TaxTMI 
TaxTMI 
2019 (8) TMI 1265
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....s passed. Whereas the grounds of appeal in para 1 to 1.3 are for the Assessment year 2008-09 Assessment year 2009- 10, Assessment year 2010-11 and whereas in Assessment year 2011-12 assessee has raised the grounds similar to earlier years para 1 to 1.3 and also other grounds of appeal 2 to 2.2. Therefore, for the sake of convenience, we shall take up the assessee appeal ITA No. 4356/Del/2015, for assessment year 2009-10 and facts Narrated. The assessee has raised the following grounds of appeal:- 1. That the Commissioner of Income-tax (A) erred on facts and in law in confirming the notional addition of Rs. 36,29,637/- made by the Assessing Officer on account of alleged suppression of income from sale of wastage. 1.1. That the Commissioner of Income-tax (A) erred on facts and in law in confirming the aforesaid addition, without appreciating that the assessing officer had failed to bring on record any evidence to prove that the appellant had received any amount in excess of the declared value of scrap. 1.2. That the Commissioner of Income-tax (A) erred on facts and in law in not appreciating that the Assessing Officer enhanced the rate for sale of cattle....
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....ith the income of Rs. 2,92,62,271/-. Whereas the assessee in the return of income filed under section 153A of the Income Tax Act has disclosed additional amount of Rs. 1,61,31,720/- towards wastage sale and the value mentioned at Rs. 1.13 per kg against earlier 0.73 per kg. The AO observed that there is a difference in rate as per the books and the rate conducted for computation of income and Filing of return of income under section 153A of the Act. 4. The AO further made observations on the search proceedings by the DDIT(Investigation) and found that the assessee was not disclosing the full and true sale of value of waste generated during the production of IMFL and was being sold outside the books of accounts. The AO on the information of few Distilleries of U.P. Region considered the market value of wastage and also the calculations made by the assessee @ 1.13 per kg whereas AO found other Distilleries rate is 1.22 per kg. Hence, the AO made an addition on the difference in sale value of wastages not credited in the Books of accounts Rs. 36,29,637/- and with other additions assessed the income of Rs. 37,22,74,271/- and passed the order under section 153A of the Act on 3.6.2....
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....he prevailing rate of wastage generated in the organic manure on identical products in the relevant period and whereas the assessee's main production plant is situated at Rampur, U.P. and AO based on the enquiries adopted the rate of 1.22 per kg. The ld. AR further submitted that the assessee in order to buy piece with the department has increased the rate of wastage to 1.13 per kg and to avoid litigation whereas the AO has adopted 1.22 per kg without any evidence and there is no clarity in respect of the nature of the wastage produced. The ld. AR referred to the page 292 of paper book in respect of the value of wastage sale. The contention of the ld. AR that the cattle fodder is sold at the factory premises and the assessee is not incurring any other expenditure and supported with submissions. 9. We heard the rival submissions and perused the material on record. We find the submissions of the ld. AR are duly supported with facts and the rate adopted by the assessee for the said assessment year in filing the Return filed under section 153A was only to buy peace. We are of the considered opinion that the Assessing authority though adopted the rate at 1.22 per kg by general enquir....
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....n of Rs. 56,21,468/- made by the AO on account of alleged distribution of unaccounted surplus computed on the basis of shortage of stock of empty bottles of Radico brand found at the premises of the bottler namely M/s N.V. Distilleries & Breweries Ltd. 2.1 That the CIT(A) erred on facts and in law in holding that the bottles found short had been sold outside the books of accounts and the profit on the same have been shared between the bottling plant and the appellant, without bringing on record any evidence to support the same. 2.2 That the CIT(A) erred on facts and in law in observing that the appellant had entire control over the business of M/s N.V. Distilleries & Breweries Ltd., in terms of the Bottling agreement, and , therefore, proportionate amount of alleged unaccounted sales made by that party were to be added as income in the hands of the appellant. 11. The Assessing Officer in the assessment proceedings found that there is a shortage of stock of empty bottles. There was survey operation u/s 133A on the bottling plant of M/s N.V. Distilleries & Breweries Ltd., on 15.2.2011 whereas investigation wing found 1,90,780 number of empty bottles of different ....
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....ancial statements and supported judicial decisions. Contra the ld. DR supported the orders of the CIT(A) and relied on the observations of the CIT(A) and further emphasis that the shortage of bottles has to be explained by the assessee and the onus of claim should be established by the assessee company for shortages and also there is a contravention of provision of excise laws. The assessee could explain with reasons in regard of shortages. Before the appellate proceedings or the Hon'ble Tribunal and prayed for dismissing the grounds of appeal of the assessee. 14. We have heard the rival submissions and perused the material on record. The ld. AR has been emphasizing that the shortage is not related to the assessee company and the assessee company is not related to M/s N.V. Distilleries & Breweries Ltd. But it has only entered into an agreement for manufacturing of assessee's brand Radico Brand in his bottling plant. The contention of the ld. AR that the issue of shortages, has to be explained by the M/s N.V. Distilleries & Breweries Ltd., with whom the assessee has tie up. Further there is no evidence to trace that the shortages has to be taxed in the hands of the assessee. We c....