TaxTMI 
TaxTMI 
2019 (12) TMI 683
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....ies which is indirectly an "added cost" of the securities. 2.3. The CIT(A) ought to have appreciated that the assessee during the assessment proceedings said that it has been showing the Govt. securities as stock-in-trade in the balance sheet. These securities shown as investment under capital account. 2.4. The CIT(A) ought to have appreciated that the assessee has not even followed the RBI guidelines in this regard. Since it has been proved that assessee has not been showing the securities as stock-in-trade, the same became a capital set and any interest paid on acquisition of the same will have to be capitalized. 3.1. The CST(A) erred in deleting the disallowance of depreciation arising in the valuation of securities held as stock-in-trade at the end of the accounting year. 3.2. The CIT(A) failed to appreciate that the assessee is providing only for the depreciation and not for appreciation. The assessee has taken the stand that he has provided for the appreciation as welt but same is not true as what appreciation has been provided for is in respect of only those securities where depreciation was earlier claimed. In other words, where there is no depreciation claimed and ....
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....of accounts and as per form 26AS. Finally, the AO added a sum of Rs. 3,28,32,575/- which remains unproved as per details below: Sr No Name of the Party Nature of transactions Amount Rs 1 Shreekush machinery & spares Pvt. Ltd. Hygiene Contract 17,10,639 2 Virtual cleaning systems Pvt. Ltd. Hygiene Contract 6,01,371 3 Charkop Petroleum Oil & Fuel 1,10,81,002 4 Ronak Overseas Oil & Fuel 1,05,68,465 5 Ratna Machines Pvt. Ltd. Purchase 88,71,098 Total 3,28,32,575 5. In the appellate proceedings, the Ld. CIT(A) deleted the disallowance by observing and holding as under: "5.6 I have considered the facts on record and submissions carefully. It is seen from Para 4.1. of the assessment order that the assessing officer informed the appellant of non-service/no reply in respect of various creditors only vide letter dated 20.3.2015 and the assessment order was passed on 30.3.2015. Reply was filed vide letter dated 27.3.2015 which is reproduced in the assessment order in Para 4.2. The assessing officer has accepted that confirmations were filed in respect of four parties but has objected to it stating that supporting bills, vouchers , quantitative deta....
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....nbsp; Others 40000 32,31,033 1449 67,062 Mahanagar Gas Ltd. 630,508 (installation charges) 247,839 92,25,851 444,628 181.43.47 0 Total 255,11,008 128,17,67 5 183,07,21 2 5.10. It is noted from the above that similar purchases have been made in subsequent years also. No such addition/disallowances are made in assessment orders for AY 2013-14 and AY 2014-15 as seen from the copies filed before me. In later years, the appellant has switched to gas as fuel instead of oil and fuel. Confirmations have been filed by all the parties. None of these parties are related to the appellant. Payments have been made by cheques. None of the expenses claimed have been proved to be non-genuine. If the parties have not given details such as their bank statements, copy of agreement etc. it does not mean that the expenses claimed are bogus. It is not necessary that there be a formal agreement in all cases. As per the Job Work Agreement between the appellant and BIL, the appellant is required to ensure that highest standard of cleanliness is maintained at the factory at all times. 5.11. In the facts of the case, and for the reasons narrat....
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....appeal is against the deletion of Rs. 2,02,64,475/- by Ld. CIT(A) as made by the AO on account of income representing unaccounted production. 10. The facts in brief are that the assessee is engaged in the business of production of bread for Britannia Industry Ltd. on contractual basis. The entire raw material is supplied by the Britannia Industry Ltd which go into the manufacturing processes. During the year, the assessee disclosed the receipt of conversation charges of Rs. 9,16,00,806/- in the P&L account from Britannia Industry Ltd. According to the AO the said amount is not in agreement with the amount shown in 26AS and accordingly information was called for under section 133(6) from Britannia Industry Ltd. besides requiring the assessee to furnish the copy of agreement with the Britannia Industries Ltd. bills, vouchers, quantitative details, finished goods manufactured and raw materials consumed etc. which was replied by the assessee on 27.03.2015 explaining the query raised by the AO. Finally, the AO rejected the books of accounts of the assessee under section 145(3) of the Act on the ground that results as per books of accounts were not reliable as there was excess consumpti....
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.... the addition on the ground that the assessee is engaged in the contract manufacturing for Britannia Industry Ltd. and was not involved in direct selling of the manufactured product. The Ld. D.R. submitted that there was excess use of power fuel to the tune of 24,638 liters which was not explained at all and consequently the said addition was made on the basis of not submitting any plausible explanation on excess consumption of oil in the manufacturing . Besides, the AO noticed several infirmities and anomalies in the books of accounts of the assessee. Similarly, there was short consumption of electric unit to the tune of 77,17 which was also not explained by the assessee. The Ld. D.R. submitted that in view of these facts the result as shown in the books of accounts were unreliable and AO was not in a position to assess the income correctly and therefore rightly rejected the books of accounts and estimated the unaccounted sales of the assessee. The Ld. D.R. therefore prayed that the order of Ld. CIT(A) may be set aside on this issue by allowing the appeal of the Revenue on this ground. 13. The Ld. A.R., on the other hand, relied heavily on the order of AO by submitting that the ....