TMI Blog2012 (4) TMI 742X X X X Extracts X X X X X X X X Extracts X X X X ..... ee is a Private Limited Company engaged in the business of extracting oil from copra. During the course of assessment proceedings, the A.O. noted that the electricity units consumed per tone of Copra crushed is comparatively higher than that of last year. Similarly, yield percentage too has fallen compared to the last year. The A.O noted the comparative figures of copra crushed cum electricity units consumed and yield percentage in respect of the current year and the immediately preceding year, the details of which are as under : F.Y. 04-05 F.Y. 05-06 Electricity Units Consumed 128482 158664 Copra crushed per Unit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... entage was around 34% only. On being questioned by the A.O to explain the reasons for such low yield when the yield percentage of MS copra was around 63% in the same period, it was submitted by the assessee that the material sent for crushing during the aforesaid period was of inferior quality containing higher moisture due rainy season. It was further submitted that the above stock was affected by rains which affected the quantum output adversely and resulting in increase in losses. Rejecting the various explanations given by the assessee, the A.O. rejected the book results and estimated the G.P. at the rate of 14.52% and determined the suppressed G.P. at 596409/-. The A.O. similarly determined the unrecorded sales of oil generated on acco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 461331 32.60 503360 38.27 366728 43.79 32130 33.52 39 above 296839 20.90 337462 25.66 185750 22.18 309330 32.27 Total 1415033 100.00 1315373 100.00 837501 100.00 958490 100.00 It was submitted that the assessee during AY 2006-07 had purchased 46.42% of its total purchases of lower/inferior quality as against 36.08%, 34.03% and 34.21% ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... extract the oil and consumed more time to crush the copra. It was submitted that the assessee maintains full details of quantitative records. All sales/purchases and expenses including electricity expenses are supported by bills and vouchers. The accounts are audited and no defects were pointed out by the auditors and there was no change in the method of accounting regularly followed by the assessee company. It was submitted that the A.O merely on presumption and surmises rejected the book result which is not justified. 5. Based on various details regarding the electricity consumed and quality of raw material filed by the assessee, the Ld CIT(A) called for a remand report from the A.O. The A.O. after making various enquiries submitted th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reworked the G.P. percentage and unrecorded sales applying mathematical formula in view of the new figures estimated by him. Thus, the A.O. made an addition of ₹ 5,96,409/- on account of low G.P. and ₹ 9,85,800/- on account of unrecorded sales. During the remand proceedings, the appellant submitted various details regarding the electricity consumption and the quality of raw material which were forwarded to the A.O. for re-examination of the same and to submit a report. The A.O. in his report made necessary enquiries and found that low quality of raw material was used as compared to the immediately preceding year. It was also found that the appellant was maintaining stock inventory at the end of the year even though there was no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng the order of the CIT(A) drew the attention of the Bench to the voluminous paper book filed and submitted that assessee maintains proper records, accounts are audited and no defects were pointed out by the auditors. There is no evidence with the A.O that the assessee has made unaccounted sales. So far as the addition on account of low G.P. is concerned, she submitted that the A.O. in the remand report has admitted that assessee has used inferior quality of raw material. She accordingly submitted that order of the CIT(A) be upheld and grounds raised by the revenue should be dismissed. 7. We have considered the rival arguments made by both the sides, perused the orders of the A.O and CIT(A) and the paper book filed on behalf of the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X
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