Income Tax Appellate Tribunal - Chandigarh
Ito, Khanna vs M/S Regal Steel Rolling Mills, Khanna on 4 December, 2017
IN THE INCOME TAX APPELLATE TRIBUNAL
DIVISION BENCH 'B', CHANDIGARH
BEFORE SHRI SANJAY GARG, JUDICIAL MEMBER
AND MS. ANNAPURNA GUPTA, ACCOUNTANT MEMBER
ITA No.218/Chd/2013
(Assessment Year : 2009-10)
The Income Tax Officer, Vs. M/s Regal Steel Rolling Mills,
Ward-III, Khanna. Vill. Alour, GT Road, Khanna.
PAN: AAAFR9904L
And
ITA No.247/Chd/2013
(Assessment Year : 2009-10)
M/s Regal Steel Rolling Mills, Vs. The Income Tax Officer,
Vill. Alour, GT Road, Khanna. Ward-III, Khanna.
PAN: AAAFR9904L
(Appellant) (Respondent)
Appellant by : Smt.Meenakshi Vohra, Sr. DR
Respondent by : Shri Parikshit Aggarwal, CA
Date of hearing : 05.09.2017
Date of Pronouncement : 04.12.2017
O RDE R
PER ANNAPURNA GUPTA, A.M.:
Both the appeals, by the assessee and the Revenue, have been filed against the order of learned Commissioner of Income Tax (Appeals)-II, Ludhiana dated 28.12.2012 relating to assessment year 2009-10.
2. Th e i s s u e i n b o t h t h e a p p e a l s a r i s e s f r o m t h e s am e s e t o f f a c t s a n d a r e i n t e r - r el a t e d . B ri e f l y s t a t e d th e as s e s s e e i s i n t h e b us i n e s s o f m a n u f ac t u r i ng o f TM T b a r s a n d a n g l e s. During a s se s s me n t p r o c e ed i n g s , t h e a s s e s se e f i l e d m o n th wise detail of raw materials consumed a nd e l e c t r i ci t y c o n s u m p t i o n . Th e A s s e s si n g O ff i c e r f o un d f r om t h e s a m e t h a t t h e r e w a s wi d e v a r i a t i on i n t h e e l e c t r i c i t y c on s u m p t i o n 2 p a t t e r n v i z - a- v i z c o n s u mp t i o n o f r a w m a t e r i a l var y i n g fr o m 8 7 u n i t s o f e l e ct r i c i t y c o n s u me d P e r M e tr i c To n ( P M T) o f r a w m a t er i a l con s u m e d i n t h e m o n t h o f M a r c h 2 0 0 9 t o 2 2 4 . 8 8 un i t s P MT o f r a w m at e r i al s c o n s um e d i n th e m o n t h o f J u n e , 20 0 8 . Th e s e f a c ts w e r e c o n f r o n t ed t o t he a s s e s s ee a n d a f t e r c o n si de r i n g t h e a s s es se e ' s r e p l y o n t h i s i s s u e t h e A s s e s s i n g O f f i c er c a m e to t h e c on c l u s i o n t h a t t he a s s e s s ee w a s m a n u fa c t u ri n g g o o d s o u t s i d e t h e b oo k s o f a c c o u n t s. He, t h e r ef o r e , held that p ro d u c t i o n and sales w e re s u p p r e s s ed . Th e Assessing Officer r e c o m p u te d the total p r o d u c t i on o f t h e a s s e s s e e b y t ak i n g a v e r a g e c on s u m p t i o n of electricity at 114 units P M T o f r a w m a t e ri a l , w h i c h w as t h e s e co n d l e a s t c o ns u m p t i o n ra t e ( d ur i n g t h e m o n t h of J a n u a r y , 2 0 0 9) . B y a p p l y i n g t h i s r a t e o f 1 1 4 u n i t s P M T, t h e A s s e s s i n g O ff i c er a r r i v e d a t t h e t o t a l c o n s u m p ti o n o f r a w m a t e r i a l a t 9 5 3 6. 