TaxTMI 
TaxTMI 
2002 (11) TMI 275
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....to para 3 of AO's assessment order and contended that the identity, quantity, and cash could not be verified as has been noted by AO. He has contended that in view of the various defects in sales as pointed out by AO, the trading addition was rightly made by AO. He has supported the AO's order. As against this, the learned authorised representative of assessee has contended that the AO has admitted that the quantity-wise details of sales and purchases were fully maintained. He has contended that the AO has pointed out that there were cash sales to small dealers in surrounding villages and as such the sale prices in respect of such sales were not verifiable; and similarly the expenses for carriage inward transportation, loading unloading wer....
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....sale price was less than that on which sales were made to a dealer in city who paid by cheque. He has contended that the purchases were duly supported by purchase bills. He has contended that many items of assessee were "essential commodities" which were subject to control and verification by District Food authorities. He has contended that the carriage inward, transport, and loading-unloading charges debited in the books pertained to purchases only and to none else, nor has the AO pointed any charges, unrelated to purchases, to have been debited in the books, nor has he pointed out even a single instance of excessive or unreasonable charges. He has contended that the AO has not pointed out any basis or justification for the said trading ad....
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.... so made the addition rightly. He has relied on AO's order. As against this the learned authorised representative of assessee has supported the CIT(A)'s order and has contended that the learned CIT(A) rightly deleted the addition. He has contended that the AO made this addition on account of the losses in trading accounts as detailed below: Rs. (i) Imli Taxable Account 30,127 (ii) Tea S.T.P. 6,378 (iii) Guwar refined oil 4,512 (iv) Methi 4,751 (v) Misc. (petty 5 items) 2,654 48,422 He has contended that the AO has given the following reasons for making addition on account of losses: (i) The accounts had the same defects which were in the earlier year i.e., the loss was there beca....
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....f some inferior goods being there within the lot. He has contended that the assessee is having practice of separating inferior quality of goods from the good quality at the year end; the good quality and inferior quality goods are separately valued by following the method of lower of cost and net realizable value. He has contended that in the case of inferior goods the value adopted for valuation is likely to be lesser than cost depending upon condition of goods. He has contended that in any case there being complete quantitative tallies of stock, and there being justification/explanation for deterioration of quality of goods considering the nature of items being dealt with by assessee, there is no justification for disallowance of loss. He....
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....nded that the AO has not pointed out any specific defect in the books of accounts. He has contended that all the purchase and sales are vouched and the AO has not given any instance of unvouched purchases or sales or of difference in quantities, nor has he given any instance of defect in the books of account in the relevant previous year, but has just stated that there were defects of the same nature. He has contended that the AO has not appreciated the nature of trade being carried on by assessee. He has contended that the assessee is dealing in Kirana items like Imli, Khopra, Gota, etc. wherein there is high probabilities of quantity deterioration. He has explained along with examples as to how various items dealt with by the assessee get....