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Dy. Commissioner of Income Tax Central Circle–25, Mumbai Versus M/s. Parle Products Ltd.

2017 (12) TMI 298 - ITAT MUMBAI

Suppression of closing stock - Held that:- It is evident that the Assessing Officer without calling for an explanation from the assessee to reconcile the difference has made the addition alleging suppression of closing stock. However, before the first appellate authority, the assessee has reconciled the difference with supporting evidence which was sent for verification of Assessing Officer. - Decided against revenue - Addition on account of inflated purchases - Held that:- As seen, on the b .....

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he paper book for the examination of the Assessing Officer. Therefore, the allegation of the Learned Departmental Representative that the Assessing Officer was not given opportunity to examine additional evidence is unacceptable. It is further to be noted, the Learned Departmental Representative has not been able to controvert the factual finding of the first appellate authority that the reconciliation submitted by the assessee is on the basis of books of account. - Decided against revenue - .....

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ssioner (Appeals), the documentary evidences furnished by the assessee before the first appellate authority in a paper book were sent to the Assessing Officer for his examination and comments. It also emerges from record that during the remand to the Assessing Officer, the assessee has made ground–wise submissions before the Assessing Officer by referring to the relevant supporting documents. In view of the aforesaid, we uphold the order of the learned Commissioner (Appeals) by dismissing the gr .....

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ntary evidence including Central Excise registers before the first appellate authority. Notably, the learned Commissioner (Appeals) after verifying the production records, Excise records, has found that the uniform rate cannot be applied to regular biscuit and burnt / broken / power biscuits. It is a fact on record that the evidences produced by the assessee were sent for examination of the Assessing Officer in remand and before the Assessing Officer the assessee has made detailed submissions ju .....

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of foreign travel undertaken by the directors and executives. As in assessee’s own case for immediately preceding assessment year, i.e., 1995–96, the Tribunal has upheld 50% disallowance of foreign travel expenses in respect of the very same persons. Therefore, respectfully following the aforesaid order of the Tribunal, we restore the disallowance made by the Assessing Officer. This ground is allowed. - Unutilised MODVAT credit - Held that:- The issue stands decided in favour of the assessee .....

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of ad–hoc disallowance made by the Assessing Officer in respect of confectionary. Therefore, we delete the addition sustained by the learned Commissioner (Appeals). - Disallowance of deduction claimed on account of spoilt and damaged goods - CIT-A sustained the disallowance @ 5% out of the deduction claimed on account of mouthwash and toothbrush - Held that:- We are of the opinion that assessee’s claim of deduction on account of spoilt and damaged goods insofar as it relates to biscuits and .....

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d production resulting in suppressed sales of biscuits - Held that:- As compared to the yield of Mumbai unit in the preceding assessment years as noted above, the assessee has shown a higher yield for the Mumbai unit in the impugned assessment year. Therefore, on over all consideration of facts and circumstances of the case, we are of the considered opinion that rejection of books of account and addition made on estimate basis alleging suppression of sale is not in accordance with law. Therefore .....

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ommissioner (Appeals) on this issue by dismissing the ground raised. - Disallowance of depreciation on guest house - Held that:- The issue has been decided against the assessee by the Tribunal in the preceding assessment years as well as by the decision of the Hon'ble Supreme Court in Britannia Industries Ltd. v/s CIT(2005 (10) TMI 30 - SUPREME Court). - Disallowance of depreciation on certain plant and machinery - Held that:- The machine in question is used for cutting and wrapping conf .....

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h machinery has been allowed has not been controverted by the learned Departmental Representative. Therefore, we delete the disallowance made by the Assessing Officer and confirmed by the learned Commissioner (Appeals) - ITA no.4023/Mum./2002 And ITA no.3806/Mum./2002 - Dated:- 29-11-2017 - SHRI SAKTIJIT DEY, JUDICIAL MEMBER AND SHRI N.K. PRADHAN, ACCOUNTANT MEMBER For The Revenue : Shri Alok Johri For The Assessee : Shri Percy Pardiwala ORDER PER SAKTIJIT DEY, J.M. Aforesaid cross appeals are d .....

