ACIT, Jalna Circle, Jalna v. Gajlaxmi Steel
[Citation -2019-LL-0919-133]

Citation 2019-LL-0919-133
Appellant Name ACIT, Jalna Circle, Jalna
Respondent Name Gajlaxmi Steel
Court ITAT-Pune
Relevant Act Income-tax
Date of Order 19/09/2019
Assessment Year 2014-15
Judgment View Judgment
Keyword Tags excess production • unrecorded sales • consumption of electricity • suppression of production • central excise duty
Bot Summary: The CIT(A)-I erred in ignoring the fact that the department is in appeal before Hon'ble Bombay High Court, Bench at Aurangabad in assessee's case for earlier years. During the proceedings before the First Appellate Authority, the assessee relied on various decisions including that of the decision of the Co-ordinate Bench of the Tribunal in the case of Bhagyalaxmi Steel Alloys Pvt. Ltd. vide ITA No.1292/PUN/2012 dated 15.07.2015 where the CIT(A) held that there is no contrary material to support the estimation and granted relief to the assessee. DR for the Revenue relied heavily on the order of the Assessing Officer and prayed for setting aside the order of the CIT(A). We further find on similar facts in the case of Bhagyalaxmi Steel Alloys Pvt., the relief was granted by the Tribunal to the assessee. Aggrieved with the said relief granted by the CIT(A), the Revenue filed the present appeal informing that the Revenue already filed an appeal before the Hon ble Jurisdictional High Court for the earlier assessment years and 4 ITA No.1434/PUN/2018 this is the intention of the Revenue to file the present appeal is to keep the issue alive on this issue. Since the facts were identical to that of the case decided by the Tribunal following the decision of the Coordinate Bench of the Tribunal in the case of Bhagyalaxmi Steel Alloys Pvt. Ltd. ITA Nos.1292/PN/2012 and in absence of any contrary material brought to its notice, the grounds raised by the Revenue were dismissed by the ITAT, Pune and the addition sustained by the CIT(A) was also deleted. The production of the assessee company is liable to Central Excise Duty and hence, the assessee has also maintained records and register as prescribed under Central Excise Act.


IN INCOME TAX APPELLATE TRIBUNAL BENCH, PUNE. BEFORE SHRI D. KARUNAKARA RAO, AM AND SHRI VIKAS AWASTHY, JM . ITA No.1434/PUN/2018 Assessment Year : 2014-15 ACIT, Jalna Circle, Jalna. Appellant V/s. M/s. Gajlaxmi Steel, F-4, 5, 6, Phase-II, Addl. MIDC Area, Jalna-431203. PAN : AACCG0547R Respondent Revenue by : Mrs. Shabana Parveen Assessee by : Shri S. N. Puranik Date of Hearing : 15.07.2019 Date of Pronouncement : 19.09.2019 ORDER PER D. KARUNAKARA RAO, AM: This appeal is filed by Revenue against order of CIT(A)-1, Aurangabad dated 07.06.2018 for Assessment Year 2014-15. 2. grounds raised by Revenue are as under :- 1. Ld. Commissioner of Income-tax (A)-I erred in passing order both on facts of case and in law. 2. Ld. Commissioner of Income-tax (A)-I erred in allowing relief for Rs. 4,38,86,292/- being addition made by AO on account of suppressed production on basis of electricity consumption. 3. Ld. Commissioner of Income-tax (A)-I erred in directing that no addition can be made merely on basis of electricity consumption formula. 4. CIT(A)-I erred in ignoring fact that department is in appeal before Hon'ble Bombay High Court, Bench at Aurangabad in assessee's case for earlier years. 2 ITA No.1434/PUN/2018 5. order of CIT(A) be vacated and order of AO be restored. 6. appellant craves leave to add, amend or alter any other ground at time of hearing. 3. Briefly stated relevant facts include that assessee is engaged in business of manufacturing of MS Billets for Re-Rolling Mills for manufacturing of MS Bars. This is case where there is allegation of clandestine production of Billets on basis of consumption of electricity. discussion given in para 5 of order of Assessing Officer and estimation was made on excess production of assessee company based on electricity consumption. This is also case where there was scrutiny of accounts of assessee by DGCEI of Internal Excise Department. Accordingly, on basis of estimation, net suppressing production was calculated and such net suppression production works out Rs.4,38,86,292/-. During proceedings before First Appellate Authority, assessee relied on various decisions including that of decision of Co-ordinate Bench of Tribunal in case of Bhagyalaxmi Steel Alloys Pvt. Ltd. vide ITA No.1292/PUN/2012 dated 15.07.2015 where CIT(A) held that there is no contrary material to support estimation and granted relief to assessee. appeal of Revenue was dismissed by Tribunal. Applying said principle, CIT(A) granted relief to assessee in this year also as per discussion given in para 5 of first appellate order. relevant lines read out before us by ld. Counsel for assessee. 