2 8 9 M e tr i c To n ( M T) a s a g a i n st 72 0 9 . 0 3 M T s h o w n b y t h e as s e s s e e . Th e d i ff e r e n c e o f 2 3 27 .2 5 9 m e t ri c t o n s o f r a w ma t er i a l w a s h e l d t o b e r o l l ed o u t si d e t h e b o ok s o f a c c o un t s . Th e y i e l d o n th i s wa s c o m p ut e d a t th e r a t e o f 9 4 . 5 9 4 w hi c h cam e t o 2 20 1 . 4 4 7 M T o f a n g l e s and 4 5 m e tr i c t o n s o f me l t i n g s c r a p . O n t h i s ba s i s , t h e A s s e ss i n g O f f i ce r c a l c u l a t ed t h e sa l e s m a d e ou t s i de t h e b o o k s o f ac c o u n t s t o t h e e x t e n t o f R s. 7 , 6 2 , 0 3 ,3 7 7 / - an d a d d e d t h e s am e t o t h e turnover of th e assessee. Th e Assessing O ff i c e r further n o t e d t h a t t h e a s s e s s e e ha d d ec l a r e d g r os s p r of i t r a t e of 1.43% in the impugned year, while in the i m m e d i a t e ly preceding years i.e. A.Ys. 2 0 07 - 0 8 and 2 0 06 -0 7 it had shown G .P . r at e 2.72% and 2.19% r e s p e ct i v e l y . The 3 Assessing Of f i ce r also found that in the case of a comparable c o mp a n y i.e. M/s. Param Steel I n d u s t r i e s, M a n d i , G o bi n d ga r h , G . P . r a t e at 4 . 0 7 % w as s ho w n . Th e s e f a c t s w e r e c o n f ro n t e d t o t h e a s se s s e e a n d a f t e r c o n s i d e r i n g t h e a s se s s e e ' s r ep l y o n t h e i s s u e t h e A s s es s i n g O ff i c e r he l d t h a t i t w o u l d b e r e a s o n a b l e t o t ak e G . P . r a t e of l a s t 2 y ea r s i n t h e a ss e s s e e's o w n c a se w h i c h w o r k e d o u t to 2 . 4 4 5 % . Th i s G . P . r a t e wa s a p p l i ed t o t he t u r n o v er a s e nh a n c e d b y t h e s a l e s f o u n d t o h a v e b ee n m a d e o u t si d e t he b o o k s o f a c c o u n t s o f t he a s s e s s ee a n d ad d i t i o n o f R s . 42 , 3 6 , 6 1 2 /- w a s m a d e t o t h e i n c o m e o f t h e as s e s s e e . A d di t i on w a s a l s o m a d e o n a c c o unt o f u n d e r v al u a ti o n o f m e l t i n g sc r a p t o t h e t u n e o f R s .2 , 9 7 ,9 0 0 / - . F u rt h e r t he b o o k s o f a c c o un t s o f t he assessee w er e rejected u/s 14 5 ( 3 ) of the Income Ta x A c t , 1 9 6 1 ,o n a c cou n t o f t he a f o re sa i d d i s c r e p a nc i e s .
