TaxTMI 
TaxTMI 
2014 (12) TMI 1402
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....s as under:- "2. The learned CIT (Appeals) erred in allowing the appellant's claim for conversion / manufacturing loss to the extent of 5 per cent only; and thereby the learned CIT (Appeals) erred in confirming the disallowance of the sum of Rs.2,12,953/- out of the ad-hoc disallowance of Rs.6,08,913/- made by the assessing officer out of the appellant's claim for conversion / manufacturing loss. i. The learned CIT (Appeals) erred in rejecting the appellant's explanation in support of its genuine claim for conversion / manufacturing loss, and in ignoring the directions issued in this regard by the Government of India, Ministry of Commerce and Industry, Department of Commerce according to which 9 per cent of wastage of gold ....
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.... learned CIT (Appeals) erred in partly confirming the ad-hoc disallowance made by the assessing officer in an arbitrary manner without considering the relevant facts and appellant's submissions which support the appellant's claim for conversion / manufacturing loss. He also submitted that the rest of the grounds are the arguments of the assessee. 3. The Authorized Representative of the assessee submitted that the assessee-company is engaged in the business of manufacturing polished diamonds out of rough diamonds; as also in the business of manufacturing of diamond studded gold jewellery. During the course of assessment proceedings, the Assessing Officer raised the query regarding the conversion / manufacturing loss in the manufac....
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....sallowance made on account of its claim for conversion / manufacturing loss. Before the CIT (Appeals) also, the assessee has repeated the submissions as were made before the Assessing Officer in support of its submission that the assessee's claim for conversion / manufacturing loss is genuine and is fully supported by appropriate evidence. Besides, the assessee has filed the written submissions during the course of hearing of its appeal before the CIT (Appeals). Vide its said written submissions, the assessee has further elaborated the factual and legal position in the matter and has explained that in the report under section 44AB, quantitative details of raw material, production of finished goods, sales and closing stock have been furnishe....
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.... The CIT (Appeals) has not mentioned anything as to why he has not deleted the entire disallowance in view of the facts and assessee's submissions which have not been disputed. The Authorized Representative of the assessee also submitted that the CIT (Appeals) has not quashed the Assessing Officer's action in initiating penalty proceedings under section 271(1)(c) though the assessee has neither concealed any particulars of income nor furnished any inaccurate particulars of income. 6. The Departmental Representative supported the orders of the lower authorities. 7. We have heard the rival submissions and perused the orders of the lower authorities and material available on record. In the instant case, as per the quantitative detail....