2011 (4) TMI 1509

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....of the case and hence is unsustainable. 2. Because, learned Commissioner of Income Tax (Appeals) erred in sustaining the addition on account of estimated excess scrap generation presumed to the tune of 18,382.2 Kg. In total disregard to facts on the record and without any evidence/basis against the assessee. 3. Because, learned Commissioner of Income Tax (Appeals) erred in not appreciating the facts on the record like no defect in audited accounts, day to day stock records like no defect in audited accounts, day to day stock records accepted by excise/trade tax auth. etc is overlooked and absence of quantity details of finished goods is an impossibility as these are sold in numbers. As such, the total addition sus....

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....nerated has been taken at 18382.2 Kgs which has been valued at Rs. 14 per kg. and addition of Rs. 2,57,351/- is made on account of undisclosed scrap and the income of the assessee has been assessed at Rs. 5,15,205/- against returned income of Rs. 2,57,854/-. 4. Before CIT (A) it was the case of the assessee that the audit report filed by the assessee was supported by the books of account maintained in the regular course of business. The Assessing Officer did not point out any defect in the accounts/stock record maintained by the assessee. The books of account and trading results have been accepted. Thus, it was pleaded that there was no basis whatsoever with the Assessing Officer to adopt 2% scrap generation and in the absence of rejecti....

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....s of account, the addition made by the Assessing Officer with regard to scrap generation was not justified. He drew our attention to the record maintained by the assessee which, according to him, clearly revealed that the assessee was maintaining stock registers even for scrap generation and those registers have been verified by the excise authorities. Thus, he pleaded that learned CIT (A) has wrongly upheld the part addition and the addition should have been deleted in its entirety. 6. On the other hand, relying upon the order of CIT (A), it was pleaded by learned DR that the addition has rightly been partly sustained and the order of CIT (A) should be upheld. 7. We have carefully considered the rival submissions in the light of the ....