TMI Blog1995 (6) TMI 76X X X X Extracts X X X X X X X X Extracts X X X X ..... . 3. The assessee purchases yarn and gets gray cloth prepared through M/s Rajasthan Processors (I) Ltd. At the assessment proceedings, the AO noted that the assessee had claimed shrinkage at 5.25% as against shrinkage of 3.91% in last year. On being asked to explain the increase in shrinkage percentage this year, it was explained that the variation in percentage depends on several factors includ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Apart from that, the learned counsel for the assessee has advanced very learned arguments, with which we feel completely satisfied. 6. The learned counsel for the assessee is very right in his contention that the provisions of s. 145 cannot be made applicable until and unless the AO brings a case within the purview of either s. 145(1) or 145(2). In the present case the AO has pointed out no def ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in such record. The learned CIT(A) has further pointed out that the shrinkage did not exceed 4.9% in this year and the AO had wrongly taken that at 5.25%. Taking into account all the facts and circumstances of the case, we are of the opinion that the learned CIT(A) has deleted the addition in question for very sound and cogent reasons. There is thus no force in this appeal. 8. The appeal is dis ..... X X X X Extracts X X X X X X X X Extracts X X X X
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