TMI Blog2015 (5) TMI 707X X X X Extracts X X X X X X X X Extracts X X X X ..... venue is allowed for statistical purposes. - I.T. A. No.1188/AHD/2011 - - - Dated:- 20-3-2015 - Shri Mukul Kr. Shrawat Shri Anil Chaturvedi JJ. For the Appellant : Shri M.K. Singh, Sr. D.R. For the Respondent : Shri Tushar. P. Hemani, A.R. ORDER Per Shri Anil Chaturvedi,A.M. 1. This appeal filed by the Revenue is against the order of CIT(A)-XI, Ahmedabad dated 25.02.2011 for A.Y. 2008-09. 2. The relevant facts as culled out from the material on record are as under. 3. Assessee is a company stated to be engaged in the business of manufacturing of alloys and steel casting on job work basis. Assessee filed its return of income for A.Y. 2008-09 on 27.09.2008 declaring total loss of ₹ 2,12,36,146/-. The case was selected for scrutiny and thereafter the assessment was framed under section 143(3) vide order dated 12.11.2010 and the total income was determined at ₹ 3,94,20,720/-. Aggrieved by the order of A.O., Assessee carried the matter before ld. CIT(A) who vide order dated 25.02.2011 granted substantial relief to the Assessee. Aggrieved by the aforesaid order of ld. CIT(A), Revenue is now in appeal before us and has raised the following gr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on by holding as under:- 2.2. I have considered the submissions made by the A. R. of the appellant and the observations of the assessing officer in the assessment order. Similar issue arose in the appellant's own case for earlier assessment years. The ClT(A)-XVI, Ahmedabad, vide his order in appeal No. ClT(A)- XVI/DCIT.Cir.5/898/09-10 dated 01-09-2010 for A.Y. 2007-08 held as under :- 3.3. I have considered the submission made by the appellant and observation of the A.O. As stated by the A.O. and the appellant and as it is clear from the decision of Honorable ITAT for assessment year 2003-04, it is clear that the facts are same in the current year. As in that year, the honorable ITAT observed that the department has not pointed out as to whether this freight and octroi was paid in respect of raw materials brought from the principal or finished goods supplied back to the principal. Under the circumstances, the finding of the CIT(A) that the freight and ocotroi expenditure claimed by the assessee has incurred on purchase of consumables and stole materials, cannot be disturbed. The honorable ITAT deleted this disallowance. Since the facts in the current year are same as in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nditure in respect of which freight and octroi, etc. were claimed. The learned CIT(Appeals) has distinguished the nature of expenditure with the nature of expenditure which was covered by the said agreement. On that basis, he has held that the disallowance was unfounded. With this brief background, now before us, an order of the Tribunal ITAT Ahmedabad D Bench for assessment year 2003-04 passed in ITA No.2954/Ahd/2006 dated 31/12/2009 is placed before us, wherein vide Para-7 it was held as under:- 7. We have heard the learned DR and the learned AR. The learned DR basically relied on the order of the AO and the learned AR relied on the order of the learned CIT(A). After hearing the parties, we decline to interfere in the order of learned. It is not pointed out by the Department as to whether freight and octroi have been paid in respect of raw materials brought from the principal or finished goods supplied back to the principal. Under these circumstances, the findings given by the Id. CIT(A) that the freight and octroi expenditure claimed by the assessee were incurred on purchase of consumables and stores materials cannot be disturbed. As a result, this ground of Revenue is rej ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the Assessee cannot be accepted. He also concluded that Assessee did not maintain proper records and register for day to day manufacturing activities and complete details of raw material consumed in production on day to day and shortage loss occurring at each stage of manufacturing process. He therefore concluded that the books of accounts are not reliable and do not show correct profit of the Assessee and therefore he rejected the book result by invoking the provision of Section 145 of the Act. He thereafter considered the shortage on account of burning/process loss at 5.78% and thereafter worked out the suppressed conversion charges at ₹ 1,33,21,509/- and added to the income. Aggrieved by the order of A.O., Assessee carried the matter before ld. CIT(A). CIT(A) noted that the facts of the case in the year under consideration are similar to that of earlier years and he thereafter following the order of his predecessor for A.Y. 2007-08 deleted the addition by holding as under:- 3.2 I have considered the submissions made by the A. R. of the appellant and the observations of the assessing officer in the assessment order. Similar issue arose in the appellant's own case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... have not furnished the industry-wise loss or the history of the loss in the case of the assessee for last 4/5 years, the loss incurred during various process undertaken by the assessee, percentage of loss in each process under taken by the assessee, comparison of such loss in difference processes industry-wise and various assessment year-wise in case of the assessee, other comparative instances, the reasons for incurring loss and other factors such as type of machinery used, claim of manufacturer of machines as to the amount of loss likely to occur when work is done on their machines. Accordingly, we restore this issue to the file of the AO for examining it afresh. As a result, this ground of Revenue is allowed but for statistical purpose. 13.1 For assessment year 2002-03 and 2004-05 on identical issue, the Coordinate Bench vide order dated 19-11-2010 in ITA No.1807 and 1808/Ahd/2007 held as under: 11. Apropos ground No.4, the observation of the Assessing Officer was that the average burning loss during the year was 10.92%, which according to him was higher considering the type of furnace, i.e. electric fire furnish used by the assessee. As per Assessing Officer, the burnin ..... X X X X Extracts X X X X X X X X Extracts X X X X
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