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TMI Blog2022 (2) TMI 337X X X X Extracts X X X X X X X X Extracts X X X X ..... etallurgic combination of copper and zinc and they have hedge that copper and zinc No fault in the finding of the Ld. CIT(A) in allowing this loss against the income of the assessee, since the Ld. DR has not contracted any of the facts placed before us and before the Ld. CIT(A) . Therefore, we are inclined to agree with the views of Ld CIT(A) and based on the above finding the ground of Revenue that appellant is not eligible to set off the hedging loss having no merits and same is dismissed. Disallowance of the raw material consumption, treating the same as suppressed income from production @ 2 % - HELD THAT:- There is no abnormal increase in byproduct yield and drastic fall in finished goods but the same is due to change in the product mix, development of new product, import of material which contains higher impurities. The Ld. AO has provided the assessee with unjustifiable or invalid reasons without any basis by considering the excessive claim of 2% on generation of by-product during the manufacturing process as 'unaccounted income from suppression of production. The Ld A.O. has compared the yield figures of F.Y. 2010- 11 F.Y. 2009-10 and considered the decrea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of assets, it does not create any enduring benefit and expenditure were incurred wholly and exclusively for the purposes of the business and same is allowable. In our considered view the finding of ld. CIT (A) is correct and department has not objected to any of the arguments on facts. Therefore, this ground of appeal of the Revenue is dismissed. Disallowance u/s. 40(a)(ia) - non deduction of tax on the reimbursement of expenses paid the C F agent - HELD THAT:- The issue being covered by the jurisdictional High court in the case of CIT vs. Gujarat Narmada Valley Fertilizers Co Ltd [ 2014 (4) TMI 235 - GUJARAT HIGH COURT ] CIT(A) has rightly deleted the addition and we found no error of facts and in law and therefore, this ground of appeal of the Revenue is dismissed. Addition of abnormal increase of store and spare expenses - HELD THAT:- The argument of the ld. DR which is repeated from the assessment order are general in nature. As such the ld. DR has not pointed any single defects in the books of account and the supporting evidence placed before the AO. Whereas the ld. AR brought our attention to paper books where all the details and evidences are placed and stated t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dering the same loss as speculative loss. 2. The learned CIT (A) erred in law and facts in deleted the raw material consumption, treating the same as suppressed income from production @ 2% amounting to ₹ 2,02,64,920/-. 3. The learned CIT (A) erred in law as well as on facts in deletion the addition made towards the claim of ₹ 4,22,800/- on account of stamp duty paid. 4. The learned CIT(A) erred in law as well as on facts in deletion the addition made towards the claim of ₹ 32,60,146/- u/s 40(a)(ia). 5. The learned CIT(A) erred in law as well as on facts in deletion the addition made towards the claim of ₹ 15,08,905/- on account of abnormal increase of store and spares expenses. 6. The learned CIT(A) erred in law as well as on facts in deletion the addition made towards the claim of ₹ 36,715/- on account of payment made u/s 36(l)(va). 7. On the basis of the facts and circumstances of the case, the learned CIT(A) ought to have upheld the order of the Assessing Officer. 8. That the revenue craves leaves to add, amend, alter or withdraw any ground of appeal. 9. It is therefore prayed that the order of the CIT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... E Zinc 30-Jun-11 5 25.47 21,54,750 22,93,250 (1,38,500) TOTAL 26,96,36,291 28,43,83,211 (1,52,46,920) 3.2 During the assessment proceeding the main point of arguments of the assessee were as under: a) The loss is incurred on account of the derivative transaction entered into to safeguard the business of the assessee. b) The loss is allowable as business expenditure considering the CBDT circular dated 8-9-1954 and out of the speculative transaction. c) The transaction entered is duly supported by copies of bills of Jhaveri Capital and Credits Limited. Ledger account of the Jhaveri Capital and Credits Limited. Month wise details of the stock on hand by the company. d) The transaction entered into does not attract section 43(5) of the Act. 3.3 The assessing officer mainly contended on following aspects while making addition is reproduced from the assessment order s page 8 .In the case under considerat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onnected commodity issues. d) As regards the contention of the AO that the transaction is not entered into the recognized stock exchange, as the transaction entered is covered by clause (a) of exception and the subsequent condition as prescribed in clause (d) is irrelevant considering the facts of the case. e) The AO has not pointed any single defects in the records of the assessee produced before him and has not rejected the books of accounts which are audited by an independent Chartered Accountant. 