2024 (5) TMI 158

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....) of the Income Tax Act, 1961 (hereinafter referred to as "the Act") by the Assistant Commissioner of Income Tax Circle-4(1)(1), Ahmedabad (hereinafter referred to as "AO") for Assessment Year (AY) 2017-18. 2. The assessee has raised following grounds of appeal: 1. The Hon'ble Commissioner of Income-tax Appeals (NFAC) has erred in law and on facts of the case by upholding the disallowance to the extent of Rs. 15,85,650/-made by the learned Assessing Officer in respect of increase in material consumption for the year under consideration. 2. The Hon'ble Commissioner of Income-tax Appeals (NFAC) has erred in law and on facts of the case by upholding the disallowance made by the learned Assessing Officer under secti....

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....nder this ground of appeal, the assessee stated that Ld.CIT(A) has erred in upholding the disallowance to the extent of Rs. 15,85,650/- made by AO in respect of raw material consumption. From the submission/material available on records, arguments of the Ld. Counsel of the assessee and the facts recorded by AO and the Ld.CIT(A) in their orders, it can be seen that: i. Increase in material consumption compared to previous year was, mainly, due to the inclusion of Job work Charges under cost of raw material. In the previous year the same was not included in the cost of raw material. Thus, the effective increase in cost of raw material is 21.82% instead of 63.78% as claimed by the Assessing Officer. ii. The books of accounts ....

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.... year, does not necessarily lead to inference that there has been suppression of facts. b. when the AO had not pointed out any specific discrepancies or defects in the books of accounts of assessee not had he brought out any material to establish purchases or expenses were inflated or receipts were supressed, there was no justification in rejecting its books results invoking provisions of section 145. 5.2. On the other hand, the Ld. DR placed his reliance on the order of CIT pointing out the fact that there is corelated increase in sales as compared to increase in raw material consumption and the onus to give reason was on assessee. 6. We have heard the rival contentions of both the parties and perused the material available ....