TaxTMI 
TaxTMI 
2018 (6) TMI 1505
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.... of Rule-46A". 2. "That on the facts and in circumstances of the case, the CIT(A) erred in holding that payment of commission of Rs. 34,92,603/- is allowable expenditure by accepting additional evidences which were not produced before the AD. at the time of assessment, ignoring the fact that this is violation of Rule-46A". 3. "That on the facts and in circumstances of the case, the CIT(A) erred in law as well as on facts in holding that addition of Rs. 14,26,50,526/- on account of law GP rate was not warranted by accepting additional evidence which was not produced at the time of assessment, ignoring the fact that there was sharp fall in GP from 13.09% to 2.14% in comparison to previous year and also violated the provisions of Rule 46A". 4. "That on the facts and in circumstances of the case, the CIT(A) erred on facts as well as in law in holding that addition on account of difference in finished goods of Rs. 8,62,26,753/- was not correct following the decision for the earlier year for the AY. 1999-2000 & 2000-2001, ignoring the fact that each AY. is separate proceedings and principal of 'res-judicata' is not applicable in this case". 5. That the appellant craves fo....
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....sessing officer has not responded to the requisition of a remanded report and consequently the Ld. CIT(A) considered the evidence on record and submissions made by the assessee and granted relief. He pointed out that the ld. DR could not controvert the factual findings of the Ld. CIT(A) on merits. Hence he argued that the findings of the Ld. CIT(A) should be upheld and the appeal of the revenue dismissed. 8. On ground no. 4 he relied on the order of the Ld. CIT(A) and submitted that he had followed the order of his predecessor for the assessment year 1999-2000 and for the year 2000-01 and granted relief to the assessee. He submitted that the fact remaining the same, on the principle of consistency no disallowance could be made. Hence he prayed that the order of the Ld. CIT(A) should be upheld. 9. We have considered the rival submissions. On a careful consideration of the facts and circumstances of the case, a perusal of the papers on record, orders of the authorities below and case law also cited, we hold as follows. 10. We find from the record that the case was transferred from New Delhi to Kolkata vide order passed u/s 127 of the Act on 17.05.2012. The Ld. CIT(A), Central-2, K....
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....r, if the AO was of the opinion that the amount of commission was on higher side or the entire claim was not genuine then he should have brought some material on record to prove that the increase in the amount of payment was not genuine. Under the circumstances, it is held that the AO was not justified in making the disallowance on account of payment of commission and he is directed to delete the same. The ground no. 3 is allowed. The above demonstrates that no additional evidence was filed. Hence ground no. 2 is dismissed by upholding this finding of the Ld. CIT(A). On ground no. 3 the Ld. CIT(A) held as follows: 12. I have considered the submission of the appellant and perused the assessment order. It is observed that in the course of assessment proceedings, the appellant submitted the reasons due to which there was sharp fall in the gross profit margins. The appellant also submitted a comparative chart of turnover and expenses for the year under consideration and the immediately preceding year. It is observed that there was decline in the production and as a result there was decline in the turnover also. There was decline in the consumption of the raw material as well. Howeve....
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....e assessment order for the assessment year 2000-01. On perusal of point no. 14(b) of Notes of Account, it is observed that the auditor had stated that there were differences between the quantities of finished goods as per the physical count and as per the book records, which were on account of broken glasses. Thus, the auditor had specified that the difference was due to breakage and not for any other reason. Further, on point no. 24, the auditor had given information in regard to sales and stocks of finished goods both quantity-wise and value-wise. In the note given, the auditor specified that the breakage and spoilage of 8451 (previous year 8408 MT) have not been considered in the quantities indicated above. Thus, it is apparent that the difference of 8451 MT in the year under consideration was only due to breakage and spoilage. In the immediately preceding year i.e assessment year 2000-01, such difference was 8408 MT. In the course of assessment proceedings, the appellant explained the reasons for shortage as per the note given by the auditor. However, the AO did not appreciate the facts explained by the appellant. In the assessment year 1999-2000, in the course of assessment pr....
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....penditure on account of 'Computer software' as revenue expenditure, ignoring the fact that the 'software' was for longer period having benefit of enduring nature as decided by the Pune bench of ITAT in the case of Sudarsan Chemical wherein, it is held that expenditure on software is capital in nature" 3. "That on the facts and in circumstances of the case, the CIT(A) erred on facts as well as in law in holding that disallowance of bad debt of Rs. 29,60,481/- was not warranted by accepting additional evidence in the form of party wise details which was not furnished before the A.O. which is clearly a violation of Rule 46A": 4. "That on the facts and in circumstances of the case, the CIT(A) erred in law as well as on facts in holding that 'reduction in inventory' of Rs. 91,94,216/- was not eligible to be considered for computing book profit u/s 115JB, ignoring the fact that the 'reduction in inventory' of Rs. 91,94,216/- which was wrongly deleted has to be considered for computing book profit u/s 115JB". 5. That the appellant craves for leave to add, alter or withdraw any ground or grounds of appeal before or at the time of hearing of the appeal.....
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.... opinion that it cannot be said that the appellant company had reduced the value of the inventory in ad-hoc manner. It is further observed that a similar issue was considered by the Ld. CIT(A)-IV, Delhi in the appellant's own case for the assessment year 2000-01 in the IT appeal no. 24/03- 04 dated 20.05.2009. In that year the appellant had similarly made provision for reduction in the value of old stock for Rs. 83,81,625/- in respect of inventory at Rishikesh Plant. The AO disallowed the assessee's claim in assessment year 2000-01 as well because he found that the items of inventories lying in stock for very long time were valued after discounting the cost by 80% or 20% or 10%. In the course of appeal the assessee similarly explained the reasons for adopting the varying rates of reduction in relation to different inventory items and justified adoption of such varying rates. After considering the assessee's submissions, detailed working statements and after applying ratio laid down in the case of Bharat Commerce & Industries Ltd. in (244 ITR 246 Del), the Ld. CIT(A) allowed the claim of the assessee company in assessment year 2000-01. The Ld. CIT(A) held that the appellant made pro....