TaxTMI 
TaxTMI 
TaxTMI 
2021 (7) TMI 716
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....limited company engaged in manufacturing of Sponge Iron, M.S. Billets and TMT Bars. The return income of the assessee was (-) Rs. 12.67 Crores against which the book profit u/s 115JB shown was of Rs. 6.47 Crores. 4. During the assessment, the assessee could not furnish any confirmation in details in respect of the following three parties: 1. Concast Exim Ltd. Rs. 3,59,06,000 /- 2. Fridon Kikalishvili Rs. 64,46,557/- 3. Aggarwal Coal Corporation Pvt. Ltd. Rs. 4,86,531 /- Hence, it was incumbent upon the Assessing Officer to make addition on account of unproved purchases in the absence of any evidence furnished by the assessee before him. 5. During the First Appellate proceedings, the assessee submitted that these three parties were trade creditors from whom the assessee had purchased raw material in the goods were supplied to them and provided all the documentary evidences. The same have been forwarded to the Assessing Officer and remand report have been sought. 6. We have gone through the order of the ld. CIT (A) wherein the entire issue and the reconciliations have been examined. The confirmation, bills, transport receipts and other documents given by creditors ....
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....vili in the Appellant Ledger of books of (a) 13.02.2010 Custom Duly paid by 275,614 (b) 27.03.2010 Custom Duty paid by 816,473 3 Custom Duty on purchase credited in Ledger of M/s Fridon Kikalishvili in the books of Appellant (a) 3.02.2010, Voucher No. FRK-008 (Excise Duty on Purchase) (270,302) (b) 31.03.2010, Voucher (Excise Duty on Purchase) No. FRK-0013 (799,690) Balance as per books of Fridon Kikalishvili (in INR) 6,468,652 Equivalent to USD 138171 c. Reconciliation Statement between balances as on 31.03.2010 as per books of Account of assessee and ACCL/ACCL(s) S. No. Particulars Amount Dr./(Cr.) 1 Balance of ACCL as on 31.03.2010 as per books of Appellant 486,531 2 Difference in Opening balance 7,816,103 2 Balance of Agarwal Transport Corp. Pvt. Ltd. adjusted by party (167,640) 3 Amount write off by the party as per ledger maintained by the party (Same is also written back by Appellant in next year) (259,994) 4 Less: Letter of credit matured & accounted by us which was accounted by party 20....
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.... in the Books of assessee as on 31.03.10 was Rs. 64,46,557 /-. A reconciliation Statement for the reason of difference between balance of assessee and M/ s Fridon Kikalishvili was submitted by the assessee. 12. In view of the entire facts of the case, we hold that no addition is called for on account of purchases from M/s Fridon Kikalishvili. 13. With regard to M/ s Agarwal Coal Corporation Pvt. Ltd. (ACCL), the Closing Balance of the assessee in books of M/s ACCL as on 31.03.10 was Nil, whereas Closing Balance of M/s ACCL in the Books of assessee as on 31.03.10 was Rs. 4,86,531 /-. It was stated that the copy of account for the F.Y. 09-10 shows that a sum of Rs. 73,88,469 /- was the opening credit balance as on 01.04.09, and a total payment of 78,75,000 /- was made to that party by the assessee, and thus, a Debit Balance of Rs. 4,86,531/- was outstanding in the Books of the assessee. 14. On going through the details no addition could be made under this Section because (i) there was Opening Balance and no New Credit had appeared in the Books of the assessee this year, and that (ii) it was the Debit Balance against M/ s Agrawal Coal Corp. P Ltd. (ACCL) and not the Credit Balance,....
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....or Trial Run from the date of the installation to the date of the start of commercial use. The Assessing Officer has made the disallowance on the Ground that the interest incurred for the period before the commercial starting of the Power Plant had to be disallowed, without taking into account the period for "Trial Run". 22. Heard the arguments of both the parties and perused the material available on record. 23. We have gone through the case law of Shri Rama Multi Tech Ltd (supra) relied upon by the assessee and find that neither the facts of the case nor the ratio laid down in the case are applicable to the instant case. 24. We have gone through the issue with relevance to the allowances claimed in the P&L account whether it be depreciation or capitalization of interest with regard to the "Trial Run" of the unit. 25. In the case of PCIT Vs Larsen & Turbo Ltd., the Hon'ble Court ruled that once the plant commenced operations and a reasonable quantity of product is produced, the business is set up even if product was sub-standard and not marketable. In this case, a trial run was conducted for one day. After the trial run, commercial production of cement was initiated within rea....