TaxTMI 
TaxTMI 
2025 (9) TMI 211
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....es, appeal in ITA No. 431/Chd/2024 was taken as a lead case for discussion wherein the Assessee has raised the following grounds: "1. The impugned order is both against facts and erroneous in law. 2. On the facts and circumstances of the case, the Ld.CIT(Appeals) NFAC, Delhi, has erred in having confirmed the action of the Ld.AO in having passed an order u/s 154 of the Income Tax Act, which was without jurisdiction, and void abinitio. 3. On the facts and circumstances of the case the Ld.CIT(Appeals) NFAC has erred in having confirmed the order u/s 154 dated 30.03.2021 passed by the Ld.AO having no DIN. 4. The impugned order has been passed without any application of mind by the CIT(Appeals) NFAC on assess....
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.... loss/shortage/ evaporation of petrol and an amount of Rs. 3,17,802/- on account of excess / shortage / evaporation of diesel which, on appeal, has been sustained by the Ld. CIT(A) and against which, the assessee is in appeal before us. 4. During the course of hearing, the Ld. AR submitted that the AO has passed the order under section 154 without appreciating the fact and provisions of law that provisions of Section 154 were not applicable in the present case as proper stock record were maintained by the assessee and all necessary information / details/ records were produced during the course of assessment proceedings and after due consideration thereof the assessment was framed. It was further submitted that the quantum of evaporation ....
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....ge on sale of unleaded petrol and Diesel by the ITO while passing the order U/s 143(3) is totally out of purview of section 154. Moreover in the impugned notice the allowance of Loss/Shortage is stated to be in violation of the Rules/rates as prescribed by the Oil Company. In the notice under reply, there is no mention of the Rules/Rates said to have been violated by the assessee while claiming Loss/Shortage. Further, it is most respectfully submitted that the claim of shortage/Evaporation by the assessee was in complete compliance of company rules as prescribed and the same was allowed by the learned Assessing Authority after due verification during the course of assessment proceedings. In the notice under reply, you have....
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....lained and as per the Gazette, should be considered by taking into account the different facts. The relevant portion of the Gazette read as under: (i) Evaporation/handling losses in Motor Spirit (ie. Petrol) as follows:- 0.75% on quantity sold up-to and annual average of 600 KLs;and0.60% on additional quantity beyond an annual average of 600 KLs. (ii) Handling losses in HSD Diesel as follows: 0.25% on quantity sold up-to annual average of 600KLs; and 0.20% on additional quantity beyond an annual average of 600KLs. (Shrikage losses and temperature variation allowance quantities on Motor Spirit/High Speed Diesel to be taken into account wherever applicable) A mail from the Assistant Manage....
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....n records and rectifiable under the Act has crept in the assessment order passed under section 143(3) of the Act. 6. Further, reliance was placed on the decision of Coordinate Chandigarh Benches in case of ACIT Vs M/s Sukhna Automobiles Petrol Pump (in ITA Nos. 912 & 913/Chd/2012) wherein the shortage of 1% was held eligible. It was submitted that in the instant case, the loss/shortage claimed by the assessee is much below 1% inspite of the fact that the assessee is operating in hilly areas where higher loss on account of shortage / evaporation/shrinkage is permissible. 7. It was further submitted that over and above the shortage / evaporation loss as per the well laid down norms, the assessee company is also eligible for shrinkage al....
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.... mistake apparent from records. In response to the said notice, the assessee has furnished reply and stated that as per the company norms/rules/rates shrinkage is allowed as under :- Petrol Diesel 0.5357% 0.3891% The. reply and other documents furnished by the assessee have carefully been considered and found not tenable as there is mistake in the rates of evaporation applied by the assessee. 5. The assessee has shown sale of unleaded petrol of 920062 litres. Therefore, shortage/evaporation of petrol upto 6,00,000 Itrs is allowable at 4500 litres @ 0.75% and above 6,00,000 Itrs, shortage/evaporation is allowable at 1920 @ 0.60%, totaling to 6420 litres as against claimed by the assessee at 12681 Itrs. Thus, the....