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TMI Blog2019 (10) TMI 72X X X X Extracts X X X X X X X X Extracts X X X X ..... In the absence of any rebuttal or attempt by the Revenue to seek the relevant documents from the Bank, I find that estimated addition by resorting to tinkering with the G.P. rate on facts was not warranted in the peculiar facts of the present case. The addition made is, accordingly, directed to be deleted. - ITA No. 1582/CHD/2017 - - - Dated:- 31-5-2019 - SMT. DIVA SINGH, JM For The Assessee : Shri Ashwani Kumar For the Revenue : Shri A. K. Dhir, Sr. DR ORDER The present appeal has been filed by the assessee assailing the correctness of the order dated 11.09.2017 of CIT(A)-2, Ludhiana pertaining to 2012-13 assessment year on the following grounds : 1. That the order of the Ld. CIT(A) is against the facts of the case and is bad in law. 2. That the Ld. CIT(A) has erred in confirming the action of the Ld. A.O. for rejection of books of accounts by drawing adverse inference from variation in Power Consumption. 3. That the Ld. CIT(A) has erred in confirming the addition of ₹ 23,30,046/- on account of G.P. rate on the declared turnover of the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... regard to the production register for this year maintained by the party, we have to submit that we have not dealt with any office records of the party during the process of the physical possession of the unit. 2.2 Addressing the manner in which the addition has been made by the AO and confirmed by the CIT(A), ld. AR invited attention to the un-numbered page 18 of the assessment order (para 16) to show that ignoring the facts as set out in the order itself and ignoring the explanation given which had also been extracted in the order itself, the addition has been made without addressing either the facts or the explanation. Relying upon the explanation offered before the AO for the drop in the GP rate in the year under consideration which has also been extracted at page 13 to page 16 in para 19 in the order it was argued that G.P. can never be static. The reasons have been given. These have not been assailed. The addition made in the circumstances was stated to be arbitrary. Accordingly, it was his submission that in the peculiar facts and circumstances apart from suspicion, there is nothing else on record. It was argued that it is an accepted fact that the GP rate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rders of the authorities below. 4. Both the parties submitted that the facts as available in the assessment order were addressed as the reasons for making the addition are set out in detail in the said order and the CIT(A) has only confirmed the finding without giving any specific independent finding. In view of this the findings and explanations available in the said order have been referred to. 5. I have heard the rival submissions and perused the material available on record. It is seen that admittedly the assessee in the year under consideration had become a non paying asset and the unit had come under the possession of Punjab Sind Bank, Kukar Majra, Mandi Gobindgarh. As a result of these events, the assessee admittedly claimed that it had no access to the unit since it was under lock and key of the bank. The said position of fact as per record has been confirmed by the responsible person of the Bank on query raised by the AO himself. No rebuttal on facts is made available by the Revenue. The reason for not providing stock registers, cenvet record and electric bills consequently I find stand addressed by a plausible and cogent explanation which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 935 960.128 Nov.,2011 1156470 1252 923.698 Dec.2011 1033320 948 1090.000 Jan.,2012 959760 1079 889.490 Feb.,2011 633120 993 637.583 March,2012 312840 694 450.778 Total 11386260 11868 959.408 From the above chart, it is amply clear that there is huge variation in all the consumption of Electricity units and production as per central excise record obtained by this office ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n required by your honour during the assessment proceedings. Had the unit been working properly in a profit making way, there would have been no reason to close the unit. Your honour, is very much aware of the adverse market conditions in the Iron Steel Industry at Mandi Gobindgarh. Already about 40% of the Industry had closed down its business and the electric connections have been disconnected. Further regarding number of points mentioned by your honour for rejection of books of accounts, it is submitted that the assessee has maintained complete records including daily stock records as prescribed under the Central Excise Rules. Regarding the G.R'S. in respect of Inward Outward freight, it is submitted that the Inward freight is on account of Scrap purchased by the assessee and is duly supported by G.R'S. Regarding outward Freight, it is submitted that as per practice at Mandi Gobindgarh the ingots are sold on FOR basis by all the units. Thus the outward freight is in respect of sales made by the assessee. The yield of Finished goods is at 91.68%. The resultant figure is not the wastage only but also consists of Runner Risers which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ding results be kindly accepted. 5.2. Considering the same, I am of the view that in the peculiar facts and circumstances of the case wherein admittedly the assessee before the AO produced the audited books of account. As per record, in the last phase of 2012, the business was stopped on account of some dispute amongst the Directors, which is cited as one of the reasons for the decline of the business and ultimately the bank took possession of the business. It is further seen that when para B relied upon by the ld. Sr.DR is considered alongwith the above explanation extracted also from the assessment order, it is seen that the conclusions referred to by the AO qua electricity bills are de-horse the explanation offered namely that over and above the electricity utilized from the electric company, electricity was stated to have been purchased from the private parties. No rebuttal or contrary fact has been referred to either by the AO or the CIT(A). Similarly, it is seen that yield of the finished goods claimed at 91.68% is on record which also has not been rebutted by the Revenue or the CIT(A). Accordingly, in the peculiar facts and circumstances of the present ca ..... X X X X Extracts X X X X X X X X Extracts X X X X
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