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gets the products manufactured on contract basis through a number of contract manufacturing units located in different parts of the country. For the assessment year under dispute, the assessee filed its return of income on 29th November 1996, declaring total income of ₹ 33,39,71,830. During the assessment proceedings, the Assessing Officer called upon the assessee to furnish itemwise details of valuation of closing stock of raw material after verifying the details furnished by the assessee .....

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to be ₹ 1,07,28,443=86. From the aforesaid figures of closing stock, the Assessing Officer worked out the value of raw materials of Mumbai Unit in respect of items Others to be ₹ 1,08,44,078. Whereas, the assessee has accounted for stock of other raw material at ₹ 1,05,00,833. He, therefore, held that the assessee has suppressed closing stock of raw materials others to the extent of ₹ 3,43,237. Accordingly, he added back the amount to the income of the assessee. Assessee .....

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iliation statement furnished by the assessee deleted the addition. 5. Learned Departmental Representative submitted, before the first appellate authority the assessee has furnished additional evidence by way of reconciliation chart which was not filed before the Assessing Officer. He submitted, learned Commissioner (Appeals) was not justified in deleting the addition without allowing an opportunity to the Assessing Officer to examine the additional evidence. 6. Learned Authorised Representative .....

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paper book, submitted that the assessee has reconciled the difference in value of closing stock of raw material and others. He submitted, reconciliation chart was duly forwarded to the Assessing Officer by the learned Commissioner (Appeals) which is evident from the submissions made by the assessee before the Assessing Officer in the course of remand. 8. We have heard rival contentions and perused the material available on record. From the facts and material on record, it is evident that the Ass .....

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ssed. 9. In ground no.2, the Revenue has challenged deletion of addition made of ₹ 24,89,077 on account of inflated purchases. 10. Brief facts are, during the assessment proceedings, the Assessing Officer noticed that the consumption of raw materials for biscuits and confectionaries for Mumbai unit was shown at 49103.146 MTs. However, from the monthly details of purchases and consumption furnished by the assessee the consumption of material worked out to ₹ 49280.481 MTs. The Assessin .....

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The assessee challenged the addition before the first appellate authority. 11. Before the learned Commissioner (Appeals), it was submitted by the assessee that as per materials brought on record, the correct consumption of raw material as per monthly statement should be 46136.446 MTs. It was submitted, in letter dated 31st March 1999, it was stated by the assessee that stores issued sugar was wrongly entered at 1.60 lakh kgs instead of 16,000 kgs. Therefore, a Credit Note no.3002 dated 31st Jan .....

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nce in consumption of raw material as alleged by the Assessing Officer the addition of ₹ 24,89,077 cannot be sustained. 12. We have heard rival contentions and perused the material available on record. The only contention before us by the Learned Departmental Representative is, learned Commissioner (Appeals) has deleted the addition on the basis of additional evidence submitted before him. Learned Authorised Representative on the other hand submitted that all the evidences produced before .....

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learned Commissioner (Appeals) after examining the reconciliation statement having found that it is on the basis of the books of account of the assessee has deleted the addition. Further, it is evident on record, the first appellate authority has sent the evidences filed in the paper book for the examination of the Assessing Officer. Therefore, the allegation of the Learned Departmental Representative that the Assessing Officer was not given opportunity to examine additional evidence is unaccept .....

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sing Officer alleging suppression of production resulting in unaccounted sales. 15. In the course of assessment proceedings, on the basis of information from contract manufacturing units, through notice issued under section 133(6) of the Act, the Assessing Officer found that the quantity of production shown by contract manufacturing units in their books of account is more than the quantity of production for contract manufacturing units as shown in the books of account of the assessee. As per the .....

