9911796707
TMI Blog2000 (6) TMI 115X X X X Extracts X X X X X X X X Extracts X X X X ..... f electricity expenses, water charges and cooking gas, etc. and further disallowed Rs. 71,806 out of maintenance of transit house. Rs. 20,000 claimed by the assessee as maintenance in respect of small guest house maintained at Calcutta were also disallowed making disallowance of Rs. 1,18,576. On appeal, the CIT(A) reduced the disallowance on electricity, water, and gas, etc. to Rs. 12,000 and also deleted the disallowance of Rs. 20,000 in respect of premises at Calcutta. Aggrieved, the Revenue as well as the assessee are in cross-appeals before the Tribunal. 2.1. At the time of hearing the learned counsel for the assessee submitted that identical issue was involved in the case of assessee for asst. yr. 1984-85 and Tribunal vide its order dt. 5th Sept., 1994, in ITA Nos. 1655 and 2149/Del/1990 in the cross-appeals of assessee and Department, involving asst. yr. 1984-85 had decided this controversy and deleted the disallowance of Rs. 20,000 made on account of premises hired by M/s Bajaj Electricals at Calcutta on the finding that the same was being used as house. Further, in the same order, appearing at pp. 53 to 60 of the paper book, the Tribunal had deleted the addition in respect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e for asst. yr. 1984-85 and the Tribunal in the case of assessee vide para 5 had deleted such addition after following the case law. The learned Departmental Representative conceded to this proposition and we conclude that no such disallowance was called for. The ground of the assessee is allowed in view of the decision of Tribunal in assessee's own case referred to above and ground of Revenue fails. 4. Ground No. 5 of assessee's appeal relates to the disallowance of Rs. 68,912 made by the AO out of the provisions for bonus on the ground that the said amount was shown payable to those workers who were drawing salary more than Rs. 1,000 p.m. It appears that CIT(A) has not decided this ground which was specifically agitated as ground No. 15 before him. So the CIT(A) is directed to decide this ground. 5. Ground No. 6 of assessee's appeal relates to addition of Rs. 5,021 in respect of alleged undervaluation in stores. We find that the CIT(A) has not discussed this issue in the order impugned. Accordingly, matter is restored to the file of the CIT(A) to decide the issue in question in accordance with law. 6. Ground No. 7 of assessee's appeal relates to disallowance of Rs. 36,061 made ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... les-tax, U.P. sales-tax and additional tax on U.P. sale-tax by following the decision of Allahabad High Court in the case of CIT vs. S.P. Foundries (1990) 185 ITR 555 (All). Further the reliance was placed on the decision of Hon'ble Supreme Court in the case of Allied Motors (P) Ltd. vs. CIT (1997) 139 CTR (SC) 364 : (1997) 224 ITR 677 (SC). The learned Departmental Representative conceded to this proposition. The AO has also taken note of the fact that amount of sales-tax and Central sales-tax which was outstanding as was not payable up to the end of accounting year was paid by the assessee before filing of return under s. 139(1) of the Act. In view of this factual position, the ratio of Honble Supreme Court in the case of Allied Motors (P) Ltd. vs. CIT is fully applicable and thus amounts are to be deleted and AO is directed to delete the same. 8.3. So far as amount of ESI and gratuity is concerned, the AO as well as the CIT(A) have not discussed the actual details of these amounts and matter stands restored back to the file of AO for deciding the issue afresh in accordance with law. 9. Ground No. 10 to 13 of assessee's appeal relate to initial depreciation and depreciation on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... quarter for Pujari and the ground of the assessee stands allowed as assessee is entitled for depreciation and initial depreciation on temple, Pujari's quarter, mess workers and school which are admittedly within factory premises. 10. Now we are taking the Revenue's appeal. Ground Nos. 1 to 3 relate to addition on Rs. 1 lakh made by AO after invoking the provisions of r. 6D. It was noted by AO that assessee himself had offered Rs. 1,68,606 for disallowance under s. 6D as per computation of tax auditors. However, AO was of the opinion that assessee had furnished details of travel in respect of employees drawing more than Rs. 1,000 p.m. For want of details in respect of remaining employees the AO made an ad hoc disallowance of Rs. 1 lakh in addition to the disallowance already offered. This disallowance was deleted by the CIT(A) following the order for asst. yr. 1984-85. The Revenue is in appeal. 