3.5 The Ld.CIT(A) has given a clear and concluding finding citing above points and various judicial decisions and has deleted the addition of ₹ 1,52,76,370/- . 3.6 Being aggrieved by the order of the ld. CIT-A, the Revenue is in appeal before us: 3.7 During the course of hearing the Departmental Representative heavily relied upon the contention of the Assessing Officer. 3.8 On the other hand, the ld. AR has filed a paper book running from pages 1 to 1 to 586 and evidences and decisions relied upon. The ld. AR has also filed a written submission as well as synopsis citing the contention of the AO, reasoning of the Ld.CIT(A) and their contention against the Re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n eligible transaction in respect of trading on commodity derivatives carried out in a recognized association [which is chargeable to commodities transaction tax under chapter VII of the Finance Act, 2013 (17 of 2013)]] Assessee has entered into transaction through the recognized association i.e. MCX which was notified later on 29/11/2013. We rely on the following decisions wherein it was held that Procedural delay in recognition of stock exchange would not lead a derivative transaction to be categorized as speculative one: k) ACIT vs. Mr. Arnav Akshay Mehta Appeal No. ITA 2742/Mum./2011 (Mumbai Tribunal) (page no. 274-277 of paper book) l) Vimal Oil Foods Ltd vs. ACIT [2015] 54 taxmann.com 107 (Ahmedabad Tribunal) (page no. 278- 280 of paper book) b) Assessee has claimed such loss as normal business loss eligible for set off in normal business considering as directly spring from the business of the assessee. The commodities hedged are raw material of the assessee. Hence, the same is considered by assessee u/s. 43(5)(a) of the Act. c) During the course of assessment proceedings, assessee has explained vide submission ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Jamnagar (copy of order attached at page no. 248-273 of paper book). g) The assessee has also relied upon various decisions the same is not reproduced from the paper 3.9 We have heard the rival contentions of both the parties and perused the materials available on record. We have persuaded the contention of the assessing officer, the contentions placed on record by both the side and after hearing the rival contention and arguments placed on record. It is not disputed by the ld. DR that the brass is a metallurgic combination of copper and zinc, and the assessee and company is engaged in the business of brass. The hedging transaction done as tabulated at para 7 are of Copper and Zinc and thus the finding of the AO that this hedging is not for safeguarding the raw material brass does not seem to be correct and there are no other contrary arguments placed before us. The DR vehemently relied upon the finding of the AO before us. The commodity hedged being Copper and Zinc are raw material of the assessee and is considered for the purpose of business of the assessee. As regards the recognition of the exchange we have relied upon the argument of assessee that the transaction of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ial decrease in yield as compared to immediately preceding year with documentary evidences. 4.2 Against the observation of the AO the assesse furnished its explanation which is discussed in Para 3.6 of the assessment order and same is extracted below: The assessee contended that in the tax audit report, the increase /decrease in work in progress had been shown as manufacturing of goods and that he production of finished goods and consumption of scrap was taken inclusive of sales return in the immediately previous year. It is further contended that during the last year, the assessee used more copper mix scrap than the brass mix scrap and that the assessee produced high precision goods to penetrate into the international market as can be seen from the increased export turnover and higher gross profit. The assessee ultimately contended that it maintained day to day stock register and production records. 4.3 The AO rejected the explanation of the assessee on the basis of reasoning given in para 2 of page 11 of his order. The relevant observation of the AO is extracted below: a) The auditor for both the year same how the representation in the ratio will change. