9911796707
TMI Blog2017 (11) TMI 364X X X X Extracts X X X X X X X X Extracts X X X X ..... authorities below show that the assessment order was passed by the Assessing Officer on the ground that there was variation in the ratios of production to raw material consumptions, of scrap generation, of invisible loss and even negative losses in two months. The assessee was asked to show cause as to why the production should not be worked out on the basis of normal ratios of production by other mills. The assessee submitted that there were mistakes in the figures committed by its accountant. The assessee submitted a fresh chart giving revised figures. The Assessing Officer did not accept the same. It was noticed that such mistake could not have been committed by the accountant since the assessee was maintaining excise records of purchase and sales. The source of the revised figures of raw material consumption was not entered into the stock register produced by the assessee before him. Further it was held that the revised figures were manipulated and the assessee's books were not reliable and the same were rejected. On appeal by the assessee, the CIT(A) recorded that the Assessing Officer was not justified in taking the rate of goods in the closing stock as the rate of sale o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ritten submissions in the form of brief synopsis and submitted that Assessing Officer had rejected the books of accounts u/s 145(3) of the Act. It was submitted that Assessing Officer during the assessment proceedings had noted down various alleged mistakes in the raw material consumptions, which the assessee had clarified that the Accountant of the assessee firm had committed certain mistakes and thereafter, had filed a revised chart. The Assessing Officer did not consider the revised chart and made the additions after rejecting the books of accounts and after working out the unrecorded sales out of books of accounts. It was submitted that Hon'ble High Court has noted down the Tribunal has not made a finding of facts while allowing relief to the assessee. The Ld. AR submitted that the Hon'ble Tribunal had made detailed findings and in this respect our attention was invited to the order of Tribunal. 5. The Ld. DR, on the other hand heavily placed his reliance on the order of authorities below. 6. We have heard the rival parties and have gone through the material placed on record. We find that Assessing Officer in the assessment order had rejected the second chart prepared and sub ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s unexplained. Quantum of Production in the revised version has been kept the same but the %age of production of finished goods has come down from 69.16 to 66.44 and scarp to 25.26% from 26.29% as per the original reply on this issue. Similarly the increase of raw material consumption of shifted quantum (735.623 Mts from March 2007) of 21.72 MTS, 50 MTS, 49.47 MTS, 69.60 MTS, 54.950 MTS 130.005 MTS, 109.955 MTS, 110.220 MTS, 95.550 MTS and 9.438 MTS respectively in the months of May 2006 to Feb 2007 has been consumed by increase of burning/ invisible loss by %age of 2 013, 4.274, 3.843, 7.166, 4.725, 11.531, 9.812, 13.853, 11.59], 1.624 respectively. By some mysterious happening burning loss which was 91.14% in march 2007 as per original reply filed on 22.10.2009 has come down to petty 14.051% in the reply filed on 22.12.09 with the distribution of 755.623 MTS of raw material by shifting from the quantum consumption of 820.199 MTS in march 2007 as per bifurcation sorted out in Para 1(b) above. Quantum of finished goods/scrap has remained unchanged in all the months in which quantum of 735.623 MTS was apportioned with a view to make the things look less manipulated. Is the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... month of April 2006. Assessee's reply on this issue in Para 4 has been considered. It is useless and rejected as such. Ratio of consumption value of Furnace Oil per PMT consumption of raw material also varies from Zero for the month of Dee.2006 to Ks.1247.54 for the month of April 2006. It is a drastic & horrifying situation. Assessee's explanation at Para 7 of the said reply is further confounding and horrifying No defence on this issue has been given & there is no justification at all except evasive and hawal observations. With the forgoing discussion of facts it is concluded that books of account, being not reliable at all, not maintained in the routine flow of business and of no help in ascertaining the true and correct assessable income of the assessee are rejected u/s 145(3) of the I T Act 1961 on all the issues as discussed above" The Tribunal while deciding the issues in favour of assessee had observed as under: "13. We have heard the rival contentions and perused the facts of the case. The assessee is carrying on the business of running a Rolling Mill, apart from other businesses. The Rolling Mill is being run under the name and style of M/s. Sobti Rolling Mills. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that if the AO can make mistakes in totaling, any person can genuinely make mistakes in totaling and it is the corrected figure which tallied with the books of account and such records ought to have been considered. 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 and 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 Ld. 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. 13.3 As per the order of the AO, raw-material issued for production is 6358.945 MT whereas the consumption of raw-material as per books of account is 10820.83 MTS. The assessee has submitted the explanation before the Ld. CIT(A), which is available at pages 10 and onwards with Data Chart 'D' prepared by the AO was never confronted to the assessee, certain wrong monthly totals of issue of raw mater ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , we are of the view that there is no mistake or error as per revised chart submitted by the assessee, which tallies with the books of account or records. 13.6. As regards the re-use of the rejections, there is nothing on record that the assessee has re-used the whole of the rejections, since the assessee was not having any furnace, be that a rotary or an induction furnace, but was having a regular furnace in the Rolling Mill. The Ld. CIT(A) relied upon the scrap generated by M/s. Mukesh Steels Ltd; who does not produce the product as the assessee does. Therefore, such reliance by the ld. CIT(A) or by the AO has resulted into absurd results and cannot be accepted. 13.7. The Ld. CIT(A) was quite aware as is evident from the findings in his order in paras 8 to 8.7 (pages 29 to 32) that the assessee has maintained regular books of account showing details of purchases and sales including that sale of scrap. The findings thereafter in the said paras are based on surmises and conjectures. The reliance is placed by the ld. CIT(A) on the decisions of various courts of law, therefore, cannot help the Revenue. There is no evidence with any of the authorities below that the assessee has ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
