSE ADDITIONS MADE BY THE AO ON THE GROUND THAT THE AO HAS NOT BROUGHT ANY OTHER MA TERIAL. THE TRIBUNAL WHILE DECIDING THESE ISSUES HAS RESTRICTED THE ADDITION M ADE BY THE AO ONLY IN RESPECT OF THE SCRAP SOLD BY THE ASSESSEE TO THE PARTY IN WHOS E CASE THE IMPOUNDED INCRIMINATING MATERIAL WAS ACCEPTED BY THE ASSESSEE . THEREFORE, BASED ON THE INCRIMINATING MATERIAL, THE TRIBUNAL HAS SET ASIDE THE ISSUE TO THE RECORD OF THE AO FOR PROPER VERIFICATION AND THEN APPLY THE SAME RAT E IN RESPECT OF THE SCRAP SALE MADE BY THE ASSESSEE TO THE SAID PARTY AND CANNOT B E EXPENDED TO THE SALE MADE TO THE OTHER PARTIES. SIMILARLY, IN CASE OF FREIGHT C HARGES, THE ASSESSEE HAS ACCEPTED THE DIFFERENCE OF THE FREIGHT BILL AND ACTUAL EXPEN DITURE AS REPRODUCED IN PARA 13 OF THE IMPUGNED ORDER AND THIS IS NOT A SINGLE ISOLATE D TRANSACTION BUT THESE ARE NUMBER OF TRANSACTIONS. THEREFORE, THE TRIBUNAL FOU ND IT PROPER THAT THE FREIGHT CHARGES PAID TO ONE PARTY IN RESPECT OF WHICH THE I MPOUNDED MATERIAL HAS SHOWN THE 7 MA NO. 127/JP/2018 M/S. SUPREME CYLINDERS LTD., BHIWADI, ALWAR. DIFFERENCE OF EXPENDITURE CLAIMED AND BILL AMOUNT A S PER THE LOOSE PAPERS, THE SAME DIFFERENCE CAN BE APPLIED IN RESPECT OF THE TOTAL F REIGHT CHARGES PAID TO THE SAME PARTY AND NOT TO THE OTHER PARTIES, HENCE THE ISSUE WAS AGAIN SET ASIDE TO THE AO FOR PROPER VERIFICATION AND THEN DECIDE THE SAME AFTER GIVING AN OPPORTUNITY TO THE ASSESSEE. THESE FINDINGS OF THE TRIBUNAL ARE BASED ON DUE ANALYSIS OF THE FACTS AS WELL AS THE EVIDENCE WHICH IS NOT IN DISPUTE. THER EFORE, IT IS A DECISION OF THE TRIBUNAL WHICH IS NOW SOUGHT TO BE REVIEWED OR REVI SED IN THE PRESENT PROCEEDINGS UNDER SECTION 254(2) OF THE IT ACT. HENCE THE RELI EF SOUGHT BY THE ASSESSEE IN THE MISCELLANEOUS APPLICATION IS BEYOND THE PROVISIONS OF SECTION 254(2) AS THE JURISDICTION OF THE TRIBUNAL IS VERY LIMITED AND CI RCUMSCRIBED TO RECTIFY THE APPARENT MISTAKE ON RECORD AND NOT TO REVIEW OR REVISE THE O RDER PASSED ON MERIT. EVEN OTHERWISE, THE IMPUGNED ORDER CHALLENGED BY THE ASS ESSEE MAY BE AN ERROR OF DECISION BUT IT IS NOT A MISTAKE APPARENT ON RECORD TO BE REVIEWED UNDER SECTION 254(2) OF THE IT ACT. ACCORDINGLY, WE DO NOT FIND ANY MERIT OR SUBSTANCE IN THE MISCELLANEOUS APPLICATION OF THE ASSESSEE. 4. IN THE RESULT, MISCELLANEOUS APPLICATION FILED B Y THE ASSESSEE IS DISMISSED. ORDER IS PRONOUNCED IN THE OPEN COURT ON 21/01/ 2019. SD/- SD/- ( FOE FLAG ;KNO ) ( FOT; IKY JKWO (VIKRAM SINGH YADAV ) (VIJAY PAL RAO) YS[KK LNL;@ ACCOUNTANT MEMBER U;KF;D LNL;@ JUDICIAL MEMBER JAIPUR DATED:- 21/01/2019. DAS/ 8 MA NO. 127/JP/2018 M/S. SUPREME CYLINDERS LTD., BHIWADI, ALWAR. VKNS'K DH IZFRFYFI VXZSF'KR@ COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT- M/S. SUPREME CYLINDERS LTD., ALWA R. 2. THE RESPONDENT THE ACIT, CIRCLE-2, ALWAR. 3. THE CIT(A). 4. THE CIT, 5. THE DR, ITAT, JAIPUR 6. GUARD FILE (MA NO. 127/JP/2018) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASSISTANT. REGISTRAR 9 MA NO. 127/JP/2018 M/S. SUPREME CYLINDERS LTD., BHIWADI, ALWAR.