2016 (2) TMI 513

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....trary and illegal should be deleted. (2) That the ld. CIT(A) went wrong in confirming the trading addition of Rs. 37,768/- of EOU Unit-II by working 25% on un verified purchases amounting to Rs. 1,59,073/- which should be deleted. 2. Regarding ground No.1, the brief facts relevant for the matter under consideration are that the assessee, which is in business of manufacturing and trading of previous and semi-precious stones and studded Diamond jewellery, is having two units, unit-I and unit-II. The unit-II is 100% Export Oriented Unit (EOU) which is eligible for exemption u/s 10B of the Act. During the year under consideration, the assessee has debited an amount of Rs. 5,36,228/- towards Foreign Exhibition Participation expenses ....

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....y else and money was refunded. However, it refused to pay the booking amount of booth No. 44103 as per the cancellation policy and as such the amount of Rs. 5,36,228/- represented the cancellation charges of booth No. 44103. 2.2 The ld. DR is heard. 2.3 We have heard the rival contentions and perused the material available on record. Firstly it is noted that the amount of Rs. 5,36,228/- which has been debited in the profit and loss account of unit-I relates to cancellation of participation in the exhibition being organized by the Gem & Jewellery Export Promotion Council due to the business exigencies of the assessee. Secondly, it is noted that the initial deposit of Rs. 9,45,000/- was paid out of the books of accounts of Unit-I as evi....