9911796707
TMI Blog2014 (12) TMI 718X X X X Extracts X X X X X X X X Extracts X X X X ..... Assessing Officer. 3. That the order of Ld. CIT(A) be set aside and that of A.O. be restored." 1. "On the facts and in the circumstances of the case, the Ld. CIT(A) has erred in deleting the addition of Rs. 10,19,255/- made by the Assessing Officer on account of low yield. 2. On the facts and in the circumstances of the case, the Ld. CIT(A) has erred in directing the Assessing Officer to assess the commission income of Rs. 2,05,34,037/- under the head "income from Business" as against "Income from other sources" assessed by the Assessing Officer. 3. That the order of Ld. CIT(A) be set aside and that of A.O. be restored." 2. The relevant facts as are emanating from the assessment order in the case of M/s Rana Casting are that the assessee vide return dt. 31.10.2001 returned a loss of Rs. 1,16,13,290/- and computed profit u/s 115JB of Rs. 851536/-. The said return was subjected to scrutiny after issuance of notice u/s 143(2) & 142(1) alongwith questionnaire etc. The AO referring to schedule-16 of the Audit Report took note of the fact that the assessee had shown an income of Rs. 3,46,85,515/- which consisted of the following income:- 1. "Intt. Received on UPSEB security 9960 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd Trading of Mild Steel Ingots, Rounds etc. in a induction finance Mill. The appellant Co. has maintained regular and proper books of accounts, along with manufacturing records, as required under Excise Rules, Stock Registers, Sales and Purchase Bills and vouchers and the same have been produced before the Assessing Officer time to time, as and when required. The Raw-material of the assessee appellant Company is Iron Scrap & Sponge Ironore is also excisable, as well as the finished goods are also excisable. The Assessing Officer has made the following additions to the income of the assessee while completing the assessment u/s 143(3):- 1. Estimated ad-hoc addition on account of low yield. Rs. 10,19,255 = 00 2. The A.O has also observed that the commission income received by the appellant Co. is actually income from other sources and not income from business as declared by the assessee appellant. 1) Regarding estimated adhoc addition on account of low yield- Rs. 10,19,255 = 00:- The Assessing officer has made estimated addition of Rs. 10,19,255 = 00 to the income of the assessee with the maintained the regular and proper leakages. The assessee Company has maintained the regular a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... learned CIT (appeals) has accepted the appeal of the assessee and has allowed the issue in favour of the assessee that the income from commission is to be assessed as income from business as disclosed by the assessee. The Deptt. Has gone in appeal before hon'ble ITAT. Hon'ble ITAT has discussed the appeal of Deptt. And has confirmed the order of learned CIT (appeals) in ITA No.2101/Del/00 vide order dated 31.03.2006 (Copy enclosed) for your ready-reference. That the Assessing Officer has made the observation about the other income as disclosed by the assessee-appellant company from different parties. The Assessing officer has accepted this income as income from other sources, while the income, as earned by the appellant company, actually the income from business and the similar income has been accepted as income from Business in the past as well as in future, the copies of the Profit & Loss account of the assessee Company is being enclosed for your ready reference. The Assessing Officer has called the details directly from the parties through whom the assessee appellant Company has earned Share Business. Income who have also confirmed the same. There was no reason with the Assessi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sale of shares and name of companies (6) total amount paid by the company (assessee) for purchase of share and mode of payment (7) amount of profit remitted to the company and mode of payment of profit (8) rates of shares (9) whether any tax paid by the company on share profit (10) amount of commission paid by te company with copy of bank account. For payment of commission, the parties were asked to furnish copy of agreement for commission, copy of bank A/c showing payment of commission, evidences of services and name and address of their Assessing Officers. Letter have been received unserved in the case of cases of KCS Financial Services M.v. Marketing (P.) Ltd, Adhunik Sales India, Churuwala Exports (P.) Ltd. and Ankur Cultivators (P.) Ltd. have been received back unserved. Also in other case, no replies have been received. To prove the services rendered to earn the commission/share profit of Rs. 20534037/-, only nature of work done have been submitted. Genuineness of services rendered not established. Therefore, the income of Rs. 20534037/- is treated as 'Income from other sources'." 6.3. Considering the facts of assessee with a similarly situated concern M/s Vehelna Steel, h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ks of accounts, along with manufacturing records, as required under Excise Rules, Stock Registers, Sales and Purchase Bills and vouchers and the same have been produced before the Assessing Officer time to time, as and when required. The Raw-material of the assessee appellant Company is Iron Scrap & Sponge Ironore is also excisable, as well as the finished goods are also excisable. The Assessing Officer has made the following additions to the income of the assessee while completing the assessment u/s 143(3):- 1. Estimated ad-hoc addition on account of low yield. Rs. 10,19,255=00 2. The A.O has also observed that the commission income received by the appellant Co. is actually income from other sources and not income from business as declared by the assessee appellant. 1) Regarding estimated adhoc addition on account of low yield- Rs. 10,19,255=00:-The Assessing officer has made estimated addition of Rs. 10,19,255=00 to the income of the assessee with the observation to cover up the possible leakages. The assessee Company has maintained the regular and proper books of account and manufacturing records. In a manufacturing process when the entire sales and purchases of the Company h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... om commission is to be assessed as income from business as disclosed by the assessee. The Deptt. Has gone in appeal before hon'ble ITAT. Hon'ble ITAT has discussed the appeal of Deptt. And has confirmed the order of learned CIT (appeals) in ITA No.2101/Del/00 vide order dated 31.03.2006 (Copy enclosed) for your ready-reference. That the Assessing Officer has made the observation about the other income as disclosed by the assessee-appellant company from different parties. The Assessing officer has accepted this income as income from other sources, while the income, as earned by the appellant company, actually the income from business and the similar income has been accepted as income from Business in the past as well as in future, the copies of the Profit & Loss account of the assessee Company is being enclosed for your ready reference. The Assessing Officer has called the details directly from the parties through whom the assessee appellant Company has earned Share Business. Income who have also confirmed the same. There was no reason with the Assessing Officer why and what circumstances, he has established this income as income from Other Sources and not as Business Income, as sh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o.-2101/Del/2000 pertaining to 1995-96, the departmental ground had been dismissed. Inviting further attention to the impugned order referring to the facts recorded in the assessment order in the case of Rana Castings Pvt. Ltd. It was his submission that firstly the facts pertaining to M/s Vehelna Steel Ltd. were never confronted to the assessee. Moreover the fact that the said concern as per the information recorded in the assessment order itself was using sponge iron only to the extent 41.43% as against the 68 % utilized by the assessee. The yield consequently was bound to be higher in the case of M/s Vehelna Steel Ltd. who used higher percentage of Iron Ingots as raw material and this fact along cannot lead to the conclusion that the records maintained by the assessee did not reflect the true picture. Referring to the order it was his submission hat no specific defects have been pointed out and an adhoc addition on this ground accordingly was not maintainable. For similar reasons, the additions have been made in the case of M/s Doaba rolling Mills Pvt. Ltd. accordingly heavy reliance was placed upon the impugned order. 10. The Ld. Sr. DR in the face of the decision of the Hon'b ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
