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2015 (10) TMI 1520 - DELHI HIGH COURT

2015 (10) TMI 1520 - DELHI HIGH COURT - TMI - Addition on account of suppressed production and sale of AMT cut at Unit G-3 & G-4 - ITAT deleted the addition - Held that:- The Court is of the view that opinion of the CIT (A), which has been concurred with by the ITAT, was essentially based on facts as found that the AO had presumed the length of the entire polyester film roll to be 6100 m, whereas, all rolls were not of that length. Even the wastage of batch of roll was presumed to be 14% without .....

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dditions by taking the sale of AMT cut at ₹ 3 per cut, which was inclusive of excise duty of 60 paise.. The order of the CIT (A) has elaborately discussed the said facts in support of its conclusion. With the factual findings of both the CIT (A) and the ITAT being concurrent, the Court is of the view that no substantial question of law arises for consideration, as far this issue is concerned. - Decided against revenue.

Addition on account suppressed sale of blank audio cassettes .....

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Decided in favour of the Assessee and against the Revenue by the decision of the Supreme Court in JCIT v. Mandideep Engineering & Packing Industries (P) Ltd. (2006 (4) TMI 75 - SUPREME Court) and the decision of this Court in CIT v. SKG Engineering Pvt. Ltd. (2005 (5) TMI 37 - DELHI High Court) which in turn refers to the decisions in CIT v. J.P. Tobacco (1996 (8) TMI 29 - MADHYA PRADESH High Court) and CIT v. Chokshi Contracts Pvt. Ltd. (2001 (2) TMI 66 - RAJASTHAN High Court). - Decided agains .....

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f consumption was therefore found to be misconceived. 90 gm of VMT comprised polyester film (76.34 grams) and chemicals (14 grams). The AO in making the addition did not consider the weight of the chemicals. As a result, the entire calculation was rendered erroneous. - Decided against revenue. - ITA No. 625/2010 - Dated:- 5-10-2015 - S. Muralidhar And Vibhu Bakhru, JJ. For the Petitioner : Mr Rohit Madan, Adv For the Respondent : Mr Satyen Sethi, Adv ORDER 1. This appeal by the Revenue under Sec .....

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nit G-3 & G-4? (B) Whether on the facts and in the circumstances of the case, the ITAT erred in law and on merits in granting depreciation of ₹ 2,46,135/- the fixed assets in respect of Namoli Unit? (C) Whether on the facts and in the circumstances of the case, the ITAT erred in law and on merits in deleting the addition of ₹ 23,97,748/- on account suppressed sale of blank audio cassettes from Namoli Unit? (D) Whether on the facts and in the circumstances of the case, the ITAT er .....

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in Unit G-5 & G-6? 3. At the outset, it requires to be noticed that questions B and D stand covered by the decision of this Court in CIT v. Tony Electronics Ltd. [2015] 375 ITR 431 (Del) in favour of the Assessee and against the Revenue. 4. Question C is covered in favour of the Assessee and against the Revenue by the decision of the Supreme Court in JCIT v. Mandideep Engineering & Packing Industries (P) Ltd. (2007) 292 ITR 1 (SC) and the decision of this Court in CIT v. SKG Engineering .....

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roducing AMT at Unit I at Noida and VMT in Unit II, also at Noida. The Assessee was assembling blank audio cassettes at Unit IV viz., the Namoli Unit and blank audio/video cassettes at its Unit V in Malanpur. The Daryaganj Unit of the Assessee was trading in audio and video cassettes. 6. For the AY in question, the Assessee had shown production of 1,43,20,025 AMT cuts of various lengths i.e. C-60, C-45 and C-36. The Assessing Officer ('AO') adopted three different methods to examine the .....

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of chemicals, the AO concluded that 28,42,915 AMT C-60 cuts were produced outside the books. Accordingly, an addition of ₹ 85,28,745 was made on the basis that 28,42,915 must have been sold at ₹ 3 per cut. 7. The Commissioner of Income Tax (Appeals) [CIT (A)] allowed the Assessee's appeal by order dated 20th September 2000 and reversed the above order of the AO. The CIT(A) found that the AO had presumed the length of the entire polyester film roll to be 6100 m, whereas, all roll .....

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the chemical was not the principal raw material. CIT (A) also noted that the AO had made additions by taking the sale of AMT cut at ₹ 3 per cut, which was inclusive of excise duty of 60 paise. The ITAT in the impugned order upheld the above findings of the CIT (A). 8. Having heard learned counsel for the parties, the Court is of the view that opinion of the CIT (A), which has been concurred with by the ITAT, was essentially based on facts. The order of the CIT (A) has elaborately discusse .....

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according to the Assessee was its market strategy. The bulk of the sale was made at two price ranges i.e., ₹ 16.45 and ₹ 22.10 per cassette. The AO concluded that the lower priced models ought to have been sold at ₹ 17.25 per piece and on that basis made an addition of ₹ 23,97,748. 10. The CIT (A) noted that the additions were made without there being any evidence of under-invoicing of sales. The additions were made on the basis of suspicion. Merely because some of the ca .....

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