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Income Tax Appellate Tribunal, PUNE BENCH, ‘A’ PUNE
Before: SHRI R.S. SYAL & SHRI S.S. VISWANETHRA RAVI
This appeal by the Revenue is directed against the order passed by the ld. CIT(A)-1, Aurangabad on 10-01-2018 in relation to the assessment year 2011-12.
The only issued raised herein is against restricting the addition by the CIT(A) on account of suppressed production from Rs.5,05,56,718 to Rs.22,54,480.
Briefly stated, the facts of the case are that the assessee is engaged in manufacturing of MS billets from Sponge Iron and MS scrap. The assessee filed e-return declaring loss of Rs.3,73,611/-.
The Assessing Officer completed assessment at total income of M/s. Saptashrungi Alloys Pvt. Ltd., Rs.4,28,960. Thereafter, the Pr. CIT, vide his order u/s.263 dated 31- 03-2016, held the assessment order to be erroneous and prejudicial to the interest of the revenue. The AO, in the consequential proceedings, found that the assessee was involved in clandestine removal of goods without payment of excise duty to the tune of Rs.58,05,287 on the value of goods amounting to Rs.5,63,62,005/.
After deducting such amount of excise duty paid by the assessee, the AO made an addition of Rs.5,05,56,718/- on account of unaccounted sales. The ld. CIT(A), relying on the Pune Tribunal orders in M/s.
Rajuri Steel Pvt. Ltd. and M/s. Meta Rolls & Commodities Pvt. Ltd., held that the addition should be made only for the profit element embedded in such sales and not the entire amount of sales. Taking cognizance of the Tribunal view in identical circumstances, he restricted the addition to 4% of such sales. Aggrieved thereby, the Revenue has approached the Tribunal.
We have heard the ld. DR and gone through the relevant material on record. There is no appearance from the side of the assessee despite notice. It is seen that the AO found the assessee to be involved in making unaccounted sales without payment of excise duty on such goods manufactured by it. This factual matrix is not controverted. For selling goods outside the books of account, one
M/s. Saptashrungi Alloys Pvt. Ltd., needs to manufacture the same, which entails costs. In such circumstances, it is the profit element plus basic investment, which can be taxed. It is discernible from the impugned order that the Pune Tribunal in identical facts and circumstances has restricted the addition to 4%. The ld. DR could not point out that the view taken by the Tribunal in such orders, as taken note of by the ld. first appellate authority in the impugned order, has been modified or overturned by the Hon’ble High Court. In that view of the matter, no infirmity can be traced in the impugned order restricting the addition to this level.
We, therefore, uphold the same.
In the result, the appeal is dismissed. Order pronounced in the Open Court on 13th September, 2021.