M/s. D.C.Engineering Industries, Ahmedabad V. The Dy.CIT, Circle-11, Ahmedabad

MA 4/AHD/2014

• Counselvise Citation: [2014] 124 COUNSELVISE.COM (IT) 1751 (ITAT-AHMEDABAD)
• Duration Of Justice: 4 month(s) 17 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 30-05-2014
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 21-03-2014
• Assessment Year: 2007-2008
• Appeal Filed On: 13-01-2014
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: O P BATHEJA
• Assessee Lawyers: R C SHAH
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, AHMEDABAD (BEFORE SHRI G.C.GUPTA VICE PRESIDENT & SHRI ANIL C HATURVEDI, A.M.) M. A. NO. 04/AHD/2014 (IN ITA NO. 15 45/AHD/2010) (ASSESSMENT YE AR: 2007-08) M/S. D.C. ENGINEERING INDUSTRIES NEAR JAIN RAKSHABANDHAN, OPP. OLD EVEREST CINEMA, POTALIA TALAV, BAPUNAGAR, AHMEDABAD -380024 V/S THE DY. C.I.T. CIRCLE-11, AHMEDABAD (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI R.C. SHAH A.R. RESPONDENT BY : SHRI O.P. BATHEJA, SR. D.R. ( )/ ORDER DATE OF HEARING : 21-03-201 4 DATE OF PRONOUNCEMENT : 30 -05-2014 PER SHRI ANIL CHATURVEDI,A.M. 1. BY THIS MISCELLANEOUS APPLICATION, THE ASSESSEE HAS REQUESTED FOR RECALLING OF THE ORDER DATED 07-06-2013 PASSED BY THE ITAT AHMED ABAD BENCH IN ITA.NO.1545/AHD/2010 FOR THE ASSESSMENT YEAR 2007-0 8. IN THE MISCELLANEOUS APPLICATION, THE ASSESSEE HAS SUBMITT ED AS UNDER:- L.THE ABOVE APPEAL WAS HEARD ON 29-04-2013 AND DISP OSED OFF ON 7-6-2013 BY 'C' BENCH OF THE TRIBUNAL CONSISTING OF HON'BLE SHRI G. C. GUPTA AND HON'BLE SHRI ANIL CHATURVEDI. DURING THE COURSE OF HEARING OF THE APP EAL, THE APPLICANT'S COUNSEL SHRI RAJESH C. SHAH APPRISED THE HONOURABLE MEMBERS OF T HE NATURE OF PRODUCT MANUFACTURED BY THE APPELLANT AND ALSO THE FACT THA T THE BURNING LOSS IS INEVITABLE IN THE COURSE OF MANUFACTURING PROCESS. IT WAS ALSO PO INTED OUT THAT THE C,I.T.(APPEALS) HAD COMMITTED AN ERROR IN WORKING OUT THE BURNING L OSS IN CASE OF JOB WORK PARTIES IN MA NO 04/A/14 (IN IT A NO. 1545/A/10) . A.Y. 2007- 08 2 AS MUCH AS THE SALES REJECTION RECEIVED FROM THE JO B WORK PARTIES WAS ALSO ADDED TO THE RAW MATERIAL INGOTS RECEIVED FROM SUCH PARTIES INSTEAD OF DEDUCTING THE SAME FROM TOTAL DISPATCHES . THE CORRECT WORKING OF BURN ING LOSS IN CASE OF JOB WORK WAS GIVEN AT PAGE NO. 3 OF THE PAPER BOOK AND IN CASE O F OWN PRODUCTION, THE SAME WAS GIVEN AT PAGE NO. 15 OF THE PAPER BOOK. IT WAS ALSO POINTED OUT THAT EVEN THE OUTSIDE PARTIES WHO WERE SENDING THEIR MATERIAL FOR JOB WOR K WERE ALSO ALLOWING BURNING LOSS UPTO 10% AND IN SUPPORT THEREOF ATTENTION WAS DRAWN TO PAGE NO. 3 AND 4. AT THIS STAGE, HE WAS ASKED THE QUESTION AS TO WHAT WAS THE BURNING LOSS AND G.P. IN THE EARLIER YEARS AND THEREUPON, SHRI RAJESH SHAH DREW THE ATTENTION OF THE HONOURABLE MEMBERS TO PAGE NO. 12 AND IT WAS SHOWN THAT THE BURNING LOSS VARIED BETWEEN 9.10% AND 11% IN CASE OF ALUMINUM AND BETWE EN 5.01% AND 9.20% IN CASE OF ZINC, DEPENDING UPON THE QUALITY OF RAW MAT ERIAL INGOT RECEIVED, DURING THE PREVIOUS THREE YEARS WHEREAS G.P. VARIED BETWEEN 13.92% AND 