9911796707
TMI Blog1984 (1) TMI 83X X X X Extracts X X X X X X X X Extracts X X X X ..... ec, 1980 and 4th June, 1981. In other words the assessment had been subjected to the proceedings u/s 144B of the Act. In the course of these proceedings the IAC also acting u/s 144A of the Act directed the ITO to make inquiries regarding the wastage in the production. As a result of the inquiry, the ITO made the addition of Rs. 40,150 on account of invisible and unproved wastage. We will have occasion to deal with this aspect of the matter, a little later in our this order. Suffice it to say at this stage that the addition was subsequently deleted by the CIT (Appeals). 2. Against such deletion, the department has filed the present appeal. The assessee has also taken certain cross objections. Through some of them it has been submitted tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the notice, file a memorandum of cross objection, verified in the prescribed manner, against any part of the order of the Appellate Assistant Commissioner or, as the case may be the Commissioner (Appeals) and such memorandum shall be disposed of by the Appellate Tribunal as if it were an appeal presented within the time specified in sub-section (3)." It is clear from the above that a cross objection can be filed only against any part of the order of the CIT (Appeals) and it will be disposed of as if it were an appeal. It is, therefore, necessary that before a cross objection can be taken, the matter relating thereto must have been dealt with in the order of the CIT (Appeals) and should form part of that order. It was not disputed by t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... He, thus, held that the assessee had to account for 53303 kgs. against 34934 kgs. already accounted for by the assessee. The ITO further held on the basis of some comparable case that the sale price of the scrap in the market was Rs. 912 per MT. He applied this rate to 53303 kgs. and made an addition of Rs. 40150. 7. The assessee appealed to the CIT (Appeals). It was submitted before him that the assessee had been maintaining regular books of account and, therefore, the entire loss as shown required to be accepted. It was also submitted before him that the total loss of 4.1% declared by the assessee was reasonable when compared to the asst. yr. 1979-80 when the business had been started and subsequent two assessment years. The CIT (Appea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ses. On the basis of such comparable cases some standard should be evolved to find out an average percentage of wastage in the process of manufacture. We may state that there was no dispute before us that the total percentage of the loss at 41.1% was not reasonable. The dispute was only with regard to invisible wastage and the balance left as scrap. We will, therefore, direct the ITO to find out through comparable cases the amount of invisible wastage or the wastage completely lost to the assessee and then find out whether the loss shown by the assessee was reasonable. If the loss claimed by the assessee is not found to be reasonable, he will be justified to disallow unreasonable part and make an addition on that ground. 9. Similarly we ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
