TMI Blog2012 (12) TMI 201X X X X Extracts X X X X X X X X Extracts X X X X ..... een held to be reasonable by the Tribunal – addition deleted - ITA NO.5324/DEL/2011 & ITA NO.5325/DEL/2011 - - - Dated:- 31-1-2012 - SHRI G.D. AGRAWAL AND SHRI A.D. JAIN, JJ. Appellant by: Shri R.I.S. Gill, CIT(DR) Respondent by: Shri H.P. Aggarwal ORDER PER G.D. AGRAWAL, VICE PRESIDENT ITA No. 5324/D/2011 The only ground raised in this appeal by the assessee reads as under:- On the facts and circumstances of the case and in law, the CIT(A) has erred in deleting the addition of Rs.2,37,66,448/- made by the AO on account of reconciliation difference in the closing stock of natural gas. 2. At the outset, it was pointed out by the ld. Counsel that the issue is squarely covered in favour of the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... venting during such operations. Similarly, whenever a segment of pipeline is commissioned that pipeline stores a significant quantity of the gas. It is not always possible to accurately estimate this quantity that is consumed or stored. This, therefore, contributes to uncertainty. c) On account of reasons of safety, there are Pressure Relief Valves which allow the gas to go out, many a times; it is difficult to estimate this quantity. d) The pressure in the line keeps varying depending on the drawl rate/input from GAIL. The variation in the line pressure would result into increase/decrease of the gas in the pipeline. This cannot be estimated accurately. e) There is no allowable tolerance in the accuracy of the meters and to the extent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , submitted that the order of the CIT(A) should be reversed and that of the AO should be restored. 5. We have carefully considered the arguments of both the sides and perused the material placed before us. The facts of the year under consideration are identical to the facts in AY 2005-06. In both the years, addition was made by the AO for reconciliation difference in the closing stock of gas. Against the original assessment order, the matter traveled upto the ITAT. The ITAT set aside the matter back to the file of the AO. The AO repeated the addition made in the original assessment. When the second round of appeal reached ITAT in AY 2005-06, the ITAT considered the whole issue and upheld the order of the CIT(A) wherein he has deleted the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the AO was justified in disallowing the reconciliation loss. The ld. CIT(Appeals) made observations about expert opinion, but the same has not been obtained and the relief has been given on the basis of observation of the Tribunal that the loss of 4% was reasonable and the loss in this year is lower than this percentage. However, he did not carry the matter further to obtain appropriate expert view from the officials of GAIL or ONGC Ltd. with a view to settle the issue once and for all. Therefore, since the assessee failed to furnish the details as per the order of the Tribunal, namely, whether the percentage of loss at about 3.46% of purchases had to be subjected to verification, as reasonable loss. Accordingly, it is argued that the addit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f about 4% of purchases is reasonable subject to verification. Instead of verifying the percentage of loss, the AO reproduced his earlier order. The loss of 3.4% is borne out by audited accounts, which is lower than the average loss of about 4%. Therefore, there seems to be no reasonable cause to make the disallowance of reconciliation loss by stating that the details of stock lying in pipe lines were not furnished in qualitative or quantitative terms. What had to be verified was whether the loss was in the vicinity of 4%, which has been held to be reasonable by the Tribunal. In these circumstances, we do not find any error in the order of the ld. CIT(Appeals) which requires correction from us. 6. Since the facts of the year under cons ..... X X X X Extracts X X X X X X X X Extracts X X X X
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