- (1.) In all these appeals common question of law and facts arises and they relates to same assessee, therefore, these appeals were heard together and decided by this common judgment. 1.1 By way of these appeals, the appellant has challenged the judgment and order of the Tribunal whereby Tribunal has dismissed the appeals preferred by the Department.
(2.) While admitting the appeals, this Court framed the following substantial question of law: "(1) D.B. Income Tax Appeal No.117/2008 (1) Whether in the facts and circumstances of the case, the ITAT has not acted illegally and perversely and has not grossly erred in deleting the additions on account of excessive wastage which was rightly and on the basis of record restricted to 25% by the AO? (2) Whether in the facts and circumstances of the case ITAT has not acted illegally and perversely and has not grossly erred in overruling the decision of CIT(A) and AO regarding rejection of books of accounts invoking provisions of Section 145(3) of the Act? (2) D.B. Income Tax Appeal No.65/209 (1) Whether in the facts and circumstances of the case, the ITAT has acted illegally and perversely in deleting the additions under section 69c on account of difference in the closing stock of finished goods and work in progress as well as deleting the additions on account of non-genuine expenditure. (2) Whether in the facts and circumstances of the case, the ITAT has acted illegally and perversely and has grossly erred in deleting the additions on account of excessive wastage in computation of income under chapter IV of Income Tax Act which was on the basis of record restricted to 25% by the Assessing Officer. (3) Whether, in the facts and circumstances of the case, the ITAT has acted illegally and perversely and has not grossly erred in overruling the decision of CIT(A) and AO regarding rejection of books of accounts invoking provisions of Section 145(3) of the Act. (3) D.B. Income Tax Appeal No.44/2010 "(1) Whether in the facts and circumstances of the case, the ITAT has acted illegally and perversely and has not grossly erred in overruling the decision of AO regarding rejection of books of accounts invoking provisions of Section 145(3) of the Act." (4) D.B. Income Tax Appeal No.56/2010 "(1) Whether in the facts and circumstances of the case, the ITAT has acted illegally and perversely and has not grossly erred in overruling the decision of Assessing Officer regarding rejection of books of accounts invoking provisions of Section 145(3) of the Act? (5) D.B. Income Tax Appeal No.83/2011 "(1) Whether in the facts and circumstances of the case, the ITAT has acted illegally and perversely in deleting the additions under section 69C on account of difference in the closing stock of finished goods and work in progress as well as deleting the additions on account of non-genuine expenditure. (2) Whether in the facts and circumstances of the case, the ITAT has acted illegally and perversely and has grossly erred in deleting the additions on account of excessive wastage in computation of income under Chapter IV of Income Tax Act which was on the basis of record restricted to 25% by the Assessing Officer. (3) Whether, in the facts and circumstances of the case, the ITAT has acted illegally and perversely and has not grossly erred in overruling the decision of CIT(A) and AO regarding rejection of books of accounts invoking provisions of Section 145(3) of the Act." (6) D.B. Income Tax Appeal No.63/2014 "(1) Whether in the facts and in the circumstances of the case, the ITAT has acted illegally and perversely and has grossly erred in deleting the additions on account of excessive wastage which was on the basis of record restricted to 25% by the Assessing Officer? (2) Whether in the facts and circumstances of the case, the ITAT has acted illegally and perversely and has not grossly erred in overruling the decision o9f Assessing Officer and CIT(A) regarding rejection of books of accounts invoking provisions of Section 145(3) of the Act?" (7) D.B. Income Tax Appeal No.65/2014 "(1) Whether in the facts and in the circumstances of the case, the ITAT has acted illegally and perversely and has grossly erred in deleting the additions on account of excessive wastage which was on the basis of record restricted to 25% by the Assessing Officer? (2) Whether in the facts and circumstances of the case, the ITAT has acted illegally and perversely and has not grossly erred in overruling the decision of Assessing Officer and CIT(A) regarding rejection of books of accounts invoking provisions of Section 145(3) of the Act.?" (8) D.B. Income Tax Appeal No.124/2016 "(1) Whether in the facts and circumstances of the case, the ITAT has acted illegally and perversely and the grossly erred in deleting the additions of Rs.22013105/- and also not confirming the rejection of books of results done after pointing out specific defects in its books. (2) Whether the ITAT was justified in confirming the decision of the CIT (A) deleting the trading addition despite of the fact that during the survey proceeding and assessment proceedings many inconsistencies were noticed. (3) Whether in the facts and circumstances of the case, the ITAT and CIT(A) have not acted illegally and perversely in deleting the additions made by AO on account of restriction of wastage which was done after examining the