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as left to be recorded in the production register. The Assessing Officer, however, was not convinced with the explanation of the assessee. He proceeded to work out the difference in production vis-a-vis the closing stock which ultimately resulted in a difference of 64 MTs which according to the Assessing Officer was not accounted for in the books. The Assessing Officer adopting the rate of ₹ 31,561 per MT as adopted by Parle Biscuits Ltd. a sister concern for valuation of closing stock, wo .....

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d. The only submission made by the Learned Departmental Representative before us is, the learned Commissioner (Appeals) has deleted the addition on the basis of additional evidence which were not filed before the Assessing Officer. The learned Authorised Representative strongly supported the finding of the learned Commissioner (Appeals). As could be seen, only on the basis of information obtained from the two contract manufacturing units, the Assessing Officer has made the addition alleging supp .....

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ences brought on record being satisfied with the claim of the assessee has deleted the addition. As far as the contention of the Learned Departmental Representative that learned Commissioner (Appeals) has deleted the addition on the basis of addition evidence is concerned, we are unable to accept the same. As could be seen from the impugned order of the learned Commissioner (Appeals), the documentary evidences furnished by the assessee before the first appellate authority in a paper book were se .....

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e of waste biscuits / biscuit powder / broken biscuit. 19. Brief facts are, from the details of other income of ₹ 228.18 lakh shown in the Profit & Loss account, the Assessing Officer found that the assessee has sold waste biscuit powder, weighing 660.500 MTs for an amount of ₹ 9,77,569 at 1.47 per kg. The Assessing Officer, however, did not find the claim of the assessee acceptable. He observed, any prudent manufacturer will not sell broken and burnt biscuit and biscuit powder a .....

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of 31007.300 MTs. On consideration of the aforesaid facts, the Assessing Officer concluded that 664.590 MTs of biscuit were sold at normal rate. Alleging that assessee did not furnish item-wise details of sales, the Assessing Officer adopted the average sale price of biscuit of ₹ 36,025 per MT and made addition of ₹ 2,29,64,845. While doing so, the Assessing Officer also observed that on a physical enquiry made in the factory of the assessee, it was found that the manufacturing proce .....

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factory premises of the assessee, it was found that the entire manufacturing process is automated and there is very little scope of wastage. He submitted, even in case of wastage by way of broken biscuits, etc., they are re-usable which is found from contract manufacturing unit. He submitted, before the first appellate authority, the assessee produced additional evidence which were not brought to the notice of the Assessing Officer. Therefore, he submitted, learned Commissioner (Appeals) was not .....

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as separate items in RG-1 Register. He submitted, all these facts were brought to the notice of the Assessing Officer through detail submissions made during the remand proceedings. 23. We have heard rival contentions and perused the material available on record. As could be seen, other income shown by the assessee is from sale of broken biscuits, and powder biscuits. While burnt biscuits are of no use, broken biscuits are re-usable in manufacturing process and they have been sold at ₹ 26 .....

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he assessee were sent for examination of the Assessing Officer in remand and before the Assessing Officer the assessee has made detailed submissions justifying its claim. Thus, the learned Commissioner (Appeals) having recorded a purely factual finding based on documentary evidence and which could not be controverted by the Department through contrary material brought on record, we uphold the order of the learned Commissioner (Appeals) by dismissing the ground raised. 24. In ground no.5, the Dep .....

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unch. Accordingly, the Assessing Officer disallowed an amount of ₹ 1 lakh out of the expenses claimed. The learned Commissioner (Appeals) considering assessee s submissions that expenditure on training program and conference is not in the nature of entertainment and further, the assessee voluntarily having disallowed an amount of ₹ 3,60,353, restricted the disallowance to ₹ 50,000. While doing so, he followed the reasoning of his predecessor in assessment year 1995-96. 26. We h .....

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20,57,746 on account of disallowance of expenditure on foreign travel. 28. During the assessment proceedings, the Assessing Officer noticing that the assessee has claimed foreign travel expenses of ₹ 40,95,492, called upon the assessee to produce the relevant details and justify its claim. After examining the details furnished by the assessee, the Assessing Officer found that the foreign travel expenses related to foreign trips made by the directors of the company and executives. The Asse .....

