Sanjaykumar R. Mantri (HUF), Jalna V. Assistant Commissioner of Income-tax, Aurangabad

MA 2/PUN/2017

• Counselvise Citation: [2018] 124 COUNSELVISE.COM (IT) 6667 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 7 month(s) 2 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 15-05-2018
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2007-2008
• Appeal Filed On: 13-10-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Deemed to accrue or arise in india
• Section: 69C; 234B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A , PUNE , , BEFORE MS. SUSHMA CHOWLA, JM AND SHRI ANIL CHATURVEDI, AM . / MA NO. 0 2 /P U N/ 20 1 7 ARISING OUT OF ITA NO. 1 2 1 /P U N/20 1 2 ASSESSMENT YEAR : 20 0 7 - 0 8 SANJAY MANTRI (HUF), D - 57, ADDITIONAL MIDC, JALNA 431203 ... APPLICANT PAN: AADHM9093C VS. THE ASST. COMMISSIONER OF INCOME TAX, CIRCLE 1, AURANGABAD ... RESPONDENT APPLICANT BY : S HRI S.N. PURANIK RESPONDENT BY : S HRI ACHAL SHARMA / DATE OF HEARING : 04 . 0 5 .201 8 / DATE OF PRONOUNCEMENT: 15 . 0 5 .201 8 / ORDER PER SUSHMA CHOWLA , JM : THE APPLICA NT ASSESSEE HAS FILED THE PRESENT MISCELLANEOUS APPLICATION AGAINST THE ORDER OF TRIBUNAL DATED 31.03.2016 AND IS AGGRIEVED BY THE UPHOLDING OF ADDITION BY THE TRIBUNAL OF 9,06,132/ - . 2. WITH REFERENCE TO APPEAL OF ASSESSEE IN ASSESSMENT YEAR 2007 - 08 DATED 31.03.2016, T HE APPLICANT HAS POINTED OUT THAT THERE IS MISTAKE IN THE ORDER OF TRIBUNAL IN PARA 26 WHILE UPHOLDING THE ADDITION OF 9,06,132/ - . IT IS FURTHER POINTED OUT THAT THE ENTIRE ADDITION ON ACCOUNT OF UNDISCLOSED INVESTMENTS NEEDS 2 M A NO. 0 2 /P U N/20 1 7 TO BE DE LETED AS HAS BEEN HELD IN OTHER CASES AND HENCE, THE ORDER SUFFERS FROM INFIRMITY. 3. THE LEARNED DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE POINTED OUT THAT THE ISSUE HAS BEEN DECIDED BY THE TRIBUNAL IN PARA 27 AFTER CONSIDERING THE FACTS OF CASE . THE ADDITION IS IN RESPECT OF OTHER ITEMS REQUIRED FOR MANUFACTURE , IN ADDITION TO THE MATERIAL , WHICH HAVE BEEN UPHELD IN THE HANDS OF ASSESSEE AND IT WAS ALSO POINTED OUT BY THE LEARNED DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE THAT NO SUCH ISSUE WAS DECID ED BY THE TRIBUNAL IN OTHER CASES AND HENCE, THERE WAS NO MERIT IN THE PLEA OF APPLICANT IN THIS REGARD. 4. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. VIDE CONSOLIDATED ORDER, THE APPEAL OF ASSESSEE WAS DECIDED FOR VARIOUS YEARS BUT THE PRESENT MISCELLANEOUS APPLICATION IS ARISING OUT OF ORDER OF TRIBUNAL DATED 31.03.2016 IN ITA NO.121/PN/2012 I.E. THE APPEAL FILED BY THE ASSESSEE. THE YEAR UNDER APPEAL WAS ASSESSMENT YEAR 2007 - 08. THE TRIBUNAL WHILE DECIDING THE APPEAL OF ASSESSEE FOR ASSESSMENT YEAR 2007 - 08 NOTED THE CONTENTIONS OF ASSESSEE VIDE SAID ORDER IN WHICH THE ASSESSEE HAD ADMITTED TO CLANDESTINE REMOVAL OF GOODS