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TMI Blog2019 (3) TMI 1064X X X X Extracts X X X X X X X X Extracts X X X X ..... of evidence adduced before us in accordance with law. Accordingly, we set aside the finding of the CIT(A) on this issue and direct the Assessing Officer to examine the claim of the assessee afresh after providing an opportunity of being heard to the assessee in accordance with law. Accordingly this issue is decided in favour of the assessee. Addition as suppressed production - information was received from Commissioner of Central Excise and Customs Aurangabad that the assessee indulged in suppression of production and clandestine removal of finished products without payment of excise duty - HELD THAT:- The addition was raised on the basis of the information received from the Central Excise and Customs, Aurangabad dated 29.03.2010. The suppression of production was assessed on the basis of different criteria reported by the IIT, Kanpur in their Technical Opinion Report. The assessee challenged the addition before the Custom Excise and Service Tax Appellate Tribunal (CESTAT) who deleted the addition. The CIT(A) has also deleted the addition raised by the Assessing Officer on the basis of the decision of the Custom Excise and Service Tax Appellate Tribunal (CESTAT). We also find t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , without appreciating that where more than one payment is made to party on the same day for different independent transaction no disallowance could be made u/s.40A(3) as the ceiling limit applies to each such payment and not to aggregate payment. 5. The learned CIT(A) failed to appreciate that the transporter are outside parties and reside at distant places therefore payment could not be made through account payee cheque more so the transporter driver requires cash to get the lorry refuelled and for other petty expenses, therefore having regards to the nature of transaction the disallowance may be deleted. 3. The brief facts of the case are that the assessee filed its return of income declaration income to the tune of ₹ 18,64,750/-. The return was processed u/s.143(1) of the Income Tax Act, 1961 (in short the Act ) and thereafter the case was reopened by way of issuance of notice u/s. 148 of the Act for the following reasons:- Information was received from Central Excise and Customs Department, Aurangabad on 29th March, 2000 that on the basis of information of raw material purchases, production, clearances, value of clearances, duty paid, electricity consumpti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dings for levy of central excise and various factors served a show cause cum demand notice bearing No.62/CEX/2008 dated 05.05.2008 for the financial years 2003-04, 2004-05, 2005-06, 2006-07, 2007-08 2008-09. Subsequently SCN cum Demand Notice No.70/CEX/Commr/2009 dated 20.05.2009 for the financial year 2008-09 was served on the assessee. In these demand notices, the fact of unrecorded production and surreptitious removal of goods without payment of duty was established as brought out in the table above. 4. Thereafter, the notices u/s.143(2) and 142(1) of the Act were issued and served upon the assessee and after the reply of the assessee an addition of ₹ 12,39,57,666/- was raised as suppressed production and added to the income of the assessee. The assessee also violated the provision u/s.40A(3) of the Act, therefore, an addition of ₹ 19,50,580/- was also raised and total income of the assessee was assessed to the tune of ₹ 12,77,72,996/-. Feeling aggrieved, the assessee filed an appeal before the CIT(A) who partly allowed the claim of the assessee but declined the claim of the assessee on the grounds raised above, therefore, the assessee has filed the pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... A.N.Swarna Prasad Vs/ Additional Commissioner of Income Tax Range 2 [2015] 230 taxman 536/56 taxman.com 138 and decision of ITAT, Hyderabad A Bench in case titled as Sonali Castings (P.) Ltd. Vs. Deputy Commissioner of Income tax [2017] 88 taxmann.com 869. Both the above mentioned authority speaks that the CBDT Circular No.5 of 2010 dated 03.06.2010 is not applicable retrospectively, however, the same would take effect prospectively w.e.f. A.Y.2009-10. Taking into above mentioned facts and circumstances, we are of the view that the addition raised by the Assessing Officer and confirmed by the CIT(A) on account aggregate payment to a single party in a single day is not liable to be sustainable in the eyes of law. Therefore, in the said circumstances, we also delete the addition in sum of ₹ 90,48,181/-. Accordingly, this issue is decided in favour of the assessee against the revenue. ISSUE NO.4:- 7. Under this issue, the assessee challenged the confirmation of the addition on account of payment made to transporter in excess of ₹ 20,000/- u/s.40A(3) of the Act. The learned representative of the assessee has argued that the assessee has explained the payment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on, higher consumption of electricity alone can form the basis for determining the suppression of production? In the circumstance the said decision was squarely distinguishable on facts. 9. The brief facts of the case has already been discussed while deciding the appeal of the assessee in ITA No.2061/Mum/2016, therefore, there is no need to repeat the same. ISSUE NO.1 TO 3:- 10. Under this issue the revenue has challenged the deletion of the addition in sum of ₹ 12,39,57,666/- as suppressed production. The facts leads to controversy is that an information was received from Commissioner of Central Excise and Customs Aurangabad on 29.03.2010 that the assessee indulged in suppression of production and clandestine removal of finished products without payment of excise duty during the A.Y.2003-04, 2004-05, 2005-06, 2006-07, 2007-08, 2008-09 2009-10. The Central Excise and Customs Department had taken in to account of all important parameters on productivity like thermal efficiency, nature of mix of raw material, design of furnace, use of capacitors melting practice, heat balance as reported by the IIT, Kanpur in their Technical Opinion Report. On the basis of this ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s the Commissioner of Customs and Central Excise, Aurangabad after having considered all the facts of this case, has given a specific finding that the assessee is indulged in suppression of its production and clandestine removal of stock. As mentioned in his order at page 4 para 6, a copy of the technical report of IIT, Kanpur was attached with the Show Cause Notice and was thus provided to the assessee. In view of the above, as also the detailed comparative analysis of data prepared from the assessee s books of accounts, peer analysis and details furnished, it is apparent that, the rate of units of electricity per metric tonne adopted by the Hon ble Commissioner of Central Excise, Aurangabad are very much reasonable, fair and justified. I, therefore, conclude that the rates for calculation of suppressed production in assessee s case adopted by Commissioner of Central Excise, Aurangabad are absolutely reasonable. The same is adopted accordingly for the purpose of calculation of unaccounted production of finished goods. On the lines of the above discussions, pattern of input, output, electricity consumption for per metric tonne of production, usage of raw material, comparison of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... teels Pvt. Ltd. vs. Addl. CIT Range 1, Aurangabad ITA No.123 124/PN/2012 dated 16.01.2015 and Bhaghyalakshmi Steel Alloys Pvt. Ltd. Vs. The Addl. CIT Range 1, Aurangabad in ITA No.234, 285, 286/PN/2012 dated 15.07.2015. 13. The facts of the present case is quite similar to the facts of the case relied by the learned representative of the assessee. Taking into account of all the facts and circumstances and law relied upon by the learned representative of the assessee, we are of the view that the CIT(A) has decided the matter of controversy judiciously and correctly which is not liable to be interfere with at this appellate stage. 14. Accordingly, these issues are decided in favour of the assessee against the revenue. ITA NO.2162/M/2016 15. Since the matter of controversy has been adjudicated while deciding the ITA bearing no.2061/Mum/2016, therefore, finding given by us above in the said case is quite applicable as mutatis mutandis. Accordingly, the said appeal is hereby decided partly in favour of the assessee against the revenue on similar lines. ITA NOS. 2168/M/2016, 2169/M/2016 2170/M/2016:- 16. The matter of controversy in the above mentioned app ..... X X X X Extracts X X X X X X X X Extracts X X X X
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