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
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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/-
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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.
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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
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