3. Th e m a t t e r w a s c a r r i e d i n a p pe al b e f o r e t h e Le ar n e d C I T( A p p e al s ) w h o u p h el d t he r e j ec t i o n of B o ok s of a c c o u n ts b u t d e l e t e d t h e e n h a n c e m en t m ad e t o t h e t u r n ov e r o f t h e a s s e s s e e a n d t he c o n s e q u e n t a dd i t i o n m a d e t o t h e i n c o me b y c o m p u t i n g G.P . @ 2 . 4 4 5 % t h er e o n . A t t h e s a me t i m e , h e u p h e l d t he a d d i ti o n m a d e by a p pl y i n g G . P. r a t e of 2 . 4 4 5 % o n t h e d e c l a r e d t u r n o ve r as a ga i n s t G . P r a t e o f 1. 4 3% s h o w n b y t h e as s e s s e e . F u r th er v i s a v i s the addition m a d e o n a c c o un t o f u n d e r v a l ua t i o n o f s t o c k o f m e l t i ng s c r a p , t h o ug h th e L d . CI T( A ) a g re e d t h a t t h e a ss e s s e e h a d u n d e r v a l ue d t h e s a m e b u t t h e a d d i t i o n m a d e w a s d e l e t e d 4 t e l e s c o p i n g i t i n t h e t o t a l a d di t i o n m a d e o n a c c o u n t o f estimation of GP rate.
4. Aggrieved by t he same both the assessee a nd the r e v e n u e h a v e c om e u p i n a p p e a l b e f o r e u s . Th e r e v e n u e h as c h a l l e n g ed the action of the Learned CI T( A p p e a l s ) in deleting the e nh a n c e m e n t m a de to t he t u rn ov e r of the assessee on t he basis of s u pp r e s s e d sales and t he c o n s e q u e nt d e l et i o n o f t h e a d d i ti o n m a de b y a p pl y i n g G. P . r a t e o f 2 .4 4 5 % th e r e o n r ai s i n g th e f o l l o wi n g g r ou n d s i n i ts a p p e a l i n I TA N o. 2 1 8 / C HD / 2 0 1 3 : -
"1.(a) The Ld. Commissioner of Income Tax (Appeal)-ll, Ludhiana, on facts as well as in law, has erred in deleting the addition of Rs.7,62,03,377/- to the gross turnover of the assessee, which was computed on the basis of consumption of electricity units.
(b) The Ld. Commissioner of Income Tax (Appeal)-ll, Ludhiana has failed to appreciate that consumption of electricity is one of the major inputs and is a valid basis for estimation of production and turnover.
2. That the order of the Commissioner of Income Tax (Appeal)-ll,Ludhiana be set aside and that of the A.O. be restored.
3. That the appellant craves leave to add or amend any ground of appeal before it is finally disposed."
5. Th e a s s e s s e e , on t h e o t h e r h a nd , h a s c h a l l e n g ed t h e action of the Learned CI T( A pp e a l s ) in u p h ol d i n g the a p p l i c a t i o n o f G .P . r a t e o f 2 . 4 4 5% t o t h e d e c l a r ed t u r n o v e r o f t h e a s s e s se e as a g a i n s t 1 . 43 % s h o w n b y t h e a ss e s s e e a n d t h e v a l u a t i o n o f s t o c k of m el t i n g s c r a p , r a i s i ng t he f o l l o w i n g g r o u n d s i n i t s a pp e a l i n I TA N o. 24 7 / C H D / 2 01 3 :
"1. That on the facts and in the circumstances of the case and in law, learned CIT-A erred in upholding the action of Ld AO to apply the enhanced G.P (gross profit) rate of 2.445% instead of actual rate of 1.43% contrary to 5 precedents cited squarely applicable to present fact situation.
2. That on the facts and in the circumstances of the case and in law, learned CIT-A erred in upholding the action of Ld AO to apply the enhanced G.P (gross profit) rate of 2.445% instead of actual rate of 1.43% without any 'substantial' and "material" error in 'audited' books maintained by assessee and fully vouched sales and purchases.
3. That on the facts and in the circumstances of the case and in law, learned CIT-A erred in upholding the action of Ld AO for adjustment of alleged incorrect stock valuation of melting scrape against principle settled by Supreme Court in Chainrup Sampatram case 24 ITR 281, and erroneously telescoping the same into enhanced GP rate addition.
4. That the appellant craves leave to add, to, amend, modify, rescind, supplement or alter any of the grounds stated herein above, either before or at the time of hearing of this appeal."
