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TMI Blog2000 (4) TMI 169X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessee in this appeal relates to the confirmation of the addition made on account of shortages in various items. The first addition is of Rs. 4,008 made in respect of value of scrap of jali obtained by the assessee in the course of manufacturing of jali from raw material known as wire. The AO has observed that the assessee has shown the total consumption of wire of 20,788 kgs. on which it claimed the shortage of 501 kg. of wire which comes to 2.5 per cent. The AO required the assessee to explain the reasonableness of such shortage claimed at 2.5 per cent. It was explained on behalf of the assessee that purchase of raw materials of wire in gross weight included packing material such as Bardana, plastics, etc. Bardana, plastics are throw ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re is cut into pieces and small pieces left over can be sold as scrap material. Such scrap has realisable value and is being often sold by such industrial units. I am, therefore, of the opinion that the learned CIT(A) has rightly confirmed the said addition of Rs. 4,008. I do not find any justification to interfere with the view taken by him. 4. The next ground relates to the addition of Rs. 1,477 and Rs. 4,213 in respect of shortage of Loha in taxable goods and Loha S.T. paid goods. The learned counsel pointed out that the shortage in Loha taxable goods account was 0.05 per cent which is most reasonable and which has been accepted in previous and subsequent assessment years. Likewise the shortage in Loha S.T. paid goods is 0.049 per cent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stock @ Rs. 9.47 per kg. which comes to Rs. 75,305 as against the declared value of such stock at Rs. 63,059. The AO thus made an addition of Rs. 12,246. The learned CIT(A) confirmed the said addition. 7. The learned counsel submitted that the method of valuation adopted by the AO at the average purchase price is acceptable to the assessee in relation to all the items of closing stock appearing in Loha taxable stock inventory except in relation to three items which were valued at the same rates at which opening stock of such material was made. He drew our attention to the opening stock and closing stock inventory furnished at pp. 19 and 20 of the paper book. The learned counsel contended that these three items, are, iron chadar (sheet), ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the view that there is no justification for sustaining the addition of Rs. 12,246 in respect of alleged undervaluation of closing stock. The AO is directed to delete the same. 8. The next ground relates to the addition of Rs. 12,308 made by the AO by estimating the sales at Rs. 28,75,000 and by applying the G.P. rate of 8.5 per cent. The AO observed that since specific additions have been made on account of shortage and undervaluation of closing stock, this addition of Rs. 12,308 made by applying the G.P. rate of 8.5 per cent is not being separately added. 9. I have considered the submissions made by the learned representatives of the parties and have gone through the relevant documents submitted in the compilation. The entire purchases ..... X X X X Extracts X X X X X X X X Extracts X X X X
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