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The ITO, Ward-1, Mandi Gobindgarh HQ Sirhind Versus M/s Dhiman Steel Rolling Mills, M/s Dashmesh Alloys, M/s Sunshine Steel Corporation, M/s Mandi Alloys Pvt. Ltd., M/s Prem Steel & Metals Pvt. Ltd, M/s Punjab Steels, M/s Royal Steel Rolling Mills, M/s Shiv Saraswati Steel Strips Pvt. Ltd, M/s Singla Concast Pvt. Ltd.

2017 (4) TMI 1310 - ITAT CHANDIGARH

Rejection of books of accounts - Income estimation - on the basis of average sales rate, the value of total unaccounted production was estimated - variation of 15% in consumption of electricity per metric ton of finished goods - Held that:- CIT(A) has accepted the variation of 15% in consumption of electricity per metric ton of finished goods as per the report of the Committee. The same has already been followed by the Assessing officer in subsequent assessment year. Considering the above facts .....

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/Chd/2017, , ITA No. 402/Chd/2017 ITA No. 395/Chd/2017 ,ITA No. 400/Chd/2017, ITA No. 403/Chd/2017 - Dated:- 28-4-2017 - SHRI SANJAY GARG, JUDICIAL MEMBER & MS. ANNAPURNA GUPTA, ACCOUNTANT MEMBER Appellant By: Sh. Ravi Sarangal Respondent By: Sh. Ashok Goyal, Sh. Deepak Aggarwal ORDER Per Sanjay Garg, Judicial Member: The above captioned appeals relating to different assessees are arising from separate orders of Commissioner of Income Tax (Appeals), [hereinafter referred to as CIT(A)] Patial .....

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appeals have been filed by the Revenue, hence, we proceed to decide all the appeals including ITA Nos. 393/Chd/2017, 400/Chd/2017 and 403/Chd/2017, being identical, through this common order. For the sake of convenience, the facts have been taken from ITA No.403/Chd/2017. 4. The brief facts relating to the issue under consideration are that the assessee company run a furnace Unit and is engaged in the production of Ingots. During the assessment proceedings, the Assessing officer asked the asses .....

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mption data of electricity vis-a vis the production of finished goods and observed that there were wide variation in ratio of electricity units consumed to per metric tons of finished goods produced during the year. He observed that the lowest units consumed for production of one metric ton of finished goods were 1117.17 units and the highest electric units consumed for production of one metric ton of finished goods were 1188.12 units. He further observed that on some days, electric units consum .....

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her days, there was also a balance and consistency in consumption of electric units vis-a-vis production of finished goods. He, therefore, observed that it indicated that the daily production recorded by the assessee of the finished goods was not correct and, hence, not reliable. He observed that the data relating to the daily production had been maintained as per actual production. When confronted in this respect, the assessee explained that the consumption of electricity was dependent on vario .....

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e accordingly rejected the books of account of the assessee by invoking the provisions of section 145(3) of the Income- tax Act, 1961 (in short 'the Act') and proceeded to frame the assessment in the manner as provided u/s 144 of the Act. He, thereafter estimated the income of the assessee on the basis of minimum valuation of average of electric unit consumed per metric ton of finished goods produced for over the period of 10 days. He took the lower average value of electric units consum .....

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duction was worked out. Secondly the peak unaccounted production for the relevant month was determined and by multiplying the average sale rate of finished goods, the unaccounted investment was worked out. The Assessing officer in this way worked out the total unaccounted income of the assessee out of the unaccounted production at ₹ 86,88,365/- and added back the same to the income of the assessee. 5. Being aggrieved from the above order of the Assessing officer the assessee preferred appe .....

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eel Technology) and also the industry representatives. On the basis of the report of the committee, it was decided that if the variation in the consumption of the electricity is within the range of 15% of the yearly average consumption of power, the book results should be accepted. Accordingly, its book results were accepted for the assessment year 2013-14. It was, therefore, pleaded that its book results for the assessment year 2012-13 should also be accepted and consequently, the addition shou .....

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e Committee, the assessee was entitled to benefit of 15% variation in consumption of electricity per metric ton of finished goods produced from the average worked out on yearly basis and the variation up to 15% would not warrant any adverse cognizance. He accordingly held that since pursuant to the report of the committee, the Assessing officer has already followed this norm while making the assessment in similar cases and in same set of circumstances has accepted the books results shown by the .....

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ook results shown by the assessee and deleted the additions so made by the Assessing officer on estimation basis. 7. Being aggrieved by the above order of the Assessing officer, the Revenue has come in appeal before us. 8. At the outset, the Ld. Counsel for the assessee has brought to our knowledge that on identical issues, wherein the additions made by the Assessing officer on estimation basis as discussed above were upheld by the concerned CIT(A), the assessees preferred appeals before this Tr .....

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