High Court Of Delhi
CIT vs. Hindustan Tin Works Ltd.
Section 4, 145(2)
Asst. Year 1993-94 to 1995-96
Madan B. Lokur & V.B. Gupta, JJ.
IT Appeal Nos. 1231, 1232, 1234 & 1236 of 2006
9th March, 2007
Counsel appeared :
R.D. Jolly with Ms. Sonia Mathur, for the Appellant : C.S. Aggarwal with Prakash Kumar, for the Respondent
V.B. Gupta, J. :
By this common judgment, four appeals being IT Appeal Nos. 1231, 1232, 1234 and 1236 of 2006 filed by the Revenue are being disposed of.
2. All these appeals arise out of the consolidated order dt. 9th Dec., 2005 passed by the Income-tax Appellate Tribunal (hereinafter referred to as the Tribunal) in ITA No. 6331/Del/1996 for the asst. yr. 1993-94, ITA No. 5423/Del/1997 for the asst. yr. 1994-95, ITA No. 5293/Del/2004 for the asst. yr. 1993-94 and ITA No. 5058/Del/1998 for the asst. yr. 1995-96.
3. The brief facts are that the assessee is engaged in the manufacturing and sale of tin containers. A search and seizure operation was carried out on 9th/10th March, 1995 in the business premises of the assessee. Certain documents were seized and amongst others there were daily production reports prepared on a printed proforma titled “daily production report in the fabrication department”. As per the assessee, these reports are prepared everyday after every shift and they contained the actual number of containers manufactured. The assessee was required to produce the stock register of its unit-II. The AO found that the production recorded in the stock register was less than the production shown in the production report for the months of November, 2002, February, 2003 and March, 2003. He also found that there was no record showing defective containers and that the containers produced were shown more according to the production report, whereas the number of containers produced recorded in the stock register were less in the subsequent period. It was also observed by the AO that the claim of assessee was not supported by the facts, since the assessee was not able to prove with evidence that the containers recorded as on a particular date in the stock register as compared to the production report were compensated for on a subsequent date; that no record was maintained for goods recorded and not recorded in the stock register so it was unverifiable as to the number of containers manufactured on a particular day, which were defective and as to whether they were recorded in the stock register at all. The AO also observed that the work-in- progress was reflected in terms of metric tonnes, whereas the containers produced were reflected in terms of numbers. Accordingly, the AO made the addition of Rs. 1,74,58,165 on account of understatement in production and sale of tin containers.
4. The CIT(A) deleted the addition made by the AO observing, inter alia, that such addition was mainly based on alleged difference in the production of containers, while there was no such difference.
5. The Tribunal agreed with the finding of the CIT(A) and dismissed the appeal filed by the Revenue.
6. It has been argued by learned counsel for the Revenue that addition was made on the basis of daily production report seized during the course of search containing details of containers actually produced by the assessee in the specified period of three months, the details of which could not be reconciled with the production recorded in the stock register for the period November, 2002, February-March, 2003. Further, the work-in-progress was indicated in the records in terms of metric tonnes whereas, the production of containers was reflected in terms of numbers (which) did not support the explanation tendered by the assessee. The assessee did not produce the production record for the remaining nine months despite repeated requirement conveyed by the AO and as such the AO rightly invoked the provisions of s. 145(2) of the Act.
7. The CIT(A) deleted the aforesaid addition observing, inter alia, that such addition was mainly based on the alleged differences in the production of containers, while in fact there were no such differences.
8. The Tribunal agreed with the finding of the CIT(A) observing that : “Before us, the learned Departmental Representative has not been able to interpret the categories and detailed findings of fact recorded by the learned CIT(A). These findings have not been alleged to be erroneous, much less perverse. Admittedly, there is no evidence on record to show that there had been any unaccounted sales of tin containers by the assessee. Rather, the assessee had provided all the requisite details regarding its production activity. Undisputedly, the production was meticulously routed through the assesseeâs daily production register. The entries therein were definitely co- relatable to the entries in the stock register, enabling an easy stock tally, if one was so required. However, the AO did not deem it fit to carry out the exercise of tallying the stock as per these entries in the two types of books. He merely went by the alleged difference, which was not at all there. Very many details with regard to opening stock of raw material, purchases, issue for fabrication, balance, the various types of containers manufactured, along with the respective weights thereof, were duly furnished by the assessee. This copious evidence was wrongly ignored by the AO, which was duly set right by the learned CIT(A). The learned CIT(A), on verifying the factual position, held, and rightly so, that there was no difference in the recording of the production of containers in the stock register and that the AO did not make out any case of unrecorded sale of containers by the assessee.”
9. Since these are concurrent findings of fact of the two authorities to the effect that there is no difference in the recording of the production of the containers in the stock register, we do not find any reason to differ with the findings of facts recorded by these authorities.
10. The above being the position, no fault can be found with the view taken by the Tribunal.
11. Thus, the order of the Tribunal does not give rise to a question of law, much less a substantial question of law, to fall within the limited purview of s. 260A of the Act, which is confined to entertaining only such appeal against the order which involves a substantial question of law.
12. Accordingly, the present appeals are, hereby dismissed.
[Citation : 291 ITR 290]