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2019 (8) TMI 1265 - AT - Income TaxAddition of suppression of income from sale of wastage - AO observed that there is a difference in rate as per the books and the rate conducted for computation of income and Filing of return of income u/s 153A - AO on the information of few Distilleries of U.P. Region considered the market value of wastage rate is 1.22 per kg - HELD THAT:- We find the submissions of the ld. AR are duly supported with facts and the rate adopted by the assessee for the said assessment year in filing the Return filed u/s 153A was only to buy peace. Assessing authority though adopted the rate at 1.22 per kg by general enquiries but there is no concrete proof in support of rate at 1.22 per kg. In the present case, the assessee has considered the rate of wastage sale generated @ 0.73 per kg in the Books of accounts but whereas at the time of filing of Return of income u/s 153A that assessee has adopted rate 1.13 per kg. AR envisaged that to buy peace the assessee has enhanced the rate by 0.40 per kg and Disclosed in the Return of income. Whereas the Assessing authority without any supporting evidence except mentioning that the few Distilleries of U.P. Region also generates the wastage and they are selling at ₹ 1.22 per kg. cannot be a benchmark of unorganized sector. The Assessing authority though made the specific observations but could not support with any logical and documentary evidence. Therefore, addition of the AO is without any cogent evidence and cannot be sustained. Therefore, we set aside the order of the ld. CIT(A) and Direct the AO to delete the addition and allow the grounds of appeal of assessee Shortage of stock of empty bottles account - addition of alleged distribution of unaccounted surplus computed on the basis of shortage of stock of empty bottles of Radico brand found at the premises of the bottler - HELD THAT:- The contention of the ld. AR that the issue of shortages, has to be explained by the M/s N.V. Distilleries & Breweries Ltd., with whom the assessee has tie up. Further there is no evidence to trace that the shortages has to be taxed in the hands of the assessee. We considering the facts and the findings of the ld. CIT(A) find the explanations of the assessee are not satisfactory though the ld. AR has referred and relied on obligations and warrantees of the assessee and similarly of M/s N.V. Distilleries & Breweries Ltd. We find that without any relatable cause, the business of bottling cannot proceed. Further agreement was entered which is not disputed by the Revenue but the fact remained that the assessee could not explain the shortage of stock though referred to the permissions of bottling agreement. Whereas the Ld. AR contention that the difference has to be explained by the M/s N.V. Distilleries & Breweries Ltd., to the Revenue but the facts remain that the assessee has business tie up with this company various brands of products, manufactured and bottled by M/s N.V. Distilleries & Breweries Ltd., in the Bottling plant. The assessee has accepted that net distributable surplus after deducting the expenses and bottle charges as per agreement entered by with M/s N.V. Distilleries & Breweries Ltd., dated 12.04.2004 and the distributable surplus shall be appropriated. We find there are inter related transactions which the Revenue has rightly made observations and the assessee could not overruled the finding of the Revenue with proper explanations or evidences. CIT(A) has considered the submissions, agreement and ratio of distributable surplus has passed a reasoned and logical order on this ground of appeal confirming the addition of the AO which we are not inclined to interfere and upheld the same and dismissed this ground of appeal of the assessee for the AY 2011-12
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