TaxTMI 
TaxTMI 
2018 (3) TMI 1077
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....essment year 2012-13. 2. Since both the appeals are arising out of the same order of the CIT(A), hence, the same have been heard together and are being disposed of by this common order. First, we will take up appeal of the Revenue in ITA No. 839/Chd/2017. 3. The Revenue is aggrieved by the act ion of the CIT(A) in deleting the addition made of Rs. 34,14,667/- on account of suppressed sale. The assessee is involved in manufacturing of packaging material and plastic products. The Assessing officer observed that assessee had shown less yield for the year under consideration as compared to earlier assessment years. He, therefore, concluded that the assessee might have suppressed its sales. He by taking average of the past years vis-a-v....
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....e has explained about var ious factors contributing for the low yield. Even otherwise, in our view, in the absence of any incriminating evidence, it cannot be assumed that the assessee might have suppressed the sales. We, therefore, do not f ind any merit in the appeal of the Revenue and the same is accordingly dismissed. 7. Now coming to the appeal of the assessee in ITA No. 816/Chd/2017, wherein the assessee has taken following grounds:- 1. That the Ld CIT(A) has erred in confirming the capitalization of interest paid, amounting to Rs. 53,157/-, on loan raised for purchase of machinery on the ground that the machinery has not been used during the year under consideration whereas, as per the assessee the trial run has been cond....
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....allowance made may kindly be set aside. 5. That the Ld. CIT(A) has erred in partially confirming the disallowance of travel ling expenditure to the tune of Rs. 3,91,028 (out of Rs. 4,66,028/-) on the ground that the family of director accompanied him on the trrip whereas, as per the assessee the business exigency of the foreign trip is not in doubt, therefore the disallowance made may kindly be set-aside. 6. That the Ld. CIT(A) has erred in confirming the disallowance @ 50% of sales promotion expenses which comes to Rs. 4,52,118/- on the ground that the assessee failed to give the ident ity of a person to whom the costly gifts have been paid and the some expenditure has been booked on 31.03.2012 whereas, as per the assesse....
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....d convincing evidence. We, therefore, do not f ind any merit in this ground and accordingly dismiss the same. 10. Ground No. 2 is regarding the deprecation on building amounting to Rs. 57,474/-. The Assessing officer observed f rom the bills and vouchers of cement and br icks that the bi lls were of the month of March 2012. He, therefore, held that the building was not completed at the end of the f inancial year i .e. by 31s t March, 2012. He, accordingly disallowed the depreciation claimed on the building. The said disallowance has been further upheld by the Ld. CIT(A) . We have heard the rival content ions. Admittedly, the bricks and cement was purchased in the month of March itself, which was used for the construct ion of the afore....
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....s regard. Before us, Ld. Counsel for the assessee could not explain about the justificat ion in incurring of the expenses on the gifts and also could not corelate with evidence that the said expenditure were relating to the business activity of the assessee. In view of this, we do not f ind any merit in this ground of appeal and the same is accordingly dismissed. 13. Ground No.7 is relating to the disallowance of expenditure incur red on consumables. The Assessing officer found that the assessee has shown expenditure on consumables which was more than expenditure claimed in the ear lier assessment years. The assessee explained that the expenditure on consumables vary f rom year to year and that there cannot be a straight jacket formul....