WITHOUT PAYMENT OF EXCIDE DUTY AND ALSO THE ADMISSION OF ASSESSEE THAT IT HAD MADE CASH PURCHASES OUTSIDE THE BOOKS OF ACCOUNT. WHILE DECIDING THE ISSUE, THE FINDINGS OF TRIBUNAL IN PARAS 26 AND 27 READ AS UNDER: - 26. ANOTHER ASPECT IS TO BE SEEN THAT THE YEAR UNDER APPEAL I.E. ASSESSMENT YEAR 2007 - 08 IS FIRST YEAR IN WHICH THE ASSESSEE HAD ADMITTED TO CLANDESTINE RE MOVAL OF GOODS WITHOUT PAYMENT OF EXCISE DUTY. FURTHER, THE ASSESSEE HAD ALSO ADMITTED THAT HE WAS THE DIRECTOR OF NILESH STEEL AND ALLOYS PVT. LTD., FROM WHICH IT HAD MADE CASH PURCHASES OF INGOTS FOR THE PURPOSE OF TMT BARS OR CTD BARS. THE ADMISSION OF ASSESSEE IN THIS REGARD WAS CASH EQUIVALENT TO 497 MT FOR THE VALUE OF RS.73,84,150/ - . THE SAID AMOUNT WAS TREATED AS DEEMED INCOME OF THE ASSESSEE UNDER SECTION 69C OF THE ACT. HOWEVER, NO ADDITION WAS MADE BY THE ASSESSING OFFICER SINCE IT WAS HELD THAT THE SAID AMOUNT SUBSUMED IN THE ADDITION ON ACCOUNT OF SUPPRESSED PRODUCTION. THE CIT(A) ON THE OTHER HAND, NOTED THE CONTENTION OF ASSESSEE IN PARA 8.6 AT PAGE 13 OF THE APPELLATE ORDER IN THIS REGARD, 3 M A NO. 0 2 /P U N/20 1 7 WHEREIN IT WAS CLAIMED THAT THE PURCHASE OF RAW MATER IAL AND SALE OF FINISHED GOODS WERE BOTH ON CREDIT AND AFTER RECEIPT OF SALE PROCEEDS, THIS PAYMENT WAS MADE TO THE SUPPLIERS OF RAW MATERIAL AND HENCE, NO ADDITION SHOULD BE MADE ON THIS ACCOUNT. THE CIT(A) NOTED THAT THE CONTENTION OF ASSESSEE THAT AFTER RECEIPT OF PROCEEDS OF SALE, THE SUPPLIERS OF RAW MATERIAL WERE PAID WERE NOT SUPPORTED BY EVIDENCE. FURTHER, IT WAS HELD THAT FOR PRODUCING THE GOODS, OTHER MANUFACTURING EXPENSES IN ADDITION TO RAW MATERIAL WERE ALSO REQUIRED TO BE INCURRED. IN VIEW THE REOF, THE SAID UNDISCLOSED INVESTMENT IN RESPECT OF UNDISCLOSED TURNOVER WAS ESTIMATED AT AVERAGE UNDISCLOSED TURNOVER OF HALF WEEK OF EARLIEST YEAR UNDER APPEAL. THE UNDISCLOSED SALE FOR THE EARLIEST YEAR UNDER APPEAL WAS RS.9,42,37,718/ - AND THE INVESTME NT REQUIRED FOR THE PRODUCTION OUT OF BOOKS WORKED OUT TO RSS.9,06,132/ - , WHICH WAS ADDED IN THE HANDS OF ASSESSEE. 27. IN THE TOTALITY OF THE ABOVE SAID FACTS AND CIRCUMSTANCES OF THE CASE AND KEEPING IN MIND THE ADMISSION OF ASSESSEE BEFORE THE EXCISE A UTHORITIES THAT IT HAD MADE PURCHASES TO THE VALUE OF RS.73,84,150/ - FROM ITS OTHER CONCERN FOR UNACCOUNTED PRODUCTION, WE FIND MERIT IN THE CLAIM OF ASSESSEE THAT THE PAYMENTS WERE MADE TO THE SUPPLIERS OF RAW MATERIAL AFTER RECEIVING THE SALE RECEIPTS. T HIS IS THE PLAUSIBLE EXPLANATION AND CAN BE ACCEPTED IN THE HANDS OF ASSESSEE SINCE THE ASSESSEE IS MAKING THE SAID PURCHASES OF INGOTS FROM ITS CONCERN ITSELF, WHICH WAS CONTROLLED AND RUN BY HIM. HOWEVER, IN RESPECT OF OTHER ITEMS REQUIRED FOR MANUFACTUR ING IN ADDITION TO RAW MATERIAL, WE FIND MERIT IN THE ORDER OF CIT(A) IN WORKING