9911796707
TMI Blog2015 (1) TMI 615X X X X Extracts X X X X X X X X Extracts X X X X ..... 001-02. 2. Brief facts of the cases on hand are that the assesee company is engaged in the business of grey cloth manufacturing and also selling dyed and printed cloth after processing in other dyeing houses on job work basis. The assessee's unit is a composite unit i.e. activities like twisting, weaving and warping are carried out by them. Return declaring income of Rs. 9,20,470/- under Section 115 JB of the Income Tax Act, 1961 (for brevity 'the Act') was filed on 30/10/2001 but the Assessing Officer (AO) determined the income of Rs. 2,94,43,565/- under Section 143(3) of the Act vide order dated 31/03/2004. The AO made addition of Rs. 3,23,01,330/- on account of unaccounted income generated by the company on the ground that c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llant in the aforesaid paras. The Assessing Officer (AO) appears to have made a huge addition on the basis of presuming wrong facts which are not even in existence The finished product of the appellant company is clearly different from the two companies. The appellant has furnished facts and figures stating the fuel expenses incurred by them are not exactly the same type as of the compared two companies. The appellant company has shown gross profit as under: Asstt. Year Turnover Percentage Asstt. Year Turnover Percentage 1999-2000 8,086,131.00 20.11% 2000-2001 61,523,497.00 24.47% 2001-2002 93,051,446.00 18.23% 2002-2003 87,636,580.00 18.37% Looking to the facts of this case including decline in gr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 47.64 per meters. This factor in itself shows that goods produced by the assessee were of superior quality. Similarly, there is a vast difference between rawmaterial used by these concerns and the assessee. The assessee has used the rawmaterial having value of Rs. 113.34, whereas, these concerns were using rawmaterial of Rs. 164.60 and Rs. 180.95 respectively. The other concerns were using the costly rawmaterial and producing cheaper goods. On the other hand, the assessee is using cheaper rawmaterial and producing costly finished products. All these circumstances indicate that the result are not comparable. The assessee has been using different types of machineries which can only be run on a specific electric motor having a specific power ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e fuel expenses recorded by the assessee and arrived at a wrong conclusion that it varies from Rs. 4.99 to Rs. 10.58 per meter. The ld. Counsel for the assessee has demonstrated before us that this comparison has been made on the basis of purchase and not on the basis of consumption. Therefore, we find merit in the appeal of the assessee and allow the same, whereas, the appeal of the Revenue is devoid of any merit, it is dismissed." 4.1 In support of his case, he relied on decision of Rajashthan High Court in Commissioner of Income-tax Vs. Sulabh Marbles (P.) Ltd., reported in [2007] 165 Taxman 258 (Rajashthan), decision of Kerala High Court in St. Teresa's Oil Mills Vs. State of Kerala, reported in [1970] 76 ITR 365 (Kerala) as well a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the books of accounts maintained were not correct and complete. The Tribunal then found, after mentioning the situations in which the books of accounts maintained could be said to be incorrect and incomplete, that in this case there was no material brought on record to prove and establish that the purchases and expenses had been inflated or the sales had been suppressed and in the absence of any such material or finding given, the provisions of Section 145 (2) ought not to have been invoked. It was held that on the facts given, the Tribunal did not find sufficient justification for invoking the provisions of Section 145(2) of the Act. In our opinion, in view of the finding reached by the Tribunal that there were no discrepancies or de ..... X X X X Extracts X X X X X X X X Extracts X X X X
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