10.1. At the time of hearing the learned counsel for the assessee submitted that Tribunal in the case of assessee for asst. yr. 1984-85 had upheld the order of CIT(A) in deleting similar ad hoc disallowance as is apparent from para 9 appearing at pp. 58 and 59 of the paper book. Facts are i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and vice versa in ITA Nos. 1707 & 1744/Del/1991 for asst. yr. 1988-89 decided on 22nd July, 1998. The assessee in the aforesaid case had claimed hundred per cent deduction under s. 32AB in respect of food-pots. The Tribunal after considering all the factual position concluded that food-pots were plant and machinery and assessee was eligible for deduction under s. 32AB. On the same analogy the contention of the learned counsel for the assessee is that assessee was having identical case as assessee had got manufactured trollies for use in the manufacturing process and such trollies are plant and machinery. Further cost of each of the trollies was less than Rs. 5,000 and depreciation at 100 per cent was allowable. We do find force in the contention of the learned counsel for the assessee and do not find any infirmity in the order of CIT(A) who had rightly decided the controversy. Ground fails. 14. Ground Nos. 8 and 9 of Revenue's appeals relate to addition of Rs. 6,53,715 made by AO on account of alleged unexplained investment in the construction of certain building and residential units. He called upon the assessee to furnish complete details or the building and residential units. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... id as AO had not pointed out any defects in the books of account and in the absence of such no addition is warranted. Reliance was placed on the decision of Rajasthan High Court in the case of CIT vs. Pratapsingh Amrosingh Rajendra Singh & Deepak Kumar (1993) 2000 ITR 788 (Raj) in which their Lordships have concluded that if proper books were maintained by the assessee and expenditure was fully supported by vouchers then reference to valuation cell will not be valid unless accounts are rejected and addition to income could not be made on the basis of report of the Valuation Officer. Further reference had been made to the decision of Tribunal Indore Bench in the case of ITO vs. Pradeep Kumar Badjatiya & Co. (1997) 57 TTJ (Ind) 727 : (1997) 61 ITD 75 (Ind) and Ahmedabad Bench decision of Tribunal in the case of ITO vs. Pravinchandra Girdharlal (1999) 63 TTJ (Ahd) 357 and other case laws in which same ratio had been laid down On the basis of all these facts the learned counsel submitted that CIT(A)'s order need not be disturbed. 14.3. After going through the facts and circumstances of the case we are of the opinion that AO had made the addition in a very cursory manner. He called upo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the opinion that assessee had maintained records of consumption of raw material, manufacturing process, end-products/finished goods and scrap but he was of the opinion that method employed by the assessee was not fully proved as complete verification was lacking. He also took into consideration the auditor's report and noted that assessee had given figures of opening stock, purchases during the year, closing stock, material issued, increase/decrease in the work-in-progress and semi-finished goods but further informations were not given that is why auditors were silent about the yield of finished products, percentage of yield, storage/manufacturing, shrinkage, etc. and for that AO reproduced the report of auditors as appearing from Annexure 10. Further the AO noted that assessee had shown realisation of the value of scrap at lower rate than the prevailing market rates and for that he took into consideration that average sale rate comes to Rs. 19.50 per kg. while average rate quoted in Financial Express was Rs. 21.50 per kg. He worked out the difference amount of Rs. 3.50 lakhs and also noted that no quotation, etc. were produced in respect of different scrap waste glass and waste pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt but AO should prove that assessee had received more than what is declared. According to learned counsel nothing has been brought by the AO to prove that assessee received more than the amount what had been shown in the account books or sold any scrap outside the books. 15.4. We have considered the rival submissions and perused the record as well as gone through the copy of submissions made before the AO as well as the CIT(A) in which all the details of generation of different types of scrap was given as well as the process being adopted by the assessee for sale of scrap, etc. These facts have not been disputed. The addition had been made on ad hoc basis and on the basis that there was difference in the average sale rate shown by the assessee and than to the rate shown in the Financial Express. The assessee was found carrying on business in the remote area and persons who are purchasing scraps have to keep in mind that they have to incur expenses for transportation on scrap from remote area to the market while rate in the Financial Express may not be the same as in the case of assessee and that basis was also not sufficient warranting any addition. The CIT(A) had taken into cons ..... X X X X Extracts X X X X X X X X Extracts X X X X
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