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expenses claimed. The assessee challenged the disallowance before the learned Commissioner (Appeals). The learned Commissioner (Appeals) though found that in the preceding assessment year, 50% disallowance out of such expenses was upheld by his predecessor, however, following the order of the Tribunal for earlier assessment years he deleted the addition. 29. Learned Departmental Representative submitted in assessee s own case for assessment year 1995-96, the Tribunal has upheld disallowance of 5 .....

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ord supporting documentary evidence to demonstrate the purpose of foreign travel undertaken by the directors and executives. Though, in the assessment year 1984-85 and 1986-87, the Tribunal has deleted the addition, however, as could be seen from the order dated 30th September 2004, passed in ITA no.157/Mum./1999, in assessee s own case for immediately preceding assessment year, i.e., 1995-96, the Tribunal has upheld 50% disallowance of foreign travel expenses in respect of the very same persons .....

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e learned Commissioner (Appeals) following the decision of the Hon'ble Jurisdictional High Court in Indo Nippon Chemicals Co. Ltd., 245 ITR 384 (Bom.) deleted the addition. 34. Learned Counsels appearing before us have agreed that the issue stands decided in favour of the assessee by the decision of the Hon'ble Supreme Court in CIT v/s Indo Nippon Chemicals Co. Ltd., [2003] 261 ITR 275 (SC). Considering the aforesaid submissions of the parties, we uphold the order of the learned Commissi .....

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ccording to him, if the raw material under the head Others is accounted for, the percentage of yield would come down to 91.5%. Whereas, the contract manufacturing unit has shown yield of confectionary items ranging from 86.80% to 102.67%. Accordingly, he worked out the average yield of contract manufacturing units at 100.24%. Though, the assessee submitted before the Assessing Officer that Mumbai unit manufactures various items of confectionary, the Assessing Officer did not accept the claim of .....

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jor discrepancy found by the Assessing Officer is on account of maida, which is not a raw material for confectionary, however, he upheld disallowance of ₹ 2 lakh. 39. We have heard rival contentions and perused the material available on record. The learned Commissioner (Appeals) has recorded a factual finding that most of the discrepancies found by the Assessing Officer are on account of maida which is not a raw material for confectionary. That being the case, there is no justification for .....

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. 41. During the assessment proceedings, the Assessing Officer noticed that the assessee has claimed deduction on account of spoilt and damaged goods as under:- i) Mouthwash and tooth brush Rs. 14.04 lakh; ii) Confectionary Rs. 19.66 lakh; and iii) Biscuits Rs. 98.96 lakh; 42. When the Assessing Officer called upon the assessee to justify its claim, the assessee submitted debit notes issued by the distributors for damaged goods. The Assessing Officer, however, was not convinced with the submissi .....

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anufactured items do have a self-life and there can be defects in packaging and goods may be damaged in transit also. He also agreed with the assessee that dealers / distributors will not bear the cost of damaged goods and will get it reimbursed from the assessee who is the manufacturer. However, he held that such deduction can only be allowed to the assessee in respect of goods manufactured by it. He observed, as far as the goods manufactured by the affiliates of the assessee like mouthwash an .....

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ar as it relates to biscuits and confectionaries is allowable, since, assessee itself manufactures such items. However, as far as mouthwash and toothbrush are concerned, the assessee has not manufactured such products, therefore, the assessee could have returned such damaged goods to the manufacturer and claimed reimbursement. In view of the aforesaid, accepting the reasoning of the first appellate authority we dismiss the grounds raised by the Department as well as by the assessee. 45. Ground n .....

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antitative details of raw material consumed in the manufacture of biscuit and confectionary separately; percentage of yield in respect of biscuits and confectionery; percentage of shortage / wastage in the process of manufacturing biscuits and confectionery separately; monthly statement of item-wise purchases of raw materials; monthly statements of item-wise consumption of raw materials and packing materials in the process of manufacturing biscuits and confectionery separately; monthly yield of .....

