The Commissioner Of Income Tax v. Srj Peety

( 1 ) Tax Appeal No.30 of 2011 and others IN THE HIGH COURT OF JUDICATURE OF BOMBAY BENCH AT AURANGABAD TAX APPEAL NO.30 OF 2011 (The Commissioner of Income Tax Vs. SRJ Peety Steels Pvt.Ltd.,) WITH TAX APPEAL NO.31 OF 2011 (The Commissioner of Income Tax Vs. Shree Om Rolling Mills Pvt.Ltd.,) WITH TAX APPEAL NO.32 OF 2011(The Commissioner of Income Tax Vs. SRJ Peety Steels Pvt.Ltd.,) WITH TAX APPEAL NO.33 OF 2011 (The Commissioner of Income Tax Vs. Shree Om Rolling Mills Pvt.Ltd.,) WITH TAX APPEAL NO.34 OF 2011 (The Commissioner of Income Tax Vs. Shree Om Rolling Mills Pvt.Ltd.,)WITH TAX APPEAL NO.35 OF 2011 (The Commissioner of Income Tax Vs. SRJ Peety Steels Pvt.Ltd.,) WITH TAX APPEAL NO.36 OF 2011 (The Commissioner of Income Tax Vs. Shree Om Rolling Mills Pvt.Ltd.,)WITHTAX APPEAL NO.37 OF 2011 (The Commissioner of Income Tax Vs. Shree Om Rolling Mills Pvt.Ltd,) WITH ( 2 ) TAX APPEAL NO.38 OF 2011 (The Commissioner of Income Tax Vs. Shree Om Rolling Mills Pvt.Ltd.,) WITH TAX APPEAL NO.39 OF 2011 (The Commissioner of Income Tax Vs. SRJ Peety Steels Pvt.Ltd.,) WITH TAX APPEAL NO.40 OF 2011 (The Commissioner of Income Tax Vs. Shree Om Rolling Mills Pvt.Ltd.,) WITH TAX APPEAL NO.41 OF 2011 (The Commissioner of Income Tax Vs. SRJ Peety Steels Pvt.Ltd.,) WITH TAX APPEAL NO.42 OF 2011 (The Commissioner of Income Tax Vs. SRJ Peety Steels Pvt.Ltd.,) WITH TAX APPEAL NO.43 OF 2011 (The Commissioner of Income Tax Vs. SRJ Peety Steels Pvt.Ltd.,) Mr.Alok Sharma, Sr.Standing Counsel for appellant.Mr.S.M.Godsay, Advocate for respondents. (CORAM : S.C.DHARMADHIKARI AND RAVINDRA V.GHUGE, JJ.) DATE : 10/02/2014 PER COURT: 1.In this group of appeals, it is submitted that the question of ( 3 )Tax Appeal No.30 of 2011 and otherslaw is a substantial one and namely that the material removed and without accounting for is subject matter of proceedings under The Central Excise Act, 1944. So long as the proceedings there are pending, this Court should permit the department in this case to await the outcome thereof or in any event, that substantiates the stand of the Department that there were irregularities in the books of account. 2.It is not possible for us to accept these contentions unless it is demonstrated in Law that pendency of the proceedings under a distinct Act and for distinct liability could be relied upon so as to seek quashing and setting aside of the impugned orders. As a matter of law, the Department / Revenue must be in a position to rely on the pending proceedings under the distinct law so as to quash and set aside the impugned orders. This becomes clear because Assessee / Company is engaged in the business of manufacturing of ingots and billets used for production of M.S. Bars and TMT Bars. A search action u/s 132 was carried out in this case on 17/03/2006. Consequent upon the search action, the Assessing Officer initiated proceedings u/s 153A of the Income Tax Act, 1961. During assessment proceedings, the Assessing Officer has observed that the Assessee / Company has consistently incurred losses. Hence the books of accounts submitted by the Assessee during the assessment proceedings and those seized in CD format during search action, were examined by the Assessing Officer. 3.It is submitted that the issue involved in the appeal relates to assessment year 2000-01 and pertaining to rejection of books of accounts on the basis of findings during the assessment proceedings and relying on the electricity consumption. assessment proceedings, the Assessing Officer has observed that the Assessee / Company has consistently incurred losses. Hence the books of accounts submitted by the Assessee during the assessment proceedings and those seized in CD format during search action, were examined by the Assessing Officer. 3.It is submitted that the issue involved in the appeal relates to assessment year 2000-01 and pertaining to rejection of books of accounts on the basis of findings during the assessment proceedings and relying on the electricity consumption. 4.In that regard, the Tribunal as also the Commissioner of Income Tax (Appeals) have concurrently found that the search was initiated on 17/03/2006 in the residential and business premises of SRJ Peety Steels Pvt.Ltd.. Prior to the search, the returns of the income for the assessment year 2000-01 to 2005-06 had already been filed u/s. 139(1) of the Act, accompanied by all requisite documents and proceedings. The scrutiny was thus completed. During the course of search, no incriminating material was found relating to the said years, which could have been added in the ( 5 )Tax Appeal No.30 of 2011 and others proceedings u/s 153A. The details regarding the consumption of electricity for the production for each of the year under consideration was placed before the Authorities in the Director’s Report of each year. The same has not been disputed by the Revenue. The Tax Audit Report also contains the unit production of each year, which was accepted year after year alongwith returns and no query was raised by the Revenue. The finding of fact dated 31/03/2008 in the order passed by the Income Tax Appellate Tribunal refers to a detailed chart. The matter of fluctuating electricity, therefore, was held to be one, and since details were made available to the Department,which could have been raised during the course of regular assessment and not u/s. 153A of the Act. The finding is that nothing incriminating was found in the course of search relating to these assessment years. The additions, therefore, were not corresponding to the seized material during the course of search. The relevant income tax returns, in normal course, are disclosing the particulars. They were already on record. The returns have been accepted. In such circumstances, the Tribunal, as also, the Commissioner of Income Tax (Appeals) have in their orders, held that there are several factors which have to be taken into consideration and while arriving at a ( 6 )Tax Appeal No.30 of 2011 and others conclusion with regard to the alleged production calculated on the basis of electricity consumption. Rejection of books for these years only on the ground that there has been divergence in the consumption of electricity, therefore, was held not justified. 5.We do not find that such findings of fact give rise to any substantial question of Law and on the grounds which are urged by Mr.Sharma. Therefore, we do not find any merit in the appeals and the appeals are, therefore, dismissed. ( RAVINDRA V.GHUGE, J.)( S.C.DHARMADHIKARI, J. )