2020 (9) TMI 967

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....n the manufacturing of calcined petroleum coke (CPC). It filed its return of income on 25.09.2014 for the AY 2014-15 declaring total income of Rs. 63,29,360/-. The AO completed the assessment u/s 143(3) of the Act on 30.12.2016 determining the total income at Rs. 1,46,99,170/- inter alia making disallowance of (a) Labour Charges, (b) Finance Cost, (c) Packing Material Consumption etc. Aggrieved, the assessee carried the matter in appeal without success. 3. Further aggrieved, the assessee is before us. 4. The ld. Counsel for the assessee submitted that ground nos. 1 & 7 are general in nature and ground nos. 5 & 6 are not pressed in view of the smallness of the amounts. Hence these grounds are disposed off as such. 5. On ground nos. 2 & 4,....

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.... case laws: i. CIT vs. Reliance Utilities & Power Ltd. [2009] 313 ITR 340 (Bombay) ii. CIT vs. Tin Box Co. [2003] 260 ITR 637 (Delhi) iii. Munjal Sales Corpn. Vs. CIT [2008] 298 ITR 298 (SC) 7. The ld. DR on the other hand submitted that the assessee has not properly cooperated nor produced the necessary evidences either before the AO nor the ld. CIT(A). He submitted that this case can be restored to the file of the ld. CIT(A) for fresh adjudication in accordance with law with the direction to the assessee to cooperate and produce all necessary evidences. He relied on the orders of the authorities below. 8. In reply, the ld. Counsel for the assessee submitted that written submissions were filed before the ld. CIT(A) and these wer....

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....ufacturing vis a vis sale. So assessee has inflated expenditure on account of consumption of packing material. This has increased almost double. Therefore, 50% increase of Rs.(1,37,48,121 - 81,84,068) =Rs. 27,82,027/- i.e. Rs. 3,15,71,319/- is being disallowed and added to the total income of the assessee." 12. A perusal of the above demonstrates that the disallowance was made on the ground that the assessee could not establish the requirement of expenditure and that this was inflated expenditure to reduce profits. We are of the view that these disclosures are based on presumptions and assumptions. The assessee explained before the ld. authorities the reasons for the increase in the expenditure. At page 34 of the paper book, a copy of the....