Ravji Oil Indus Ltd, Ahmedabad vs Department Of Income Tax
- CitationI.T.A. No.3748/Ahd/2002
Ratio decidendi
The rule this decision rests on
The Tribunal holds that, in an assessment, an addition for unaccounted sale of oil cannot be sustained merely on the difference between the count of empty tins and the count of dispatched tins, where no other evidence of unaccounted sales is shown and no irregularity is found in the corresponding raw-material consumption; the Revenue bears the burden of pointing to evidence beyond such a numerical differential before presuming unaccounted sales. Where the Revenue seeks to sustain a consignment-sale addition but places on record no consequential order in a related assessment year that accepts the same treatment, and the appellate authority has directed only factual verification of the consignment sales, the Tribunal will not interfere with that direction in the particular circumstances of the case. An addition based on entries in seized books of accounts is not sustainable where the appellate authority has found, on the record, that the impugned entries pertain to a different assessment year, and the Revenue has placed no cogent evidence rebutting that finding. A protective addition made on the basis of loose papers seized from a person connected with the assessee cannot be sustained where the substantive addition in respect of the assessee's group concern has already been confirmed and the Revenue has offered no rebuttal.
Written by Miss Lucy from the judgment below, not taken from a headnote.
Judgment
As delivered
आयकर अपील सं./I.T.A. No.3748/Ahd/2002 ( नधा रण वष / Assessment Year : 1991-92) The ACIT बनाम/ M/s.M.Ravji Oil Industries Circle-4 Ahmedabad Vs. Ltd. Kalupur Ghee Bazar, Ahmedabad थायी ले खा सं . /जीआइआर सं . / PAN/GIR No. : 31-084-CQ-0332 (अपीलाथ /Appellant) .. ( यथ / Respondent)
अपीलाथ ओर से / Appellant by : Shri Dinesh Singh, Sr.DR यथ क ओर से/Respondent by : - None -
ु वाई क तार ख / सन Date of Hearing 16/04/2015 घोषणा क तार ख /Date of Pronounce ment 22/05/2015
आदे श / O R D E R
PER S.S. GODARA, JUDICIAL MEMBER :
This Revenue's appeal for Assessment Year 1991-92 arises from order of the CIT(A)-VIII, Ahmedabad dated 03/09/2002 in appeal No.CITA-VIII/75/94- 95, deleting additions of Rs.7,46,604/- on unaccounted sale of oil, Rs.9,50,912/- in case of consignment sale, Rs.29,26,000/- on the basis of seized books of accounts and Rs.4,62,421/- on protective basis made due to loose-paper files seized respectively, in proceedings u/s.143(3) of the Income Tax Act, 1961 (in short "the Act").
ITA No.3748 /Ahd/2002 ACIT vs. M/s.M. Ravji Oil Industries Ltd.
Asst.Year - 1991-92 -2-
2. The Assessee ran a modern oil refinery. The department conducted a search on 17/08/1990 at the office, factory and residential premises of the assessee's directors/trusted employees along with office and shops of its sister- concern M/s.Ravji & Co. and Amar Sales, etc. Its empty tin register revealed that 2010-tins for refilling had not been accounted for at the time of despatch. The assessee stated this balance of tins to have been sold as scrap. The Assessing Officer noticed inventory of scrap sold stating the same to be 192 tins having capacity of 15Kgs. and 3 tins of 5Kgs. each. The Assessing Officer further observed that the tins purchased were of very high price and scrap sales had not been entered in the scrap inventory. He inferred in assessment order dated 30/03/1994 that the assessee had sold 2010 tins of oil outside its books of accounts and computed price thereof as Rs.7,46,604/- resulting in consequential addition.
3. The CIT(A) has accepted the assessee's contentions for deleting the impugned addition. He holds that there is no one-to-one tallying of the tins issued and dispatched. He noticed similar difference in the month of April itself. The assessee's explanation of having brought forward empty tins in the factory to be filled up has been accepted. The CIT(A) observes in these circumstances that there has been a difference of excessive tins to the extent of 5000 pieces as in assessee's case. He observes that the Assessing Officer has not stated any basis for adopting a cut off date qua the difference in empty and despatched oil tins. The assessee has succeeded in the lower appellate proceedings.
4. The Revenue strongly argues for restoration of the impugned addition. The assessee does not appear despite service of notice. The Revenue has filed a service report attested by two panchas dated 09/04/2015 reporting its premises to ITA No.3748 /Ahd/2002 ACIT vs. M/s.M. Ravji Oil Industries Ltd.
Asst.Year - 1991-92 -3-
have been closed. An affixation report is also there on record. The assessee is accordingly proceeded ex-parte.
5. We have heard the Revenue and gone through the case file. The soul basis of the impugned addition being made in the course of assessment is only difference in empty and dispatched tins amounting to 2010 Units. The Revenue fails to point out any evidence of unaccounted sales of oils apart from quoting this differential figure. The lower appellate authority holds the assessee to have been bringing forward empty tins. Other similar instances are also quoted during the relevant previous year itself. We observe in these circumstances that the Assessing Officer ought not to have drawn a presumption of unaccounted sale of oil merely on the basis of difference in the count of empty and dispatched tins as no irregularity is being noticed in the concerned raw-material consumption as well. We affirm the CIT(A)'s finding accordingly. The Revenue's first ground is rejected.
