Ita v. Ita

1 HIGH COURT OF MADHYA PRADESH : BENCH AT INDORE ITA No.74 of 2017 I. T. A. No.74 of 2017 -Indore, Dated: 24/04/2018 Ms. Veena Mandlik, Advocate for the appellant. Heard on the question of admission. The respondent—assessee Company filed its return ofincome for the assessment year 2001-02 on 31.10.2001declaring total income of Rs.25,90,840/-. On 22.8.2005, thecase of the assessee was reopened under Section 147 of the I.T.Act, 1961 and notice under Section 148 was issued. Learned Assessing Officer considering the fact that theassessee has utilized the amount of Modvat credit amounting toRs.77,43,268/- as per the audit report which did not tally withthe excise duty debited to the profit and loss accountRs.75,12,187/-. Therefore, the Assessing Officer came to theconclusion that the assessee has debited lesser amount ofRs.2,31,081/- as excise duty expenses in profit and loss accountand accordingly came to the conclusion that the excise dutymust have been concealed and estimated the correspondingunaccounted sales of Rs.51,60,039/-. The learned CIT as well as learned ITAT considered theaforesaid question after considering the documents andreceipts in respect of the Modvat credit availed by the assesseeand utilized on clearance of excise duty and came to theconclusion that total excise duty was Rs.81,73,799/- and notRs.77,43,268/- and set aside the order of the Assessing Officerand allowed the appeal of the assessee and ITAT upheld theaforesaid finding by dismissing the appeal of the revenue.Paras 7 to 9 are relevant which reads as under:- HIGH COURT OF MADHYA PRADESH : BENCH AT INDORE ITA No.74 of 2017 “7. We have considered the submissions of both the sides.Looking to the facts and circumstances of the case, we find thatthe learned CIT(A) has held that while reopening theassessment, reasons for reopening are reproduced in the orderof the learned CIT(A) as under :- 8. The Assessing Officer reopened the assessment order on theground that the assessee has utilised the amount of Modvatcredit amounting to Rs.7743268/- as per the audit report whichdid not tally with the excise duty debited to the profit and lossaccount Rs.7512187/-. Therefore, the Assessing Officer came tothe conclusion that the assessee has debited lesser amount ofRs.231081/- as excise duty expenses in profit and loss accountand accordingly came to the conclusion that the excise dutymust have been concealed and estimated the correspondingunaccounted sales of Rs.5160039. From the above table, thelearned CIT(A) was of the view that the assessee has explainedin the tax audit report that the requirement is only to provideinformation about Modvat credit, as claimed and utilised ITA No.649/Ind/2013 ACIT vs. Mittal Appliances by the assessee. Thetotal amount of excise duty was Rs.8173799/- and notRs.7743268/-. The assessee has filed reconciliation statementand as per the reconciliation table, excise duty paid comes toRs. 8173799/- including excise duty actually paid Rs. 430531/-and Modvat credit of Rs. 7743268/-. Out of this, Rs. 661612/-as excise duty was utilised towards the provision in respect ofopening stock of finished goods which resulted in balance figureof Rs. 7512187/- which is claimed as excise duty expenses inthe profit and loss account. The learned CIT(A) was of the viewthat the Assessing Officer has picked and chose two differentfigures from the return of income filed by the assessee. Theassessee has shown excise duty payment in his return ofincome. The Assessing Officer has taken up two figures ofexcise duty from the return of the assessee that the excise dutyof Rs. 7512186/- claimed as expenses in profit and loss accountand in tax audit report Modvat ITA No. 649/Ind/2013 ACIT vs. 3 HIGH COURT OF MADHYA PRADESH : BENCH AT INDORE ITA No.74 of 2017 3 HIGH COURT OF MADHYA PRADESH : BENCH AT INDORE ITA No.74 of 2017 Mittal Appliances credit claimed was Rs. 7743268/-. Therefore,when these two figures were picked up from the return ofincome and audit report filed by the assessee, it cannot beproved that the Assessing Officer has any information.Moreover, the Assessing Officer has, by booking the two figures,come to the conclusion that there are unaccounted sales butthere is no tangible material to come to the conclusion thatthere is escapement of income from assessment and, therefore,the reopening of the case cannot be sustained. We find that thelearned CIT(A) has verified the accounts, reconciliationstatement of excise duty paid which was filed before theAssessing Officer and the learned CIT(A) and the learned CIT(A)has held that there is no reason to believe that there isseparation of sale to the extent of Rs.5160039/-. We also getsupport from the order of the Hon'ble Apex Court in the case ofKelvinator of India Ltd. and Orient Craft Ltd. ITA No.649/Ind/2013 ACIT vs. Mittal Appliances (supra). We, therefore,find no merit in this appeal of the revenue and dismiss thesame. 9. In the result, the appeal of the revenue stands dismissed.” On due consideration of the aforesaid, we are of the viewthat no substantial question of law arises in this appeal. Appealfiled by the assessee has not merit and is, accordingly,dismissed. (P. K. Jaiswal)Judge (S. K. Awasthi) Judge pp/ Digitally signed by Pankaj Pandey Date: 2018.04.25 10:25:26 +05'30'