15.70% AND IN FACT, THE BOOK RESULT FOR THE ASST. YR. 2006-07 WHEREIN BURNING LOSS WAS 11% AND 7.71% IN CASE OF ALUMINUM AND ZINC RESPECTIVELY WAS ACCEP TED IN THE SCRUTINY ASSESSMENT U/ 143(3) OF THE I. T. ACT. IT WAS ALSO POINTED OUT IN CASE OF A SISTER CONCERN VIZ. M/S DIE CAST ENGINEERS THE HONOURABLE TRIBUNAL HAD ACCE PTED THE BURNING LOSS OF 11.01% ON THE FACTS OF THE CASE BY OBSERVING THAT BURNING LOSS OF 12.19% W AS ACCEPTED IN THE ASST. YR, AND THAT THERE WAS NO EVI DENCE ON RECORD TO SHOW THAT THE ASSESSEE HAD MADE ANY SALES OUT OF BOOKS OF ACCOUNT AND THE BOOKS OF ACCOUNT WERE ALSO NOT REJECTED. AT THIS JUNCTURE, SHRI RAJESH C. SHAH WAS ASKED NOT TO ARGUE FURTHER AND THE D.R. WAS ASKED TO MAKE HIS SUBMISSI ONS GIVING AN IMPRESSION THAT THE HONOURABLE BENCH WAS TOTALLY AGREEABLE TO THE S UBMISSIONS OF SHRI RAJESH SHAH. THE D.R. JUST RELIED UPON THE ORDER OF THE A.O. 2.ON PAGE 7 OF THE ORDER, THE BURNING LOSS IN CASE OF ZINC AND ALUMINUM IS STATED TO BE 8.96% AND 8.75% RESPECTIVELY WHICH IS, WITH DUE RESPECT, OTHER WAY ROUND . MAJORITY OF THE CONSUMPTION IS OF ALUMINUM INGOTS . HONOURABLE TRIBUNAL HAS ON SAME PAGE STATED THAT THE FACTS IN CASE OF SISTER C ONCERN WHOSE DECISION OF CO- ORDINATE BENCH OF HONOURABLE TRIBUNAL HAS BEEN PLAC ED ON RECORD ARE DISTINGUISHABLE. THE SAID DECISION WAS REFERRED TO HIGHLIGHT THE PRI NCIPLES APPRECIATED BY THE HONOURABLE TRIBUNAL AND THE BASI C FACTS REGARDING THE NATURE OF PRODUCT MANUFACTURED WHEN IT SAID THAT '(A)THERE IS NO EVIDENCE ON RECORD TO SHOW THAT THE ASSESSEE HAD MADE ANY SALES OUT OF BOOKS OF ACCOUNT, (WHICH IS CLEARLY THE CASE IN THE PRESENT CASE ALSO) (B)M ASST. YR. 1989-90, BURNING LOSS AT 12.19% WAS ACCEPTED BY THE DEPARTMENT WHEREAS IN THE YEAR UNDER CONSIDERATION, BURNING LO SS WAS 11.01%, ( IN THE PRESENT CASE, BURNING LOSS IS LOWER THAN THE LOSS ACCEPTED IN SCRUTINY ASSESSMENT IN A.Y. 2006-07) THE ASSESSEE IS NOT MAINTAINING THE STOCK REGISTER , BUT THE ASSESSEE IS MAINTAINING OPENING STOCK, PURCHASES, CONSUMPTION AND CLOSING S TOCK OF RAW MATERIALS AS WELL AS SALES OF FINISHED GOODS AND STOCK OF FINISHED GOODS AT THE END OF EVERY YEAR, ( WHICH IS THE FACT FOR THE PRESENT APPEAL ALSO) (D)THE DEPARTMENT HAS ACCEPTED THE BOOK RESULTS, TH EREFORE, IN OUR OPINION, NO ADDITION IS REQUIRED IN THE YEAR UNDER CONSIDERATIO N. (IN THE PRESENT APPEAL ALSO, G.P. PERCENTAGE AND SALES ARE DULY ACCEPTED BY THE A.O. BUT SURPRISINGLY BURNING LOSS WAS MA NO 04/A/14 (IN IT A NO. 1545/A/10) . A.Y. 2007- 08 3 DISALLOWED ON THE GROUND OF EXCESSIVENESS WITHOUT R EFERRING TO THE PAST RECORDS AND WITHOUT ALLEGING/PROVING ANY SALES OF SUCH LOSS ) THE APPELLANT SUBMITS THAT THE SAID PRINCIPLES DO A PPLY IN THE PRESENT APPEAL ALSO. THE HONOURABLE TRIBUNAL APPEARS TO HAVE AGREED WITH THE PRINCIPLES BUT BECAUSE BURNING LOSS WAS DIFFERENT IN CASE OF ALUMINUM AND ZINC CASTINGS, THE LOWER OF THE TWO HAS BEEN ALLOWED. WITH DUE RESPECT, THE BURNING LOSS DIFFERENCE IN CASE OF ALUMINUM AND ZINC IS ONLY BECAUSE BOTH ARE DIFFEREN T TYPES OF RAW MATERIALS . THE SAME IS SUPPORTED BY DIFFERENT BURNING LOSS IN THE EARLIER YEARS ALSO. THE APPELLANT WILL BE HIGHLY OBLIGED IF THIS MISTAKE IS RECTIFIED AND THE ACTUAL BURNING LOSS IN CASE OF ZINC AS WELL AS ALUMINUM CASTINGS IS ALLOWED SO THA T THE RECORD OF THE APPELLANT REMAINS CLEAN. 