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TMI Blog2015 (10) TMI 471X X X X Extracts X X X X X X X X Extracts X X X X ..... of shortage of stock of 4349.35 kg. of raw material amounting ₹ 8,81,679/- without giving cognizance to the facts of the manufacturing process of such goods which has result of shortage/wastage which comes in the process of making grey cloth ready for making hosiery goods as well as cutting of grey cloth for making hosiery items. This fact has neither been taken care by the Assessing Officer and nor by the ld. CIT(Appeals) in their orders. Therefore, we delete the addition made by the lower authorities and allow the claim of the assessee. - Decided in favour of assessee. - I.T.A. No. 2092/KOL/ 2013 - - - Dated:- 6-8-2015 - Shri Mahavir Singh, J. For The Assessee : Shri Deepak Chaturvedi, Advocate For The Department : Shri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by Dr. D.D. Kothari, M.D., Electrocardiography report s and other supporting document s which clearly prove that the assessee was under-going regular t reatment for Ischemic Heart disease during the period 07.12.2012 to 02.07.2013. This being a reasonable cause and beyond the control, of the assessee, I condone the delay in filing the appeal. The assessee s appeal is admitted. 4. The only ground raised by the assessee is for sustaining the addition of ₹ 8,81,679/- towards shortage of 4349.35 Kgs. on account of dying and bleaching of semi-finished hosiery cloth also terms as grey cloth by the ld. CIT(Appeals). 5. The fact s of the case are that the assessee has claimed shortage of 4349.35 kg. on account of process of manufacturi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , ledger, journal, sale bill book, purchase bills and expenses bills duly produced along with books of account for being examination by the tax auditor and the stock bill showing opening, purchase, consumption, closing stock and shortage has been duly certified by the tax auditor in his tax audit report. However, the Assessing Officer did not accept the claim of shortage made by the assessee because there was no documentary evidence except declaration of such loss stated based on inventory taken at the close of the year. Hosiery than and goods as reported and considered does not include any goods under process or lying with the processor and as such suggesting to be of such nature as not involving any major operation. The assessing officer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hich reads as follows:- However, coming to the AO s contention that even this addition is not justified, it is seen that the AO has considered certain issues including the fact that the appellant is not maintaining stock register and is only calculating closing stock on the basis of inventory carried out at the end of the financial year on which basis a shortage of 4349.35 kgs has been disclosed. It is also seen that the AO has considered the appellant s own results in the earlier assessment year, i.e. 2008-09, when against closing stock of 8238 kg NIL shortage had been disclosed. Now, the submissions made by the appellant have been considered but it is not been able to justify as to why there was no such shortage in the earlier year, wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... due to the pre-t reatment processes adopted and the fabric shrinkage observed during the processing. During pre-t reatment of the greige fabric, there is a certain amount of weight loss in the material. The weight loss observed in the greige fabric during pre-treatment process is due to removing of impuri ties present in the fabric. Greige knitted cotton fabric made of cotton fibres consists of approximately 10% by weight non-cellulosic substances such as lipids, waxes, organic acids, protein substances, and other unidentified compounds. In order to remove these non-cellulosic material s or impurities from the fabric/fibres, scouring is normally carried out wi th st rong alkali at high temperature for a certain specified time. Total amount ..... X X X X Extracts X X X X X X X X Extracts X X X X
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