TaxTMI 
TaxTMI 
2023 (10) TMI 1190
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....ing the addition of Rs. 34,60,000/- without appreciating the fact that the assessee has failed to submit any documentary evidence of sale of scrap machinery or auction document as claimed at the time of assessment proceedings" "That on the facts and under the circumstances of the case, the Ld. CIT(A) has erred in deleting the addition of Rs. 3,49,08,598/- on account of alleged suppression of sales without appreciating the fact that the assessee consuming electricity to produce of off the record cabinets and selling the same out of the book" "The Appellant craves to be allowed to add any fresh ground of appeal or delete or amend any of the ground of appeal". 3. Brief facts of the case are that, the assessee filed return of income for As....
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....essee submitted party wise details of purchase, wherein shown that the assessee had purchased goods of Rs. 34,60,000/- from some suppliers shown as scrap machinery. The A.O. was of the opinion that the assessee had inflated purchase by showing scrap machinery of Rs. 34,60,000/- without corresponding sales or inventory and also observed that the assessee had not shown the same as the fixed asset. In view of the same, the said amount of Rs. 34,60,000/- has been added to the closing stock of the assessee being item included in purchases neither sold during the year nor included in the list of inventory. The Ld. CIT(A) vide order impugned deleted the said additions on the ground that the assessee Company has duly accounted for sale of scrap mac....
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....issed as meritless. 8. We have heard both the parties and perused the material available on record. The Ld. A.O. made addition of Rs. 34,60,000/- on the ground that the assessee had inflated its purchase by showing scrap machinery without corresponding sales or inventory. The said addition has been deleted by the CIT(A) in following manners:- "7.2. I have carefully considered the finding of the AO and written submissions filed by the Ld. AR. The AO added a sum of Rs. 34,60,000/- to the closing stock of the appellant as items included in purchases but neither sold during the year nor included in the list of inventory (closing stock). The Ld. AR has submitted that scrap machinery of Rs. 34,60,000/- lying in the Noida Unit of the appellant,....
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....ed for. In view of these facts, it is held that the appellant company has duly accounted for the sale of scrap machinery during the year in its books and therefore, the addition of Rs. 34,60,000/- made by the AO to the closing stock, is directed to be deleted. This ground of appeal is ruled in favour of the appellant." 9. It is found that the Ld. CIT(A) after verifying the material on record observed that scrap machinery lying Noida Unit of the assessee was transferred to Kirti Nagar Unit, during the period 07/05/2010 to 09/11/2010 and in the books of Noida Unit, the said machinery has been excluded from the schedule of assets and was included as purchases in the Kirti Nagar Unit. Further during the year itself the machinery has been sold ....
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....the AO and the Rejoinder to the Remand Report. The AO added a sum of Rs. 3,49.08.598/- being margin on sales out of books on the basis of consumption of electricity and powder consumed during the year in the manufacturing process. The appellant is in the business of manufacture of plastic mould through injection mounding machines and utilizes powder to make the mould as per the specifications of purchase orders. The appellant also does job work for vendors in which the raw material is supplied by the vendors for moulds. The AO has worked out the margins on the basis of variance in electricity unit consumed and powder consumption. 9.3. The AO has stated that no raw material (powder) was issued in the month of February and March, 2011 where....
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....suppression of sales without appreciating the fact that the assessee consumed electricity to produce of off the record cabinets and selling the same out of the books. 12. Per contra, the Ld. Assessee's Representative by relying on the findings and conclusions of the CIT(A) submitted that there are many factors for determine the consumption of electricity for manufacturing, therefore, there cannot be one-to-one co-relation between electricity consumed vis-à-vis production of cabinet. By taking us through the paper book and the documents produced in the Paper Book, the Ld. Assessee's Representative relied on the various judicial pronouncements in support of her contention and submitted that the additions have been righty delet....