6. D u r i n g t h e co u rs e o f h e a r i ng b ef o r e u s , o u r a t t en t i o n w a s d r a w n t o t he f a c t t ha t i de n ti c a l i s s ue o f ad di t i o n m a de o n a c c o u n t of u n a c c o u n te d p ro d u c t i o n an d s al e s o n t h e b a s i s o f d i s p a ri t y i n e l e ct r i c i t y co n s u m p t i on p a t te r n i n t he c a s e o f r o l l i n g m i l l s h a s b e en d e a l t b y t h e C h a n d i g a rh B e n c h of I TA T i n t h e i r o r d er i n th e g r o up o f c a ses , w i th t h e l e a d c a s e b e i ng t h e c r o s s a p p ea l s i n M / s M o di O i l a n d G e n e r a l M i l l s L t d . i n I TA N o . 1 4 9 / C H D / 2 0 16 a n d i n I TA N o . 1 1 2 / C H D / 20 1 6 d a t e d 1 4. 2 . 2 0 1 7. Th e c o p y o f t h e s a i d o r de r w a s p l a c e d b e for e u s . R e f e r r i n g t o t h e s a i d o r de r , i t w a s p o i n t e d o u t t o th e B e n c h t h at th e i s s u e i n t he c a s e w a s i d e n t i c a l w he r e i n o n a c c o u n t o f d i s p a r i t y i n c o nsu m p t i o n o f e l e c t r i ci t y vi z - a -v i z r a w m a te r i a l s , t h e b o o ks o f a c c o u nts w e r e r e j ec t e d an d t h e r e af t e r ta k i n g t h e l o w e st v a l u e of e l e c t r i ci t y c o n su m p t i o n , t he actual p r o du c t i o n of t he a s s e s s e e w as e s ti m a t e d a n d r e duc i n g t h e r e fr o m th e f i n i s h e d 6 g o o d s a s s h o w n t o h a v e be e n p r od u c e d b y t h e a s se s s e e , t he u n a c c o u n te d p ro d u c t i o n w as c al c u l a t e d . Ap p l y i n g t h e r e o n t h e a v e ra g e s al e r a t e , t o t a l u na c c o u n t e d p r o du c t i o n wa s e s t i m a t e d i n mon e t a r y te r m s and a d o p t i n g G . P. r a t e s h o w n b y t h e a s s e ss e e u n a c c ou n t e d pr o f i t wa s wo r k ed o u t a n d a d d e d t o t h e i n co m e o f t h e a s s e ss e e . I t w a s p o i n te d o u t t h at t h e a f o re s a i d f a ct s i n t he p r es e n t c a s e a re i d e nt i ca l t o t ha t i n M / s . M o d i O i l a n d G e n e r a l M i l l s L t d . ( s u p ra ) . Th e r e a f t e r, referring to the order in the case of M/s. Modi Oil and G e n e r a l M i l l s L td . ( s u p r a ) , i t w as p o i n t e d o u t t ha t a t t e n t i on h a d b e en d r a w n t o th e Be n c h i n t h o s e g r ou p ca s e s , th a t a f t e r p a s si n g o f t h e a s s e s s me n t o r d e r , t h e Pr . CI T, P a t i a l a h a d c o n st i t u t ed a c o m m i tt e e t o v e r i f y no r m a l v ar i a t i o n i n c o n s u m p t i o n o f e l e c t r i ci t y f o r ma n u f a c t u ri n g o f e a c h M e t r i c To n o f f i n i sh e d go o d s a n d t h e c om m i t t e e h a d g i v en a r ep o rt o n 2 5 . 5 . 2 0 1 6 o n t h e b a s i s o f w hi c h t h e P r . CI T h a d i s s u e d i n t e r n a l g u i de l i n e s r e fe r r i n g a cc e p t a n c e o f v a r i a t i o n up to 1 5 % . I t w a s f u r th e r p o i n t e d o u t f r o m t h e o r d e r th a t t h e D R i n t h e sa i d c as es h a d v e ri f i e d t he s t a n d o f t h e de p a r t m e n t b y s e e k i n g e x p l an a t i o n f r om t h e o f f i c e o f th e P r . C I T, w h i c h i n t u r n , h a d a gr e e d t o t h e s a me b y s u b m i t t i ng l e t t e r a s r e p r o d u c ed i n the o r d e r as u n d er: -
OFFICE OF THE PRINCIPAL COMMISSIONER OF INCOME TAX AAYKAR BHAWAN. PATIALA Ph:0175-2214883/Fax: 0175-2219416 F.No.Pr. CIT/PTA/Tech/Consp. Of Elect/90/16-17 Dated : 30.01.2017 To The Commissioner of Income Tax (D.R.-1), Income Tax Appellate Tribunal, Room No. 402, 4th Floor, Aaykar Bhawan, Himalaya Marg, 7 Sector 17-E, Chandigarh-160017.
