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TMI Blog1991 (10) TMI 102X X X X Extracts X X X X X X X X Extracts X X X X ..... ndicate that the consumption of power this year worked out to 3.5 units per kg. Whereas in the immediately preceding year it was nearly 1.60 unit per kg. He rejected the explanation offered by the assessee and held that the overall working revealed that total production in the preceding year was almost four times than of this year but the consumption of power during the year was more than two times as compared to last year. He, therefore, made a lump sum addition of Rs. 50,000 to the income of the assessee "to cover up the leakages ultimately affected the increase in production due to increase in power consumption". (Sic). 2. When the matter went before the CIT(A), he took into account the fact that actually the consumption of electricity ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or sold yarn out of books or sold excessive yarn produced. He finally stated that the ITO had given no basis or working of the addition made at Rs. 50,000 and, hence deleted the entire addition. 3. Being aggrieved by the order of the learned CIT(A) the Department is in appeal before us claiming that the CIT(A) had legally erred in deleting the addition of Rs. 50,000 made by the ITO. 4. We have heard both the sides and have perused the material on record. From the facts stated in this order, which have been virtually taken from the orders of authorities below, it is obvious that the ITO had made no efforts to understand the facts and circumstances of the case. In the first instance even the figures of electricity consumption have not bee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r. The assessee has pointed out that the assessee's unit was facing huge problems as a result of which there was no work at all in the first month as well as the last three months of the accounting year. Moreover, whereas assessee's main business was to manufacture woollen yarn, the assessee switched over to manufacturing cotton waste yarn, this year woollen yarn was manufactured only in three months. We further agree with the observation of the learned CIT(A) that the ITO has brought no material on record to show that appellant produced more yarn than declared or sold yarn outside books of account. We further observe that the ITO has brought no material on record to show that the assessee had falsely reduced the claim of expenditure on wag ..... X X X X Extracts X X X X X X X X Extracts X X X X
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