2013 (5) TMI 468 - AT - Income Tax

Addition in income As per CIT(A) mere disparity in the consumption of electricity could not be a reason for estimating higher turnover as the production depends upon various factors. The estimation of production, made by the (AO), did not lend itself to be a scientific basis, so that the addition to income worked with reference to such higher turnover, stood deleted. Revenue appeal against CIT(A). Held that - Issue under reference in the instant appeal stands decided by the Tribunal in the assessee s favour in its own case 2013 (5) TMI 456 - ITAT MUMBAI for the earlier years, being A.Ys. 1998- 99 and 1999-2000, by confirming the order of the first appellate authority, who had followed the decision by the tribunal in the case of assessee s sister concern, M/s. Boon Industries 2010 (7) TMI 833 - ITAT MUMBAI , referring to the relevant part of the said order. In the current year also no distinguishing feature has been brought on record by the Revenue, so as to impugn the reliance by the ld. CIT (A) on the decision by the tribunal in the case of Boon Industries (supra), or otherwise show us as to how the same is not applicable to the assessee s case as well. Thus, impugned order is upheld.

Summary

Issues:
1. Appeal by the Revenue against the Order by the Commissioner of Income Tax (Appeals) partly allowing the assessee's appeal for the assessment year 2002-03.
2. Contention regarding the issue previously decided by the Tribunal in favor of the assessee for earlier years.
3. Disparity in consumption of electricity as a basis for estimating higher turnover.
4. Deletion of impugned addition by the first appellate authority following the Tribunal's decision in the case of the assessee's sister concern.
5. Lack of distinguishing features brought by the Revenue for the current year's case.

Issue 1:
The appeal was filed by the Revenue against the Order by the Commissioner of Income Tax (Appeals), which partly allowed the assessee's appeal for the assessment year 2002-03.

Issue 2:
The assessee's counsel contended that the issue under reference had been previously decided in the assessee's favor by the Tribunal for earlier years, and the ld. DR could not rebut this contention or provide any distinguishing feature with previous cases.

Issue 3:
The main issue concerned the disparity in the consumption of electricity and its use as a basis for estimating a higher turnover. The Tribunal held that mere alleged disparity in consumption of electricity could not be a reason for estimating turnover as production depends on various factors, and the estimation made by the Assessing Officer did not have a scientific basis.

Issue 4:
The first appellate authority deleted the impugned addition by following the Tribunal's decision in the case of the assessee's sister concern, where similar additions were made. The Tribunal had also previously deleted similar additions in the assessee's own case for earlier years.

Issue 5:
No distinguishing feature was brought on record by the Revenue for the current year's case to impugn the reliance on the tribunal's decision in the case of the assessee's sister concern. The Tribunal found no reason to interfere with the findings of the first appellate authority based on the lack of distinguishing facts.
In conclusion, the Tribunal upheld the impugned order, as there was no infirmity found to call for interference, and the Revenue's appeal was dismissed. The decision was based on the lack of distinguishing features brought by the Revenue for the current year's case and the previous favorable decisions by the Tribunal for the assessee in similar circumstances.