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... laim of 2 % slag generation which is a unsubstantiated claim, is treated as suppressed production not accounted for in the books of account of the assessee. Accordingly, the two percentage of total consumption of 3897134 kg. works out to ₹ 77942 kg of raw material consumption. In money terms the suppression is worked out at ₹ 2,02,64,920/- at an average rate of purchase of brass/copper scrap of ₹ 260 per kg. in the assessee own case. Thus, this amount of ₹ 2,02,64,920/- is treated as un accounted income of the assessee from suppression of production to that extent. 4.6 Aggrieved, assessee preferred an appeal before the ld. CIT-A, who deleted the addition made by the AO. The observation of the ld. CIT(A) is summarized as under: a) The fall in the yield is an established fact. But the fall is on account of the various reasons, such as the combination of the copper and zinc, both the material melt at different level of heat, therefore in the process of melting and heat the yield may reduce on account of higher heat if given. b) Assessee has carried out R D activities for the needs of innovations and that can be fall on this point also. c) The U ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... filed a synopsis of the argument made and in respect of the impugned addition, his arguments or submission before us are reproduced as under: 1. Facts of the case: Assessee is engaged in the business of manufacturing of non-ferrous extrusion rods for selling and job work and trading. It is subject to excise duty and therefore full records as per excise laws are maintained by the assessee. It maintains the full records relating to receipt, issue and production and dispatch of the goods which were audited by excise department also. Being the company, its books are subject to tax audit and subject to VAT. During the year under consideration assessee has made 6.10% of slag yield during the first cycle of molding process from which non-ferrous brass/copper extrusions are manufactured. In response to this, the Assessing Officer allowed a claim of only 4.10% stating the fact that the standard by-product generation in Brass industry is only about 4% disallowed the remaining 2% which amounted to ₹ 2,02,64,920/-. Ld. AO treated the same as an unaccounted income of the assessee from suppression of production disallowed the excessive claim of by pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Reasons for addition by A.O. Contention of the assessee 1. Page no. 13 Ld A.O. has contended that there has been an abnormal increase in by-product yield drastic fall in finished goods yield. There is no abnormal increase in by product yield and drastic fall in finished goods but the same is due to change in the product mix, development of new product, import of material which contains higher impurities. 2. Page no. 14 Ld A.O. has further contended that such fall in yield of finished goods is on account of abnormal loss of slag not on the high precision components manufacturing or increase in exports by 8 times. Ld AO has provided the assessee with unjustifiable or invalid reasons without any basis by considering the excessive claim of 2% on generation of by-product during the manufacturing process as 'unaccounted income from suppression of production'. Ld A.O. has, by comparing the yield figures of F.Y. 2010-11 F.Y. 201 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... furnished by the A.O., it seems as if the Ld A.O. has concentrated merely on figurative details not on the facts provided by the assessee and has not provided any such 'reasonable cause' to reject the claim. Ld A.O has treated the same as unaccounted income of the assessee from suppression of production to that extent rejected the excessive claim of 2%. Mere variations i.e. increase or decrease in the slag yield doesn t provide a strong base to the A.O. for the assessee being indulged in any manipulative tactic to misdirect or misguide the A.O. Further, there are no provisions referred in the IT Act, 1961 that increase in slag yield leads to accounting jugglery to evade taxes. Further justification: 3. Sales Profile of assessee: We would like to put before Your Honours the brief sales profile of the company as compared to the previous year: On the basis of above table Your Honours will kindly notice that there is increase in exports form 27 lakhs to 248 lakhs almost 8 times. This requires a good quality product, which should ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (iii) Brass Components (Excisable) 2 42 427.49 10 68 09 370.14 1 93 215.80 6 98 57 668.61 Less: Sale Return 16 288.08 65 02 613.67 13 605.93 47 95 154.20 Net Sales 2 26 139.41 10 03 06 756.47 1 79 609.87 6 50 62 514.41 2 62 036.96 12 56 15 227.55 