Sir, Sub: Appeals before the ITAT in respect of cases of consumption of Electricity viz-z-viz suppression/ unaccounted production of Mandi Gobindgarh- Regarding -
********** Kindly refer to your office letter No. 1064 dated 24.01.2017 on the subject cited above.
2. As desired, I have been directed to intimate that the parawise comments on the arguments of the assessees, whose cases are pending before the ITAT, Chandigarh, are being sent as under:-
i) It is contended that In this regard, it is submitted that with Pr.Commissioner of Income regard to pendency of appeals before the Tax, Patiala has already Hon'ble ITAT pertaining to Assessment subsequent to passing of Years 2010-11 to 2012-13, on the issue of Orders u/s 143(3) issued some electricity, the department has estimated internal guidelines regarding the unaccounted production after rejecting acceptability of variation upto the books of accounts because there was 15% and no addition have been wide variation in the consumption of made on similar issue in electricity units per metric ton production subsequent years by the AO in of finished goods. Thereafter, for the same cases of assessee on estimation u/s 144, in case of rolling mills, similar issues in favour of the average of 30 days and in case of assessee. induction furnaces 10 days average involving the least consumption of electricity units for production of one metric ton was taken to work out the alleged unaccounted production on which gross profit was applied to determine the unaccounted income. Similarly, by adopting number of holding days, unexplained investment in the alleged unaccounted production was estimated.
Thereafter, taking into consideration the grievances amongst the tax payers, a committee was constituted by the Pr.
Commissioner of Income Tax, Patiala. The said committee was required to examine the actual business state of affairs of the assessees engaged in production i.e. steel rolling mills and furnaces. The committee by visiting various units found that variation in consumption of electric units of different sizes of finished goods produced are there.
Therefore, the committee only in those cases where there was wide variation considered their cases for the purposes of rejection of books of accounts. Further, on the basis of finding given by visiting various units, it was decided that upto 15% variation in the consumption of electricity units per MT of finished goods produced are justifiable and 8 reasonable having regard to the facts and circumstances of each case in the Iron & Steel Industry because zero variation cannot be visualized or achieved by any level of technology given the different nature of raw material, machinery and finished goods. However, in the earlier years only the cycle involving minimum number of consumption of electricity unit was considered for estimation of unaccounted production/income which was culled from assessees books of account to extrapolate the alleged unaccounted production which led to unreasonable/unjustified additions not based on the actual facts and circumstances of the assessees because while extrapolating unaccounted production, the average industrial norm of number of electricity units consumed per MT of finished goods was not taken into consideration. There are number of cases where unaccounted production was extrapolated even by taking 15 to 20 units of electricity for production of per MT finished goods, which is impossible. In order to make the estimation u/s 144 more fair and reasonable, it was decided to adopt average of minimum and maximum number of units consumed per cycle of 30 days/10 days on the basis of book's of account maintained by each assesses. The idea was to consider both the extremes to arrive at fair and judicious estimation of income. However, the department has kept the main issue alive i.e. rejection of books of accounts by modifying the basis of estimation of unaccounted production on the basis of minimum and maximum value of average electricity consumed per MT for a continuous period of 30 days in the case of Rolling Mills and 10 days in the case of furnaces, alongwith unexplained investment in unaccounted production. It is worthwhile to mention here that every year is an independent assessment year. However; considering the facts & circumstances of each case, the appeals may be decided on merits.
