9911796707
TMI Blog2012 (9) TMI 233X X X X Extracts X X X X X X X X Extracts X X X X ..... tion and trading has also not been doubted. AO made the addition purely on the basis of estimate. More importantly, the ITAT in assessee’s sister concern had deleted the addition made on this account. CIT(A) in his order tried to distinguish assessee’s case with the case of assessee’s sister concern on the basis of raw material used by both parties which according to him was different but did not bring on record any thing to support his findings that material used by assessee generated more scrap as compared to assessee’s sister concern. Therefore, on facts, addition is directed to be deleted - Decided in favor of assessee. - I.T.A. No.5681/Del/2011 - - - Dated:- 20-7-2012 - SHRI RAJPAL YADAV, AND SHRI T.S. KAPOOR, JJ. Appellant by : ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee and observed that keeping in view the turnover and on the basis of practices prevalent with exporters in similar trade the generation of scrap must be substantial as compared to sale of scrap shown by the assessee. The Assessing Officer also relied upon the case of M/s Krishna Kumar Aggarwal v. ACIT in I.T.A. No. 1187 3992/2006 wherein the Hon'ble ITAT had held that 0.2% of turnover as fair estimate for calculation of scrap sale in the same kind of business. On this basis, the Assessing Officer made an addition of Rs.6,90,481/- to the income of the assessee. 4. Aggrieved, the assessee filed appeal before Ld CIT(A) and submitted as under:- i) That in the case of sister concern M/s Richa Co. in I.,T.A. No.1733/Del/.2010 dated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eted the addition on generation of scrap and that the sister concern and the appellant are carrying out the same business activity. The appellant has also submitted that they did not maintain month-wise record of wastage and during the year they have reflected scrap sale of Rs.94,125/- which has been credited in the P L Account. The appellant was asked to produce sample copies of purchase and sales bills and vouchers of the appellant concern as well as that of the sister concern. It was seen that the fabric used by the sister concern and the garment being manufactured by the sister concern are totally different. While the sister concern is using fabric and selling garments of polyster the appellant is purchasing yarn and selling goods mad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ook us to page 9 10 of paper book wherein relevant copies of ITAT orders in I..T.A. No.3502 3503/Del/2010 relating to assessee s sister concerns were placed. 8. The Ld DR relied upon the order of Assessing Officer and Ld CIT(A). 9. We have heard the rival submissions of both the parties and have gone through the material available on record. We find that the Assessing Officer has not found any defect in the books of accounts of the assessee. There is no finding about assessee s supressed production. Manufacturing production and trading accounts have been duly accepted during preceding three years though assessments were completed u/s 143(3) of the Act and no addition on this account was ever made. Current year s figures of productio ..... X X X X Extracts X X X X X X X X Extracts X X X X
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