2. THE LEARNED DR, ON THE OTHER HAND, CONTENDED THAT T HERE IS NO MISTAKE IN THE ORDER OF THE TRIBUNAL. 3. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIONS AND, PERUSED THE MATERIAL ON RECORD. WE HAVE ALSO GONE THROUGH THE MISCELLANE OUS APPLICATION. WITH RESPECT TO THE SUBMISSION OF ASSESSEE THAT AT PAGE 7 OF THE ORDER, THE BURNING LOSS IN CASE OF ZINC AND ALUMINIUM WAS STATED AT 8. 96% AND 8.75% RESPECTIVELY WHICH SHOULD HAVE BEEN 8.75% & 8.96% F OR ZINC AND ALUMINIUM RESPECTIVELY. WE RECTIFY THE SAME SO THAT THE BURNI NG LOSS IN CASE OF ZINC AND ALUMINIUM BE READ AS 8.75% AND 8.96% RESPECTIVELY T O THAT EXTENT THE MISTAKE IS RECTIFIED. WITH RESPECT TO OTHER SUBMISS IONS POINTED IN THE M.A. WE FIND THAT THE SUBMISSIONS MADE BY THE LEARNED AR HAVE DULY BEEN CONSIDERED BY THE TRIBUNAL. FURTHER, A MISTAKE CAPA BLE OF RECTIFICATION U/S. 254(2) DOES NOT COVER ANY MISTAKE WHICH MAY BE DISC OVERED BY A COMPLICATED PROCESS OF INVESTIGATION, ARGUMENT OR P ROOF. IF THE PRAYER MADE BY THE ASSESSEE IN ITS MISCELLANEOUS APPLICATION IS ACCEPTED, IT WILL AMOUNT TO REVIEW OF OUR ORDER. THE LAW IS SETTLED THAT WE HAV E NO SUCH POWER. 4. IN THE CASE OF PERFETTI VAN MELLE INDIA (P) LTD. VS . CIT (2008) 296 ITR 595 (DEL) THE HON'BLE HC HAS CONCLUDED THAT ASSESSEE CA NNOT BE ALLOWED TO REOPEN AND REARGUE THE WHOLE MATTER IN THE GARB OF RECTIFICATION UNDER SECTION. 254(2). IT HAS HELD AS UNDER:- MA NO 04/A/14 (IN IT A NO. 1545/A/10) . A.Y. 2007- 08 4 'IT IS WELL SETTLED THAT AN OVERSIGHT OF A FACT CAN NOT CONSTITUTE AN APPARENT MISTAKE RECTIFIABLE UNDER S. 254(2). SIMILARLY, FAILURE OF THE TRIBUNAL TO CONSIDER AN ARGUMENT ADVANCED BY EITHER PARTY FOR ARRIVING AT A CONCLUSI ON IS NOT AN ERROR APPARENT ON THE RECORD, ALTHOUGH IT MAY BE AN ERROR OF JUDGMENT. TH E MERE FACT THAT THE TRIBUNAL HAS NOT ALLOWED A DEDUCTION, EVEN IF THE CONCLUSION IS WRONG, THAT WILL BE NO GROUND FOR MOVING AN APPLICATION UNDER S. 254(2). FURTHER, IN GARB OF APPLICATION FOR RECTIFICATION, THE ASSESSEE CANNOT BE ALLOWED TO BE PERMITTED TO REOPEN AND REARGUE THE WHOLE MATTER, WHICH IS BEYOND THE SCOPE OF THIS SECTION. 5. IN VIEW OF THE ABOVE AND FOLLOWING THE DECISION OF HON'BLE HIGH COURT CITED ABOVE, WE ARE OF THE VIEW THAT SINCE THE ASSESSEE H AS FAILED TO POINT OUT ANY MISTAKE APPARENT FROM RECORD IN OUR ORDER, THE MISC ELLANEOUS APPLICATION IS HEREBY DISMISSED EXCEPT FOR THE MENTIONING OF BURNI NG LOSS OF ZINC AND ALUMUNIUM. ORDER PRONOUNCED IN OPEN COURT ON 30 - 05 - 2014. SD/- SD/- (G.C.GUPTA) (ANIL CHATURVEDI) VICE PRESIDENT ACCOUNTANT MEMBER AHMEDABAD. TRUE COPY RAJESH COPY OF THE ORDER FORWARDED TO: - 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT (APPEALS) 4. THE CIT CONCERNED. 5. THE DR., ITAT, AHMEDABAD. 6. GUARD FILE. BY ORDER DEPUTY/ASSTT.REGISTRAR ITAT,AHME DABAD