Income Tax Appellate Tribunal - Jaipur
Supreme Cylinders Ltd., Alwar vs Acit, Alwar on 21 January, 2019
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IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES, JAIPUR
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BEFORE: SHRI VIJAY PAL RAO, JM AND SHRI VIKRAM SINGH YADAV, AM
M.A. No. 127/JP/2018
( Arising out of vk;dj vihy la-@ITA No. 525/JP/2014)
fu/kZkj.k o"kZ@Assessment Year : 2005-06.
Supreme Cylinders Ltd., cuke The ACIT,
A-146K, Industrial Area, Vs. Circle-2,
Bhiwadi, Alwar. Alwar.
LFkk;h ys[kk la-@thvkbZvkj la-@PAN No. AACCS 9200 M
vihykFkhZ@Appellant izR;FkhZ@Respondent
fu/kZkfjrh dh vksj ls@ Assessee by : Shri Himanshu Goyal (CA)
jktLo dh vksj ls@ Revenue by : Shri Ran Singh (Addl. CIT)
lquokbZ dh rkjh[k@ Date of Hearing : 18.01.2019.
?kks"k.kk dh rkjh[k@ Date of Pronouncement : 21/01/2019.
vkns'k@ ORDER
PER VIJAY PAL RAO, JM :
By way of this Miscellaneous Application, the assessee is seeking rectification of the mistake in the Tribunal's order dated 29th May, 2018. The ld. A/R of the assessee has submitted that while deciding the ground no. 2 and 4 of the revenue's appeal, the Tribunal has reversed the order of the ld. CIT (A) without considering the fact as recorded by the ld. CIT (A) that the AO has not brought on record any other material against the assessee to prove the receipt of money out of books on sale of scrap or the cash received back by the assessee in respect of the freight charges. Thus he has pleaded that there is a mistake apparent from record which may be rectified by passing an appropriate order.
2. The ld. D/R has vehemently opposed the Miscellaneous Application of the assessee and submitted that the impugned order is passed on merit after analyzing 2 MA No. 127/JP/2018 M/s. Supreme Cylinders Ltd., Bhiwadi, Alwar.
the relevant facts and record and, therefore, the decision taken by the Tribunal on merit cannot be reviewed under the provisions of section 254(2) of the IT Act. 3 Having considered the rival submissions and careful perusal of the relevant record, we find that the grievance of the assessee in the Miscellaneous application is summarized in para 4 to 11 as under :-
" 4. Ground No. 2 relating to the scrap sales has been adjudicated by your honors at para 5 onwards.
5. One of the arguments raised on behalf of the assessee was that with respect to rate of scrap sales independent enquiries were also made by the AO, however the findings of these enquiries and investigations conducted in this aspect were never provided to the assessee, inspite of the assessee's specific requests.
6. The said contention was also raised before the CIT (A). The ld.
CIT (A) in para 6.8 of his order dated 6.5.2014 has held that :-
" ..... Further, AO has not brought on record any other material or conducted an enquiry to establish the receipt of money out of the books on sale of scrap....
7. Ground No. 4 relating to Freight receipts has been adjudicated by your honors at para 11 onwards.
8. One of the arguments raised on behalf of the assessee was that no enquiries were made by the ld. AO, in-spite of assessee's specific requests, and the additions were made solely on the basis of some loose papers implanted by disgruntled employees. No evidence against the records could be produced.
9. The said contention was also raised before the CIT (A). The ld.
CIT (A) in para 7.5 of his order dated 6.5.2014 has held that :
" I have gone through the material available on record and find that AO has not brought on record any other material against 3 MA No. 127/JP/2018 M/s. Supreme Cylinders Ltd., Bhiwadi, Alwar.
the assessee to prove that the cash was received back on the total freight charges ...."
10. The above issues on record have not been dealt with and in this way an error has crept in the order passed by your honors.
11. Since it is a mistake apparent from record it is prayed that the same may be rectified by your honors by passing appropriate order under section 254(2) of the Income Tax Act."
