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TMI Blog2010 (7) TMI 125X X X X Extracts X X X X X X X X Extracts X X X X ..... AO ought to have called for the information from the excise department if any grievance was there. The alleged information collected from the Hindustan Petroleum Corporation Ltd. vide letter dated 4th January, 2005 in our opinion ought not to be preferred over the actual agreement taken place the assessee and the three oil companies unless specific defect in those agreements are pointed out. If assessee is pleading that it has manufactured cylinders having 16.7 KG of weight specified in drawings attached with agreement then the AO has to bring cogent evidence on record for dispelling the averments of assessee. This letter only specifies that average weight is approximately 15.8 KG. This evidence is not sufficient, for making the addition. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted the disallowance of Rs.95,03,697/-. 4. Ms. Rashmi Chopra, learned counsel for Revenue submitted that ITAT had erred in law in deleting the disallowance of Rs. 95,03,697/- on account of inflation in the purchase of raw material. She contended that ITAT had not appreciated the evidence on record. 5. ITAT in the impugned order has dealt with disallowance on account of inflation of purchase as under:- "11. On detailed analysis of the facts and circumstanced we find two sets of evidence. In the first set which has been relied upon the AO is the letter of Hindustan Petroleum Corporation Ltd. dated 4th January, 2005 envisaging the average weight of empty cylinder having gross capacity of 14.2 KG gas is approximately 15.8 KG. This is th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e quality of steel required to be used by the assessee. They have specified the steel required to be produced by the assessee from particular companies. This steel would give generation 55 number of cylinders on consumption of 1 MT. The assessee has placed on record copy of a certificate from the Dy. Manager Bharat Petroleum Corporation Ltd. (page 14 Paper Book) certified that the yield of 55 numbers LPG cylinder per metric ton mentioned in the terms and condition of the purchase order/agreement is related to the body steel i.e. the central two halves only. For other parts the additional steel would be required. The next evidence produced by the assessee is the opinion of Chartered Engineer who has opined that according to the BIL Standar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ollected from the Hindustan Petroleum Corporation Ltd. vide letter dated 4th January, 2005 in our opinion ought not to be preferred over the actual agreement taken place the assessee and the three oil companies unless specific defect in those agreements are pointed out. If assessee is pleading that it has manufactured cylinders having 16.7 KG of weight specified in drawings attached with agreement then the AO has to bring cogent evidence on record for dispelling the averments of assessee. This letter only specifies that average weight is approximately 15.8 KG. This evidence is not sufficient, for making the addition. Thus in our opinion no case is made out for addition on account of inflation in the purchase price. Therefore we allow the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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