9911796707
TMI Blog1999 (7) TMI 531X X X X Extracts X X X X X X X X Extracts X X X X ..... essee in this appeal is against the confirmation of addition of Rs. 1,39,127 on account of excessive payment of job charges. The assessee had declared gross profit of Rs. 44,25,009 on total sales of Rs. 2,99,87,328. Thus there was gross profit rate of 14.3 per cent. The Assessing Officer observed that the GP rate declared for the assessment year in question was at par with that for the assessment year 1985-86. He was, however, of the view that the job charges claimed were excessive inasmuch as they had gone up to Rs. 14,62,756 from Rs. 11,43,562 of last year. He also observed that the fuel and electricity expenses had also gone up. He added that the excessive job charges had been paid to related concerns. He further added that the job charg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n of profit to a sister concern. He, therefore, confirmed the disallowance of Rs. 1,39,127 as excessive job work charges paid. 6. Aggrieved further the assessee has preferred second appeal before this Tribunal. The learned counsel submitted that the disallowance was unjustified and wrong. He contended that the job work charges paid were real and prompted by business expediency. He argued that no material had been brought on record to show that the payments were not genuine. He pointed out that in the assessment year 1988-89 job work charges paid to M/s. Bumpy Udyog at the rate of Re. 1 per Kg. was allowed by the learned CIT(A) Faridabad. He contended that since the job work charges paid to the same firm for the assessment year covered u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 72 per cent shown in the immediately two preceding years and 12.5% and 10.98% shown in the subsequent two assessment years. The aforesaid GP rates in the preceding years as well as in the subsequent years were accepted. 11. In view of the aforesaid facts and circumstances of the case the addition of Rs. 1,39,127 is deleted. 12. The next grievance raised in this appeal is against the addition of Rs. 4,42,451 sustained by the learned CIT(A) in the trading account. The Assessing Officer disallowed Rs. 4,39,140 along with the aforesaid disallowance of Rs. 1,39,127 out of job work charges on the ground that the claims were excessive. The Assessing Officer observed that the payment of job charges for strap cutting and fixing to M/s. Front ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the facts that the GP rate declared was reasonable and as job work charges paid to M/s. Frontier Rubber Factory even at higher rates in other years as mentioned above had been allowed, the impugned addition was liable to be deleted in full. 16. The learned DR on the other hand, supported the order of the learned CIT(A). 17. After considering the materials on the file and the submissions made by the rival parties before us we are of the view that the impugned addition of Rs. 4,42,451 sustained by the learned CIT(A) was unjustified and wrong. No materials had been brought on record to show that the payments were not genuine. The impugned addition was made only on conjecture and surmises and on hypothetical calculations. Similar additi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8 + Rs. 42,920 + Rs. 58,560) on account of the addition in the diesel account. The learned CIT(A) also held that the assessee had shown excessive consumption of LDO. He added Rs. 44,435 on this account. Thus the aggregate enhancement by the learned CIT(A) was made for Rs. 3,72,403 (Rs. 3,27,968 + Rs. 44,435). 20. Aggrieved the assessee has preferred appeal before this Tribunal. The learned counsel submitted that the additions had been made by the learned CIT(A) on conjecture and surmises. He added that the excessive consumption etc. of diesel and LDO had been worked out by the learned CIT(A) purely on estimate without bringing any material on record to show that the assessee had shown wrong or false consumption in the books of account. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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