AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2018 (10) TMI 1291
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....ue has challenged the addition of Rs. 8,08,420/-. The relevant ground reads as under:- "On the facts and circumstances of the case, the CIT(A) has erred in law in restricting the addition to Rs. 8,08,420/- out of total addition of Rs. 48,04,151/- made by the AO on account of sale of scrap out of books." 3. Since the tax effect on the amount disputed by the revenue is less than Rs. 20 lacs, therefore, in view of recent Circular of CBDT No. 3/2018 dated 11th July, 2018, whereby the monetary limit of tax effect for not filing appeals before the Tribunal has been revised to Rs. 20,00,000/-, the appeal of the Revenue is not maintainable. It is not the case of the Revenue that the present appeal comes within the sweep of exclusion clauses as ....
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....tated that sum of Rs. 3,14,500/- was generated from sale of scrap out of the books of M/s. TRW Sun Steering Wheels Pvt. Ltd. and M/s. Sun Vaccum Formers Pvt. Ltd. He further observed that at the residential premises of Shri Subhash Sathe certain documents were found and seized which pertained to scrap sales. He thus concluded that there was a sale of scrap outside the books and from the statements given by these persons it is quite clear that there was a generation of cash through scrap which amounted to Rs. 7 to 8 lacs approximately per year. Assessee was required to provide the details regarding ratio of disclosed scrap sales and total disclosed sales and noted that from the %age to scrap sale to total sale was between 0.10% to 0.16%. Sin....
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....ssessee before the AO. Even otherwise also sale of scrap is comparable with the total sale credited to the profit and loss account and there were two types of scraps, namely manufacturing scrap and non manufacturing scrap: → Manufacturing Scrap generated out of Injection moulding process i.e. manufacturing process adopted by assessee. Such as, Plastic lumps, scrap burada, scrap plastic others, etc. → Non-Manufacturing scrap - other scraps generated not directly related to manufacturing process. Such as drums, used oil, PU Foam, wooden pallets, broken bins, paint tins, corrugated boxes, etc. 8.1. He further submitted percentage of normal industrial standard of scrap was 1.5% to 2.5% and assessee has booked scrap sales to total....
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....le value. This fact has also been admitted in one of the statement of the Director. The AO has computed the ratio on unaccounted scrap sale to accounted sale for a period of five months in the following manner:- Accordingly, as per the AO, the ratio of unaccounted scrap sale to accounted scrap sale for the 5 month period = Rs.7,98,636 =2.12 Rs. 3,77,328 As per the appellant, the ratio for the same period should be = Rs. 7,98,636 = 1.33 Rs. 6,02,235 10.1 Ld. CIT(A) after calling for the entire details, ledger account and scrap sale of both Gurgaon Unit and Manesar Unit found that invoices number as appearing in the seized documents corresponds with the scrap sale bills issued from the Manesar unit. It was also held by him ....
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....xplained. Thus, we do not find any infirmity in the order of the Ld. CIT (A) and the same is affirmed. 11. In so far as the disallowance u/s 14A of Rs. 5,11,464/- is concerned, the brief facts are that assessee has earned dividend income of Rs. 57,14,126/- against which no disallowance was offered by the assessee. In response to the show cause notice by the AO the assessee could not substantiate its claim as to why no expenditure can be attributed for earning of the exempt income. Ld. AO has computed the disallowance u/s 14A after applying rule 8D at Rs. 5,11,464/- which has been confirmed by the Ld. CIT(A). 12. Before us Ld. Counsel submitted that the investments have been made by the assessee from its reserves & surplus, share capital a....