TaxTMI 
TaxTMI 
2016 (12) TMI 1666
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....the Ld.CIT(A) has erred in law in deleting the additions of Rs. 5,71,81,580/- made by the Assessing Officer for under valuation of closing stock of sugar without appreciating facts of the case that the assessee failed to justify the rates as per A.S 2 (Revised) method as prescribed by the institute of Chartered Accountants of India which are mandatory in nature. 3. That the Ld.CIT(A) erred in law in deleting the addition of Rs. 4,58,161/- made by the Assessing Officer on account of disallowance of depreciation claimed on old machinery ignoring the fact that the machinery was old and discarded and assessee failed to prove its use. 4. On the facts and in the circumstances of the case, the order of Ld.CIT(A) deserves to be set aside and that of A.O be restored." 3. Assessee is a Limited Company and filed its return declaring Nil income on 27/10/2004 which was processed u/s 143(1) of the I.T. Act, 1961, on 20/12/2004. However, company paid taxes as per provisions of Section 115JB of the Income Tax Act, 1961 on the book profit shown at Rs. 13,42,424/-. Assessee company's case was selected for scrutiny. Accordingly, notice u/s 143(2) of the Act was issued on 3/8/2005 and was duly....
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.... @ Rs. 70.14) and added to the income of the company assessee. 5. The Assessing Officer further observed that valuation of Rs. 465919/-. Qtls Sugar was shown at Rs. 52,52,17,170/- which gives a rate of Rs. 1,127/- per quintal. Assessee company was asked to justify rate of sugar per quintal and its working and basis. Assessee company filed reply stating that working of closing stock has been made as per a-2 and value of closing stock has been shown @ 1,127/- per qtls being cost price. The Assessing Officer further observed that on verification from other sugar mills, the rate found to be on much lower side, M/s Mansurpur Sugar Mills valued its closing stock of sugar @1,285/- per qtls and has given complete working. Assessee company was therefore further required to explain as to why addition on account of under valuation of closing stock be not made. Assessee company filed reply starting that all the sales have been made in the open market. It was further mentioned that rates of sugar varied from time to time as per market conditions. Assessee company requested for supply of working of cost of sugar by the Mansurpur Sugar Mills, which was denied and assessee was asked to submit its....
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....ion of Rs. 4,58,161/- claimed by the company was disallowed as the machinery was not put to use for purposes of business as the same being old and discarded. Moreover, the assessee has not proved its use. 7. Being aggrieved by the order the Assessee filed appeal before the CIT(A). The CIT(A) allowed the assessee's appeal. 8. As regards to Ground No. 1, the Ld. DR submitted that the excise duty on closing stock of Alcohol was rightly added by the Assessing Officer. 9. The Ld. AR submitted two case laws i.e. SVP Industries Ltd. Vs. CIT 2014 50 Taxman.com 229 Delhi wherein it is held that when neither excise duty was paid nor duty was incurred under Sub-Section 1 of Section145 A is not applicable. The assessee relied on the Hon'ble Supreme Court Judgment in the case of Dina Vision which is for Assessment Year 1987-88. The Ld. AR submitted that CIT(A) is right in allowing the assessee's contentions. 10. We have heard both the parties it can be seen that the assessee neither excise duty was paid by the assessee nor the duty was incurred. Therefore, Section 145A will not be applicable, but as regards the basis of accounting concept the assessee has not followed proper procedure a....
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....CIT(A)- Muzaffarnagar. 20. The grounds of appeal are as follows:- "1. On the facts and in the circumstances of the case, the Ld.CIT(A) erred in deleting the addition of Rs. 1,11,92,000/- made by the Assessing Officer on account of treating the incentive of Rs. 1,1192,000/- on sale of levy sugar as revenue receipts as against capital receipts claimed by the assessee. 2. On the facts and in the circumstances of the case, the Ld.CIT(A) erred in deleting the addition of Rs. 3,34,413/- made by the Assessing Officer on account of provision made for storage fund claimed as revenue expenditure by the assessee. 3. On the facts and in the circumstances of the case, the Ld.CIT(A) erred in deleting the addition of miscellaneous expenses of Rs. 1,25,000/- made by the Assessing Officer . 4. The order of the Ld.CIT(A) be set aside and that of the A.O be restored." 21. As regards first ground, the same is covered by assessee's own case for Assessment Year 2000-01 being ITA No. 86/Del/2006 relevant portion is as follows:- " The first reason taken by the A.O for initiating reassessment is treating the sale of additional quota of sugar in free market amounting to Rs. 35,11,976/- as re....
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....including CIT Vs. Salem Cooperative Sugar Mills Ltd., 229 (Mad). In view of several decisions taken note of by the Ld.CIT(A) in the impugned order supporting the assessee's contention, which have not been controverted by the Ld. Dr with any contrary decision, we are of the considered opinion that the ld. First Appellate Authority has taken an unimpeachable view on this issue. We, therefore, uphold the impugned order on this score." 25. We have heard both the parties and perused the order passed in assessee's own case in ITA No. 86/Del/2006. The issue herein is squarely covered. 26. In result, Ground No. 2 is dismissed. 27. As regards Ground No. 3 is concerned, the Ld. DR relied upon the order of Assessing Officer. The Ld. AR submitted that disallowances are only on adhoc basis without a single instant of doubt. The miscellaneous expenses were properly dealt by the CIT(A). Hence no interference is required. 28. We have heard both the parties. The disallowance in respect of miscellaneous expenses was made purely on estimated basis by the Assessing Officer. The CIT(A) has rightly deleted this addition partly. There is no need to interfere with the order of the CIT(A). 29. In res....