6. The Revenue's second ground seeks restoration of addition amounting to Rs.9,50,912/- on account of consignment sale. The assessee had shown total consignment sales of Rs.24,69,338/-. Its goods sent on consignment as on 31/03/1991 read Rs.71,13,009/-. The Assessing Officer sought to verify the consignee parties. The assessee pleaded change in their addresses. The Assessing Officer issued letters of enquiry. The same were returned unserved. He accordingly called the assessee to prove genuineness of its consignments. The assessee refused to comply for the reason that its consignees would not be produced for want of being traced. The Assessing Officer considered Central Sales Tax @ 4% to observe that the impugned consignments were an effort to bye-pass the said levy due to inter-state oil sale. He also inferred that 90% of the consideration money in these consignment is collected immediately and the ITA No.3748 /Ahd/2002 ACIT vs. M/s.M. Ravji Oil Industries Ltd.
Asst.Year - 1991-92 -4-
balance 10% comes at later stage. The Assessing Officer further quoted facts of Asst.Year 1990-91 and held that the assessee had not conducted any consignment sale. And also that the impugned consignments had been actually sold in the previous year. He treated advance money of Rs.71,13,009/- as 90% of the consignment price. The gross sale price stood computed to Rs.78,24,309/-. This further led to calculation of closing stock of Rs.69,73,397/- to replaced by value of sale at the rate of 100% consignment price stated hereinabove. The same resulted in profit of Rs.9,50,912/-. The said amount stood added as profits in the assessee's income.
7. The CIT(A) has partly accepted the assessee's ground and directs the Assessing Officer to follow directions of his predecessor in Asst.Year 1990-91 regarding profit on consignment sales, allowability of expenditure on the said sales, etc. His further direction reads that the assessee is to be allowed deduction of profit taxed in the said assessment year after considering/verifying consignment sales of the said assessment year are included in the sale consideration of the impugned assessment year. The assessee's relevant ground has been accepted for statistical purposes in view of the earlier direction of the CIT(A) in relation to Asstt.Year 1990-91.
8. We have heard the Revenue and perused the relevant findings. It fails to rebut the CIT(A)'s conclusion that the impugned consignment sales need to be verified qua similar transactions in Asst.Year 1990-91. We reiterate that the impugned assessment year is 1991-92. Much water has flown since the impugned assessment year. We are in the year 2015 as of now. The Revenue fails to point out or place on record any consequential order passed by the Assessing Officer in tune with that in Asst.Year 1990-91. We find that the CIT(A) has accepted the assessee's ground only for factual verification. We do not find any reason to ITA No.3748 /Ahd/2002 ACIT vs. M/s.M. Ravji Oil Industries Ltd.
Asst.Year - 1991-92 -5-
interfere with the same in these peculiar circumstances. The Revenue's second ground also fails.
9. The Revenue's third ground challenges the CIT(A)'s order deleting addition of Rs.29.26 lacs made on the basis of seized books of accounts. The CIT(A) holds with reference to his order in Asst.Year 1990-91 that the impugned entries in the seized books pertained to the Asst.Year 1988-89. The Revenue fails to place on record any cogent evidence rebutting the same. We uphold the CIT(A)'s finding in these circumstances. The Revenue's corresponding ground fails.
10. This leaves us with the Revenue's last ground seeking to restore addition of Rs.4,62,421/- made on protective basis in the assessee's hands based on loose- paper of file seized from the residence of Shri Naseem Ravji. The lower appellate order holds that the very addition on substantive basis stands upheld in case of M/s.Ravji & Co. In these circumstances, the Revenue can hardly have any grievance once the substantive addition in case of assessee's group-concern has been confirmed. There is no rebuttal coming from the Revenue's side. We uphold the CIT(A)'s finding under challenge in this background of facts. The Revenue's last ground is also rejected.
11. The Revenue's appeal is dismissed.
Order pronounced in the Court on 22nd May, 2015 at Ahmedabad.
Sd/- Sd/- ( G.D. AGARWAL) ( S.S. GODARA ) ACCOUNTANT MEMBER JUDICIAL MEMBER Ahmedabad; Dated 22/ 05 /2015 ट .सी.नायर, व.(न.स./T.C. NAIR, Sr. PS ITA No.3748 /Ahd/2002 ACIT vs. M/s.M. Ravji Oil Industries Ltd. Asst.Year - 1991-92 -6-
आदे श क ! त#ल$प अ%े$षत/Copy of the Order forwarded to :
1. अपीलाथ / The Appellant
2. यथ / The Respondent.
3. संबं*धत आयकर आयु,त / Concerned CIT
4. आयकर आयु,त(अपील) / The CIT(A)-VIII, Ahmedabad
5. /वभागीय (त(न*ध, आयकर अपील य अ*धकरण, अहमदाबाद / DR, ITAT, Ahmedabad
6. गाड5 फाईल / Guard file.
आदे शानुसार/ BY ORDER,
स या/पत (त //True Copy//
उप/सहायक पंजीकार (Dy./Asstt.Registrar) आयकर अपील य अ धकरण, अहमदाबाद / ITAT, Ahmedabad
1. Date of dictation .. 21.5.2015 (direct on computer)
2. Date on which the typed draft is placed before the Dictating Member ..21.5.2015
3. Other Member...
4. Date on which the approved draft comes to the Sr.P.S./P.S.................
5. Date on which the fair order is placed before the Dictating Member for pronouncement......
6. Date on which the fair order comes back to the Sr.P.S./P.S.......22.5.15
7. Date on which the file goes to the Bench Clerk.....................22.5.15
8. Date on which the file goes to the Head Clerk..........................................
9. The date on which the file goes to the Assistant Registrar for signature on the order..........................
10. Date of Despatch of the Order..................
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