1 92 229.17 7 23 76 973.04 ( C) Copper Billets (i) Copper Billets 1 35 653.45 4 91 64 284.47 39 940.40 1 25 84 991.25 Less: Sale Return ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Net Sales 1 22 117.45 3 87 86 600.50 68 984.70 1 91 72 502.55 (ii) Brass EDM Wires 8 060.55 30 15 823.64 1 005.47 3 77 086.25 Less: Sale Return 0.00 0.00 6.81 2 728.75 Net Sales 8 060.55 30 15 823.64 998.66 3 74 357.50 (iii) Other Articles of Brass 8 949.70 30 56 832.25 11 312.85 32 22 723.35 1 39 127.70 4 48 59 256.39 81 303.02 2 27 69 583.40 (F) By-Products Inter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5 lakh K G only which is almost 30.62 % in this year compared to 53.33 % of last year. Copper is the base metal, which is mixed with low quality lower rate zinc and gives the brass. Therefore, this year lesser purchase of Copper resulted in lower yield. SN Particulars 2010-11 2009-10 Qty Amount Qty Amount (A) Opening Stock - Brass Scrap 1,05,741.10 220,81,913 28,861.36 59,15,424 Copper Zirconium 45.00 27,000 - - Chromium Metal 290.00 1,16,580 - - Bismuth 45. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Brass Scrap Imported 10,71,718.00 2629,49,810 3,74,767.00 958,16,600 Brass Copper Domestic 11,65,885.04 3668,32,401 17,44,496.44 4062,72,717 Bismuth - - 50.00 44,250 Copper Phosphorus 850.00 3,67,250 800.00 2,79,500 Chromium Metal - - 875.00 3,61,750 Dies - 10,63,735 - 6,83,980 Semi-Finished Goods 75,826.80 302,52,849 85,650.39 285,57,737 Silicon 4,070.00 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 27,000 Chromium Metal 145.00 58,290 290.00 1,16,580 Bismuth 36.00 31,860 45.00 39,825 Zinc 11,965.85 14,75,629 32,174.05 35,88,694 Manganese 969.50 1,58,029 153.90 21,084 Copper Phosphorus 90.00 40,950 617.80 2,12,999 Copper Tellurium 38.40 2,22,720 59.00 3,53,091 Tin 191.00 3,22,791 1,579.20 12,11,120 Nickel 486.10 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6584,53,605 5. Comparison of Gross Profit: There is improvement in Gross Profit. Assessee can carry on the business, which is most profitable to him. If in decreased yield of one product it gets higher realization and earn higher profit, AO does not have any power to not to allow the business modus operandi of product mix. Comparison of Gross Profit Ratio with the earlier year is as under: Gross Profit Working G.P. 31st March 2011 31st March 2010 Gross Profit Ratio Sales 105 41 47 754 76 80 50 774 Direct Income (Job-Work) 2 63 30 513 1 93 78 724 Turnover 108 04 78 267 78 74 29 498 Raw Material Consumed Opening stock ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1 11 79 254 77 63 967 Total 6 99 53 941 7 44 29 207 Closing stock By product 1 90 383 1 28 207 Work in process 7 39 48 992 5 86 46 481 Finished goods 4 23 41 743 1 11 79 254 Total 11 64 81 118 6 99 53 942 Sub Total 4 65 27 177 - 44 75 265 Cost of Goods Sold 100 70 32 949 73 91 63 478 Gross Profit 7 34 45 318 4 82 66 020 Gross Profit Ratio 6.80% 6.13% ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3 Copper billets 340.96 293.97 4 Copper extrusion 506.19 370.04 5 Other item 322.43 280.06 8. Comparison of assessee s case with other firms: Ld AO has relied up on the comparative results of two firms (1) Bhavani extrusion and (2) Atlas Metal Ind carrying on the business of manufacturing of Rod. Assessee is not in the business of manufacturing rods only but in manufacturing of components, profiles, and other materials of brass and copper. In fact, the value, the quality of the brass rods, which are sold by those firms, also need to be compared. AO has not given any comparable figures of those companies but rejected the comparable given by the assessee of Shree Extrusion that is comparable and is in the same line of business. AO has also not given any opportunity to co-operate the financials of that company with the assessee. Further assessee s burning loss is almost the same as those comparabl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any omission, irregularity or other defect in the method of maintaining the accounts or positive evidence to show that the accounts did not disclose the whole income of the assessee, his books of accounts cannot be rejected. Therefore similarly we request you to not to make any adjustments on this issue solely because of low yield. ACIT vs. Aroma High Tech Ltd [2019] 109 taxmann.com 65 (Ahmedabad - Trib.) (Page no. 426-429 of paper book) Where AO made addition to assessee's income on basis of increase in raw material consumption ratio, in view of fact that accounts of assessee-company were subject to statutory as well as tax audit and same were not rejected and, moreover, Assessing Officer had nowhere expressed his inability to deduce true income from said accounts, impugned addition made on estimate basis was to be set aside DCIT