OUT THE ADDITION TO THE EXTENT OF RS.9,06,132/ - AND THE SAME IS UPHELD. BUT NO SUCH SEPARATE ADDITION WAS MADE BY THE ASSESSING OFFICER SINCE THE ADDITION WAS MADE ON ACCOUNT OF UNACCOUNTED PRODUCTION. HOWEVER, THE CIT(A) HAD CONFIRMED ADDITION OF RS.9,06,132/ - SEPARATELY AND THE SAME IS CONFIRMED. IN VIEW THEREOF, WE DIRECT THE ASSESSING OFFICER TO WORK OUT ADDITION IN THE HANDS OF ASSESSEE ON ACCOUNT OF SUPPRESSED PRODUCTION IN LINE WITH THE ADMISSION MADE BY THE ASSESSEE BEFORE THE EXCISE AUTHORITIES OF CLANDESTINE REMOVAL OF GOODS WITHOUT PAYMENT OF EXCISE DUTY BY APPLYING GP RATE @ 4% OR HIGHER, IF DECLARED BY ASSESSEE. WE ALSO UPHOLD THE ADDITION OF RS.9,06,132/ - . THE OTHE R GROUNDS OF APPEAL RAISED BY THE ASSESSEE REGARDING CHARGING OF INTEREST UNDER SECTION 234A, 234B AND 234C OF THE ACT ARE CONSEQUENTIAL IN NATURE AND HENCE, THE SAID GROUNDS OF APPEAL ARE DISMISSED. THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE ARE PARTLY ALLOWED. 5. THE PERUSAL OF ABOVE SAID PARAS REFLECT THE TRIBUNAL TO HAVE FIRST TAKEN UP THE ISSUE OF ADDITION ON ACCOUNT OF PURCHASES MADE WHICH WERE RELATABLE TO UNACCOUNTED PRODUCTION OF 73,84,150/ - . THE TRIBUNAL HELD THAT WHERE THE PAYMENTS WERE MADE TO THE SUPPLIERS OF RAW MATERIAL AFTER RECEIVING SALE RECEIPTS WAS A PLAUSIBLE EXPLANATION AND THE SAID ADDITION WAS DELETED. THE TRIBUNA L FURTHER HELD THAT HOWEVER IN RESPECT OF OTHER ITEMS REQUIRED FOR MANUFACTURING IN ADDITION TO RAW MATERIAL, THERE WAS MERIT IN THE ORDER OF CIT(A) IN WORKING OUT THE ADDITION TO THE EXTENT OF 9,06,132/ - AND THE SAME WAS UPHELD. THE ADDITION WHICH HAS BEEN UPHELD IN THE HANDS OF ASSESSEE IS IN RESPECT OF OTHER ITEMS 4 M A NO. 0 2 /P U N/20 1 7 REQUIRED FOR MANUFACTURING AND NOT THE PURCHASE OF INGOTS WHICH WERE THE BASIC MATE RIAL UTILIZED BY THE ASSESSEE FOR ITS PRODUCTION. THE TRIBUNAL HAD DELETED THE ADDITION OF 73,84,150/ - WHICH WAS AS IN OTHER CASES DECIDED BY THE TRIBUNAL. HOWEVER, THIS ISSUE OF PURCHASES OF OTHER ITEMS HAS NOT BEEN DECIDED IN OTHER BUNCH OF APPEALS A ND IN VIEW OF THE FACTS OF THE PRESENT CASE, THE SAID ISSUE WAS DECIDED AND CANNOT BE SAID TO BE COVERED BY THE DECISION OF THE TRIBUNAL IN THE OTHER CASES. WE FIND NO MERIT IN THE PRESENT MISCELLANEOUS APPLICATION FILED BY THE APPLICANT AND THE SAME IS D ISMISSED. 6 . IN THE RESULT, MISCELLANEOUS APPLICATION OF APPLICANT IS DISMISSED. ORDER P RONOUNCED ON THIS 15 TH DAY OF MAY , 201 8 . SD/ - SD/ - ( ANIL CHATURVEDI ) ( SUSHMA CHOWLA ) / ACCOUNTANT MEMBER / JUDICIAL MEMBER / PUNE ; DATED : 15 TH MAY , 201 8 . GCVSR / COPY OF THE ORDER IS FORWARDED TO : 1. THE APP LICANT ; 2. THE RESPONDENT; 3. THE CIT(A), AURANGABAD ; 4. THE CIT, AURAN GABAD ; 5. THE DR A , ITAT, PUNE; 6. GUARD FILE . / BY ORDER , // TRUE COPY // / SR. PRIVATE SECRETARY , / ITAT, PUNE