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her, though, the assessee in the statement furnished before the Assessing Officer has claimed consumption of other materials at 3335 MTs. It was not mentioned in the tax audit report. Further, the assessee has revised the figures of consumption of Mumbai unit from 36690 MTs to 38490 MTs. To further verify the percentage of yield the Assessing Officer sought information from the contract manufacturing units. From the information obtained from contract manufacturing units, he found that consumptio .....

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anufacturing unit were 91.65% and 100.24% respectively. When the Assessing Officer called upon the assessee to explain the difference in consumption, the assessee submitted that the difference in consumption of coco vita oil was on account of clerical mistake and the actual consumption was 1860 MTs. Thus, on the basis of difference found in the percentage of yield as per tax audit report and the statements filed by the assessee as well as the information obtained from the contract manufacturing .....

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ry was taken as a whole and no separate records were available. To explain reason for difference in percentage of yield between its manufacturing unit at Mumbai and the contract manufacturing units assessee submitted, its unit at Mumbai was manufacturing various items of biscuits and confectionary for many years while the contract manufacturing unit have started recently and were mainly manufacturing ParleG biscuit. The assessee, though, admitted that there is a standard formula but the theoreti .....

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f the first appellate order. Further, the Assessing Officer comparing the production and sales at Mumbai unit with that of contract manufacturing units found that the sales at Mumbai unit was much less than the quantity available for sale, while for contract manufacturing units the quantity sold was more than the quantity available for sale. The Assessing Officer observed, as per standard formula, the yield should work out to 92.59%. He observed, the contract manufacturing units were showing ave .....

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production resulting in suppressed sales. Taking into consideration consumption of raw material of Mumbai unit at 37498 MTs, he worked out the suppressed production at 3359.820 MTs and by adopting ₹ 36,025, as average sale price, the Assessing Officer worked out the suppressed production of biscuits resulting in suppressed sales at ₹ 12,10,44,000 and added it to the income of the assessee. Being aggrieved of such addition, assessee preferred appeal before the first appellate authori .....

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ficer, it was submitted that contract manufacturing units were manufacturing less number of brands as compared to Mumbai unit. It was submitted, the standard formula of manufacturing cannot be applied due to various factors including wastage in the manufacturing process. In this context, the assessee submitted the different variety of biscuits and confectionary manufactured by contract manufacturing units. The assessee furnishing a statement of reconciliation of sales submitted that the Assessin .....

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hown at 81.65%. In this context, the assessee submitted the working of yield for Mumbai unit for ParleG biscuit after considering wastage and operational loss of 350 MTs, heating loss of 1978 MTs, moisture of 405 MTs and excess weight of packaging in 642 MTs are worked out at 88.24%. It was submitted, in respect of contract manufacturing units also the percentage of yield varied between 87.85% to 100.35%. Thus, it was submitted, there is no suppression of production therefore, addition made shou .....

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standard formula cannot be applied strongly though it may be a guiding factor for appreciating the result. From the material on record, he found that the yield of contract manufacturing units vary between 87.85% to 100.35%. Therefore, adopting average yield of 91.65% for all contract manufacturing unit will give a distorted picture. Referring to the percentage of yield of few contract manufacturing units, the learned Commissioner (Appeals) held that the percentage of yield of contract manufactur .....

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is not as disciplined as at contract manufacturing units. He also accepted assessee s contention that while packing the biscuits extra weight of 5% to 10% is given. Thus, taking into consideration these aspects the learned Commissioner (Appeals) held that the percentage of yield of biscuit of the Mumbai unit can be fixed at 88% which leaves a gap of 2% which is unexplained. The learned Commissioner (Appeals) observed, taking into account consumption of raw materials at 37,498 MTs, the production .....

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udit report yield of the Mumbai unit of the assessee worked out to 92.55%. Whereas, as per the statements filed before the Assessing Officer by the assessee, percentage of yield worked out to 84.50%. He submitted, in the reconciliation statement also, discrepancy was found which was again revised by the assessee. He submitted, as per the reconciliation statement, the discrepancy was found in consumption of vanaspati, sugar, maida, coco vita oil. He submitted, as per the information obtained from .....

