2011 (5) TMI 510

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.... assessee filed return for the assessment year 1994-95 declaring loss at Rs. 15.24 crores. In the revised return, loss was declared at Rs. 19.35 crores. The Assessing Officer, however, made the assessment at a loss of Rs. 11.17 crores making various additions/disallowances including addition of Rs. 65,41,984 on account of excess wastage of newspaper. 3. The appeal filed by the Revenue before CIT(A) against the order of the Assessing Officer came to be dismissed vide order dated 1st March, 2011. Before the CIT(A) an additional ground was also taken by the assessee regarding allowance of expenditure of Rs. 2,15,62,950 which was not admitted by the CIT(A). Against this part of the order of the CIT(A) the assessee came in appeal before the Tri....

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.... been incurred?" 5. The assessee had claimed a sum of Rs. 65,41,984 on account of excessive wastage which according to the Assessing Officer was @ 11.25 per cent of the total consumption of the relevant year. He relied upon the Registrar of Newspapers which allowed wastage @ 7 per cent in respect of newspapers and 1 per cent to 3 per cent in respect of magazines. The Assessing Officer accordingly allowed wastage to the extent of 6 per cent and thereby computed the excessive wastage valued at Rs. 65,41,984. 6. The CIT(A) did not agree with the mathematical reasoning given by the Assessing Officer. The CIT(A) held the wastage to be allowable by 7 per cent and restricted the addition to Rs. 33,79,167. The Tribunal while allowing the entire c....

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....he wastage @ 7 per cent. We could not persuade ourselves to the reasoning given by the authorities below in respect of restricting the wastage to 6 per cent or 7 per cent when the assessee was able to demonstrate that the reasons of wastage were various and in such circumstances standard of 7 per cent wastage rate prescribed by Registrar of Newspaper could not be applied. In fact, standard of 7 per cent may be for the purpose of raising the demand of newsprint, but the amount of wastage would depend upon various factors including the location of office, printing units, godowns, etc. Otherwise also it is a clear finding of fact and we do not see any perversity or illegality in the order of the Tribunal. 8. With regard to the additional grou....