TMI Blog2017 (11) TMI 364X X X X Extracts X X X X X X X X Extracts X X X X ..... ficer, who should re-adjudicate the additions on the basis of figures to be obtained excise records and stock record. The difference if any between the original chart and revised chart should be explained by assessee in the light of excise records maintained by it - matter remanded back. - I.T.A No.91(Asr)/2011 And I.T.A No.89(Asr)/2011 - - - Dated:- 15-3-2017 - SH. A.D.JAIN, JUDICIAL MEMBER AND SH. T.S. KAPOOR, ACCOUNTANT MEMBER For The Appellant : Sh. Sudhir Sehgal Anil Miglani (Adv.) For The Respondent : Sh. Bhawani Shankar (DR) ORDER PER T. S. KAPOOR (AM): These are cross appeals filed by assessee as well as by Revenue against the order of Ld. CIT(A), Jalandhar, dated 31.12.2010 for Asst. Year: 2007-08. 2. The appeal was earlier disposed off by the Hon ble Tribunal vide its order dated 20.11.2012. The Tribunal in its order dated 20.11.2012 had allowed relief to the assessee on its appeal and had dismissed the appeal of Revenue. 3. Aggrieved the Revenue had approached the Hon ble Punjab Haryana High Court and the Hon ble Punjab Haryana High Court has set aside the order of the Tribunal and has directed the Tribunal to decide the cases ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unt could not be rejected and no addition on that account could be made. Thus, the Tribunal deleted the additions. The relevant finding recorded by the Tribunal reads thus: 13.2 As a matter of fact, controversy has arisen only for non consideration of the revised chart, which has been submitted and of course perused by both the authorities below but not considered for the reasons best known to them, though the revised figures were found to be correct but the same having not been considered, the books of account cannot be rejected and no addition on this account can be made. Therefore, the learned CIT(A) is not justified in confirming the action of the AO with regard to rejection of books of account and sustaining the additions accordingly. 6. From the perusal of the order passed by the Tribunal, we find that the Tribunal being a final fact finding authority has not examined the material and evidence on record. Detailed reasons have not been given for deleting the additions. Consequently, the impugned order is set aside and the matter is remanded to the Tribunal to decide it afresh after hearing learned counsel for the parties in accordance with law and giving detail ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9 as per para 3 of the reply referred to the above. The facts after examination emerge as under: a) Consumption in April 2006 as per Para 3 of the reply filed on 22.12.2009 has changed from 857.940 MTS to 893.040 MTS i.e. increase of 35.1 MTS. It was the opening month of the financial year and where the complicated calculation was involved in the very first month of operation for the year under assessment? And that too of items in quantum ol MTS not in any lesser units. b) Similarly, consumption quantities have increased by 21.72 MTS, 50 MTS, 49.470 MTS, 69.605 MTS, 54.950 MTS, 130.005 MTS, 109.955 MTS, 110.220MTS, 95.550 MTS, 9.438 MTS in the months of May 2006 to Feb 2007 respectively and has alarmingly decreased by 735.623 MTS in the month of march 2007 as per this reply in comparison to month wise quantities of consumption as per original reply iilcd on 22.10.2009 on the basis of which show cause notice dated 18.12.2009 was issued. In above quantity of finished goods and scrap remain the same for the month of April 06but the burning / invisible loss has increased from 4.56% to 8.295% i.e. by 3.735%. It means that out of quantity of increased raw material i.e. 3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gures, being same as per reply filed on 22.10.2009 and the reply under discussion, tally with the stock register produced on 24.12.2009. Quantum of raw material inputs issued as per excise register Form No.RO-23A has not been entered in the stock register. Only purchase quantum is there which does not tally with quantum issued as per the said excise register. Revised version of assessee on the issue of quantum figures of consumption is manipulated and the sad\ aspect is that the surgery of books of account not only does not come to the rescue of the assessee, .rather worsen the already rotten state of health of the books of accounts. Justification of shocking discrepancies on this issue plea of miscalculation by the accountant is rejected as utterly untenable, fuitile and vain attempt. Percentage of burning loss claimed by the assessee as per reply filed on 22.10.2009 analysed in Chart A of the show cause notice vary from 1.87% on the lower side for the month of Jan 2007 to 91.4% on the higher side for the month of March 2007, with of course the miraculous exceptions when production is 1.27% and 2.32% mere than the quantum of input of raw material. Something only magic wand ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... compared to Data chart A at page 2 of the assessment order was furnished as required by the AO. Since certain mistakes crept in as explained by the assessee during the assessment proceedings itself, the same was amended and the amended chart of the production and consumption was produced, which is available at page 4 of the assessment order. The assessee had submitted the explanation for wrong chart having been prepared due to miscalculation by the accountant which was inadvertent In support of the revised chart as well as earlier chart in which mistakes had crept in, the assessee had produced books of account, stock and excise records showing the correct consumption production as declared in the books of account. It is pertinent to mention here that the books of account of the assessee are statutorily required to be audited which have been audited by the statutory auditors and no defect have been pointed out or has been reported by the statutory auditor in his audit report or even as the Notes to the Account. It was submitted by the assessee that all the figures in the subsequent chart/amended chart given to the AO tallied with the books of account. As regards the consumption ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ime and again that the assessee has special product which is sold through approved parties to the Govt. of India, Ministry of Defence, which are minutely inspected by the Officials of the Defence Department, Govt. of India and as such there is a lot of rejection. The rejected goods had to be cut into small pieces and have to be sold as scrap only. Such rejected goods for the security reasons of the nation cannot be sold as a matter of agreement and as a matter of rule of the Defence Department, Govt. of India. It was stated by Mr. Sudhir Sehgal, the ld. counsel for the assessee that such iron angle rods are sold by the assessee, are for the use alongwith India and Pakistan border or any other border for wire fencing. This is the reason that higher scrap is bound to be generated in such a unit. Therefore, the generation of scrap can be compared only by such a unit who is manufacturing identical product for supply to the parties for the use at the borders as mentioned hereinabove. On perusal, we have found no comparable case on record, neither brought out by the AO nor by the Ld. CIT(A). The Ld. CIT(A) himself has observed vide para 8 of his order at page 29 that the information co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... de accordingly, as discussed hereinabove. Thus, grounds No. 1 to 11 of the assessee are allowed and all the grounds of the Revenue are dismissed. 14. In ground No.12, the ld. counsel for the assessee had argued that the assessee has filed Nil returned income whereas the AO while making the computation had taken the returned income at ₹ 9,29,133/- and it is apparent from the record. 15. On perusal of the facts, it has been observed that the assessee had filed nil income and the AO has taken computation of income wrongly as income declared by the assessee at ₹ 9,29,133/- at page 14 of his order. The AO is directed to take income as declared Nil by the assessee. Thus, ground No.12 of the assessee is allowed. In the above order of Tribunal, we find that Hon ble Tribunal has held that the revised chart was not considered by the authorities below for the reasons best known to them and therefore, the Hon ble Tribunal had held that books of accounts cannot be rejected and no addition on this ground can be made. However, from the order of assessment as reproduced above, we find that Assessing Officer had noted down certain crucial aspects in not accepting revis ..... X X X X Extracts X X X X X X X X Extracts X X X X
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