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TMI Blog2023 (1) TMI 446X X X X Extracts X X X X X X X X Extracts X X X X ..... UCKNOW [ 1972 (1) TMI 91 - ALLAHABAD HIGH COURT] wherein the proceedings were under Section 21 of Act of 1948 and the Court was of the view that if no material was brought by the taxing authorities on record, there was no justification for rejecting the books of accounts. The said judgment was subsequently followed in M/S SUNITA ISPAT PVT. LTD. VERSUS THE COMMISSIONER, COMMERCIAL TAX [ 2016 (11) TMI 131 - ALLAHABAD HIGH COURT] and the Court found that excessive electricity consumption cannot be a ground for rejection of books of accounts. In the case in hand, there is no denial of the fact that for nine months starting from 01.04.2007 to 31.12.2007, the total electricity consumption was 8,55,375 and total grinding of wheat, which was done, was 96760.05 quintals, while for the remaining period i.e. 01.01.2008 to 31.03.2008, only 8791.14 quintals of wheat was grinded consuming 1,83,625 units of electricity, which comes to 20.887 units of electricity per quintal compared to the earlier period, where the consumption was 8.840 units per quintal. The difference between consumption of electricity for the period 01.4.2007 to 31.12.2007 and 01.01.2008 to 31.03.2008 is about 2.5 times ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Assessment Year 2008-09, the books of account of Assessee-revisionist could be rejected? 5. The Assessee before this Court had established a factory for manufacturing of Flour, Maida and Sooji. The matter relates to Assessment Year 2007-08 for the period 01.01.2008 to 31.03.2008, and Assessment Year 2008-09. The Assessee had disclosed total purchase of Rs.99,80,498/- and sale of Rs.1,20,78,303/- for the period 01.01.2008 to 31.03.2008. During the assessment period of 2007-08, a show cause notice was issued to the Assessee and the same was replied on 28.04.2010. The Assessing Authority rejected the books of accounts vide order dated 15.06.2010 and enhanced the turn over on the ground of excessive consumption of electricity. Aggrieved by the order, a first appeal was preferred before the Additional Commissioner, Grade-II (Appeals), Commercial Tax, Gorakhpur. The appeal was allowed vide order dated 15.11.2010 and the quantum of tax was reduced. Against the order dated 15.11.2010, the Department filed Second Appeal No.38 of 2011. The Tribunal allowed the appeal of the Department while rejected the appeal of the Assessee. During the assessment proceedings for the year 2008-09, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... visionist s Unit was 8,55,375 units. Further, during this period, the Assessee had purchased 96728.21 quintals of wheat and the total wheat grinded was 96760.05 quintals. Thus, electricity consumed per quintal of wheat was 8.840 units. On the other hand, for the period 01.01.2008 to 31.03.2008, the total electricity consumed was 1,83,625 units and total grinding of wheat, which was done, was 8791.14 quintals. Thus, the electricity consumed for each quintals of wheat was 20.887 units. He further contended that the Tribunal had rightly rejected the appeal of the Assessee for the Assessment Year 2008-09 and allowed the appeal of the Tribunal as during the period the Assessee had disclosed lessor turn over in spite of higher consumption of electricity. 9. According to learned Standing Counsel, the Assessing Authority as well as Tribunal after recording a finding that for the period 01.04.2007 to 31.12.2007, the consumption per quintal for grinding wheat was 8.840 units while for the period 01.01.2008 to 31.03.2008 was 20.887 units which is more than double and it cannot be believed that such high electricity consumption was because of the Air Conditioners working at the residential ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... material was brought before the Tribunal or the Court so as to demonstrate that the production was not commensurate with the use of electricity and the Court in general held that excessive use of electricity cannot be a ground for rejection of books of accounts. 15. The Division Bench of this Court was also of the view that only when the material has been brought on record to justify the rejection of books of accounts then only the high consumption of electricity can be considered. 16. In the case in hand, there is no denial of the fact that for nine months starting from 01.04.2007 to 31.12.2007, the total electricity consumption was 8,55,375 and total grinding of wheat, which was done, was 96760.05 quintals, while for the remaining period i.e. 01.01.2008 to 31.03.2008, only 8791.14 quintals of wheat was grinded consuming 1,83,625 units of electricity, which comes to 20.887 units of electricity per quintal compared to the earlier period, where the consumption was 8.840 units per quintal. The difference between consumption of electricity for the period 01.4.2007 to 31.12.2007 and 01.01.2008 to 31.03.2008 is about 2.5 times high, for which justification given by the Assessee t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it was stated that an inspection of the factory was done on 10.06.2010 and it was found that machinery was old and there was fault in the electricity being supplied to the factory. This report is of the year 2010 filed before the first Appellate Authority and that too by a private person. The report cannot be taken into account as the relevant period is 01.01.2008 to 31.03.2008. Subsequent report after two and a half years cannot be taken into account and the findings recorded by the first Appellate Authority relying upon said report was rightly negated by the Tribunal. 19. Thus, in the light of the constant view of this Court and Hon ble Apex Court, it is apparent that the Assessing Authority had rightly rejected the books of accounts on the basis of high consumption of electricity after dealing with each aspect of the case and recording a categorical finding as to the production of flour made from the wheat during the relevant period of assessment year in question. The earlier Division Bench and coordinate Bench of this Court had only held that rejection of books of accounts cannot be done on the basis of high consumption when there was no material on record. However, in the p ..... X X X X Extracts X X X X X X X X Extracts X X X X
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