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given full opportunity to reconcile the differences and prove the fact that percentage of yield is as per the standard formula. He submitted, the learned Commissioner (Appeals) without properly appreciating the reasoning of the Assessing Officer has deleted major part of the addition without proper reasoning and in a non-speaking manner. He submitted, even additional evidence produced before the learned Commissioner (Appeals) were not forwarded to the Assessing Officer for examination. Finally, .....

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was found in the books of account. He submitted, if there was any discrepancy, it was in the statement submitted before the Assessing Officer, that too, due to bonafide mistake. He submitted, in the tax audit report, there is no mention of percentage of yield. He submitted, as per Form no.3CD, prescribed under Income-tax Rules, 1962, in case of manufacturing concern, full quantitative details of principal items of raw material and finished products are to be given. He submitted, in Annexure to .....

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, the raw materials shown as Others since was not a principal item was not shown in the tax audit report. Learned Authorised Representative submitted, if at all there is any mistake / discrepancy it is in the statement furnished and not in the audit report or books of account. He submitted, books of account can be rejected if conditions of section 145(3) of the Act are fulfilled. Learned Authorised Representative submitted, only if the conditions of sub-section 3 of section 145 are satisfied, th .....

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Authorised Representative submitted, the reason for low yield is due to the factors explained before the Departmental Authorities. He submitted, because of labour problem ultimately assessee had to close down its factory at Mumbai. He submitted, it is not possible to maintain itemwise stocks considering the variety of products manufactured by the assessee qua the contract manufacturing units which primarily manufacture ParleG. He submitted, when the consumption of raw material and production of .....

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tal Representative regarding applicability of standard formula, the learned Authorised Representative submitted, such formula cannot be applied as the Tribunal in assessee s own case has held against applicability of such formula. Learned Authorised Representative submitted, compared to the yield for earlier years, the percentage of yield shown in the impugned assessment year is more. Therefore, the inference drawn by the Departmental Authorities regarding suppression of sales is baseless and un .....

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it is very much clear that the issue in dispute is purely a factual one and has to be decided after considering the facts brought on record. As could be seen, the Assessing Officer inferred suppression of sales by the assessee primarily taking into account the percentage of yield of biscuits of the assessee compared to the percentage of yield of the contract manufacturing units. The allegation of the Assessing Officer is, as per the tax audit report the percentage of yield works out to 92.55%, w .....

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rein, it was found that the manufacturing of products at Mumbai unit is through sophisticated machinery. In the course of assessment proceedings, the assessee has explained comparative lesser yield qua contract manufacturing units due to the following reasons:- i) Variety of biscuits manufactured at Mumbai unit compared to few variety of biscuits manufactured in contract manufacturing units; ii) In case of contract manufacturing units, due to similar size of production and type of machinery used .....

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y as compared to contract manufacturing units and due to sheer volume wastages are higher in Mumbai unit; v) Since, the contract manufacturing units are receiving processing charges which in turn is directly proportionate to production they exercise a better control over the labour, machine and the processing methods; vi) Mumbai unit has a trade union and employees being of permanent nature there is always labour problem. Whereas, contract manufacturing units have small work force, hence, were a .....

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sons shown for lesser yield at Mumbai unit acceptable. As far as the discrepancies pointed out by the Assessing Officer with reference to the audited accounts and the statements of consumption of raw material filed before him, it is noticed that in the audited accounts while furnishing the quantitative details of principal items of raw materials and finished products, there is no mention of the percentage of yield. Therefore, allegation of the Assessing Officer that as per the audit report, the .....

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coco vita oil has been shown at the correct figure of 1859 MTs. Therefore, the assessee s explanation that the figure of 1059 MTs shown in the original statement was due to a mistake is believable. As far as the allegation of the Assessing Officer that the raw material others were not shown in the audit report, we are of the view that non-mentioning of the said item in the Annexure to the audit report may be for the reason that as per Form no.3CD, only primary raw materials are required to be s .....

