TaxTMI 
TaxTMI 
2015 (6) TMI 936
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....siness of manufacturing of figured and wired glass at Nashik. It filed its return of income on 31-10-2005 declaring total income of Rs. 65,09,170/-. During the course of assessment proceedings, the AO observed that the assessee has claimed a sum of Rs. 54,80,239/- on account of claims/breakage. He observed that in the immediately preceding assessment year, there was no such claim on this account. He therefore asked the assessee to justify the claim. In response to the same, the assessee filed a note submitting as under: "Bharat Glass Tube Ltd. is a company manufacturing wired & figured glass at their factory at Sinnar, Nashik. The glass tendency is breakable and it is very likely to break at any point of handling. The breakage allowed to....
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.... the year under appeal and this problem was unique for this particular assessment year. The assessee also furnished certain sample confirmations of the parties confirming the credits allowed to them against their breakage claims. It was argued that had such claims been not there the assessee would not have reimbursed such loss to these parties by accepting lesser amounts from them. The decision of Hon'ble Allahabad High Court in the case of Sheo Narain Duli chand Vs. CIT reported in 72 ITR 766 was brought to the notice of the CIT(A). The assessee further submitted that neither any reason was given by the AO nor any comparative instances pointed out by him to support his contention that the breakage loss at 1% is reasonable. 5. Based ....
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....y evidence is brought on record by A.O. to justify disallowance of breakage loss at Rs. 21,01,279/-. AR was also right in pointing out that the deduction is otherwise also allowable u/s 36(1)(vii), in view of Supreme Court decision in the case of TRF Ltd. v/s CIT (190 Taxman 391), since the receivable on account of breakage is written off in the books of accounts of assessee. Hence, I allow the second ground of appeal in favour of assessee. 6. Aggrieved with such order of the CIT(A) the revenue is in appeal before us. 7. The Ld. Departmental Representative heavily relied on the order of the AO. 8. The Ld. Counsel for the assessee while supporting the order of the CIT(A) submitted that despite filing all party wise details before hi....
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..... He accordingly submitted that the order of the CIT(A) be upheld and the ground raised by the revenue be dismissed. 9. We have considered the rival arguments made by both the sides, perused the orders of the Assessing Officer and the CIT(A) and the Paper Book filed on behalf of the assessee. We have also considered the various decisions cited before us. The only dispute to be decided in the impugned appeal is regarding the allowability of the breakage loss disallowed by the AO at Rs. 21,01,279/-. On perusal of the record, we find the AO disallowed the breakage loss of Rs. 21,01,279/- out of Rs. 54,80,239/- claimed by the assessee on the ground that assessee did not furnish party wise details of breakage/claim made or offered, that no su....