Thus the assessee has contended in the Miscellaneous Application that the ld. CIT (A) has deleted the addition made by the AO on the ground that the AO has not brought on record any other material or conducted any enquiry to establish the receipt of money out of books and further to establish that the assessee has received back the cash in respect of freight charges. We note that while deciding these two issues in ground no. 2 and 4, the Tribunal has given its finding in para 7, 13 and 13.1 as under :-
"7. We have considered the rival submissions as well as relevant material on record. So far as the understatement of scrap sale in respect of the billed amount of Rs. 19,13,089/- against the actual receipt of Rs. 30,02,650/- is concerned, the said fact was duly manifested in the impugned material and, therefore, the assessee has accepted the said understatement of scrap sale. The AO applied the said rate of understatement being 56.95% on the entire scrap sale made by the assessee during the year under consideration. However, we note that the assessee has sold scrap during the year of different materials and at different rates. The scrap sale upto 5th May, 2004 is shown in the books @ Rs. 8500/- per MT and thereafter @ Rs.4 MA No. 127/JP/2018
M/s. Supreme Cylinders Ltd., Bhiwadi, Alwar.
11,500/- per MT. This sale was made only to the selected parties and, therefore, a particular scrap was sold by the assessee during the year to the selected parties. Apart from this particular metal sold as scrap @ Rs.11,500/- per MT which consist of the major amount of scrap sale during the year, the assessee has also shown the scrap sale of other items @ Rs. 25/- per KG. Thus it appears that only 3 rates are recorded in the books. First rate is Rs. 8,500/- per MT i.e. only after 8th May, 2004 and thereafter the said particular item of scrap was sold @ Rs. 11,500/- per MT. Some other items like empty containers, V.P. rings, zinc dust etc. were sold by the assessee @ Rs. 25/- per KG. Thus the details of the various items of scrap is very well clear from the record and books of account and, therefore, the scrap sale of a particular item which is found in the loose papers showing the actual receipt is more than the billed amount can be extrapolated in respect of the scrap sale of the same item and not to the other items. Further the date of scrap sale as found in the loose papers is also a relevant factor to ascertain the said transaction belongs to the lot of the scrap sale and rate prevailing during the said period. Therefore, the rate of a particular item of scrap sale as found in the loose papers and the rate as recorded in the bills and books of accounts can be verified and then only to the extent of the same rate and same item of scrap sale will be considered for making the addition on account of under billing. Hence, in view of the facts and circumstances of the case, we set aside this issue to the record of the AO for proper verification of the facts and identify the particular item of scrap sale found recorded in the loose papers impounded during the course of survey and then apply the same rate in respect of the scrap sale of the same item which is shown by the assessee sold at the rate as mentioned in the corresponding bill. Needless to say, the assessee be given an opportunity of hearing before passing a fresh order on this issue.5 MA No. 127/JP/2018
M/s. Supreme Cylinders Ltd., Bhiwadi, Alwar.
13. We have considered the rival submissions as well as the relevant material on record. The AO has noted from Annexure-A-22 of the loose papers that the bills of Haryana Rajasthan Roadlines were impounded during survey. The details of the ledger account and the bill amount as per the loose paper is given by the AO as under :-
Month Expenses claimed Bill amount as per Difference by company loose paper April, 04 78338 55000 23338 May, 04 243901 165900 7800 June, 04 127463 96800 30663 July, 04 48104 19400 28704 Aug, 04 122097 74700 47397 Total 619903 411800 137902 Accordingly the AO computed the difference between the billed amount and actual freight amount mutually determined between the parties @ 22.25%. This rate of difference was applied by the AO on the total freight charges of Rs. 32,50,451/- and arrived at total difference amount of Rs. 7,23,225/-. Since an amount of Rs. 1,37,902/- is found from the loose papers being difference between the agreed rate and the expenses claimed in the books was already surrendered by the assessee, therefore, the AO has made the addition of Rs. 5,85,323/-.
The assessee has objected to the extrapolating of this difference to the entire freight charges which is accepted by the ld. CIT (A) and deleted the said addition.
