TaxTMI 
TaxTMI 
2006 (7) TMI 202
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....-01. By the impugned order the Tribunal partly allowed the appeal filed by the respondent/assessee thereby reversing the order passed by the Commissioner of Income (Appeals) dated May 7, 2003, and deleting the additions of Rs. 30,83,659 made by the Assessing Officer and Confirmed by the Commissioner of Income-tax (Appeals). 2. The facts in brief as noticed by the Tribunal are that the assessee was engaged in the business of manufacture of rigid PVC pipes and profiles. The assessee returned a total income of Rs. 25,26,292 for the assessment year 2000-01. Survey operations under section 133A of the Act were carried out at the business premises of the assessee on December 17, 1999. In the course of survey operations, the assessee surrendere....
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.... utilized in making finished products, while some scrap which is not reusable is sold in the market. Earlier the assessee was maintaining record of only that scrap which was not reusable and was simply lifting the reusable scrap from the floor and putting it to use in the manufacture of pipes. The assessee further explained that it had applied for ISO 9000 certificate in the relevant year. At this stage, we may notice that the ISO 9000 certification was in fact granted to the assessee in August, 1999. The assessee explained that the audit team which visited the works of the assessee for the purpose of granting ISO certification insisted that reusable stock be also taken into the books and hence, in July, 1999, the assessee brought into the ....
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....is contrary to the relevant provisions of the Act. He contends that since, admittedly, the assessee had made a surrender of over Rs. 25 lakhs, during survey operation, the books of the assessee could not be relied upon and that the Assessing Officer was entitled to make his best judgment assessment since he was not satisfied about the correctness or completeness of the accounts of the assessee. He relies upon a decision of this court in Action Electricals v. Deputy CIT reported in [2002] 258 ITR 188 to contend that where the assessee has made disclosure/surrender at the time of search, the same constituted sufficient material for the Assessing Officer to base his satisfaction that the books of account of the assessee were not correct and co....
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....ation to compute the yield. Naturally, on application of simple common sense, the arithmetical computation of yield would show a lower figure than earlier years when more scrap is taken into consideration for calculation purposes. In reality, the generation of scrap has been more or less the same. This situation is well-supported by the accounts of the earlier year and the succeeding year. The fact the assessee received ISO certification in August, 1999, is not in dispute. The fact that the assessee used a bulk out of the carried forward stock of reusable scrap in the following year is well document, and it also explains the high yield of 92.75 per cent. in that year. The gross profit ratio at 14.84 per cent. during the year is comparable t....