9911796707
TMI Blog2011 (3) TMI 679X X X X Extracts X X X X X X X X Extracts X X X X ..... o. As already pointed out above, even if we proceed on the assumption that there was excess consumption of sugar, there was no rational basis for presuming that the respondent would have manufactured more soft drinks and the production of these soft drinks were suppressed. It is an admitted case that the Assessee was maintaining the regular books of accounts and no discrepancy in the books of accounts was found. Assessee is also maintaining the records of stocks. The product of the assessee is also excisable. - Excess consumption is due to excess wastage - decided in favor of assessee. - I.T.A. No.574/2007 - - - Dated:- 9-3-2011 - MR. JUSTICE A.K. SIKRI, MR. JUSTICE M.L. MEHTA, JJ. For Appellant: Ms. Rashmi Chopra, Advocate for the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ble on closing stock of raw material? (vi) Whether the provisions of Explanation 5 to Section 32(i) of Income Tax Act, 1961 inserted w.e.f. 01.04.2002 requiring the AO to compulsorily compute depreciation is clarifcatory in nature? 2. In so far as first is concerned, the Assessing Officer disallowed the amortization of the expenses of Rs. 8,02,000/- under Section 35D of the Income-Tax Act. The Assessing Officer wrongly presumed that the expenses incurred were the fee payable on account of increase in share capital. It is a matter of record arrived at by the Income Tax Appellate Tribunal as well that the expenses incurred were on the registration of the company and thus incurred before the commencement of business operation. On this ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as 28.67% higher than the preceding year. The Assessing Officer did not dispute the actual consumption of the sugar. However, curiously he concluded that since the consumption of sugar was higher by 28.67%, it would have resulted in higher production of the soft drinks by 28.67%. Thus instead of accepting the figure of production of 3,43,31,000 cases of soft drinks given by the assessee, the Assessing Officer inflated the same by 23.54% and concluded that the total soft drinks produced by the assessee would be to the tune of 4,88,27,00,000 instead of 3,43,31,000 cases as declared in Schedule 18 of the balance sheet. On this figure as declared in Schedule 18, 23.54% thereof was added as out of book sales and in this manner addition of Rs. 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9 tonnes sugar consumption. According to the CIT(A), the respondent was unable to give any satisfactory explanation of the excess consumption of sugar and, therefore, he took the excess consumption to the tune of 1259 tonnes and made the addition by taking average price of sugar at Rs. 14.17 per kg., i.e., Rs. 1,78,44,446/-. The CIT(A) thus modified the order by deleting the figure of Rs. 1,14,93,87,580/- arrived at by the Assessing Officer and substituting the same by Rs. 1,78,44,446/-. 7. Both Revenue as well as the Assessee preferred appeals to the ITAT against the aforesaid order. Insofar as the Revenue is concerned, it was aggrieved against the relief given by the CIT(A). The ITAT rejected the appeal of the Revenue and rightly ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was pointed out by it. Though this order discusses this aspect in much detail and it is not necessary to go into the same, suffice it to state that 434 tonnes was attributed to standard consumption and 826 tonnes due to wastage thereby accounting for the alleged excess consumption. 9. This is a pure finding of fact arrived at by the Tribunal holding that there was no excess consumption of sugar and, therefore, the addition made by the CIT(A) was also rightly deleted by the ITAT. 10. The third issue pertains to the depreciation allowed by the CIT(A) as well as ITAT. The contention of the Revenue is that explanation 5 to Section 32 (i) of the Income Tax, which is inserted with effect from 01.04.2002 was clarificatory in nature and the ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
