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2013 (11) TMI 269 - ITAT AHMEDABADEstimation of extra consumption by the Company - suppression of production and sale by 10% - estimation of income - Held that:- Commissioner(A) estimated extra consumption by 20% - CIT(A) has given a finding that the working of the extra consumption made by the AO could not be upheld in toto because it suffers from various infirmities - AO had worked out the consumption in case of many items on the basis of the formula/information given on the packing material and without considering the material procured by the assessee or explanation offered by him. He has further recorded that it is also noticed that there were arithmetical mistakes in case of working made in some of the products, and has observed that the explanation about the average/loss given by the assessee cannot be brushed aside because the monograph issued by Indian Pharma Copia is a more authentic and reliable evidence. Assessee has furnished a chart showing the difference which remained un-reconciled even after the fresh working made after taking into account the arithmetical mistakes, loss, average etc - CIT(A) has recorded that the extra consumption remained un-reconciled by the assessee worked out at 14.12% as per the annexed chart. In these facts, it would be most reasonable and proper to estimate the extra consumption at 15% as against 20% estimated by the CIT(A), as the assessee has filed a chart showing extra consumption remained un-reconciled at 14.12% and this ground of appeal, in this issue is partly allowed - Directed to work out the extra consumption at 15% as against 20% directed by the CIT(A). Estimation of G.P. rate - Estimatimation of profit element at 38% on the ground of extra consumption made by the CIT(A) – Held that:- Entire amount of extra consumption could not be added as income in the hands of the assessee, and that only profit element shown could be added as income. The CIT(A) has estimated the average GP at 35% as fair and reasonable estimate of income, considering the GP rate declared by the assessee in the relevant year as well as in the other years. There being no mistake in the order of the CIT(A), on this issue and his estimate of GP at 35% being most reasonable, the same is upheld, and the ground of the appeal of the assessee, on this issue is dismissed – Decided against the Assessee.
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