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materials, production of biscuits and confectionary which have been verified by the Central Excise authorities periodically and the authenticity of the entries made in the said registers have not been questioned by them. It is also a fact on record that the Central Excise registers were produced before the Assessing Officer as well as the learned Commissioner (Appeals). 53. There is no allegation by the Departmental Authorities that the consumption of raw materials and production of finished pro .....

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aintained by the assessee has been pointed out by the Assessing Officer. The alleged difference in yield was worked out on the basis of the statement and revised statement of quantitative details of consumption of raw materials and production filed by the assessee in the course of assessment proceedings as well as the information obtained from contract manufacturing units. Further, the Assessing Officer has worked out the yield by applying the standard formula as mentioned by him in the assessme .....

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he Assessing Officer has not found a single instance of sale made by the assessee outside the books. At least, no adverse material to indicate out of book sales has been brought on record by the Assessing Officer. In these circumstances, making addition on estimate basis by rejecting the books of account in the absence of any adverse material brought on record cannot stand legal scrutiny. It is also a fact on record that as per the information obtained from the contract manufacturing units, the .....

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all consideration of facts and circumstances of the case, we are of the considered opinion that rejection of books of account and addition made on estimate basis alleging suppression of sale is not in accordance with law. Therefore, even a part of addition made by the Assessing Officer cannot be sustained. Accordingly, we delete the addition made by the Assessing Officer fully. Ground no.8 of the Department is dismissed and grounds no.4 & 5 raised by the assessee are allowed. 55. In the res .....

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m of deduction under section 80I and 80IA of the Act on the reasoning that the assessee has not claimed the deduction in the return of income and has also not quantified such deduction and secondly the assessee is not eligible to claim such deduction in view of the adverse finding on such issue in assessment year 1995-96. Though, the assessee challenged the disallowance before the first appellate authority, he also concurred with the finding of the Assessing Officer. 58. We have heard rival cont .....

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e aforesaid decision of the Tribunal, we uphold the order of the learned Commissioner (Appeals) on this issue by dismissing the ground raised. 59. In ground no.2, the assessee has challenged the disallowance of depreciation on guest house. 60. We have heard rival contentions and perused the material available on record. Learned Counsels appearing for both the parties have submitted before us that the issue has been decided against the assessee by the Tribunal in the preceding assessment years as .....

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ssed. 61. In ground no.3, the assessee has challenged the disallowance of depreciation of ₹ 14,18,541 on certain plant and machinery. 62. Brief facts are, during the assessment proceedings, the Assessing Officer for verifying the claim of depreciation on plant and machinery called for necessary details. He found that the assessee had shown addition to the plant and machinery for an amount of ₹ 1,13,48,325 on which depreciation of ₹ 14,18,541 was claimed. From the details submit .....

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iry by visiting the factory premises of the assessee on 15th March 1999. In the course of physical enquiry, when the assessee was called upon to produce the documentary evidence in respect of installation of machinery in the factory premises and its use, as alleged by the Assessing Officer, no documentary evidence was produced to substantiate the claim that such machineries were directly brought into the factory premises from the Dock in January 1991. He further observed, the assessee could not .....

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of the Assessing Officer. 64. Learned Authorised Representative submitted that the machine on which the assessee has claimed depreciation is a packaging machine and has no relationship with production. He submitted, detail use of machine was submitted before the Departmental Authorities. He submitted, not only the machine was installed in the relevant financial year but it was also used in the impugned year. In this context, he drew our attention to the commissioning certificate issued by the C .....

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ed. 66. We have heard rival contentions and perused the material available on record. As could be seen from the impugned order of the learned Commissioner (Appeals), he has accepted that the assessee has produced evidence to prove that the machines were purchased through import and it was commissioned and form part of the fixed assets in the impugned assessment year. The only reason on which the learned Commissioner (Appeals) has rejected assessee s claim of depreciation is, the assessee was una .....

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