TMI Blog2003 (6) TMI 439X X X X Extracts X X X X X X X X Extracts X X X X ..... of income showing loss of Rs. 1,18,951 on 31st December, 1993. The return was processed under section 143(1)( a ) on 18‑3‑1994. Statutory notice under sections 143(2) and 142(1) alongwith detailed questionnaire was issued. In compliance to the notice, counsel and Chartered Accountant attended and filed written submission. 3. The assessee is having comber plant at Kuphalan (Distt. Sangrur) and doing combing of greasy wool purchased by assessee as well as doing job work. During the assessment year the assessee has debited a sum of Rs.4,58,445 on account of purchase of oil and lubricant. In the order under section 143(3) pertaining to assessment year 1992-93, the consumption of oil was established i.e., 1.45 per kg. of greasy ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to substantiate the arguments of the assessee in favour of its consumption of rice husk. Therefore, the Assessing Officer adopted the 0.89 kg. rice husk per kg. of greasy wool combed and calculated that the total consumption of rice husk shall be 2477.08 quintals against which the assessee claimed consumption of 3928.66 quintals of rice husk, i.e., 1,451.58 quintals excess. Therefore, the Assessing Officer by adopting the average rate as per the statement of assessee at Rs. 125 per 100 kg. Therefore, the Assessing Officer made addition of Rs. 1,45,158 while rejecting the books of account under section 145(1) of the Act. The Assessing Officer completed the assessment by making addition of Rs. 1,45,158 on account of excess consumption on r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er i.e., 89% is on estimate basis whereas the assessee ha shown 1.41 kg is normal in the line of business. The consumption of rice husk for which expenditure incurred by the assessee cannot be treated as income unless the Assessing Officer points out the greasy wool combed is excess for which income was not recorded in the books of account on the basis of cogent material. The Assessing Officer has not disallowed the expenditure for purchase of rice husk, therefore the excess consumption of rice husk does not automatically leads to inference that there may be income which is not disclosed properly. No undisclosed income pointed out by Assessing Officer. Therefore, the order of Assessing Officer is fully unjustified. 7. We have heard th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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