ii) It is also contended that in The decision of the Ld. CIT(A), Patiala in some cases of subsequent estimating total undisclosed investment in assessment years of these respect of that unaccounted production at assessees, the Assessing half of the peak unaccounted production Officers have made additions computed on monthly basis i.e. 15 days was 9 after considering favorably not accepted by the department as the AOs one third of such variation have adopted the quantum of electricity instead of half percent as consumed per MT on the basis of minimum allowed by the CIT(Appeals), value of average electricity consumed per Patiala in cases under appeal. MT for a continuous period of 30 days assuming that within a period of 30 various types and sizes of finished goods would have been produced. The department is already in appeal before the ITAT on the decision of the CIT(Appeals). Further, the AOs examined the issues having regard to the facts & circumstances of each case as against applying any uniform criteria. All the issues involved therein were examined by the respective AOs on case to case basis.
Yours faithfully, Sd/-
( Baldev Singh ) Income Tax Officer Hq.)(Tech.),Patiala"
7. Th e Bench a f t er c o n s i d er i n g th e above s u b mi s s i on restored the en t i r e c a se to the A s s e ss i n g Officer f or r e c o n s i d er a t i o n i n a c c o r da n c e w i t h t h e i n t e r na l gu i d e l i ne s i s s u e d b y t h e P r. C I T a n d o u r a t t e n t i o n w a s d ra w n t o t h e r e l e v a n t f i n d i ng o f t h e I TA T a t p a r a 1 0 o f t h e o rd e r g i v i ng t h e a f o r es a i d di re c t i o n a s u n d e r:
"10. Considering the f acts and circums tances of the case in the light of the internal guidelines i s s u e d b y t h e P r . C o m m i s s i o n e r o f I n c o me T a x , Patiala by f orming a Committee to consider the grievance of the tax payers, it is clear that R e v e n u e D e p a r t m e n t h a s t a k e n s o me r e a s o n a b l e b a s i s t o c o m p u t e t h e i n c o me o f t h e a s s e s s e e o n t h e b a s i s o f t h e p o we r c o n s u m p t i o n . It is ad mitted f act that in subsequent years, some f avourable vie w have been taken in f avour of the a s s e s s e e s b y f o l l o wi n g t h e s a m e g u i d e l i n e s . I t may be noted here that the assessee in this appeal has challenged the rejection of the books o f a c c o u n t u n d e r s e c t i o n 1 4 5 ( 3 ) / 1 4 4 o f I n c o me T a x A c t a l o n g wi t h u p h o l d i n g o f t h e a d d i t i o n o f Rs. 55,78,521/- on account of unaccounted i n v e s t me n t a g a i n s t a d d i t i o n o f R s . 