TaxTMI 
TaxTMI 
2017 (10) TMI 1545
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....ld remain the same. 2. Accordingly, for ready reference, ground of ITA 397/CHD/ 2017 is reproduced as under : "In the facts and circumstances of the case, the Ld. CIT(A) has erred in deleting the addition made by the Assessing Officer made on account of unaccounted investment and unaccounted profit out of unaccounted production. 3. Since the present appeals are filed by the Revenue, the ld. Sr.DR was required to address the issue. Reliance was placed on the assessment order, The ld. AR submitted that the issue is covered in his favour by a group of nine cases wherein a consolidated order dated 28.04.2017 in ITA 392/CHD/2017 in the case of ITO, Ward-1 Vs M/s Dhiman Steel Rolling Mills and eight other assessees pertaining to 20....
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.... there were wide variation in ratio of electricity units consumed to per metric tons of finished goods produced during the year. He observed that the lowest units consumed for production of one metric ton of finished goods were 1117.17 units and the highest electric units consumed for production of one metric ton of finished goods were 1188.12 units. He further observed that on some days, electric units consumed were very low whereas finished goods produced were very high giving a very low value of electric units consumed to per ton of finished goods, whereas on some other days, electric units consumed were very high whereas the finished goods produced were very less giving a very high value of electric units consumed per metric unit of fin....
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....erage of electric unit consumed per metric ton of finished goods produced for over the period of 10 days. He took the lower average value of electric units consumed per metric ton of average finished goods over a period of 10 days and on this basis, and calculated the actual month wise production of the assessee. He compared the same with that shown in the books of account of the assessee and estimated the unaccounted production for each month. Thereafter, on the basis of average sales rate, the value of total unaccounted production was estimated. Then adopting the gross profit rate shown by the assessee, the unaccounted profit out of the unaccounted production was worked out. Secondly the peak unaccounted production for the relevant month ....
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....r and technical person of NISST. It was decided by the committee that 15% variation from average consumption of power for producing of each metric tonne of finished goods should be accepted. As such the cases of for the A. Y. 2013-14 were decided by following these guidelines. b) The contention of the assesses that his case for the A. Y. 2012-13 falls within 15% variation has been verified from record and found to be correct." 4.2 Considering the factual background, the CIT(A) deleted the addition holding as under: "5.3 I have considered the facts of the case as also the submissions and the report of the Ld. AO. Undoubtedly, the only reason leading to the rejection of the books of accounts of the appellant company....
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....itions should be deleted. The contention of the appellant company has been verified from the AO and as quoted above, he has reported it correct. There is a decision of the Hon'ble Punjab and Haryana High Court in the case of a CIT vs. Rieta Biscuits Co. (P) Ltd (2009) 309 ITR 154 wherein their Lordships have held that "keeping in view the principles of consistency once the issue on the merits has been decided against the revenue on the same issue during the subsequent assessment years, we do not deem it appropriate to take a different view on a technical reason. Accordingly, without specifically opining on the issue on the merits, the reference is decided against the revenue". On a careful consideration of the to....
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....or production of one metric ton of finished goods inter day basis, are bound to be there." Based on its finding of facts, it has decided "to give benefit of 15% variation in consumption of electricity per metric ton of finished goods produced from the average worked out on yearly basis". Meaning, thereby that 15% variation in the number of electricity units consumed per metric ton of finished goods as compared to the average consumption of electricity units per metric ton of finished goods is the industrial norm warranting no adverse cognizance. Hence, because of that reason alone, books of account should not be rejected. Indeed, as stated above, pursuant to the report of the Committee, the AO's have followed this norm while ma....