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TMI Blog2014 (12) TMI 1017X X X X Extracts X X X X X X X X Extracts X X X X ..... made by AO towards alleged unaccounted sales. The Ld. CIT(A) ought to have deleted the addition in toto. The same be deleted now. 2 The Ld. CIT (A) has erred both in law and on facts in assuming that the moulds worth Rs. 4,14,403/- are sold outside the books without any cogent evidence and without considering the submission and explanations furnished in that regard. The Ld. CIT (A) ought to have accepted the explanation given by the assessee about the technical aspect that the moulds were duly written off as they did not have any realizable value. It be so held now and addition retained be deleted." 2.1 In the Revenue's Appeal, only Ground No.1 reads as under: "1. The Ld. CIT(A)-VIII, Ahmedabad, has erred in law and on facts in restrict ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... moulds not having realizable value hence written off 2,03,328 TOTAL 45,06,566 From the above your appellant submits that complete details with bills, voucher, etc. were produced. Without pointing out any specific defect in accounts maintained no such huge addition can be made." 5. The CIT(A) held as under: "7.3(iii) As far as addition on account of sales of moulds is concerned, it is seen that the AO has taken the sales to be Rs. 45,06,506/- on the basis of the statement which shows issue from 1-4-2005 to 31-3-2006 as at Rs. 45,06,566/-. The AO has held that the entire issue to constitute sales. The AR explained that the issue of Rs. 45,06,566/- consisted of moulds worth Rs. 30,00,000/- which were transferred from work in progress to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... having nil value nor any WIP was shown having nil value. He also clearly stated that in the books of accounts no stocks were shown as having nil value nor any WIP was shown having nil value. 7.3(vi) It is also seen that Shri Bandish Soparkar, AR of the appellant stated that he did not want to cross examine Shri Ashit N.Shah. It is also noticed that no work whatsoever was carried out during the year on any of these moulds. All these moulds were valued at Rs. 4,14,403/-. When there was no further work done on these moulds during the year, it is not understood as to how the value of these moulds became nil. 7.3(vii) The then Director, Shri Sajjan Lal Jain was authorized by the appellant to give statement on behalf of the appellant by the d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y it was realized that it was no more possible to selvedge these items and were not usable and hence had no value. Q.11 Please explain the comments that " the issue column shows the cost of moulds sold" on page 203 of the paper book? A. It shows cost incurred manufacturing/rectification/rework on the items. Q.I 2 Please explain what happens to the rejected moulds? A. We rework and try to correct them, Q.I 3. In the statement given before ITO, Ward-4(l), Ahmedabad in the detail of moulds furnished at Al.No. 4, please explain why there was no mention of moulds discarded as having Nil value. Please state whether their numbers were taken into account in the calculation in the letter dated 11-7-2008. A. Discarded moulds are yet not finishe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ccounts of the appellant. It is worthwhile to note that the job cards for these moulds are alleged to be lost in fire. 7.3(x) In view of the above, it is clear that the appellant has not accounted for these moulds in the books of accounts. There is no plausible reasons for valuing these moulds at Nil. Since these moulds are also not accounted for in stock it stands to reason that these moulds have been sold outside books of accounts. In view of the above, the addition made by the AO on account of unaccounted sales is reduced from Rs. 20,97,008/- to Rs. 4,14,403/-. 8. Appeal is partly allowed." 6. The Departmental Representative relied on the order of the Assessing Officer, whereas the Authorized Representative of the assessee reiterate ..... X X X X Extracts X X X X X X X X Extracts X X X X
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