TaxTMI 
TaxTMI 
2019 (12) TMI 359
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....e has raised following grounds of appeal:- "1) "Whether the id. CIT(Appeal) is right in law and on facts in deleting the addition ofRs. 4,47,060/- made on account of loss of raw tobacco. " 2) "Whether the Ld. CIT(Appeal) is right in law and on facts in deleting the addition of Rs. 12,74,187/- made on account of undervaluation of closing stock. " 3) "Whether the Id. CIT(Appeal) is right in law on facts in restricting the addition on account of manufacturing loss from Rs. 2,36,64,474/- to Rs. 4,47,060/- ." 4) "Whether the Ld. CIT(Appeal) is right in law and on facts in deleting the disallowance of Rs. 91,372/- made on account of damaged goods." Cross Objection No. 50/Ahd/2018 filed by assessee 3. The ....
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....nces. The particular disallowances/additions contested in the appeal of the Revenue are adjudicated as under:- Ground No. 1 (Deleting the addition of Rs. 4,47,060/- on account of loss of raw tobacco) 5. During the course of assessment, the assessing officer noticed that assessee has claimed loss of 7745.2 kg. raw tobacco, the value of which comes to Rs. 4,47,060/-. On query, the assessee explained that tobacco flakes contained various impurities which were required to be removed before processing the same, therefore, the same resulted in weight loss. The assessing officer has not accepted the explanation of the assessee stating that modern machine has improved techniques of SI in packs used by the assessee and disallowed the claim of ....
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....cals and perfumes used in the process, sweeping and filling in various size of pack etc. The assessing officer has not accepted the explanation of the assessee and treated the manufacturing loss of Rs. 2,36,64,474/- as unexplained and added to the total income of the assessee. Ground No.4 (Deleting the disallowance of 91,372 on account of damage goods) 8. During assessment , the assessing officer noticed that assessee has debited Rs. 91,372/- in the Profit and Loss account on account of damaged goods claim and disallowed the same stating that assessee has not produced any detail or any other documentary evidences to show that the loss was actually incurred by the assessee. 9. Aggrieved assessee has filed appeal before the ld. CIT(A....
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....ion adopted for valuation of stock was wrong. It is clearly elaborated in the finding of the ld. CIT(A) that during the course of assessment proceedings, the assessing officer has not demonstrated how the method of valuation adopted for valuation of stock by the assessee was wrong. Therefore, we do not find any error in the finding of ld. CIT(A). Accordingly, this ground of appeal of the revenue is dismissed 10.2 The addition of Rs. 2,36,64,474/- for the manufacturing loss was made by the assessing officer on the observation that in the process of manufacturing of tobacco, there cannot be any process loss as the assessee has used the processed material. In this regard, we have noticed that during the course of assessment, the assessee ha....
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....urther we have to comply by legal metrology act for which we have to ensure that the product in each of our various sizes of packing should have the weight of finished products as prescribed on the respective packing. Thereby in the packing process there is some quantity of give away loss" It is observed that assessing officer has not pointed out any specific defect in the manufacturing process and on general basis rejected the manufacturing loss claimed by the assessee. The entire production record was maintained as prescribed by the excise authority which was subject to scrutiny and examination by the excise authorities. During the year under consideration there was increase in the gross profit and net profit of the assessee compared t....
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....ed to the business purpose of the assessee. Even the assessee has failed to controvert the findings of the A.O. that foreign trips were made to Singapore, Hongkong under the arranged tour package and the assesse could not demonstrate with supporting evidences that tour was connected with business purpose of the assessee. Therefore, this ground of cross objection filed by the assessee is dismissed. Ground No. 3 of cross objection against disallowance of Rs. 64,886/- as excess depreciation on electrical installation 12. It is noticed that the assessee has failed to substantiate with relevant supporting evidences that the electrical fitting was part of plant and machinery, therefore, we do not find any error in the decision f ld. CIT(A).....