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TMI Blog2009 (9) TMI 983X X X X Extracts X X X X X X X X Extracts X X X X ..... ted, the facts of the case are that the assessee is engaged in manufacturing mung dal as well as trading in Adad dal and Tuver dal. In this case, a survey operation u/s 133A of the Income Tax Act, 1961 (in short the Act) was carried out on 04-02-2002 in which certain discrepancies were noticed in respect of stock cash. During the survey proceedings, for ascertaining the correct yield of main product and biITA products, a sample of milling of 1250 kg of mung was done. The above milling operation has shown the following results: Rough Mung 25 bags of 50 kg X 24 1250 kg. Mungdal 19 bags X 50 kg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wastage when stated at 9.5 % included the waste in the form of fotri dust. In fact, the real waste is dust or stone and not fotri. The real waste in the form of dust or stone is 3.9% and not 8% as pointed out in as much as the fotri or kurma or chuni is 5.6% and that it is actually sold. Further, it may please be noted that the sale A proceeds of fotrj or kurma is 3954.300 qts. and the sale proceeds of 22,55,7527- is credited into books of accounts. Therefore, the fotri cannot be taken into consideration is waste or process loss since there is no loss whatsoever of fotri. The fotri or kurma or chuni is used as cattle feed. Further the wastage of 3.9% is to be considered with reference the deduction made for quality difference and qu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... intained and that books of accounts are audited...... 4. As regards the submissions of the assessee dated 4-3-2005 , the AO observed that the mung dal consumption for the whole year was shown at 55505.77 quintals , production of mung dal was 49923.85 quintals, kurma and chuni 3954.30 quintals and wastage on account of stone/dust at i1627.62 quintal. Therefore, the yield ratio in respect of main product and bye-product is 89.94% : 07.13%. The loss on account of stone/dust comes to 2.93% as per the assessee. The AO did not accept the reply of the assessee and made addition of ₹ 11,75,658/- for the reasons stated in Para, 5, 6, 7, 8, 9 and 9.2 of the assessment order. 5. Aggrieved by the order of the AO the assessee carried the m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eld. It was also submitted that the AO has not considered the weight of bardan but discount for the purpose of arriving at actual mung dal consumption. Accordingly, it was submitted that deduction of weight of bardan and shortfall of quantity should be made in principle. It was also submitted by the assessee before the CIT(A) that the figures adopted by the AO were erroneous. The assessee furnished a correct working as mentioned hereinabove. The assessee also submitted a chart comparing between survey result and the average working for the whole year which reads as under: Particulars Result as per sample processing at the time of survey Result of average working as per audited acco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ore the CIT(A) that the impugned addition may be deleted. 7. The CIT(A) deleted the addition observing as under: 6. I have carefully considered the submissions made by the Ld. A.R. and I have also gone through the assessment order. It is to be noticed that at the time of survey the survey operation itself was called out by the survey party which reflected an yield of 90.5%. In respect of dal and the bye products were at the rate of 9.5%. It is difficult to understand the methodology adopted by th8e AO because while working the actual yield he has worked out consumption of mung after deducting wastage in weight and thus net amount use for consumption was 94824.39 kgs. However, while working out the excess shortage, he has taken the g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Deficit 1058.32 1.92% Therefore, even on this basis there is no case for any addition in the appellant s case I also find that in A. Y. 1999-2000 and 2000-01, the ld. CIT(A) has deleted such additions vide his order dated 5.12.2003 in appellant s own case. In view of the above facts, addition made by the AO is directed to be deleted . 8. We have heard the learned representatives of both the parties at length. Shri M.C. Pandit, learned DR relied on the order of the AO. On the other hand Shri A. C. Shah, learned Counsel for the assessee vehemently argued that the CIT(A) has passed a well reasoned order after appreciating the facts of the case and evidence available on record. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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