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D.C.I.T, Circle-3, Kolkata Versus M/s. Mantora Oil Products Ltd

2016 (8) TMI 453 - ITAT KOLKATA

Addition of unexplained expenditure - Held that:- The finding of the CIT-A examined the profit and loss account and schedules annexed thereto, wherein he agreed with the contention of the assessee that an amount of ₹ 1,94,03,13,928/- includes the value of crude oil and other related items such as chemicals and hydrogen gas and found the same in schedule –P which was annexed to the profit and loss account. In this regard we may refer to chart of particulars as reflecting in the page no-4 of .....

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rtered Accountants of India. - I.T.A No. 1911/Kol/2013 - Dated:- 17-6-2016 - Shri Waseem Ahmed, Accountant Member and Shri S.S.Viswanethra Ravi, Judicial Member For The Appellant : Shri Sallong Yaden, Addl. CIT, ld. Sr.DR For The Respondent : Shri Manish Tiwari, FCA, ld.AR ORDER SHRI S.S VISWANETHRA RAVI, JM This appeal of the revenue arises out of the order of the CIT(A)-Central-I, Kolkata in Appeal No. 134/CC-VII/CIT(A)C-I/10-11 dated 23rd May, 2012 for the assessment year 2005-06 against the .....

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ee is engaged in the business of manufacturing vanaspati ghee. The return was filed on 31-10-2005 declaring total income at ₹ 11,38,536/-. The assessment was completed u/s. 143(3) of the Act determining the total income of ₹ 11,62,290/-. The assessment was reopened by issuing notice u/s. 148 of the Act on the ground that the expenditure to the extent of ₹ 3,32,75,131/- towards raw material consumed was not reflected in the profit & loss account. The AO completed the assessm .....

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O has arbitrarily picked up figures from the tax audit report and the notes on accounts; and then, computed the imaginary difference of ₹ 5,1l,14,650/- which actually does not exist. The AO has found no defect or discrepancy in the audited books of account. The Ld AR filed copy of the tax audit report in course of the appellate proceedings. It was explained that total expenditure of ₹ 1,94,03,13,928/- on account of raw material consumed was debited to the profit & loss account. B .....

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oods in Transit 6,77,33,048 6,77,33,048 Chemicals 11,47,449 0 TOTAL (a) 8,83,67,611 8,72,20,162 Add: Purchases Raw Materials 1,78,36,29,836 1,78,36,29,836 Raw Materials-Goods in Transit 3,62,71,868 3,62,71,868 Chemicals 2,17,81,926 0 Hydrogen Gas (Including Freight) 82,80,116 0 Carriage Inward 5,21,41,597 5,05,61,178 Brokerage & Commission on Purchase 16,53,472 16,53,472 Cenvat Credit Reversal on Input 14,290 0 Less : Discount on Purchase on Chemicals 44,994 0 Less : Discount on Purchase on .....

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uch as he has failed to consider the figures for chemicals and hydrogen gas; and also, those for carriage inwards related to crude oil and brokerage & commission on purchase of crude oil. The AO has also erred in taking the figure for closing stock at ₹ 1,12,53,579/- while the correct figure was ₹ 1,23,53,579/-. If the above factors are taken into account, the discrepancy of ₹ 5,11,650/- gets reconciled as under:- (a) Carriage inward (crude oil) Rs.5,05,61,178/- (b) Brokera .....

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ed goods; and, the balance is taken directly to the balance sheet. The treatment of MODVAT is revenue neutral which is also evident from Annexure 1 to the tax audit report wherein the deviation from section 145A is certified as nil. 5. The Ld. CIT-A after considering the submissions of the assessee and CITA gave finding as under: 8. I have perused the assessment order and the material on record. I have also considered the submissions made on behalf of the appellant. I find merit in the argument .....

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26;133/- . However, the AO has missed the vital fact that the figure of ₹ 1,90,91 ,26,133/- mentioned in the notes on accounts relates to crude oil only whereas the figure of ₹ 1,94,03,13,928/- debited to the profit & loss account includes crude oil as well as chemicals and hydrogen gas; and; also, expenses on carriage inwards and brokerage and commission. The AO has also erred in taking the figure for closing stock of crude oil at ₹ 1,12,53,579/- (instead of ₹ 1,23,5 .....

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cord. But, in the present case, presumptions have led the AO to a state of affairs where salient evidences were overlooked and the material on record was ignored. On the other hand, the AO has brought no positive material on record to substantiate or support his conclusion that there was excess expenditure of ₹ 5,11,14,650/- towards consumption of raw material which is not reflected in the profit and loss account. The treatment given by the AO in respect of availing of MODVAT credit is als .....

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ence of ₹ 5,11,14,650/- and also referred to the AO s order that the assessee has availed MODVAT credit of ₹ 1,78,39,519/- and the difference of ₹ 3,32,75,131/- (Rs.5,11,14,650/- minus ₹ 1,78,39,5.l9/-) remained unexplained and relied on the order of AO. 7. In reply, the Ld. AR submits that the that the figure of ₹ 1,90,91, 26,133/- as entered by the auditors in the notes on accounts relates to crude oil only whereas the figure of ₹ 1,94,03,13,928/- debited to .....

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