1 , 2 9 , 1 3 , 5 6 3 / - . In the ground of appeal also, assessee has stated that ld. CIT(Appeals) has erred in not giving any 10 f inding ag ains t add ition of Rs. 60,88,005/- made by Assessing Of f icer on account of unaccounted prof it out of unaccounted production. The Revenue D e p a r t me n t in their appeal has challenged the order of ld. CIT(Appeals) in restricting the addition of Rs. 1,90,01,568/- to the extent of Rs. 1,16,66,526/-. Since all the respective grounds of appeal in cross appeals are c o n n e c t e d wi t h e s t i m a t i o n o f t h e u n a c c o u n t e d p r o d u c t i o n b a s e d u p o n p o we r c o n s u m p t i o n b y estimating unaccounted investment and unaccounted prof it out of unaccounted production a n d o n t h e s a m e , R e v e n u e D e p a r t me n t h a s constituted the Committee to consider the grievances of the assessees/tax payers and ld. P r . C o m m i s s i o n e r o f I n c o me T a x i s s u e d t h e a b o v e guidelines by modif ying the basis of estimatio n o f u n a c c o u n t e d p r o d u c t i o n a n d s a me g u i d e l i n e s have been adopted in subsequent years by the respective Assessing Off icers, theref ore, in our c o n s i d e r e d v i e w, e n t i r e m a t t e r r e q u i r e s r e - consideration at the level of the Assessing O f f i c e r . I n t h i s v i e w o f t h e m a t t e r , we s e t a s i d e the orders of authorities belo w and restore the entire issue to the f ile of Assessing Off icer i.e. rejection of the books of account under section 145(3)/144, unaccounted production of f inished goods, unaccounted prof it and unaccounted i n v e s t me n t o u t o f u n a c c o u n t e d p r o d u c t i o n wi t h ref erence to consu mp tion of electr ic ity units per m e t r i c t o n p r o d u c t i o n o f f i n i s h e d g o o d s wi t h direction to re-decide the entire issue in a c c o r d a n c e wi t h l a w i n t h e l i g h t o f t h e i n t e r n a l guidelines issued by the ld. Pr. Commissioner of I n c o me T a x , P a t i a l a . T h e A s s e s s i n g O f f i c e r s h a l l give reasonable suff icient opportunity of being heard to the assessee and assessee shall be at liberty to raise any contention bef ore Assessing O f f i c e r f o r c o m p l e t i o n o f t h e a s s e s s me n t i n a c c o r d a n c e wi t h l a w. "
8. I t w a s su b m i t te d, t h e r e fo r e , th a t s i n c e t he i s s ue i n t h e p r e s e n t ca s e w as i d e n t i ca l , t h e m a t t e r b e r e s t or e d b a c k to t h e A s s e s s i ng O ff i c e r t o b e c o n s i d e r e d a f r e s h i n th e l i g h t o f t h e i n t e r n al g u i d e l i n e s i s s ue d b y t h e P r . CI T r e g a r d i n g a c c e p t a b l e v a r i a ti o n i n el e c t r i c i t y c o n s u m p t i o n p a tt e r n .
9. Both the parties a g r e e d b e f o r e u s t h a t t h e f a c ts a n d t h e i s s ue i n t h e p r e s e n t c a s e w e re i d e n t i c a l t o t ha t i n M / s. 11 M o d i O i l a n d G en e r a l M i l l s Lt d . ( s u p r a ) a n d a l s o a g r e e d t o t h e r e s t o r a ti o n o f t h e i s s u e t o t h e A s s e s s i n g O f f i c e r t o r e d e c i d e t h e i s s ue i n a cc o r d a nc e w i t h l a w i n t h e l i g h t o f t he internal guidelines of the P r. CI T, Patiala vi s a vis a c c e p t a b l e v a r i at i o n i n e l e c t r i c i t y a s d i r e c t e d i n t h e g r o u p o f c a s e s i n M / s M o d i O i l a n d Gen e r a l M i l l s L td . ( s u p r a ) .
