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TMI Blog2014 (12) TMI 1018X X X X Extracts X X X X X X X X Extracts X X X X ..... mal [1983 (1) TMI 3 - MADRAS High Court] - the ends of justice and fair play demand that when the assessee produces additional evidence, opportunity should be given to the AO in rebuttal or otherwise and such order could not have been passed behind back of the AO in violation of the principles of natural justice – thus, the order of the Tribunal is upheld – Decided against assessee. - TAX APPEAL NO. 5 of 2004 - - - Dated:- 27-11-2014 - MR. KS JHAVERI AND MR. K.J.THAKER, JJ. FOR THE APPELLANT : MR.S.N.SOPARKAR, LEARNED SENIOR ADVOCATE WITH MR.B.S.SOPARKAR, ADVOCATE WITH MRS SWATI SOPARKAR, ADVOCATE FOR THE RESPONDENT : MRS MAUNA M BHATT, ADVOCATE JUDGEMENT Per: K S Jhaveri: 1. By way of this appeal, the appellant has challenged the judgment and order of the Tribunal dated 17.04.2003, whereby, the Tribunal has dismissed the appeal of the assessee and allowed the appeal of the Revenue and treated the same as partly allowed for the statistical purpose. 2. The facts of the case are that the appellant is a jointsector company established with financial collaboration of Gujarat Industrial Investment Corporation, a Government company, for setting up a Soda As ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... edure adopted by the industry. He contended that the average loss for the previous year which were placed on record in the paper book. He pointed out that in the year 1988-89, the average loss of the assessee was around 6.66%. The table showing the details for the Assessment Years 1988-99 to 1994-95. Asst. Years Amount of additions u/s 143(3) Rs. in Lacs Quantitative details/status as per the assessment order 1988-89 32.47 Op. stock + production -sales Balance Cl. stock Loss MT Loss (overall) Amount of addition 16076 MT at ₹ 202 per MT = ₹ 32.47 lacs MT 171131 158061 --------- 329192 1940 --------- 327252 311176 --------- 16076 --------- 4.88% 1989-90 21.86 Loss Jafrabad Una Port Victor Amount of disallowance 13944 MT at ₹ 156 per MT = ₹ 21.86 lacs % - 8.97 2.83 .33 MT Loss (overall) MT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 90, a claim of 2.15% was allowed. The assessee has not been able to given any specific reason for such an increase in the claim of loss. I also find that different losses have been claimed at different places while the raw material, manufacturing loss and the management at all the three places remain the same. I, however, agree that in this manufacturing, some loss will take place and the basis can be taken from past records only. In assessment year 1988-89, a loss upto 5% was allowed by the Commissioner of Incometax (Appeals)-V, Ahmedabad. There is no specific reason in this year for the claim of a higher percentage and I hold that a normal claim of loss of 5% should be allowed to the assessee in this year also. The loss at Una is less than 5% and no disallowance is called for. In Zafrabad, the loss is 5.18% and a light change to either side is always possible. No addition is made in this account also. In respect of port Victor, the loss claimed is ₹ 8.74% which is restricted to 5.18% of Zafrabad. The difference of 3.56% is disallowed. In metric tonnes, the difference comes to 6431 MT and at the rate of ₹ 100/- per metric tonne, the disallowance comes to ₹ 6,43,1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... supporting material we are of the view that loss is to be estimated. Now question arose is what should be the reasonable estimation of loss. For this purpose the AO is to adopt some reasonable basis. He has taken the basis of loss declared by the assessee itself on different sites which is 8.74% for Port Victor, 5.18% for Jafrabad site and 3.65% for Una site. The AO adopted 3.65% basis of loss and accordingly he calculated the addition. The CIT(A) found that in A.Y. 88-89 loss upto 5% was accepted by the then CIT(A) and after considering the other material, facts, submission of the assessee, he found that about 5% rate of estimation of loss as reasonable and he accordingly confirmed the loss and addition of ₹ 6,13,100/. Now before us, the ld.AR urged that the entire addition should be deleted and the loss declared by the assessee should be accepted whereas the ld.DR urged that the loss accepted by the AO should be upheld. 24. A decision in ITO Vs. Doongarshi Salt Works (P) Ltd. Supra referred by the ld.AR is distinguishable on facts as in the said case the loss of salt was due to cyclone rain and not due to regular feature in this line. On perusal of the releva ..... X X X X Extracts X X X X X X X X Extracts X X X X
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