complete process of production. (4) Whether in the facts and circumstances of the case, the ITAT and CIT(A) have not acted illegally and perversely in not considering that the estimation of wastage made by the AO was on the basis of report of CGRI which is an independent agency having expertise in the related filed. (5) Whether in the facts and circumstances of the case, the ITAT has erred in deleting addition of Rs. 2472851/- made for depositing the employee's contribution to PF A& ESI beyond the prescribed time limit provided in the respective Acts, when the employee's contribution is governed by the provisions of section 36(1) (va) r.w.s. 2(24) (x) and not section 43B of the IT Act. (9) D.B. Income Tax Application No.135/2016 "(1) Whether in the facts and circumstances of the case, the ITAT has acted illegally and perversely and has grossly erred in deleting the trading additions of Rs.33015176/- may be the Assessing Officer without appreciating the fact that the estimation of wastage made by the Assessing Officer was on the basis of CGCRI Report which is in independent agency having expertise in the related filed. (2) Whether in the facts and circumstances of the case, the ITAT has acted illegally and perversely and has not grossly erred in overruling the decision of Assessing Officer regarding rejection of books of accounts invoking provisions of Section 145(3) of the Act. (10) D.B. Income Tax Appeal No.198/2016 "(1) Whether in the facts and circumstances of the case, the ITAT has acted illegally and perversely and has grossly erred in deleting the entire additions of Rs.16643028/- on account of unaccounted production made by the Assessing Officer without appreciating that the estimation of wastage made by the Assessing Officer on the basis of report of CGCRI which is an independent agency having expertise in the related field. (2) Whether the ITAT was justified in confirming the decision of the CIT(A) deleting the trading addition despite of the fact that during the survey proceeding and assessment proceeding many inconsistencies were noticed. (3) Whether in the facts and circumstances of the case, the ITAT has acted illegally and perversely and has not grossly erred in overruling the decision of Assessing Officer regarding rejection of books of accounts invoking provisions of Section 145(3) of the Act.
(3.) Mr. R.B. Mathur has taken us to the order of AO which reads as under:- "In response to this query the assessee vide its' A/R's letter dated 26.03.2004 submitted as under:- 'In para no.1, you have pointed out in-consistency in output/input ratio. In this respect we will like to submit. , (a) You have included plaster of paris consumed 346.365 M.T. in the inputs. Plaster of paris is not ingredient of our product. This is being used as consumable for mould purposes and as such it should not be included for calculating input output ratio. (b) The output/input ratio for the year under assessment comes to 67.31% whereas this was 68.34% in the financial year 1998-99 and 66.19% in the financial year 1999-2000. We are enclosing a comparative chart for this purpose. There is no major difference in these ratios. (c) The output is the actual and most reasonable. Here we would like to mention that the output ratio will depend on number of factors depending on the quality of the goods produced, quality of furnaces and machines used, temperature required, tolerable fluctuations. As well as the quality of raw material used and the ingredient used and in the ingredients used. (d) We agree that in our sister concern M/s Bharat Potteries Ltd., their yield comes to 73.14% and in our case it is only 67.31%. The basic reason of difference are as under: (i) We are manufacturing Bone China Crockery at large and the manufacturing of Stone Ware Crockery is less. The Stone Ware Crockery manufactured by us is lower as compared M/s. Bharat Potteries Ltd. (ii) Bharat Potteries Ltd. is manufacturing maximum stoneware crockery and we are manufacturing maximum Bone China Crockery. (iii) Stoneware Crockery is heavy in weight in comparison to the Bone China Crockery. (iv) Green Strength of Bone China Crockery is less in comparison to Stoneware Crockery. Therefore Green Wastage and Wastage in Biscuitting is more in Bone China Crockery. (v) The temperature in Bone China Biscuitting is 12300 and Stoneware temperature is 9500. Therefore due to high temperature the percentage of breakage is more in Bone China Crockery in comparison to Stoneware Crockery. (vi) Temperature range in Stoneware Crockery is 500 centigrade and Bone China Crockery is 100 centigrade. (vii) In view of the above the production and breakage of Bone China and Stoneware can never be same. Therefore, the yield of output will differ as compare to our sister concern M/s. Bharat Potteries Ltd. The comparison of our yield with M/s. Bharat Potteries Ltd. is not justified. The difference in yield is only of 6.19% and no 21.44 as pointed out by you in your show cause notice. Therefore there is no question of unrecorded production." 3.1 He has also taken us to the order of CIT appeal, para 3.4 of which reads as under: 3.2 Taking into consideration he contended that the view taken by the AO is correct even at the most even assuming but not admitting, if it is taken to be correct, it cannot travel beyond reasoning adopted by the tribunal. ;