ACIT, JAIPUR vs. PUHP FORGINGS PVT. LTD., JAIPUR

PER SHRI KUL BHARAT, JM.

This appeal by the Revenue is directed against the order of Ld. CIT (A)-2,

Jaipur, dated 30.09.2016 pertaining to assessment year 2013-14. The Revenue has

raised the following grounds of appeal :-

“(i) Whether on the facts and in the circumstances of the case and in law, ld. CIT(A) has erred in deleting the addition of Rs. 1,10,49,086/- made by the AO on account of undisclosed sale of scrap. (ii) The appellant craves its rights to add, amend or alter any of the grounds on or before the hearing.”

made by the AO on account of undisclosed sale of scrap.

2 ITA No. 1079/JP/2016 M/s Pushp Forgings Pvt. Ltd. Jaipur.

scrutiny assessment under the category of CASS, and the assessment under section

143(3) of the Income Tax Act, 1961 was made vide order dated 16/03/2016.

Thereby, the Assessing Officer made addition on account of undisclosed sale of

scrap and disallowance on interest of income tax.

after considering the submissions, deleted the disallowance made on account of

undisclosed sale of scrap by following the decision of Co-ordinate Bench of this

Tribunal, rendered in ITA No. 659/JP/2012 in assessee’s own case pertaining to the

assessment year 2009-10. Now, the Revenue is in appeal before this Hon’ble

Tribunal.

in assessee’s own case relating to the earlier years has been decided by the Tribunal

in ITA No. 376/JP/2015, ITA No. 659/JP/2012 pertaining to the assessment year

2009-10. Ld. Departmental Representatives conceded the facts, that under the

identical facts the Hon’ble Tribunal has decided this issue in favour of the assessee.

However, it is contended that the Revenue has challenged the finding of the Tribunal

before the Hon’ble High Court. It is contended that the Hon’ble High Court has not

decided the issue and the operation of the order of the Hon’ble Tribunal has not

been strayed.

record and gone though the order of the authorities below. The ld. CIT(A) has

decided the issue in para 2.3 has under”-

3 ITA No. 1079/JP/2016 M/s Pushp Forgings Pvt. Ltd. Jaipur.

“2.3. I have perused the facts of the case, the assessment order and the submissions of the appellant. In the assessment year 2009-10 in the case of assessee’s sister concern Pushp Enterprises, the issue has been decided by ITA No. 659/JP/2012 by the Hon’ble ITAT, Jaipur Bench in favour of the assessee of the assessee observing as under:-

“ we find no infirmity in the order of ld. CIT(A) inasmuch as nothing has been brought on record by ld. Assessing Officer that the assessee’s job workers returned any scrap to assessee. Nothing has also been brought on record to demonstrate in any way that assessee indulged in any sale of scrap outside the books of account. This is further indicated by new Cenvat Credit Rules, which holds that the scrap was not required to be returned to the assessee. The same is referred to by the judgment in the case of M/s Rocket Engineering Corporation vs. CCE (supra). The assessee further provided evidence from M/s Noble Industries, which has done a job work of 3.56 crore and has shown the income attributable to sales of scrap of Rs. 747109/- in its books. These facts and observations demonstrate that the assesee did not receive any scrap back from job workers. There being no evidence whatsoever suggesting any unaccounted sales by the assessee, the order of ld. CIT(A) on these issues is upheld.

In view of the above decision of Hon’ble ITA, Jaipur bench and the facts being similar to the above case, this ground of appeal is allowed.”

Under the identical fact, the Co-ordinate Bench of this Tribunal in ITA No.

659/JP/2012 has decided the issue in favour of the assessee in para 8.1 to 8.2 as

under:-

“ 8.1 Apropos the second ground, which includes the addition amount of Rs. 1,35,56,787/- relating to concealed sale of scrap, the balance amount to different shown by the assessee as receivable from SKF and the payable amount in the books of SKF, the assessee has demonstrated that the difference was due to the disputes pertaining to defective and inferior quality of good. The assessee used to account for the actual invoice value whereas the purchase were accounted by SKF not on the basis of the sales bills but on the basis of settled amounts qua these invoices. All these issues have been discussed in details by the ld. CIT(A) as mentioned above. In view thereof, we see no infirmity in the order of the ld. CIT(A) on this issue also, which is upheld. The second ground of revenue appeal is dismissed.

8.2. Apropos the third ground the assessee demonstrated that as per Rule 4(6) of the Central Excise Rules, the assessee was liable for excise duty on the notional value of nonreturnable scrap. Thus, the assessee has

4 ITA No. 1079/JP/2016 M/s Pushp Forgings Pvt. Ltd. Jaipur.

to fact the situation where the scrape was not returnable to it and on top of that the excise duty on such scrape was also payable by the assessee as per excise rules. In view thereof, the excise duty in respect of unreturned scrap becomes a statutory/legal liability of the assessee, which is allowable business expenditure. The ld. CIT(A) has considered the issue in right perspective and we see no infirmity in its order on this ground, the same is upheld.” The Revenue has not brought any contrary binding precedents and it is also not

stated that the facts are distinguishable from the earlier years. Therefore,

respectfully following the decision of the Co-ordinate Bench in ITA No. 659/JP/2012

(supra), we do not see any reason to interfere into the order of the ld. CIT(A), same

is hereby affirmed. The ground raised in this appeal is rejected.

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Jaipur Dated:- 17 /04/2017. Pooja/ आदेश की प्रतिलिपि अग्रेषित@ब्वचल वf जीम वतकमत वितूंतकमक जवरू

vkns'kkuqlkj@ By order,

सहायक पंजीकार@ Aेेपेजंदज. त्महपेजतंत

5 ITA No. 1079/JP/2016 M/s Pushp Forgings Pvt. Ltd. Jaipur.