AI Drafter 
TaxTMI 
TaxTMI 
2021 (7) TMI 747
X X X X Extracts X X X X
X X X X Extracts X X X X
....dent reasons while confirming the deletion of addition of Rs. 4,09,60,104/- on account of discrepancy in stock and Rs. 4,07,214/- being estimated value of scrap made by the Assessing Officer ? (B) Whether the ITAT has committed gross error of law in passing the impugned order with respect to deletion of addition on account of discrepancy in stock and estimated value of scrap after following its decision in the impugned order in Revenue's Appeal for A.Y. 2003- 04 in assessee's own case though no such revenue's appeal for the A.Y. 2003-04 has been decided by the impugned order and merely the assessee's appeals for A.Y. 2003-04 (being ITA No. 1993/Ahd/2010 and ITA No. 1551/Ahd/2014) involving completely different issues were decided by the ITAT ?" 3. The Additional Commissioner of Income Tax, Bharuch Range, Bharuch being the Assessing Officer had passed the Assessment order on 26.12.2008 under section 143(3) of the said Act in case of the respondent - assessee for the A.Y. 2006-07, whereby the Assessing Officer had made following observations with regard to the discrepancy of stock : - "6.4 The explanation of the assessee is not acceptable because of the following....
X X X X Extracts X X X X
X X X X Extracts X X X X
....n Rupees Dora Unit = 7776 M.T. x Rs. 2229 per Metric Tone = Rs. 1,73,32,704/- Hoskote Unit = 10600 M.T. x Rs. 2229 per Metric Tone = 2,36,27,400/- The total of Two Units is Rs. 4,09,60,104/- which is added to the total stock on account of discrepancy in consumption of raw material after taking into account all possible wastage." 4. Thus, the Assessing Officer after considering the value of the raw material consumed as per the annual report and the difference between the consumption of raw material as per the return and as per the working submitted in the assessment proceedings as also taking into considering all possible wastage, held that the discrepancy in respect of the two units i.e. Dora Unit and Hoskote Unit was Rs. 4,09,60,104/- which was to be added to the total stock on account of discrepancy. 5. Being aggrieved by the said order passed by the Assessing Officer, the respondent - assessee had preferred an Appeal being No. CAB/VI-398/08- 09 before the Commissioner of Income-Tax (Appeals)-VI, Baroda. The CIT(Appeals) observed as under, with regard to the addition of Rs. 4,09,60,104/- on account of discrepancy of stock and Rs. 4,07,214/- being ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ned Senior Standing Counsel Mr. Varun K. Patel for the appellant submitted that the ITAT while dismissing the appeal of the revenue for the A.Y. 2006-07 had committed an error in observing that the findings recorded in the appeal of the Revenue for A.Y. 2003-04 in earlier part of the impugned order would apply to the said appeal for the A.Y. 2006-07, however, no such revenue's appeal for A.Y. 2003- 04 was decided by the said common impugned order dated 30.03.2019. According to Mr. Patel, the appeal of Revenue for the A.Y. 2003-04 being ITA No. 2280 of 2010 was dismissed as withdrawn in view of the low tax effect vide the ITAT's order dated 23.08.2019. He further submitted that the ITAT vide the impugned common order dated 30.09.2019 had decided the other two appeals of the assessee for the year 2003-04, which were filed by the assessee on completely different issue. Under the circumstances, the impugned order passed by the ITAT not only suffers from non-application of mind but is also a nonspeaking order. 9. Now, as stated hereinabove, the ITAT while dismissing the appeal of the revenue for A.Y. 2006-07, had observed that both the parties had agreed that the facts of case for A.....
X X X X Extracts X X X X
X X X X Extracts X X X X
....format. It has been further observed by the ITAT that the Assessing Officer has not brought out any defects in maintenance of books of accounts and therefore, mere arithmetic calculation made is not suffice for making addition. It is true that the reasons given in impugned order passed by the Tribunal are not happily worded and the order could have been passed using better and accurate language, nonetheless the findings recorded by the ITAT being findings of fact, the appeal cannot be entertained in absence of any substantial question of law being involved in the same. 11. It may be noted that the Appeal under Section 260A could be admitted only on the High Court being satisfied that the case involves a substantial question of law. The Supreme Court in the case of M. Janardhana Rao versus Joint Commissioner of Income Tax reported in (2005) 2 SCC 324, while dealing with the scope of Section 260A of the Income Tax Act, 1961, observed as under : - "14. Without insisting on the statement of substantial question of law in the memorandum of appeal and formulating the same at the time of admission, the High Court is not empowered to generally decide the appeal under Section 26....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ess, it has acquired a definite connotation through various judicial pronouncements. In Sir Chunilal V. Mehta & Sons, Ltd. Vs. Century Spinning and Manufacturing Co. Ltd., AIR 1962 SC 1314 a Constitution Bench of this Court, while explaining the import of the said expression, observed that: "The proper test for determining whether a question of law raised in the case is substantial would, in our opinion, be whether it is of general public importance or whether it directly and substantially affects the rights of the parties and if so whether it is either an open question in the sense that it is not finally settled by this Court or by the Privy Council or by the Federal Court or is not free from difficulty or calls for discussion of alternative views. If the question is settled by the highest Court or the general principles to be applied in determining the question are well settled and there is a mere question of applying those principles or that the plea raised is palpably absurd the question would not be a substantial question of law." 19. Similarly, in Santosh Hazari Vs. Purushottam Tiwari (2001)3 SCC 179 a three judge Bench of this Court observed that: ....