Case Law Details
Ankur Cm Food Products (Guj) Ltd. Vs Dy. CIT (ITAT Rajkot)- Ground No.2 of appeal of revenue is in respect of deletion of addition of Rs.7,01,1 19 on account of excess stock of packing material. During the course of survey at factory premises empty bags and empty pouches numbers 1,02,98,914 were found against the book stock of 83,39,051. There was excess stock of packing material of 19,59,863 pouches valuing Rs. 7,01,119. In the statement, Shri Ashok Parekh, director of the company while answering question No.3 9 stated that packing material of outside parties for which the assessee is doing job work were also at the factory premises.
Therefore, the same were not recorded in the books of account. However, the assessing officer did not accept the assessee’s contention. He made the addition of Rs.7,01,119. The CIT(A) deleted the said addition by observing that during the course of survey itself Shri Ashok Parekh has stated that stock of outside parties was laying in his premises which were not recorded in the books of account. During the assessment proceedings, the assessing officer did not raise any question about this issue. Before the CIT(A) the assessee submitted the details of packing material pertaining to Kargil India Pvt Ltd and in support it contended that it has maintained complete record of pouches received in connection with job work and therefore consumption in job work. A statement showing details were also furnished which explained the difference of stock of Rs.19,59,860. The CIT(A) examined the said statement and noticed that there was still an excess stock of Rs.10,683 empty pouches. However, the CIT (A) deleted the entire addition observing that the difference is negligible.
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