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TMI Blog2014 (5) TMI 542X X X X Extracts X X X X X X X X Extracts X X X X ..... mpared to that of Rs. 5,46,31,886/- for the immediately preceding assessment year - The sales of the assessee company during the year were of Rs. 56,09,71,932/-, as compared to those of Rs. 39,34,31,972/- for the preceding year - Percentagewise, it worked out to 11.28% for the year, as compared to 30.89% for the preceding year - The AO had made the addition out of the closing stock incorrectly- All the fuel expenses had been made on regular bills from the suppliers and the payment had been made through account payee cheques - A copy of the assessee’s fuel account was filed – the order of the CIT(A) is upheld – Decided against Revenue. Deletion of disallowance of stores and spares expenses – Held that:- CIT(A) was of the view that all the purchase transactions were through cheque payment, but for some small purchases done on urgent basis at the plant itself, in cash, through regular cash memos, entry qua which was duly made in the assessee’s books of account - the assessee had not claimed this stock as expense u/s 37(1) of the IT Act - an asset was created in the inventory to be claimed in the next year- The expenditure found by the CIT (A) to be the figure of closing stock as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee remained not able to place on record any cogent evidence supporting its case. As a result, the AO rejected the explanation offered by the assessee and added back an amount of Rs. 37,68,727/-, being the difference in the closing stock as shown in the return filed on 14.12.09 and that filed on 26.11.09, i.e., the difference between the two revised returns. 4. The ld. CIT (A) deleted this disallowance. 5. The ld. DR has contended that the ld. CIT (A) has erred in deleting the disallowance of Rs. 37,68,727/- correctly made by the AO on account of variation in closing stock; that while doing so, the ld. CIT (A) has failed to appreciate the fact that the assessee had remained unable to produce any cogent evidence to support its case. 6. The ld. Counsel for the assessee, on the other hand, has placed strong reliance on the impugned order. 7. We have heard the parties and have perused the material on record with regard to this issue. While deleting the disallowance, the ld. CIT (A) has duly taken into consideration the explanation of the assessee that the reason for filing the revised return was on account of mistake in taking the value of the closing stock at a highe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (A) in support of its claim as had been done before the AO:- a) Printed Audited Balance Sheet showing the value of inventory as per schedule no.6 to be Rs.227,92,346/-. b) Daily stock statement received from the works and as per the excise records as on 31.03.2009 submitted to Central Excise Department and State Bank of India, New Delhi. c) Statement of closing stock of finished goods and work-in-progress as on 31.03.2009 submitted to department of Central Excise, Bhiwadi. d) Consumption chart as on 31.03.2009 (Annexure to the tax audit report giving complete opening purchase, consumption and closing stock of raw material, work-in-progress and finished goods). e) Copy of RG-1 register of Central Excise giving each finished good stock position as on 31.03.2009. f) Copy of RG-23-A, Part-1 of Central Excise register giving individual stock position of various excisable raw materials, packing material as on 31.03.2009. 8. It was submitted that the above records, in each case, tallied with the daily stock statement submitted and the total stock of raw material, finished goods, fuel, packing material and work-in-progress of Rs. 2,27,92,346/-, as per the audited acco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 6,32,63,773/-, as compared to that of Rs. 5,46,31,886/- for the immediately preceding assessment year. The sales of the assessee company during the year were of Rs. 56,09,71,932/-, as compared to those of Rs. 39,34,31,972/- for the preceding year. Percentagewise, it worked out to 11.28% for the year, as compared to 30.89% for the preceding year. The AO had made the addition out of the closing stock incorrectly. All the fuel expenses had been made on regular bills from the suppliers and the payment had been made through account payee cheques. A copy of the assessee s fuel account was filed. 18. The findings of fact recorded by the ld. CIT (A) in this regard also remained un-rebutted. Accordingly, the CIT (A) s order in this regard is also upheld. Ground No.2 is rejected. 19. Coming to Ground No.3, on comparing the stores and spares expenses of the assessee for the year under consideration with those for the immediately preceding year, the AO found there to be a substantial increase. Holding that the bills/vouchers produced by the assessee were not fully verifiable, out of the total expenses of Rs. 23,90,280/-, the AO made a disallowance of Rs. 6 lac. 20. The ld. CIT (A) d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ,655/- in the immediately preceding year. The books of account stood duly audited. The auditors had not qualified the audit report. The AO had not pointed out any discrepancy about the expenses claimed to have been incurred, nor was the genuineness of the expenditure doubted. There was also no finding to the effect that the expenses had been incurred for any non-business purpose. 21. The details of the assessee s stores and spares, as submitted before the ld. CIT (A) along with its letter dated 20.04.2012, containing the above explanation of the assessee, have also been filed before us, at pages 66-81 of the assessee s paper book. The detail of physical stock of stores and spares taken on 31.3.09 (APB 68) totals to Rs. 23,90,280.51. The details of stores and spares closing stock for the year 2008-09 are at APB 69-78 and 80-81. These details include description of the stores and spares, the party from whom they were purchased, the bill No., the billing date, the quantity, the rate and the amount. The closing stock as on 31.3.09 has been given at APB 79. 22. None of the above evidence produced by the assessee in support of its claim, as considered in detail by the ld. CIT (A), ..... X X X X Extracts X X X X X X X X Extracts X X X X
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