vs. Best Paper Mills Pvt Ltd ITA No. 975/Mum/2017 (Mumbai Trib.) (Page no. 430-446 of paper book) Assessee's yield compared with other entities without elaborating the technology being used by those concerns and the contents and quality of raw material etc. No conclusions could be derived merely on the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch were verified in great detail by AO painstakingly and accepted them in AY 2010-11 as perfect. Assessee submitted the full quantity details for the burning loss and full production data of the year. Ld AO has not discussed at all these aspects in the order. Further AO did not have any idea about the manufacturing process of brass components manufacturing, he could not point out single defect in the books, and without that he rejected the full production records and past history of assessment of assessee as well as his own assessment at the time of survey solely on the basis of conjectures and surmises. Over and above this, In income tax, assessee is assessed for last several years u/s 143(3) of the act by the highest rank of assessing officers such as Addl CIT or JCIT and they have never stated any adverse remark in all the assessment that have been carried on by income tax department. This shows that our methodology is up to the acceptance of income tax department. There is no year where the books of accounts of the assessee have been found wanting or even a single paisa addition has been made on account of lower profits/ lower yield etc. Even in AY 2007-08 the s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nvalid reasons without any basis by considering the excessive claim of 2% on generation of by-product during the manufacturing process as 'unaccounted income from suppression of production. The Ld A.O. has compared the yield figures of F.Y. 2010- 11 F.Y. 2009-10 and considered the decrease in yield as manipulative tactic of the assessee to avoid taxes. In our considered view mere arithmetical comparison of figures doesn't lead to any sort of manipulative tactic of the assessee to mislead or misguide the A.O. particularly when the assessee has maintained the stock records which are audited by Statutory auditor, VAT auditor, Excise authorities. Moreover, there cannot be comparison of current year data with the earlier years where there is constant change in technology, product mix, upgradation of machineries, demand and supply of products and economic conditions prevalent in particular year. The Ld. A.O. has also made reference to data of M/s Shri Bhavani Extrusion, Jamnagar (Manufacturing Brass rods) compared the same with the assessee record, and held that assessee co. is manipulating the production results to reduce the tax-burden. Again in our considered opinion compa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed, assessee preferred an appeal before the ld. CIT-A, who deleted the addition made by the AO. 5.4 Being aggrieved, the Revenue is in appeal before us. 5.5 During the course of hearing the ld. Departmental Representative heavily relied upon the contention of the Assessing Officer. 5.6 on the other hand ld. AR before us made written submission which is extracted below: 1. During the year under consideration assessee has claimed ₹ 4,43,560/- under the head Legal Professional fees in the Profit Loss A/c which include Stamp Duty of ₹ 4,22,800/-. 2. Details of such stamp duty payments is as under: - Regarding payment of ₹ 4,22,800/-, it was paid for stamps affixed on documents relating to sanction/renewal of CC limits and charge creation. Details of the same are as under: Sr. No. Nature of Documents Amount (Rs.) 1 Arrangement Letter SME-01 100/- 2 Guarantee Agreement SME-03 200/- 3 Supplementary Agreement SME-04 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reasons, simply added the sum by stating that the stamp duty is not of a revenue expenditure. Whereas, the ld. AR before us argued that the CIT(A) has rightly deleted the addition made the AO by observing that the expenses are not related to purchase of assets, it does not create any enduring benefit and expenditure were incurred wholly and exclusively for the purposes of the business and same is allowable. In our considered view the finding of ld. CIT (A) is correct and department has not objected to any of the arguments on facts. Therefore, this ground of appeal of the Revenue is dismissed. 6. The next ground no. 4 is against the disallowance of ₹ 32,60,146/- made u/s. 40(a)(ia) on account of non-deduction of tax at source on payments made to clearing and forwarding agent. 