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2014 (6) TMI 106 - AT - Income TaxAdditions - Job work on behalf of principle - Rejection of books of accounts u/s 145 - non maintaining the stock register of raw material and closing stock - assessee claimed abnormal burning loss during the year and GP rate also have fallen down Held that:- There was a decline in the GP rate compared to preceding year but converging charges in gross have been increased substantially - The raw material is supplied by the sister concern which has been processed by the assessee on job work basis on behalf of the sister concerned, AIA Engineering Co. Ltd. The ld. A.O. had not brought on record that assessees job receipt compared to other parties of similar nature of work, were booked on lower rates as decided in assessee own case for the earlier year, it has been held that average job work realized has fallen compared to preceding year - The entire job work also subject to TDS - The stock register was impounded by the Department and was possession with the department which could be examined by the AO at the time of assessment - The assesee had maintained day-to-day stock register - The assessee does not have any stock for its own - The entire raw material was given by the Principal which after manufacturing returned back the same to the Principal - The entire burning loss belonged to the Principal not the assessee - The burning loss has not been claimed in the p&l account - the assessee wholly depended on the job work of the Principal - No outside job work was performed by the assessee thus, the order of the CIT(A) is set aside Decided in favour of Assessee. Deletion of disallowance of freight inward, outward and octroi expenses Held that:- CIT(A) rightly was of the view that the freight and octroi expenditure claimed by the assessee has incurred on purchase of consumable and store material, cannot be disturbed - Freight inward did not comprise of any freight paid for raw material on behalf of the Principal - The total consumables purchased during the year was Rs.2.07 crore which includes refractories, ramming mass etc. Octroi of Rs. 7.02 lacs was paid on the stores and consumables purchased during the year - Freight outward was incurred for loading, unloading and freight for moving the used moulding sand and other scrap materials out of factory premises to be taken to a remote place for disposal - Coolie / cartage was paid for loading, unloading and freight for moving the castings in process for job work outside our factory premises for such job work and bringing it back to the factory - The freight and octroi expenditure shown in the agreement was for incoming the raw material and on sending back casting was borne by the Principal - both the expenses are different the order of the CIT(A) is upheld Decided against Revenue. Deletion of suppressed conversion charges Held that:- Following The Deputy Commissioner of Income Tax, Circle-5, Versus M/s. Reclamation Welding Ltd. [2012 (11) TMI 232 - ITAT, AHMEDABAD] - The issue cannot be decided without complete data as the parties have not furnished the industry-wise loss or the history of the loss for last 4/5 years, the loss incurred during various process, percentage of loss in each process, comparison of such loss in difference processes industry wise and various assessment year-wise & other comparative instances and factors like type of machinery used, claim of manufacturer of machines as to the amount of loss likely to occur when work is done on their machines thus, the matter is remitted back to the AO for fresh adjudication Decided in favour of Revenue.
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