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TMI Blog2015 (12) TMI 973X X X X Extracts X X X X X X X X Extracts X X X X ..... confirmed or deleted in toto and thus the partial confirmation by the ITAT is bad in law. II. Whether on the facts and in the circumstances of the case, the Income Tax Appellate Tribunal was justified in law in holding that appellant was not entitled to the deduction under section 80HHC on the surrendered amount though utilized for the business of the appellant without placing any evidence against the assessee on record and without rebutting the evidence presented by the assessee on record? III. Whether on the facts and in the circumstances of the case, the Income Tax Appellate Tribunal was justified in law in holding that appellant was not entitled to the deduction under Section 80HHC on the interest received on FDRs which though were maintained for the purpose of taking limits from the Banks and thus was factually directly and intrinsically related to the business activities of the appellant and thus was eligible for the impugned deduction in view of established principles of law?" 2. A few facts relevant for the decision of the controversy involved as narrated in the appeal may be noticed. The assessee is a limited company based at Ludhiana. It is engaged in the business of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f wastage as according to the revenue it was without any reasons and the wastage claimed was in excess to the wastage as claimed in earlier years by the assessee. The assessee filed cross objections against the relief declined by the CIT(A). The Tribunal reduced the addition to 50% of the total i.e. from the total addition of Rs. 20,12,092/- to Rs. 10,06,000/-. Thus the Tribunal partly allowed the appeal filed by the revenue and dismissed the cross objections filed by the assessee. Hence the instant appeal by the assessee. 3. We have heard learned counsel for the parties. 4. Question No.I relates to excess wastage claimed by the assessee. The Tribunal had disallowed 50% of the wastage claimed by the assessee. According to the learned counsel for the assessee, no addition could have been made without rejecting the books of account especially when every entry of wastage was vouched. 5. On the other hand, learned counsel for the revenue relied upon findings recorded by the Tribunal to the effect that in the entire year, the average wastage per day came to 66.734 kgs whereas during the impugned period for 25 days, wastage shown was 8897.267 kgs. giving an average of 355.89 kgs. 6. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 00 Garments 22689.656 Closing stock 13219.656 Total 25989.656 25989.656 Quantitative details of closing stock as on 31.4.2004 (Garments) Particul ars Quantity (Pcs) Quantity (Kg.) Particulars Quantity (Pcs) Quantity (Kg) Opening stock 4550 1706.25 Sale Local 166981 62617.875 Finished goods 298646 143576.923 Sale Bison 39795 14923.125 Sale Export 45914 17217.750 Cutting Waste 31585.923 Closing stock 50500 18937.500 503190 145283.173 303190 145283.173 Cutting Waste Particulars Quantity (Kg.) Particulars Quantity (Kg) Opening stock 3300.00 Sale 12770.000 Garments 31586.923 Closing stock 22118.923 Total 34886.923 34886.923 Quantitative details of closing stock as on 5.3.2004 (Garments) Particulars Quantity (Kg.) Particulars Quantity (Kg) Opening stock 1706.25 Sale local 157034 Purchases 770 Sale export 2111124 Sale return 3576 Closing stock 4550 Finished goods 17236 Total 182708 182708 If the aforesaid details are analysed, it is se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d. We are making it clear that the aforesaid adoption may not be treated as precedent for other assessment years as this belongs to facts of the present assessment year only, therefore, this ground of the revenue is partly allowed." It is a question of fact adjudicated by the Tribunal which is a plausible view. In such circumstances, no interference is called for with the findings recorded by the Tribunal. 7. Question No.II relates to the amount of Rs. 20 lacs which was surrendered by the assessee which was from business income. Learned counsel for the assessee submitted that the assessee was entitled to deduction under Section 80HHC of the Act and the Assessing Officer should have allowed the same. Reliance was placed on judgments in CIT vs. Suman Paper and Boards Limited, (2009) 314 ITR 119 (Guj.) and CIT vs. Margaret's Hope Tea Co. Limited, (1993) 201 ITR 747 (Cal.). 8. On the other hand, learned counsel for the revenue relied upon decisions of this Court in Sangeeta Tools Pvt. Limited vs. CIT, Aayakar Bhawan, Ludhiana, ITA No.171 of 2009, decided on 8.8.2013 and M/s Tudor Knitting Works Pvt. Limited vs. CIT, Aayakar Bhawan, Ludhiana, ITA No.440 of 2010, decided on 8.8.20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the block assessment. In Margaret's Hope Tea Co. Limited's case (supra), the assessee's main activity was the cultivation, manufacture and sale of tea. The cash credits account had appeared in the assessee's books of account. The Tribunal was held justified in holding that the cash credits appearing in the books of account should be treated as income of the assessee from its tea business and not as income from undisclosed sources. Such is not the situation in the present case. Thus, the assessee cannot derive any advantage from the said pronouncements. 11. This Court while considering identical issue in National Legguard Works's case (supra) recorded as under:- "7. We are unable to accept this submission. Deduction under Section 80HHC of the Act is available only on showing fulfilment of conditions specified therein and there could be no presumption that surrender made on account of unexplained stocks represented export income. The assessee was unable to give any explanation. There could be no presumption that additional amount surrendered represented income from exports. Deduction under Section 80HHC of the Act can be claimed only on showing facts which ma ..... X X X X Extracts X X X X X X X X Extracts X X X X
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