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TMI Blog2017 (7) TMI 1334X X X X Extracts X X X X X X X X Extracts X X X X ..... e deleting the addition made under section 68, failed to appreciate the fact that assessee has not clarified as to how the replies given in the statement were incorrect, and also ignored the findings mentioned in the assessment order with regard to the non-genuine sundry creditors. 3. On the facts and in the circumstances of the case the learned CIT(A) erred in deleting the addition made on account of unexplained investment in Chilling Plants without appreciating the fact that the Partner of the Firm had admitted the amount of unaccounted investment in the Plants and no reasons for the retraction was either given post the survey proceedings or during the assessment proceedings. 4. On the facts and in the circumstances of the case the learned CIT(A) erred in deleting the addition made on account of treating the expenses incurred on crates and cans as capital expense without appreciating the fact that Income tax Rules prescribes the rate of depreciation at 50% for these articles, implying that these are capital assets. 5. On the facts and in the circumstances of the case the learned CIT(A) erred in deleting the addition of Rs. 5,00,000I- made on account of disallowance out o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as correctly allowed the claim of the firewood expenses are covered under Rule 6DD in as much as the assessing officer disallowed the same on the basis of agreed addition and non production of any evidence regarding the expenses. 5. Over all, the Learned Commissioner of Income Tax (Appeals) has correctly observed that all the additions made by the Assessing officer, even though based on the admissions at the time of Survey, are not sustainable considering the Ratio of decision of the Madras High court in the case of CIT Vs Khadar Khan and son, which is affirmed by the Supreme Court. Hence, the Grounds of the department as appellant In this appeal need to be dismissed. First we take up Revenue's Appeal: 3. The facts of the case are that survey was carried out in the premises of assessee on 06.11.2013. During the course of Survey it was noticed that the figure of Sundry Creditors - Milk Suppliers as on 31/3/13 was mentioned as Rs. 12,21,81,032/- in the data maintained in the hard disc of the computer. However, in the same disc, the opening balances as on 01/04/13 was taken as Rs. 5,67,09,835/- i.e. the balance of Sundry Creditors was taken less by Rs. 6,54,71,197. In the state ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee's own case for assessment year 2012-13(supra) wherein the Tribunal after considering the entire facts of the case observed herein-under:- " 6. We have considered the rival submissions and also perused the material on record. Admittedly, survey u/s 133A of the Act was carried out by the Department on 6.11.2013. The previous year relevant to the assessment year was ended on 31.3.2012. In other words, the relevant financial year for this assessment year is 2011-7. The survey conducted u/s 133A was not resulted in unearthing any evidence relating to inflation of purchase cost of milk for the relevant assessment year. Further, the Assessing Officer made estimation of inflated purchase on the reason that the assessee has not furnished the confirmation letters from the creditors. The assessee pleaded before the Assessing Officer that there are large number of milk vendors who were form villages and they exactly not maintained any books of account to show that what exact amount was outstanding to them for the supply of milk. The assessee has categorically stated that it is maintaining collection centres and payments are made to the farmers from there. There is no third party evid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -12 & 2012-13 as declared by the assessee. Accordingly, in this assessment year under consideration also, we direct the AO to estimate the income of assessee by considering the average G.P rate of assessment years 2011-12, 2012-13 & 2013-14 as declared by the assessee and decided accordingly. This issue of Revenue raised in its ground No2. 1 & 2 is partly allowed for statistical purposes. 6. The second issue in Revenue's appeal is with regard to deletion of addition made on account of unexplained investment in Chilling Plants. 6.1 The facts of the issue are that at the time of survey in reply to question no 33 of the statement recorded on 06/11/2013 Shri. S. P. Loganathan, Managing Partner of the assessee Firm, had stated that upto 31/3/13 investment in the newly under construction chilling plant units at Karur and Namakkal was around Rs. 3,60,00,000/-. During the course of survey he had declared additional income of Rs. 1,17,66,347/- on account of unaccounted investment in the chilling plants. This declaration was however not considered while filing the revised return. Despite being given opportunity during the course of assessment no explanation was filed as to why the said d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... epreciation at the rate of 50% for plastic and glass containers which are re-usable. In view of this fact the expense claimed on account of crates and crates were held as capital asset by the AO and disallowance made after allowing depreciation. Aggrieved by the order of ld. Assessing Officer, the assessee carried the appeal before the Ld.CIT(A). On appeal, the Ld.CIT(A) observed that no enduring benefit is conferred warranting to treat expenditure on milk cans as capital in nature, following the decision of Tribunal in ACIT Vs. M/s.Tirumala Milk Products P Ltd., Narasaropet in ITA No.242/Vizag./2009 for assessment year 2005-06 and deleted the addition made by the ld. Assessing Officer. Against the order of Ld.CIT(A), now the Revenue is in appeal before us. 9. We have heard both the parties and perused the material on record. The decision of the Ld.CIT(A) is based on the Order of Tribunal in the case of M/s.Tirumala Milk Products P Ltd., (supra). Being the expenditure towards plastic cane and crate, which is not an enduring nature, 100% depreciation to be granted as revenue expenditure. Hence, this issue in Revenue's appeal is dismissed. 10. The last issue in Revenue's appeal i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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