9911796707
TMI Blog1983 (7) TMI 111X X X X Extracts X X X X X X X X Extracts X X X X ..... nt of excessive shortage. On appeal, the CIT(A) considered this issue in para 3 (b). She concurred with the ITO that wastage of 5% was reasonable in the activity of the assessee, and, therefore addition of Rs. 36,800 relating to second period was confirmed. Before us, Shri Dani, ld. representative for the assessee, drew our attention to a comparative chart on page 27, as included in the compilation. From this chart, it is clear that in the case of the assessee itself shortage was taken at 8% in the asst. yrs. 1977-78, 1975-76 and 1974-75 and at 7% in the asst. yr. 1976-77. The argument of Shri Dani is that as compared to the earlier years, the assessee claimed lesser shortage in the year under appeal. Then, he drew our attention to page 31 of the paper book, which is a letter addressed from Iron & Steel Controller to M/s Ludhiana Steel Rolling Mills, Miller Ganj, Ludhiana. In this letter, the authority certified the wastage in Billets and several other items, which are being manufactured by the assessee. The wastage so certified ranges between 10 to 20%. On the basis of these materials, Shri Dani argues that the CIT(A) was not right in restricting the shortage to 5% only. We find s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iii) Flats excess 42 tonnes @ 1625 per ton 68,250 (iv) Bars 16 tonnes @ 1625 per ton 26,000 (v) Semi finished 10.110 tonnes @ 1270 per ton 12,840 . 1,49,070 6. Thus, in her opinion, the excess stock of the value of Rs. 1,49,070 was there. The addition of Rs. 2,31,965 was, therefore, reduced to Rs. 1,49,070 and relief of Rs. 82,895 was given. It is against this relief, the revenue has come up in appeal. The principal plea of the assessee before the CIT(A) was that there was no excess stock and, in alternative, the assessee pleaded that if any excess stock was found, then the value of such excess closing stock found in the first period be taken to be the opening stock of the second period. The CIT(A) accepted this plea of the assessee. The revenue has challenged this finding of CIT(A) also. 7. The most important question for consideration before us is whether there was any excess stock with the assessee as on 12th November, 1976, when survey was conducted by a team of officers of the department. The case of department that that the stock was scientifically weighed in the presence of Shri Mahendra Kumar, one of the partners of the assessee firm and Shri Vashudeo Munim of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1.00 Tons Bars 12.00 Tons Bars 7.00 Tons . 55.00 Tons 9. The description of the finished goods as per page 3 is as follows: Sleeper . 28 Tons 32, 000 Kg. Flats 12x5 sq. 425x20 7 '' 8,500 Kg. Flats 12 1/2x4 8 '' 8,000 Kg. Flats 12 1/2x4 1.50 . . Flats 12 1/2x4 sq. 6.50 . . Flats 12 1/2x5 sq. 8.00 . . Flats 12 1/2x3 sq. 8.50 . . Flats 12 1/2x6 mm 8.00 . . Flats 18x4 sq. 0.60 . . Flats 5x4 sq. 24.00 . . Flats . 10.00 . . Flats . 2.50 . . Flats . 7.00 . . Flats . 11.00 . . Flats . 13.00 . . Flats . 6.00 . . Flats . 4.00 . . Flats . 3.00 . . Flats . 12.00 . . Flats . 20.00 . . . . 193.60 . . Flat . 3.00 Tons . Flat . 1.50 . . Trucle . 1.00 . . . . 199.10 . . 10. Stock of old iron scrap has been described on page 4 as follows: Broken wheels of Train 70 pieces app. Wt. 40 Kg. 2800 Kg. Misc. Broken blades 200 Kg. Scrap Bars--part of wheel 200x10 2000 Kg. One big rod (de shape) 100 Kg. Iron bars broken in finishing this remained scrap 500x13 including half pieces 7500 Kg. Iron bars (Flat) 300 Kg.x5 1500 Kg. Angle rod and half sheet 400x20 80 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lots of same description, then by actually weighing one piece of such a lot, correct weight of the entire lot could have been done. The inventories show that the stock was of heterogeneous character and that could not be kept in similar 4 lots bearing the same shape, size and weight. On these facts, we hold that the contention of the assessee is correct. The weight recorded by the Income-tax personnel's in the inventories is not correct and no reliance can be placed thereon. That being so, we do not agree that the finding regarding the excess weight was rightly arrived at. No addition can be made for excess stock on the facts and circumstances of this case. For the reasons, we delete the addition of Rs. 1,49,070, as sustained by the CIT(A) on account of excess stock. The result of this finding is that the grounds being raised by the revenue require no consideration. When the entire addition made one account of excess stock stands deleted, there is no need to consider addition made on account of excess stock stands deleted, there is no need to consider the question whether the stock remained in actual possession of the assessee and whether that was sold during the year by the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
