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2015 (5) TMI 707 - ITAT AHMEDABAD

2015 (5) TMI 707 - ITAT AHMEDABAD - TMI - Disallowance of freight inward, freight outward and octroi expenses - CIT(A) allowed the claim - Held that:- Since, the facts of the case in the present appeal are similar to that of assessment year 2002-03 and 2004-05, which has been accepted by the learned AR and the learned DR and since on identical facts the Coordinate Bench of the Tribunal has already decided the issue in earlier years in favour of the assessee, we, following the decision of the Co- .....

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o the file of the Assessing Officer for examining it afresh after giving reasonable opportunity of hearing to the assessee. Thus, this ground of appeal of the revenue 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)- .....

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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 grounds;- 1. The Ld. Commissioner of Income tax (A) has erred in law and on facts in deleting the disallowance of freight inward, freight outward and octroi expenses of ₹ 48, .....

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spect to deleting the disallowance of freight and octroi expenses. 4. On perusing the Profit and Loss account, A.O noticed that Assessee had debited freight and coolie and cartage expenses to the Profit and Loss account. He also noticed that Assessee was working only for AIA Engineering Ltd its holding company and was doing the job work for it. On perusing the agreement dated 02.05.2000 entered by the Assessee with the holding company, he noticed that one of the terms and conditions stated that .....

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o noticed that similar disallowances were made in A.Y. 2002-03, 2005-06 & 2006-07 and in A.Y. 2002-03, the Hon ble Tribunal had decided the issue in favour of the Assessee but Revenue has preferred an appeal before Hon ble Gujarat High Court. He therefore disallowed the aggregate amount of ₹ 48,63,066/- and added to the income. Aggrieved by the order of A.O., Assessee carried the matter before ld. CIT(A). CIT(A) while granting the relief noted that the issue in the year under considera .....

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r 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 w .....

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wing the decision of honorable ITAT for assessment year 2003-04. This ground of appeal is therefore, allowed. 2.2.1 Since the issue for the assessment year under consideration is similar to that of earlier years, assessing officer is directed to delete the disallowance made by him of ₹ 48,63,066/-. This ground of appeal is allowed. 5. Aggrieved by the aforesaid order of ld. CIT(A), Revenue is now in appeal before us. 6. Before us, ld. D.R. supported the order of A.O. On the other hand, ld. .....

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while granting the relief had noted that the facts of the case in the year under appeal are identical to that of earlier years and he following the decision of his predecessor decided the issue in favour of the Assessee. We find that the co-ordinate Bench of Tribunal while deciding the appeal for A.Y. 2006-07 had decided the issue in favour of the Assessee by holding as under:- 8. We have heard the rival submissions and perused the material on record. We find that before the Coordinate Bench for .....

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respect of incoming raw-material and dispatch of the goods was to be borne by the said holding company, then the assessee has wrongly debited the freight in Profit & Loss account. When the matter had gone before the first appellate authority, the Learned CIT(Appeals) examined each head of the expenditure 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 .....

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earing 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 .....

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ar 2002-03 and 2004-05, which has been accepted by the learned AR and the learned DR and since on identical facts the Coordinate Bench of the Tribunal has already decided the issue in earlier years in favour of the assessee, we, following the decision of the Co-ordinate Bench cited supra dismiss this ground of appeal of the revenue. 9. Before us, ld. D.R. could not point any distinguishing feature of the case with that of A.Y. 2006-07. We therefore respectfully following the order of co-ordinate .....

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b work, he noticed that raw material and store shortage on account of burning loss in conversion was to be borne by AIA Engineering Ltd. The Assessee was therefore asked to justify the claim of burning loss claimed by it. The Assessee interalia submitted that the actual process loss incurred by the Assessee ranged between 10 to 12% and was dependent on the composition of raw materials, the quality of scraps and several other factors. It was further submitted that the melting loss has been mistak .....

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ecords 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 the .....

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s of the assessing officer in the assessment order. Similar issue arose in the appellant's own case for earlier assessment years. The CIT(A)-XVI, Ahmedabad, vide his order in appeal No. CIT(A)- XVI/DCIT.Cir.5/898/09-10 dated 01- 09-2010 for A.Y. 2007-08 held as under :- "4.3. I have considered the submission made by the appellant and observation of the A.O. From the assessment order as well as the appellate order of the CIT(A) for A.Y.2006-07 and A.Y. 2003- 04, it is seen that on this i .....

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esaid order of ld. CIT(A), Revenue is now in appeal before us. 12. Before us, ld. D.R. supported the order of A.O. On the other hand ld. A.R. submitted that similar issue came up before the Tribunal in earlier years for A.Y. 2006-07, the Hon ble Tribunal by following its earlier orders restored the matter to the file of A.O. He therefore fairly submitted that since the facts of the case in the year under appeal are identical to that of earlier years, the matter with similar directions may be res .....

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have heard the rival submissions and perused the material on record. We find that in the assessment year 2003-04 there was a similar issue before the Coordinate Bench. The issue was undisclosed conversion charges on account of claiming excess burning loss. The Coordinate Bench vide order dated 31-12-2009 in ITA No.2954/Ahd/2006 held as under: "13. We have heard the learned DP and the learned AR. In our considered view, the issue cannot be decided without complete data. The parties have not .....

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hines 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 avera .....

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medabad Bench vide order dated 31/12/2009, vide Para -13, the matter was restored back for a fresh adjudication; reproduced below: "13. We have heard the learned DR and the learned AR. In our considered view, the issue cannot be decided without complete data. The parties 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 un .....

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