2015 (7) TMI 1201

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....n deleting addition of an amount of Rs. 1,12,35,202 made by AO alleging short / incorrect accounting of stock. 3. Briefly the facts relating to this issue are, assessee a Govt. of India undertaking is engaged in the business of manufacture of super alloys and special metals. For the AY under consideration, it has filed its return of income on 29/09/2011 declaring total income of Rs. 75,41,16,213. During the assessment proceeding, AO noticed that assessee has set up metal bank for procuring strategic raw materials and storing it for utilization in production of super alloys against specific sale orders placed by Vikram Sarabhai Space Centre (VSSC), DMRL, Hyderabad and HAL, Bangalore. AO observed that assessee is receiving advances from co....

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.... examined and there is no dispute with reference to the fact that assessee is maintaining a metal bank for procuring strategic raw-material and using them as and when there was order from VSSC for its supply. It is also on record that the VSSC is providing funds and assessee only procures them on behalf of the VSSC and keeps sufficient stock in its godown. Just because the stock was procured by the assessee, it does not mean that it has ownership on the stock, which pertained to VSSC. We are surprised about the order of the CIT(A) also. While accepting that the assessee is maintaining the stock of material on behalf of others and only charging fixed amount for this service, and as such, apparently, there is no need to admit the same in thei....

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....we do not find any infirmity in the order of ld. CIT(A) by deleting the addition made by AO following the observations of the coordinate bench. Grounds raised are, therefore, dismissed. 5. The only other issue as raised in ground No. 4 is against decision of ld. CIT(A) in deleting the addition of an amount of Rs. 4,92,319 made by AO u/s 14A of the Act. 6. Briefly the facts are, during the assessment proceeding, AO on examination of balance sheet of assessee found that assessee during the relevant PY has invested an amount of Rs. 2,10,11,000, income from which is exempt from taxation. He, therefore, called upon assessee to explain why expenditure incurred for earning such exempt income should not be disallowed u/s 14A read with rule 8D....