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2015 (10) TMI 471 - AT - Income TaxDisallowance of shortage of 4349.35 kg. claimed by the assessee in the process of making hosiery goods out of grey cloth - Held that:- The assessee has taken the stock at the end of the year and as duly supported for shortage of claim with the tax audit report dated 22.09.2009. The assessee has al so submitted the detail s of quantity of grey cloth received, quantity of processing as well as the shortage arising in the process. Copies of bills from various suppliers of grey cloth have been shown in support of the quantity-wise purchase details submitted by the assessee. The Assessing Officer was not justified in disallowing the claim of shortage of stock of 4349.35 kg. of raw material amounting ₹ 8,81,679/- without giving cognizance to the facts of the manufacturing process of such goods which has result of shortage/wastage which comes in the process of making grey cloth ready for making hosiery goods as well as cutting of grey cloth for making hosiery items. This fact has neither been taken care by the Assessing Officer and nor by the ld. CIT(Appeals) in their orders. Therefore, we delete the addition made by the lower authorities and allow the claim of the assessee. - Decided in favour of assessee.
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