13.1. Having considered the facts and circumstances of the case, when the assessee has admitted the over-inflated claim of freight charges as found in the loose papers for the months of April to August in respect of the payment made to one transporter, namely, Haryana Rajasthan Roadlines, the said rate of inflated expenses on account of freight charges can be applied in respect of the freight charges claimed by the assessee paid to Haryana Rajasthan Roadlines. Therefore, to the extent of freight paid to the said transporter, the inflated rate as 6 MA No. 127/JP/2018 M/s. Supreme Cylinders Ltd., Bhiwadi, Alwar.
applied by the assessee is justified but not in respect of the other transporter when there is no material or other record to show such an arrangement between the assessee and other transporter. Accordingly, we set aside this issue to the record of the AO to verify the other freight charges and only to the extent of freight charges to Haryana Rajasthan Roadlines this difference rate can be applied." Thus it is clear that the Tribunal has considered the relevant facts as well as the record which was found during the survey and impounded. The assessee has not disputed the material impounded during the survey and also disclosed the income as per the impounded record. The AO while passing the assessment applied and extrapolated the incriminating material for all other transactions of scrap sales as well as freight charges. The ld. CIT (A) deleted those additions made by the AO on the ground that the AO has not brought any other material. The Tribunal while deciding these issues has restricted the addition made by the AO only in respect of the scrap sold by the assessee to the party in whose case the impounded incriminating material was accepted by the assessee. Therefore, based on the incriminating material, the Tribunal has set aside the issue to the record of the AO for proper verification and then apply the same rate in respect of the scrap sale made by the assessee to the said party and cannot be expended to the sale made to the other parties. Similarly, in case of freight charges, the assessee has accepted the difference of the freight bill and actual expenditure as reproduced in para 13 of the impugned order and this is not a single isolated transaction but these are number of transactions. Therefore, the Tribunal found it proper that the freight charges paid to one party in respect of which the impounded material has shown the 7 MA No. 127/JP/2018 M/s. Supreme Cylinders Ltd., Bhiwadi, Alwar.
difference of expenditure claimed and bill amount as per the loose papers, the same difference can be applied in respect of the total freight charges paid to the same party and not to the other parties, hence the issue was again set aside to the AO for proper verification and then decide the same after giving an opportunity to the assessee. These findings of the Tribunal are based on due analysis of the facts as well as the evidence which is not in dispute. Therefore, it is a decision of the Tribunal which is now sought to be reviewed or revised in the present proceedings under section 254(2) of the IT Act. Hence the relief sought by the assessee in the Miscellaneous Application is beyond the provisions of section 254(2) as the jurisdiction of the Tribunal is very limited and circumscribed to rectify the apparent mistake on record and not to review or revise the order passed on merit. Even otherwise, the impugned order challenged by the assessee may be an error of decision but it is not a mistake apparent on record to be reviewed under section 254(2) of the IT Act. Accordingly, we do not find any merit or substance in the Miscellaneous Application of the assessee.
4. In the result, Miscellaneous Application filed by the assessee is dismissed.
Order is pronounced in the open court on 21/01/2019.
Sd/- Sd/-
(foØe flag ;kno) (fot; iky jkWo ½
(VIKRAM SINGH YADAV ) (VIJAY PAL RAO)
ys[kk lnL;@Accountant Member U;kf;d lnL;@Judicial Member
Jaipur
Dated:- 21/01/2019.
Das/
8
MA No. 127/JP/2018
M/s. Supreme Cylinders Ltd., Bhiwadi, Alwar.
vkns'k dh izfrfyfi vxzfs "kr@Copy of the order forwarded to:
1. The Appellant- M/s. Supreme Cylinders Ltd., Alwar.
2. The Respondent - The ACIT, Circle-2, Alwar.
3. The CIT(A).
4. The CIT,
5. The DR, ITAT, Jaipur
6. Guard File (MA No. 127/JP/2018) vkns'kkuqlkj@ By order, lgk;d iathdkj@ Assistant. Registrar 9 MA No. 127/JP/2018 M/s. Supreme Cylinders Ltd., Bhiwadi, Alwar.