9911796707
TMI Blog1992 (5) TMI 70X X X X Extracts X X X X X X X X Extracts X X X X ..... duced during the year are 7,187 M.T. as compared to last year of 13,019 M.T. The ITO found that the assessee is maintaining two godowns, one at Shahdara and one atGhaziabadfor finished goods, for which separate registers are maintained. While checking the godowns registers, it was found that in theGhaziabadgodown register, on3rd March, 1982, it has been shown that 98,850 M.T. has been received from Shahdara godown register. But on the corresponding date, i.e.,3rd March, 1982according to Shahdara godown register, there is despatch of 75.510 M.T. to Rathi Udyog Ltd. Shahdara,Ghaziabad. 2. Secondly, the assessee was getting the ingots rolled into bars from its two sister concerns--M/s Rathi Udyog Ltd. and M/s G.D. Rathi. The assessee has paid rolling charges at the rate of Rs. 550 per M.T. to Rathi Udyog Ltd. and at Rs. 625 per M.T. to G.D. Rathi. The assessee explained the difference in rates by saying that the rolling was got done from M/s Rathi Udyog is ranging from 8 mm to 32 mm dia, while the rolling from G.D. Rathi Steels Ltd. is from 8 mm to 16 mm dia. Thirdly, there was no quantitative tally available in respect of the rates. In the stock register, the ITO noted that sale of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l of higher sizes, i.e., 20 mm and 25 mm from M/s G.D. Rathi Steel Pvt. Ltd. The assessee was also asked to file a certificate from G.D. Rathi Pvt. Ltd. of last thickness rolled which they could not file. Therefore, the ITO made the addition to the amount of Rs. 10,00,000 in the trading results. 3. When the matter came before the CIT(A), he deleted the addition of Rs. 8,86,218 and confirmed the addition of Rs. 1,12,782 in respect of 23.340 M.T. despatch from the Godown No. II for the following reasons: "3.2 I have carefully considered the submissions made and have also gone through the evidence produced before me. As regards the discrepancy pointed out in respect of despatch of goods from one godown to another despite sufficient opportunity accorded to the appellant the register of second godown was not produced before me to support the fact that 23.340 M.T. worth goods were despatched from the aforesaid godown. Admittedly, on the other hand, the goods received atGhaziabadgodown were reflected at 98.850 M.T. showing the difference of 23.340 M.T. which remained unexplained. In the face of this, the explanation rendered that since one godown reflected more quantity of goods the pre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n any case, these discrepancies at the most could lead to the conclusion that the appellant's accounts were not fully verifiable inasmuch as which the quantitative tally was available, there were not quantitative reconciliation available with the appellant-company. But the next issue which arises is could it be said that the GP rate declared was not in consonance with the past history or with the one declared by the other concerns dealing in the same line of business or for that matter the wastage was high. The trading account was looked at from this angle also. It was found that while in the asst. yr. 1982-83, the GP rate was 9.07per cent in the asst. yr. 1983-84 it is 8.9per cent There is a slight fall in the GP rate by 0.17per cent which would be more than compensated if the addition in respect of 23.340 MT of goods is taken into account. As regards wastage it is found that while in the asst. yr. 1982-83 it was reflected at 13.85per cent in asst. yr. 1983-84, it was shown at 10.45per cent The trading results of the earlier years have always been accepted and then no comparable cases have been brought on record to prove that the estimate of GP rate is justified. In view of these ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the same value, there cannot be any unaccounted sale of 23.340 M.T. Simply because the assessee could not produce the register of Godown No. II, it cannot be presumed that the assessee had made sales out of books. There is no evidence on record to presume that the assessee had not despatched 23.340 MT of material from Shahdara Godown No. 2 toGhaziabad. This sale of assessee is verifiable from the general voucher to Rathi Udyog Ltd. were in the purchase account, the same quantity of M.T. against Bill No. 337 dt.3rd March, 1982is shown of the same value. It is also pointed out that the assessment order has been passed in a great hurry, therefore, the AO has not looked into the explanation given by the assessee. It is further pointed out that the CIT(A) while deleting a part addition not only looked the matter from the angle of differences pointed out by the ITO but also compared the GP rate of last year. The difference in rolling charges was on account of fact that there was a different in diameter of goods rolled by the two concerns, therefore, the charges paid were higher. It was also pointed out that in the case of M/s Chhabra Rolling Mills, the charges were paid at the rate of 7 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... thi Udyog Ltd. The assessee had explained despatch of 75.510 MT from godown No. I but he could not produce despatch register of Godown No. II because it was not traceable. The assessment cannot be finalised when other evidences are available on record simply because the register is misplaced. There is no finding of the AO that the goods were sold out of the books. It will be pertinent to mention here that the purchase and sales of the assessee have not been doubted and no material is placed on record to doubt the manufacture. There is no discrepancy in the manufacturing register. The assessee's accounts are fully audited by the auditors and no defects were found by the auditors in the maintenance of books of account. In view of these facts, the additions made on account of unexplained goods 23,340 MT is not justified. We, therefore, delete the addition made by the CIT(A) on this count. 7. Regarding Revenue's appeal with regard to the deletion of Rs. 8,86,218, we entirely agree with the finding given by the CIT(A) on this point where he has discussed this matter in detail and has mentioned rolling charges differed because of the difference in diameter of the goods rolled by two con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Shri B.L. Chopra, the terms must have been reduced into writing that means that there should have been any agreement between the assessee-company and Shri B.L. Chopra which could be produced to show that his services were utilised for sales promotion of assessee's goods. Further, the assessee could not file any evidence showing entry of services rendered by him. In view of these facts, the CIT(A) was right in treating the amount not allowable under the provisions of s. 37(2A). We do not find any substance in this ground and the ground is hereby rejected. 11. The next grievance in assessee's appeal is that the CIT(A) erred in not reducing the disallowance on account of personal use of vehicle. The assessee has claimed expenses on maintenance of vehicle. The ITO disallowed l/4th of expenses for business purposes because the director did not own their personal vehicle and personal use of vehicle was not disputed. 12. When the matter came before the CIT(A), the same was confirmed. The learned assessee's counsel assailed the order of the Revenue's authorities. As against this the learned Departmental Representative supported the order of the CIT(A). In our opinion, the personal use o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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