6.1 In respect of this addition the observation of the assessing officer is at page 17 and the same is reproduced under the contention of the AO: On verification of payment of clearing and forwarding exp it is noticed that the assessee had made TDS only on the amount of agency service charge and no TDS has been made on reimbursement. As per Circular No.715 dtd.08/08/1995 any sum paid or payabl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he same amount. 2. The C F has made payments to the transporters on behalf of the assessee amounting to ₹ 32,60,146/- , for which the assessee had made reimbursement for the same. 3. Ld AO contended that as per Circular No. 715 dated. 08/08/1995, any sum paid or payable as a reimbursement is liable for TDS. 4. We submit that Circular No. 715 dated. 08/08/1995 of the IT Act, 1961 is as follows: I. The Clearing Forwarding agents act as independent contractors. II. Any payment made to them would, hence, be liable for deduction of tax at source. III. The agents would be liable to deduct tax at source while making payments to the carrier of goods, provided the same amount is reimbursed by the principal to them. 5. We submit that Tax is deductible at source only in respect of payment of income or other sum comprising an element of income. Reimbursement of expenses does not partake the nature of income, in the hands of the payee of such expenses. Hence, the disallowance should not be made as the amount paid as reimbursement to the C F agent does not carry any element of income / profit for C F agent. 6. Reliance placed on the followi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er in deleting the disallowance of ₹ 6,93,372/-and ₹ 76,00,509/- claimed by the assessee under Section 40(a)(ia) of the Income Tax Act, we see no reason to interfere with the same. No error has been committed by the learned tribunal in confirming the order passed by the CIT(A). No question of law, much less substantial question of law, arises in the present appeal. Hence, the present appeal deserves to be dismissed and is accordingly dismissed. b) PCIT vs. Dishman Pharmaceuticals Chemicals Ltd [2019] 112 taxmann.com 91 (Gujarat) (Page no. 498-510 of paper book) Payment towards reimbursement of expenses by assessee to a nonresident did not involve any income element, therefore, no TDS was required to be deducted on such payment Hence, we submit that amount of reimbursement paid to C F agent are not liable for deduction of tax at source as it does not involve any profit element and disallowance u/s. 40(a)(ia) should not be made. 6.6 We have heard the rival contentions of both party and perused the material available on record. It is not under dispute that on the agency commission the tax at source has been deducted by the assessee. The only dispu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment proceeding it is observed by the AO that there is an abnormal increase in stores consumption as compared to last year. As such the store consumption expenses for the year have been at ₹ 1,50,89,056/- as against last year 84,42,935/-. He further observes that coal consumption has increased 250 % whereas production has been increased by @ 15 % only. Similarly, there is increase in packing material also. The detail breakup of these expenses for both the year stand as under: PARTICULAR AY 11-12 AY 10-11 Electricals 89,742 3,09,557 Crucible 2,99,338 56,812 Coal 26,81,097 10,78,444 Consumables 77,88,307 41,95,318 Packing Material 42,30,570 28,02,804 Total 1,50,89,056 84,42,935 7.2 Considering the above observation, the AO made adhoc addition of ₹ 15,08,905/- being the 10 % of total expenses cl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... explained before the AO as well as before CIT(A) and in the absence of any specific details the general and adhoc lumpsum disallowance is unwarranted and uncalled for. 7.8 The Ld. CIT(A) also observed that the profit margins have been improved, export have been increased compared to last year, the expenditure incurred is backed by proper evidence and justification given. The finding of the CIT(A) is purely on merits which has not been contravened by the learned DR. considering the facts in totality we find more force in arguments and supporting explanation placed on record by the ld. AR and we are inclined to agree with the finding of Ld. CIT(A) and thus, in the absence of department bring a single new argument or evidence for sustaining this addition we concur the view of the CIT(A) and dismissed this ground of the Revenue. 8. The ground no. 6 of the revenue is against the disallowance addition of ₹ 36,715/- on account late deposit of employee s contribution toward P. F. 8.1 The AO from tax audit report in form 3CD found that a sum of ₹ 36,715/- being employee contribution to PF was required to be paid on 15-06-2010 but same was paid on 19-06-2010. Thus t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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