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Income Tax Appellate Tribunal, IN THE INCOME TAX APPELLATE TRIBUNAL,
Before: ARUN KHODPIA & ARUN KHODPIA & ARUN KHODPIA
This is an appeal filed by the revenue his is an appeal filed by the revenue against the order of the ld against the order of the ld CIT(A)-1, Bhubaneswar 1, Bhubaneswar dated 11.9.2015 in Appeal No. in Appeal No. 0112/13-14 for the P a g e 1 | 5
Starlight Iron Pvt Ltd, Assessment Year : 2010-2011 assessment year 2010-2011. The assessee has also filed cross objection in the revenue’s appeal in .
Shri M.K.Gautam, ld CIT DR appeared for the revenue and Shri Sunil Mishra, ld AR appeared for the assessee.
It was submitted by ld CIT DR that in the course of assessment, the assessee had originally filed the details of the raw materials consumption, which was a certified document. In the 44AB report, the total material expenses was shown at Rs.30,19,16,138/- whereas in the computation, the assessee had shown only Rs.28,23,65,053/-. It was the submission that when reconciliation was sought for by the Assessing Officer, the assessee had filed another statement which showed the total material expenses of Rs.30,19,16,138/-. It was the submission that the reconciliation statement was not a certified document. Consequently, the Assessing officer had taken the certified original statement of the assessee and the difference between the outward value as disclosed in the reconciled statement, which tallied with the audit report and the original statement of the details of the raw materials used was considered and the difference between them amounting to Rs.1,95,51,085/- had been treated as bogus raw material expenses claimed. In short, as per the Assessing Officer, the assessee has claimed raw material consumption expenses was of Rs.30,19,16,138/-, whereas the actual expenses was only Rs.28,23,65,053/-. It was the submission that on appeal, the ld CIT(A) had deleted the addition by P a g e 2 | 5
Starlight Iron Pvt Ltd, Assessment Year : 2010-2011 holding that the revised statement was to be considered as the revised statement was in conformity with the figures in the books of account and records. It was the submission that he had no objection if the issue is restored to the file of the Assessing Officer for re-adjudication. It was the submission that the Annexure-IV to the audit report provided the quantitative details of principal items of raw material and finished products was in quantitative figures and consequently, it is not possible to reconcile the same at this point. It was the submission that the issue may be restored to the file of the AO for re-adjudication.
In reply, ld AR submitted that restoring the issue to the file of the AO for re-adjudication would be an injustice to the assessee insofar as after so many years, the assessee would be compelled to put the same evidence before the AO as the quantitative details are already available and no defects in the quantitative details have been shown, no addition itself should have been made. It was the further submission that if the issue is restored to the file of the Assessing officer, in the cross objection, the assessee has challenged the action of the CIT(A) in confirming the addition on account of bogus sundry creditors. It was the submission that these are not bogus sundry creditors and this issue can also be restored to the file of the AO for verification and re-adjudication.
We have considered the rival submissions. A perusal of the order of the ld CIT(A) shows that the ld CIT(A) has taken a stand that the revised P a g e 3 | 5
Starlight Iron Pvt Ltd, Assessment Year : 2010-2011 statement was in conformity with the figures of books of account and records. Admittedly, the audit report does not contain the figures in value of the raw materials. In fact, Annexure-IV to the audit report gives the quantitative details. This being so, in the interest of justice, we are of the view that the issue of raw material consumption expenses to the extent of Rs.30,19,16,138/- , i.e. the reconciliation computation of which, allegedly has given rise to the addition of Rs.1,95,51,085/- must be restored to the file of the AO for re-adjudication and we do so. In regard to the issue of sundry creditors as made by the AO and confirmed by the ld CIT(A), it is noticed that the AO has made the addition because M/s. Premier Alloys Ltd., had denied to have any outstanding debit balance in the name of the assesee as on 31.3.2010. The Assessing Officer has categorically admitted that M/s. Premier Alloys Ltd., had been taken over from erstwhile group and this amount related to erstwhile group. These are nothing but opening balance. This being so, in the interest of justice, this issue is also restored to the file of the AO for readjudication after granting the assessee adequate opportunity of being heard.
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Starlight Iron Pvt Ltd, Assessment Year : 2010-2011
In the result, appeal of the revenue and the cross objection of the assessee stands partly allowed for statistical purposes.
Order dictated and pronounced in the open court on 2/11/2022. Sd/- sd/- (Arun Khodpia) (George Mathan) ACCOUNTANT MEMBER JUDICIAL MEMBER Cuttack; Dated 2/11/2022 B.K.Parida, SPS (OS) Copy of the Order forwarded to : 1. The Revenue : Dy.Commissioner of Income Tax, Circle 2(1), Bhubaneswar 2. The assessee: Starlight Iron Pvt Ltd., Room No.F-2, Metro Classic Building, Plot No.352, Sahid Nagar, Bhubaneswar 3. The CIT(A)-1, Bhubaneswar 4. Pr.CIT-1, Bhubaneswar 5. DR, ITAT, Cuttack 6. Guard file. //True Copy// By order
Sr.Pvt.secretary ITAT, Cuttack
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