3 ITA No.1434/PUN/2018 4. Aggrieved, Revenue is in appeal before us with above extracted grounds. 5. ld. DR for Revenue relied heavily on order of Assessing Officer and prayed for setting aside order of CIT(A). 6. On other hand, rebutting claim of assessee, ld. AR for assessee relied on order of CIT(A) and filed copy of decision of Tribunal of this Bench in case of Rhishi Steel & Alloys Private Limited vs. Addl. CIT vide ITA Nos.219 to 221/PUN/2012 for assessment years 2006-07 to 2008-09 and others dated 05.08.2015 and submitted that, on identical facts, appeals of Revenue was dismissed by Tribunal. 7. We heard both sides on this issue and perused facts and orders of revenue authorities and decision of Tribunal placed before us. Considering same, we find there is no dispute on fact that Assessing Officer made addition based on estimation with reference to consumption of electricity. This is case where DGCEI scrutinized accounts of assessee. We further find on similar facts in case of Bhagyalaxmi Steel Alloys Pvt. (supra), relief was granted by Tribunal to assessee. Aggrieved with said relief granted by CIT(A), Revenue filed present appeal informing that Revenue already filed appeal before Hon ble Jurisdictional High Court for earlier assessment years and, therefore, 4 ITA No.1434/PUN/2018 this is intention of Revenue to file present appeal is to keep issue alive on this issue . 8. Considering same, in our view, such reasons for filing appeal is unsustainable. Further, we perused order of CIT(A) and find contents of para 5 of order of CIT(A) are relevant in this regard and same are extracted hereunder :- 5. . Since facts were identical to that of case decided by Tribunal, therefore, following decision of Coordinate Bench of Tribunal in case of Bhagyalaxmi Steel Alloys Pvt. Ltd. ITA Nos.1292/PN/2012 and in absence of any contrary material brought to its notice, grounds raised by Revenue were dismissed by ITAT, Pune and addition sustained by CIT(A) was also deleted. Accordingly appeal of Revenue was dismissed. Reverting back to present case, Assessing Officer had made addition of Rs.4,38,86,292/- on basis of wrong presumption/assumptions. I find it quite baffling that A.O. had levelled allegation of unrecorded sales against appellant company on basis of some mathematical exercise without any corroborative evidence on record. This allegation of A.O. has remained unsubstantiated and it is nothing more than sweeping statement. production of assessee company is liable to Central Excise Duty and hence, assessee has also maintained records and register as prescribed under Central Excise Act. Considering judicial ratios, it is clear that no addition can be made merely on basis of electricity consumption formula. This view is also supported by decisions of various Tribunals such as Janta Tiles Vs. ACIT (66 TTJ 695) (Jurisdictional Pune Bench); DCIT Kolapur Vs. J. D. Thote Dairies (Jurisdictional Pune Bench in ITA No 115/PN/2000 decision dated 31/05/2011); Roop Niketan Vs. ACIT (90 TTJ 1097) (Mumbai Bench) and ITO Vs. Gurubachansingh Juneja (55 ITD 75). Respectfully following above decisions and facts & circumstances of present case, I direct AO to delete addition of Rs.4,38,86,292/- made by him. This ground of appeal is accordingly allowed. 9. Considering above and following of rule of consistency, we are of opinion that order of CIT(A) is fair and reasonable on this 5 ITA No.1434/PUN/2018 issue and it does not call for any interference. Thus, relevant grounds raised by Revenue are dismissed. 10. In result, appeal of Revenue is dismissed. Order pronounced on 19th day of September, 2019. Sd/- Sd/- (VIKAS AWASTHY) (D. KARUNAKARA RAO) JUDICIAL MEMBER ACCOUNTANT MEMBER Pune; Dated : 19th September, 2019. Sujeet Copy of Order forwarded to : 1. Appellant. 2. Respondent. 3. CIT(A)-1, Aurangabad. 4. CCIT, Nashik. 5. DR, ITAT, Bench, Pune. 6. Guard File. BY ORDER, True Copy Senior Private Secretary , ITAT, Pune. ACIT, Jalna Circle, Jalna v. Gajlaxmi Steel
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