9911796707
TMI Blog2012 (9) TMI 788X X X X Extracts X X X X X X X X Extracts X X X X ..... explain the higher wastage which was the apparent cause of lower yield. In response to the same, it was explained by the assessee that the printed circuit boards are technical products and are manufactured as per the requirements of the buyers. They vary according to the specifications given resulting into variation in yield or wastage within a range. In support of the same RG-1 register was produced. Month-wise table of wastage was examined by the AO who noted that there was no uniformity in the pattern of losses and the assessee could not explain the same. The AO further noted that day-to-day records are not maintained to show batch-wise generation of copper waste which is one of the most important raw material used. He further noted that there is no supporting evidence in the form of weigh slip showing consumption of copper clad laminates and generation of waste from the sheets as per RG-1 register. Therefore, the explanation submitted by the assessee to explain higher wastage of copper sheets was not accepted by the AO as convincing for which he made an adhoc addition of Rs. 3 lakhs for suppressed production. 4. Before the CIT(A) it was submitted that the assessee has given q ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the PCBs to be manufactured depending on the orders received and therefore, the wastage generated on cutting of large copper clad laminates into smaller pieces of PCBs has to differ. The variation or the shortage in yield pointed out by the Assessing Officer is not very significant. The addition made is also based on adhoc estimation. However, the defect pointed out by the Assessing Officer in respect of maintenance of records at different stage of manufacturing, is in my opinion a relevant issue based on which the contention of the Assessing Officer that the generation of wastage being claimed is unverifiable, looks worthy of consideration. The finding of the Assessing Officer that the records were found not maintained in a manner which could be verified to examine the co-relation between the wastage and the size of the PCBs under manufacture for different batches, needs to be considered. In view of the above, I find that the Assessing Officer has a point which needs consideration. Even if, theoretically the contention of the appellant that the yield would change depending on the specifications of PCBs is found correct, the appellant has to maintain its record in a manner whic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . We accordingly set-aside the order of the CIT(A) on this issue and direct the AO to delete the addition. This ground raised by the assessee is accordingly allowed. 7. In Ground of appeal No. 2 the assessee has challenged the order of the CIT(A) in confirming the disallowance of Rs. 1 lakh on account of carriage inward/outward. 8. Facts of the case, in brief, are that the assessee has debited Rs. 59,13,485/- as carriage inward/outward. The AO while examining the details found that some of the expenses are not fully supported with proper evidences and vouchers since certain vouchers are of self made. In absence of satisfactory explanation given by the assessee regarding the self made vouchers the AO disallowed an amount of Rs. 1 lakh on adhoc basis. 9. Before the CIT(A) it was submitted that the allegation of the AO that vouchers are self made is not true. It was submitted that payments have been made to the parties who have submitted bills for the work done and details were submitted to the AO as per letter dated 26-08-2008. 10. However, the learned CIT(A) was not convinced with the arguments advanced by the assessee and upheld the addition made by the AO. While doing so he no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pt to satisfy the AO. However, the addition made on estimate basis being found on the higher side he restricted such disallowance to Rs. 30,000/-. The order of the CIT(A) sustaining Rs. 30,000/- under the facts and circumstances of the case in our opinion is just and proper and does not call for any interference. Accordingly the same is upheld. This ground raised by the assessee is accordingly dismissed. 14. In Ground of appeal No. 4 the assessee has challenged the order of the CIT(A) in confirming the addition of Rs. 7,25,931/- as bad debt by the AO. 15. Facts of the case, in brief, are that the assessee has claimed bad debt of Rs. 15,50,970/- on account of 3 parties the details of which are as under : S.No. Name of customers Address Amount 1 Bigesto Foods Pvt. Ltd. E-29, Site B, Surajpure, Industrial Area, Dist G.B. Nagar, Noida 825039.00 2 Videocon Industries Ltd. 14km, Stone, Aurangabad,Paithar Road, Chitegaon,Aurangabad-4311005 550098.00 3 Hotlilne Electronics Ltd. Plot No.8A, Udyog Vihar, Part-I & II, Noida, G.B. Nagar, Noida (JP) 175833.75 TOTAL 1550970.75 16. On being questioned by the AO it was submitted that the amount of Rs. 8,25,039/- in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ground by the assessee is accordingly allowed for statistical purposes. 19. In Ground of appeal No. 5 the assessee has challenged the order of the CIT(A) in confirming the disallowance of Rs. 4 lakhs made by the AO on account of stipend to trainees. 20. Facts of the case, in brief, are that during the course of assessment proceedings the AO noted that the assessee has debited an amount of Rs. 62,62,933/- as stipend to trainees. The AO asked the assessee to furnish the details of training imparted to these employees by giving the names of the institutes through which the training has been given, nature of training, name and details of training, venue of training etc. Inspite of asking for the specific details the assessee stated that no outside agency was engaged for giving the training. It was submitted that the training was given at the factory premises by the Senior Member of the factory. No specific agenda of the training was submitted except copies of the application seeking an employment. From the various details given by the assessee the AO noted that no statistical data, no dates of training, no agenda of the training, no venue of the training are submitted. The reply giv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the CIT(A) and the Paper Book filed on behalf of the assessee. We find although the CIT(A) has observed that the addition is on estimate and adhoc basis still he has sustained the addition made by the AO on the ground that such huge expenditure under the head "stipend" does not look justified. He further held that whether the same is bogus or not and if yes to what extent cannot be decided on the available material. Having observed so he upheld the disallowance made by the AO on the ground that the same is approximately 6% of the total expenditure of Rs. 62,62,933/-. In our opinion merely because the disallowance is a small percentage of the total expenditure cannot be a ground for sustaining the addition. If the claim is bogus, the entire amount has to be disallowed and if not bogus the whole amount should be allowed as deduction but no adhoc addition can be made on the basis of presumptions and surmises. In this view of the matter, the order of the CIT(A) sustaining the disallowance of stipend in our opinion is not justified. The same is accordingly directed to be deleted. This ground raised by the assessee is accordingly allowed. 23. In the result, the appeal filed by the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
