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TMI Blog2019 (8) TMI 637X X X X Extracts X X X X X X X X Extracts X X X X ..... to have upheld the order of the Assessing Officer. 4. It is, therefore, prayed that the order of the ld. CIT(A) may be set-aside and that of the Assessing Officer be restored. 2. The original assessment for A.Y. 2002-03 was completed u/s 143(3) on 22/03/2005 by then Asst. Commissioner of Income, Circle-5. Ahmedabad. 3. The Asst. Commissioner Circle-5 REDUCED LOSS OF Rs. 7377700/- as per para no 6 of the assessment order u/s 143(3) on 22/03/2005 as there was some discrepancy in presentation of schedule "P" of audit report as the quantity of cloth purchases (trading) was shown at 152911 mtrs valued at Rs. 111395957-. However in course of assessment proceedings u/s 143(3) , the quantity of cloth purchased was shown as at 424S79/- and the corresponding value was shown at Rs. 111395957-Hence according to A.O. quantity of purchase of grey cloth of Rs. 2719687- metres representing the value of Rs. 7377700/- has not been shown in the audit report while finalising the same. Thus A.O. issued show-cause notice dated 18/03/2005 reading as under: "On going through the case records and details filed during the course of assessment proceedings it is noticed that the point number-13 of sche ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e such discrepancy is not manifested. List of such 544173 mtrs valuing Rs. 14074249/- is filed. Please note that transfer of purchase mtrs of trading and sales mtrs of trading has no relevance. We hope the above reconciliation will meet with your requirement. 5. However without appreciating the substance of the reply dated 22/03/2005 that even if the value of Rs. 7377700/- is not transferred from trading account to manufacturing account there would not have any effect on financial results i.e. on profit and loss account, he reduced the loss by Rs. 7377700/-. Even if the effect have been given Schedule "K" of the audited accounts Raw Material consumption would have been Rs. 1869013627- + Rs. 7377700A aggregating Rs. 194279062/-and Trading Purchase in Schedule "L" would be reduced by Rs. 7377700/- i.e. Trading Purchase would have been Rs. 11139595 - Rs. 7377700/- = Rs. 3761895/-. Hence it would be revenue neutral. 6. The addition was made merely on the ground that the audit report does not mention of such transfer of Rs. 271968 mtrs of cloth valuing Rs. 7377700/- and further the assessee has not produced the relevant bills/ concrete evidence/ documents/ proof of passing transfer e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ated the appeal of the Revenue on 20/11/2009 narrating the contents of the order of assessing officer circle-5 dated 22/03/2005 and held vide para 11 as under: Having heard both the sides, we have carefully gone through the orders of authorities below and the relevant material placed on record, it Is pertinent to note that the bills and vouchers which the A.O. is stated in the assessment order were not examined by the Learned Commissioner of Income Tax (Appeals), it is also not known whether before the Learned Commissioner of Income Tax (Appeals) the 'assessee has produced copies of accounts showing transfer entries of the goods so that one examine whether it was a case of bonafide mistake. Keeping in view the facts and circumstances of the case. We found considerable force in the submission made by the Id. D.R. that the Learned Commissioner of Income Tax (Appeals) ought to have called the remand report before adjudicating the addition of Rs. 7377700/-. Since this was not done, we set aside the order of Learned Commissioner of Income Tax (Appeals) and restore the matter to the file of A.O. with the direction that the assessee should furnish relevant bills/ vouchers in respect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s on record mentioned in the order of CIT (Appeals) XVI dated 09/11/2005 copy filed vide Annexure. 3.1.6. ultimatly there is no impact on P& L A/c. It is also pointed out that the cloth rate was arrived at Rs. 72.98 was wrong. The quantity of cloth of 271968, if included to 152911 mtrs the value per metre would be Rs. 26.22 Ps. 3.2 "I have perused the submission and the details produced before me by the A.R. of the appellant. I have also perused the observations of the assessing officer in the assessment order. After verifying the trading account and P & L A/c. I am of the view that the value of the grey cloth purchased is very much in stock of Rs. 11646747/- instead of purchases. The cloth value of Rs. 73777001- should have been added to Rs. 185542976/- which is raw material. However, it is very much in Schedule "K" in finished goods. It is also seen that because of above mistake, there is no impact on Profit & Loss Account. But ld. A.O. was not agreed with the contention of the assessee and made addition of Rs. 73,77,700/- on account of variation in purchase of cloth. 16. Against the said order, assessee preferred first statutory appeal before the ld. CIT(A) and ld. C ..... X X X X Extracts X X X X X X X X Extracts X X X X
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