TMI Blog2016 (7) TMI 822X X X X Extracts X X X X X X X X Extracts X X X X ..... er hand, the ld.CIT(A) has observed that quantitative Excise record was maintained by the assessee, and they were subject to the audit by the Excise Department. Its product is excisable. It is not the case that the assessee has avoided excise duty or some evidence was found, exhibiting the avoidance of excise duty. Therefore, after taking into consideration the above finding, we do not find any reason to interfere with the order of the ld.CIT(A) on this issue - Decided against revenue Disallowance made by the AO under section 14A - CIT(A) has reduced the disallowance - Held that:- The order of the ld.CIT(A) need not to be interfered with for two reasons, viz. (i) Hon’ble Gujarat High Court in the case of CIT Vs. CIT V/s Corretech Enginee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as resulted the filing of the CO time-barred by seven days. After considering the application of the assessee, we condone the delay in filing of the CO and proceed to decide the appeal as well as CO on merit. 4. In the first ground of appeal, the Revenue has pleaded that the CIT(A) has erred in deleing the addition of ₹ 60,22,234/-. 5. Brief facts of the case are that the assessee has filed its return of income on 27.10.2007 declaring total income at ₹ 7,26,66,963/-. The case of the assessee was selected for scrutiny assessment and notice under section 143(2) was issued on 28.7.2008 which was duly served upon the assessee. On scrutiny of the accounts, it revealed to the AO that the assessee has made sale of scrap to 21 par ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0320 for 35770 of Stainless/Carbon Steel Tubes. 2. M/s.Tube Inc Corporation - Scrap sales ₹ 608788 for 18440 Kgs of Stainless/Carbon Steel Tubes. Further, summons u/s.131 were issued by A.O to some of the Scrap Sale Parties. In response to the summons, the parties appeared before A.O and furnished the details called for. However, no one appeared on behalf of M/s.Deepak Steel at Chattral, Dist. Gandhi Nagar. The assessee has submitted the ledger copies and bills of all scrap parties during assessment proceedings . The non-furnishing of confirmations of two parties and nonattendance of one of the parties to whom scrap tubes have been sold, was treated as sale of finished goods by the A.O. 4.2 On the other hand, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... due verification of the different process have issued the certificate regarding burning losses and scrap generation in manufacturing process of the appellant company. The copy of said certificate was submitted before the A.O for his perusal. The certificate issued by M/s. Germanisher Llyod, establish that the process loss and scrap generation of the appellant company as shown in the audited books of accounts is. true and correct. The books of accounts of the appellant are audited under the Companies Act as well as under the Income Tax Act and the Auditors have given them reports under the Companies Act and in Form No. 3CA and 3CD under the Income Tax Act and they have not found any defect therein. 4.4 On the basis of facts discu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arefully. A perusal of the assessment order, we find that the AO failed to bring any evidence on record which can suggest suppression of sales made by the assessee. The assessee was showing an income of more than ₹ 7 crores in its return. It could not file confirmation from two scrap purchases having value roughly of ₹ 40 lakhs only. The ld.AO has calculated this aspect in such manner suggesting that the assessee has sold finished goods, but there is no evidence with the AO to that effect. We failed to understand on what basis the AO has drawn this inference. On the other hand, the ld.CIT(A) has observed that quantitative Excise record was maintained by the assessee, and they were subject to the audit by the Excise Department. I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o disallowance under section 14A can be made. Similarly, Rule 8D was not applicable in the Asstt.Year 2007-08. The Hon ble Delhi High Court in the case of Maxo Maxopp Investment Ltd. vs. CIT, 347 ITR 272 and the Hon ble Bombay High Court in the case of Godrej Boyce Mfg. Co. Ltd. 328 ITR 81 has held that Rule 8D cannot be applied with retrospective effect. It is applicable from the Asstt.Year 2008-09. Therefore, no disallowance can be on the basis of Rule 8D. In view of the above discussion, the ground raised by the Revenue is rejected. 11. In the result, the appeal of the Revenue is dismissed. 12. So far as Cross Objection of the assessee is concerned, the same is in support of the ld.CIT(A) s order. Even on issue no.2 with respect ..... X X X X Extracts X X X X X X X X Extracts X X X X
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