Calcutta High Court
Commissioner Of Income Tax vs Parwati Lakh Udyog on 3 September, 2008
Author: Pinaki Chandra Ghose
Bench: Pinaki Chandra Ghose
ITA No. 615 of 2008
GA No.2575 of 2008
IN THE HIGH COURT AT CALCUTTA
Constitutional Writ/Civil Appellate/Ordinary Original Civil Jurisdiction
ORIGINAL SIDE
COMMISSIONER OF INCOME TAX, KOLKATA-XV
Versus
PARWATI LAKH UDYOG
BEFORE:
The Hon'ble JUSTICE PINAKI CHANDRA GHOSE
The Hon'ble JUSTICE SANKAR PRASAD MITRA Date : 3rd September, 2008.
The Court : We are satisfied with the grounds made in the petition for condonation of delay. Hence, the delay in filing the application is condoned and we allow the application being GA No.2575 of 2008. GA No.2575 of 2008 is thus disposed of.
We now take up the appeal. We have perused the order passed by the Tribunal. It appears that the assessee is a producer of shellac. The process of production involves two stages. It is an admitted position that the assessee maintained day-to-day account of consumption and production of the materials. It further appears that best possible production rate of seedlac has been taken and also best production rate of shellac from seedlac was accepted by the CIT [A] but it appears that the assessing officer took the average of the output of the said selected days as the best possible production rate and should be substituted for the yearly average rate disclosed in the said account basis. The learned Tribunal after assessing the facts of the case and hearing the matter came to the conclusion, which is reproduced below :
" We have considered the rival submissions and perused the material available on record. We find that the norms of the Shellac Export Promotion Council should have governed the question of higher wastage or 2 lower output instead of any speculative and fanciful norm on the basis of the peak output of any day or days in the year taken as the whole year's average. We are in agreement with the Ld. Counsel that taking the best of the year as the average of the year is a contradiction in itself. We also find that the revenue has not rejected the assessee's consumption and production account which is taken as a complete record and rather provides the starting point for the adverse inference against the assessee. We find equivocation in the Ld. CIT[A] maintaining the addition in part disregarding the fact that the Shellact Export Promotion Council reported the norm to which the assessee's rate conforms. But while deciding the question on addition for kirilac, a by-product, which we will encounter presently, he went by the said Council's report taking it as conclusive and authoritative. His order affirming part disallowance for low production suffers from a dichotomy. We have also noted the judicial pronouncements including the ones of the Hon'ble Supreme Court and the jurisdictional High Court which are quite relevant. So, cumulatively viewed the additions for both the stages of production are unsustainable as a whole. The additions are based on no valid grounds and on wishful production rates in substitution of the norms notified by the Central Government Expert Authority."
It also further appears that the Tribunal dealt with all the grounds taken by the department and after considering all the points allowed the appeal partly and we do not find that there is any substantial question of law is involved in this appeal. Hence, the appeal being ITA No.615 of 2008 is dismissed.
All parties concerned are to act on a signed copy of the minutes of this order on the usual undertakings.
Urgent xerox certified copy of this order, if applied for, be supplied to the parties subject to compliance with all requisite formalities.
(PINAKI CHANDRA GHOSE, J.) (SANKAR PRASAD MITRA, J.) pkd.
RO[ct]