10. H a v i n g he a r d bot h t h e pa r t i e s an d a f t e r h a v i ng g o n e t h r o u g h t h e o rde r o f t h e I TA T C h a n d i g a rh B e nc h i n M / s M o d i O i l a n d Gen e r a l M i l l s L td . ( s u p r a ) , w e a re c o n v i n c e d t h a t t h e i s s u e i nv o l v e d i n t h e p r es e n t a p p e a l i s i de n t i c a l to t h a t i n t h e ca s e o f M / s . M o d i O i l a n d G e ne r a l M i l l s L t d . ( s u p r a ) . Th e a d di t i o n i n t h e p r es e n t c a s e o f t h e a s s e s s e e , b e i n g i n t h e b us i n e s s o f r o l l i n g m i l l s p r o d u c i ng TM T b a r s and angles, h as b e e n m a d e on a c c o u n t of di s p a r i t y i n c o n s u m p t i o n o f e l e c t r i ci t y p a t te rn v i z - a - v i z r a w m a t e r i a l s c o n s u m e d , w i t h t h e A O h a v i ng ar r i v e d a t a fi n d i n g o n t h i s b a s i s t h at t h e ass e s s e e h as s u p pr e s s e d / pr o d u c ed a n d s o l d g o o d s o u t s i de th e b o o k s o f a c co u n t s . A s s u b mi t t e d b e f o r e t h e B e n c h i n t he c a s e o f M o d i M i l l s ( s u p r a) , o n a c c o u n t o f r e p r e s e n ta t i o n fr o m v a r i o u s r o l l i n g m i l l o w n e r s w h o h a d been a f f ec t e d by additions ma d e on t hi s ac c o u n t , a c o m m i t t e e ha d b e e n c o n s t i tu t e d t o d e t e r m i n e th e n o r m al v a r i a t i o n i n t h e p a t t e r n o f e l ec t r i c i t y c o n s u mp t i o n, W h i c h i n i t s r e p o r t h a d s ub m i t t e d a c c ep t a bl e v a r i a t i on o f 1 5 % . I t w as a l s o o b s e r ve d i n t h e s a i d o r d er t ha t t h e r e v e n ue au t h o r i t i es i n s u c c e e di n g ye a r s h a d b ee n de c i d i n g c as e s on i d e n t i c al i s s u e f o l l o w i n g th e s e g u i d e l i n e s w h i c h h a d b e en a c c e p t ed 12 b y t h e D e p a r tme n t i t se l f an d on t h i s b a s i s t h e I TA T h a d restored t he ma t t e r back to the Assessing Officer to r e d e c i d e t h e i ssu e i n a c co r d a n ce w i t h l a w i n th e l i g h t o f t h e g u i d el i n e s i s s u e d b y t h e P r.C I T, P a ti a l a i n th i s r e g a rd a n d a c c e pt e d b y t h e R e v e nu e i n l a t e r y e a rs .
11. I n vi e w o f th e s am e s i n c e t he f a ct s i n t h e p re s e n t c a s e are i d e n t i ca l to M/s. Modi Oil and General Mills Ltd. ( s u p r a ) , w e a c c or d i n g l y , f o l l o wi ng t h e o r d er o f th e I TA T i n t h e s a i d c a se , re s t o r e t h e ma t t er d e n o v o t o t he A s s e s s i n g O f f i c e r t o re c o ns i d e r th e i ss u e a f r e s h i n t he l i g h t o f t he i n t e r n a l gu i d e l i ne s i s s u e d by t h e P r . CI T i n t h i s r e g a r d a n d t h e r e a f t er d e c i d e t h e i s su e i n a cc o r d a n c e w i t h the l a w . We m a y a d d th a t th e a s s e s se e b e g i v e n d ue o p po r t u n i t y of being h e ar d in this r e g ar d an d is f r ee to adduce a ll e v i d e n c e s w h i c h i t w i s h e s t o r el y u p o n i n su pp o r t o f i ts c o n t e n t i on s . I n v i e w o f t h e ab o ve , t h e c r o s s a p pe a l s o f t h e assessee and th e R e v e nu e s t an d a l l o we d f or s t a t i s ti c a l purposes.
O r d e r p r on o u n c ed i n t h e o p e n cou r t .
Sd/- Sd/-
(SANJAY GARG) (ANNAPURNA GUPTA)
JUDICIAL MEMBER ACCOUNTANT MEMBER
Dated : 4 t h November, 2017
*Rati*
Copy to:
1. The Appellant
2. The Respondent
3. The CIT(A)s
4. The CIT
5. The DR
Assistant Registrar,
ITAT, Chandigarh
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