9911796707
TMI Blog2012 (10) TMI 121X X X X Extracts X X X X X X X X Extracts X X X X ..... e sale is organized through agents appointed all over India and as a part of business understanding, actual expenditure on account of outward freight, loading and unloading expenses are reimbursed to the agents through debit notes - Held that:- The assessee produced copy of debit note of the party along with copy of account in order to support the claim. Assessee maintains running account with the party in the books of account and there were regular transactions of credit and debit in such account and the entire amount on the basis of debit note was credited in the account. No discrepancy has been pointed out by AO. The assessee also filed the letter in respect of the amount which gives the details of freight, loading and unloading charges and draft making charges. Decision in favour of assessee - I.T.A.Nos. 2667, 2668 & 2669/Del/2011 - - - Dated:- 13-7-2012 - SHRI R.P. TOLANI, AND SHRI K.D. RANJAN, JJ. Appellant by : Shri R.S. Negi, Sr. DR. Respondent by : Shri R.S. Singhvi, CA. O R D E R PER K.D. RANJAN, ACCOUNTANT MEMBER These appeals by the Revenue for Assessment Years 2002-03 to 2004- 05 arise out of separate orders of Commissioner of Income-tax (Appeal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty of milk. The learned CIT(A) further noted that the losses claimed by the assessee for whole of the year were below the standard norms. The learned CIT(A) therefore, deleted the addition. 5. Before us the learned Sr. DR supported the order of the AO. On the other hand, the learned AR of the assessee submitted that annual loss was within the standard norms and therefore, no disallowance should be made. He accordingly supported the order of the learned CIT(A). 6. We have heard both the parties and have gone through the material placed on record. The AO while disallowing the claim for loss has not given any reasons as to why the disallowance was to be made. The assessee has been maintaining regular books of account and production records. Production records are subject to scrutiny by Excise Department. Excise Department has not found any irregularity in the books of account. The AO has also not pointed out any mistake in the books of account merely because in certain months handling loss was more, which was totally dependent upon the quality of milk. The AO in our considered opinion, has made disallowance without bringing any material on record. The handling loss shown by the as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... conclusion that the assessee has inflated the price of the milk purchased. The assessee before the CIT(A) has very categorically explained the seized paper which was also supported by the documents in the name of the commission agreement through which commission has been paid to different commission agents. The assessee has clearly explained that the findings of the Assessing Officer are incorrect. The Assessing Officer without discussing any fact or explanation of the assessee made the addition which appears to be not justified. The Assessee explained that costing at page 17 was made on the basis of fat contained in milk at 6.2%. The explanation of the assessee appears to be justified because the milk are generally purchased after verifying the quality of the fat in the milk. The assessee also clearly explained that Bahadurgarh Centre basically represented the milk assembly center which was managed by the commission agent at village level. The assessee also filed copy of the agreement with the commission agent in support of the contention of the commission was calculated on the basis of quality milk sold by them. Such payment of commission has been supported by the payment made th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Assessment Year 1993-94 and in subsequent years. Since the issue is squarely covered by the decision of ITAT, we do not find any infirmity in the order of the CIT(A) deleting the addition in all the three years. 11. Next issue in Assessment Year 2002-03 relates to deleting the addition of Rs.5,70,156/- made on account of freight and loading uploading expenses. The AO observed that the debit note of the party was not produced and as per confirmation filed by the said party reimbursement was only to the extent of Rs.41,844/- and accordingly balance amount of Rs.5,70,155/- was disallowed. 12. Before the CIT(A) the assessee submitted that debit note dated 12-07- 2001 from M/s. Akarshan Food Stuff Pvt. Ltd. relating to claim of freight, loading and upholding charges to the extent of Rs.6,12,000/- along with draft making charges to the extent of Rs.67,030/- was duly produced before the AO and in fact the AO himself has accepted claim of draft making charges to the extent of Rs.67,030/-. Further the amount of Rs.6,79,030/- was duly credited to the account of the party which was inclusive of Rs.6,12,000/- relating to freight, loading and unloading charges. The above said credit was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o the extent of Rs.41,844/- and as such the disallowance made by the Assessing Officer is illegal and arbitrary. Taking into consideration totally of the facts of the case and documents on record, the addition of Rs.5,70,156/- is not sustainable and same is hereby deleted. The ground No.1 is allowed to the appellant. 13. Before us the learned Sr. DR supported the order of the AO. On the other hand, the learned AR of the assessee filed a confirmation from M/s. Akarshan Food Stuff Pvt. Ltd. in support of the contention that expenditure of Rs.6,79,030/- was made. 14. We have heard both the parties and have gone through the details filed and order of the CIT(A). The learned CIT(A) has noted that there was running account with the party in the books of account of the assessee and there were regular transactions of credit and debit in such account and the entire amount on the basis of debit note was credited in the account. It was not the AO s case that correctness of debit note was in dispute or any clarification was called for. The learned CIT(A) has also observed that disallowance made by the AO was illegal and arbitrary. During the course of hearing the findings recorded by the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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