TaxTMI 
TaxTMI 
1982 (2) TMI 121
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....antile system of accounting. The previous year followed by the assessee is the financial year. The business of the assessee firm is manufacture of utensils and allied products and sale thereof. For the purpose of manufacture of these products, the assessee has to manufacture brass which is an alloy of zinc and copper. Ordinarily, the ratio of zinc and copper for getting brass alloy is 60:40. The ITO observed that, "the assessee has not kept any day-today stock register, consumption register which could show the exact position." The ITO noted that the assessee has consumed for the purpose of manufacturing brass the following quantity of copper and zinc: Copper : 6955.142 kgs. Zinc : 7381.610 kgs. Now, since according to the ITO the ....
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....se for invoking the provisions of s. 146(1) of the IT Act. According to him, there was a justification for adding a sum of Rs. 50,000 to the commercial results declared by the assessee and he did so in the order that he framed on 29th Feb., 1980. 4. The order was challenged in appeal before the AAC. The AAC for the reasons recorded by her in paras 1 to 6 deleted the addition of Rs. 41,525 that the ITO worked out an approximate consumption of zinc and the excess raw material which held to have been sold in the open market. The ld. AAC while considering the claim of loss of Rs. 6,252 on account of bardana, however, restricted the loss to Rs. 2,000 and deleted the balance of the addition of Rs. 6,252 resulting therefrom. 5. Now in the ap....
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....s of which the ITO proceeded was wholly erroneous. It was submitted that in such state of affairs, the assessee could not produce before the ITO day-to-day quantity tally. 7. The ld. counsel for the assessee submitted that in order to remove the doubts, if any, that the ITO had during the course of assessment proceedings, the assessee had placed before him an explanation vide letter dt. 4th Oct., 1979 addressed to him appearing at page 1 of the assessee's paper-book. It was submitted in this letter, that the assessee had submitted the explanation about the consumption of copper and zinc and had also provided tabulated data for consideration of the ITO to justify its stand that the consumption of coper and zinc shown in the books of accou....
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....TO to consider result of M/s. Tulsi Metal Works which had been compared with the results of the assessee and as such the principle of natural justice had been violate. However, we find that as recorded in para 3 of the order of the AAC the matter was sent back to the ITO for report and when the ITO made a report, it was he who first brought in the case of M/s. Tulsi Metal Works for purpose for comparison but for reasons best known to him instead of taking the figure for the asst. yr. 1977-78 which was under appeal he projected the figures of consumption of copper and zinc and production of brass, etc., in the case of M/s. Tulsi Metal Works for the asst. yr. 1978-79. Therefore, we do not find anything wrong if the AAC compared those figures ....