Vijay Solvex Ltd v. Commissioner Of Income Tax, Alwar

IN THE HIGH COURT OF JUDICATURE FOR RAJASTHANAT JAIPUR BENCH, JAIPUR D.B. Income Tax Appeal No.199/ 2005 Vijay Solvex Ltd. vs. Commissioner of Income Tax, Alwar Date of Judgment : 24.02.2015 REPORTABLEHON'BLE THE ACTI NG CHI EF JUSTI CE MR.SUNI L AMBW ANIHON'BLE MR. JUSTI CE PRAKASH GUPTA Mr. Sanjay Jhanwar, counsel for appellant.Ms. Parinitoo Jain, counsel for respondent-department. 1.This Income Tax Appeal, under Section 260A of the Income Tax Act, 1961, was admitted on the questions of law as follows: “(i)Whether the term 'Profit and Gains' used insection 80HH & 80I of the Income Tax Act, 1961 withreference to an eligible industrial undertaking have thesame meaning as the term 'income' whereas thestatute uses both the terms independently in differentprovisions of the Act?”(ii)Whether the 'profits and Gains' of current year ofthe eligible undertaking would be relevant forcomputing deduction u/ s 80HH and 80I of the Act orthe income computed after reducing depreciationallowance u/ s 32(1) shall be relevant for thesedeductions?(ii)Under the fects and circumstances of the case,whether ld. Tribunal was justified in upholding thetrading addition of Rs.5,69,346/ - by restricting thedriage loss in the process of manufacturing ofmustered oil to 18% as against 25% as per theregularly maintained records without pointing outeven a single discrepancy in the records?” 2.So far as the question Nos.1 & 2 are concerned, these are the same questions, as question No.2 in Vij ay Solvex Lt d. vs.Com m ission er of I n com e Tax , Alw ar [ D.B.I n com e TaxAppeal No.1 2 5/ 2 0 0 4 , decided on 2 4 .0 2 .2 0 1 5 ] . The same arguments have been raised to press the question Nos.1 & 2,by learned counsel appearing for the assessee-company, as inthe earlier case. We do not find any good reason to take adifferent view. The question Nos.1 & 2 are thus, decided infavour of the department and against the assessee. 3.So far as the question No.3 is concerned, the Tribunal hadupheld the trading addition of Rs.5,69,346/ - by restricting thedriage loss in the process of manufacturing of mustered oil to18% as against 25% as per the regularly maintained records. 4.It is submitted by learned counsel appearing for theassessee that each assessment year is different forassessment, and that the driage loss depends of the quality oilseeds purchased. If there is more moisture in the oil seeds,the driage loss will be more, and that in this regard, noconsistency can be maintained in the records. The AssessingOfficer did not give any reason not to accept the driage loss to25% . 5.We have gone through the assessment order, wherein the Assessing Officer had given sufficient reasons for not acceptingthe driage loss at 25% , which have been accepted by theTribunal in not allowing the driage loss to the extent of 25% . 6.In our opinion, the reasons given, for not accepting thedriage loss to the extent of 25% and reducing it to 18% , arethe findings, which have been recorded on assessment of thematerial produced on record and its comparison with theprevious years. The Assessing Officer looking to the past history of the assessee-company, and the facts did not acceptthe higher driage loss on the pretext that during the relevantmonths, the mustered seeds had more moisture. He foundthat there were no special circumstances such an excessiverain exposure to humid conditions, or any such condition in themaintenance of the seeds, which may have allowed the higherdriage loss for the same period in the assessment year inquestion. The Assessing Officer was correct in observing thatthere can be no uniform method for calculating the driage loss history of the assessee-company, and the facts did not acceptthe higher driage loss on the pretext that during the relevantmonths, the mustered seeds had more moisture. He foundthat there were no special circumstances such an excessiverain exposure to humid conditions, or any such condition in themaintenance of the seeds, which may have allowed the higherdriage loss for the same period in the assessment year inquestion. The Assessing Officer was correct in observing thatthere can be no uniform method for calculating the driage loss for the year, in comparison to the previous year. We find thatthe no such circumstances, or conditions were established,which may have permitted the assessee to claim higher driageloss. 7.The question No.3 is thus, decided in favour of thedepartment and against the assessee. 8.The Income Tax Appeal is dismissed. ( PRAKASH GUPTA) ,J. ( SUNI L AMBW ANI ) ,ACTI NG C.J. MohitM/ 8All corrections made in the judgment/order have been incorporated in the judgment/order being emailed.Mohit Tak, P.A.