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The ITO, Ward-1,Mandi Gobindgarh Vs M/s Jai Gases (P) Ltd.,Mandi Gobindgarh
July, 12th 2012
          IN THE INCOME TAX APPELLATE TRIBUNAL
            CHANDIGARH BENCHES `B' CHANDIGARH


       BEFORE SHRI H.L.KARWA, HON'BLE, VICE PRESIDENT
          AND SHRI T.R. SOOD, ACCOUNTANT MEMBER


                            MA Nos. 103 & 104/Chd/2007
                            (In ITA Nos. 23 & 24/Chandi/2004)
                      Assessment Years: 1998-99 & 1999-2000


The ITO, Ward-1,         Vs           M/s Jai Gases (P) Ltd.,
Mandi Gobindgarh                      Mandi Gobindgarh


(Appellant)                                (Respondent)


                   Appellant By            : Shri N.K. Saini
                   Respondent By           : Shri Sudhir Sehgal

                   Date of hearing       : 06.07.2012
                   Date of Pronouncement : 10.07.2012





                                   ORDER


PER H.L.KARWA, VP


      These two Misc. Applications filed by the Revenue         arise out of the

common order of the Tribunal dated 11.08.2005 passed in ITA Nos. 23 &

24/Chandi/2004 relating to assessment years 1998-99 & 1999-2000..



2.    The Revenue has filed separate Misc. Applications for assessment

years 1998-99 and 1999-2000. The common contention raised by the Revenue

in these applications is that the Tribunal while deciding the appeals for the

assessment years 1999-99 and 1999-2000 held that the average consumption
                                                                              2


rate of electricity per cylinder at 15 units as reasonable whereas while

deciding the appeal for the assessment year 1997-98, the cons umption of 13.5

units of electricity per cylinder was held justified.     Accordingly, it was

submitted by the Revenue that the mistake which is apparent from records ,

may be rectified.



3.    The brief facts of the case are that the assessee is engaged in the

business of manufacturing and sale of oxygen gas cylinders. While framing

the assessment for the assessment years 1998-99 and 1999-2000, the

Assessing Officer made the addition of Rs. 13 lacs and Rs. 26,11,729/- on

account of excess production of gas cylinders by rate of consumption of

electricity of 13.5 units per cylinder on the basis of consumption of

electricity shown by the assessee itself in the earlier assessment years. The

Assessing Officer during assessment proceedings noticed that the average

consumption of electricity per gas cylinder comes to 15.87 units which was

considered towards the higher side. In this regard, the assessee submitted its

explanation on 6.12.2000 alongwith a chart showing month wise consumption

and production of cylinders by contending that the plant has to be kept

operational irrespective of production to maintain a temperature of (-) 190

degree C which is required for production of gas. The Assessing Officer did

not accept the explanation of the assessee and adopted the rate of

consumption of electricity of 13. 5 units per cylinder and made the addition of

Rs. 13 lacs for assessment year 1998-99.       Similarly for assessment year

1999-2000, the Assessing Officer made and addition of Rs. 26,11,729/- to the

income of the assessee   on account of suppression of production of oxygen

gas cylinders. On appeal, the CIT(A) reduced the addition to Rs. 5,46,287/-
                                                                              3


for assessment year 1998-99 and Rs. 9,70,835/- for assessment year 1999-

2000. The Revenue filed separate appeals for the assessment years 1998-99

and 1999-2000 before the Tribunal against the orders of CIT(A) and the

Tribunal vide its order dated 11.8.2005 in ITA Nos. 23 & 24/Chandi/2004

relating to assessment years 1998-99 and 1999-2000 upheld the orders of

CIT(A).



4.    We have heard the rival submissions and have also perused the

materials available on record. The Tribunal has discussed this issue in paras

9 to 17 of its order dated 11.8.2005. In para 12 of the order, the Tribunal has

categorically stated that the Assessing Officer has adopted the rate of

consumption of electricity of 13.5 units per cylinder on the basis of

assessment year 1997-98, whereas the facts of assessment year 1997-98 are

different as compared to the facts of assessment year under consideration.

The Tribunal further held that for the assessment year 1997-98, as per the

working, the electric meter was defective and average was adopted.         The

Tribunal further held during the assessment years under consideration, no

evidence of sale was found on the basis of which the consumption can be

estimated.   The Tribunal further held that no defect was found in the stock

register. There are no sales outside the books of account, the production is

regularly checked by Central Excise Department. Accordingly, the Tribunal

concluded that adoption of adhoc units is not justified.       In view of the

categorical findings of the Tribunal given in order dated 11.8.2005, we do

not see any merit in the misc. applications filed by the Revenue.          The

Tribunal has categorically stated that the facts of the assessment year 1997-

98 are not similar to the facts of assessment years 1998-99 and 1999-2000.
                                                                              4





For the same, the Tribunal has given the reasons in para 12 of the order dated

11.8.2005.   We may als o add here that there is no material on record to

controvert the findings of the Tribunal given in para 9 of the order.     Even

otherwise also merely because the electricity consumption is higher, addition

cannot be made to the income of the assessee without bringing into record the

corroborative evidence. In para 17 of the order, the Tribunal has stated that

higher consumption of electricity may be due to age of the plant, ageing

process of the machinery, emerging computation, sharing work load, frequent

break down in the electricity, labour problem, availability of raw material

etc.   Considering the entire facts and circumstances of the present case, we

are of the view, that both the Misc. Applications filed by the Revenue

deserve to be dismissed particularly in absence of any mistake apparent from

the records.. Accordingly, we dismiss both the Misc. Applications.



5.     In the result, both the Misc. Applications are dismissed.


       Order Pronounced in the Open Court on this 10 t h day of J uly, 2012


      Sd/-                                               Sd/-
   (T.R.SOOD)                                         (H.L.KARWA)
ACCOUNTANT MEMBER                                   VI CE PRESIDENT
Dated : 10 t h July, 2012
Rkk

Copy to:
  1.     The Appellant
  2.     The Respondent
  3.     The CIT
  4.     The CIT(A)
  5      The DR
                          True Copy
                                                   By Order

                                               Assistant Registrar
5
 
 
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