The DCIT, Circle-1, RAJKOT-GUJARAT V. Prevail Casting Pvt. Ltd., RAJKOT-GUJARAT

ITA 1313/RJT/2010

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 4368 (ITAT-RAJKOT)
• Duration Of Justice: 2 year(s) 7 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-07-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 06-06-2013
• Assessment Year: 2007-2008
• Appeal Filed On: 01-12-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K C MA THEWS D R REI
• Assessee Lawyers: M J RANPURA CA I
• Keywords: Speculation loss
• Section: 43(5); 28; 2

Judgement Text

W , IN THE INCOME TAX APPELLATE TRIBULAL; RAJKOT BENCH, RAJKOT. . . R . . BEFORE SHRI T. K. SHARMA JM AND SHRI D. K. SRIVASTAVA AM ITA NO. 1 313 /RJT/2010 R R / ASSESSMENT YEAR 200 7 - 08 THE DCIT , CIRCLE - 1 , RAJKOT. ( / APPELLANT) PREVAIL CASTING PVT. LTD., PLOT NO.G/925, LODHIKA GIDC, KALAWAD ROAD, LODHI K A, METODA. PAN : A ABCP2908C / RESPONDE NT I / REVENUE BY SHRI K. C. MATHEWS , D R. REI / ASSESSEE BY SHRI M. J. RANPURA , CA. I / DATE OF HEARING 0 6 - 06 - 2013 I / DATE OF PRONOUNCEMENT 26 - 0 7 - 2013 / ORDER . . , R / T. K. SHARMA, J. M. : THIS APPEAL BY THE REVENUE IS AGAINST THE ORDER DATED 14 - 09 - 2010 OF CIT (A) - I , RAJKOT FOR THE ASSESSMENT YEAR 200 7 - 08. 2. BRIEFLY STATED, THE FACTS ARE THAT THE ASSESSEE IS A COMPANY ENGAGED IN MANUFACTURING OF FERROUS AND NO N FERROUS CASTINGS. FOR THE ASSESSMENT YEAR UNDER APPEAL, IT FILED THE RETURN OF INCOME ON 25 - 10 - 2007 DECLARING TOTAL INCOME AT RS.27,44,120/ - WHICH WAS REVISED ON 01 - 03 - 2009 AT TOTAL INCOME OF RS.10,91,480/ - . AO FRAMED THE ASSESSMENT U/S.143(3) OF THE I.T . ACT, 1961 ON 30 - 09 - 2009 WHEREIN, THE AO MADE THE FOLLOWING TWO ADDITIONS: - (1) DISALLOWANCE OF SPECULATION LOSS WHILE HEDGING IN THE COMMODITIES AS MCX RS.16,92,640/ - (2) DISALLOWANCE OF LOSS DUE TO SHORTAGE WHICH IS OF 1% RS.8,02,37,537/ - . 3. ON APPE AL BEFORE THE LD. CIT (A), ASSESSEE CONTENDED THAT THE LOSS INCURRED RS.16, 92,640 / - ON ACCOUNT OF THE FACT THAT THE ASSESSEE ENTER ED INTO THE FUTURE CONTRACT OF N ICKEL TO HEDGE THE PRICE FLUCTUATION OF WASTED SCRAP THEREFORE, THE CONTRACT ENTERED BY THE ASS ESSEE IS COVERED UNDER EXCEPTION TO PROVISO TO ITA 1 313 - 201 0 2 SECTION 43(5) OF THE I.T. ACT, 1961. THE DETAILED REASONING GIVEN BY LD. CIT (A) IS CONTAINED IN PARA - 6 WHICH READS AS UNDER: - 6. I FIND FROM THE ASSESSMENT ORDER THAT APPELLANT HAD CLAIMED THAT THIS WAS A LOSS INCURRED ON ACCOUNT OF HEDGING BECAUSE NICKEL WAS ONE OF THE MAIN INGREDIENTS USED BY THE APPELLANT AND ITS PRICE WAS CONSIDERABLY FLUCTUATING. THE AO HELD THAT THE APPELLANT HAD ONLY ENTERED INTO HEDGING OF COMMODITY RESULTING INTO LOSS AND NEVER I NTENDED IN ACTUAL DELIVERY OF GOODS LINKED TO THAT TRANSACTION IN THE SAID COMMODITY. ACCORDING TO THE AO, THE APPELLANT HAD FAILED IN ESTABLISHING THAT FUTURE TRADING IN THE NICKEL HAD HELPED THE COMPANY IN GUARDING ITS INTEREST AGAINST ACTUAL DELIVERY O F MANUFACTURING GOODS. THE AO HAS ALSO STATED THAT WHY THE APPELLANT HAS ONLY TRADED IN NICKEL ONLY AND NOT IN OTHER RAW MATERIALS USED BY THE APPELLANT. THE AO THEREFORE, TREATED THAT THIS WAS PURELY A SPECULATIVE TRANSACTION WHICH RESULTED IN A SPECULA TION LOSS. AFTER GOING THROUGH THE SUBMISSIONS OF THE APPELLANT IT IS SEEN THAT THE APPELLANT IS A MANUFACTURER OF INVESTMENT CASTING AND THE PRINCIPAL RAW MATERIAL IS WASTED SCRAP WHICH INCLUDES NICKE L . THE APPELLANT HAS TO COMPLY WITH STANDARD COMPOSITI ONS PROVIDED BY THE AMERICAN SOCIETY FOR TESTING AND MATERIALS AND IT HAS TO OBTAIN ANALYTICAL TESTING REPORT FROM GOVERNMENT APPROVED LABORATORY. IN VIEW OF THAT, THE APPELLANT HAS TO PURCHASE ONLY SUCH SCRAP THAT CONTAINS NECESSARY CHEMICAL COMPOSITION AND NICKEL IS ONE OF THE INGREDIENTS OF WASTED SCRAP HAVING 8 TO 12% OF TOTAL COMPOSITION, BUT ITS PRICE ELEMENT IS 60 TO 70% BASED ON 1 KG. OF WASTED SCRAP. THIS GOES TO SHOW THAT EVEN THOUGH IN QUANTITATIVE TERMS, THE USE OF NICKEL SHOULD BE LESS, BUT C OST - WISE THIS HAPPENS TO BE THE MOST IMPORTANT INGREDIENT HAVING ABOUT 60 TO 70% OF THE COST OF GOODS; I.E. WASTED SCRAP AND THE COST OF RAW MATERIAL IS SUBSTANTIALLY DEPENDING ON THE COST OF NICKEL. THE APPELLANT HAS SUBMITTED DETAILED COMPOSITION OF SCR AP, WHICH IS INCORPORATED IN THE SUBMISSIONS, TO SHOW THAT MAJOR PORTION OF COST OF SCRAP IS THAT OF NICKEL. SINCE NICKEL IS PRIMA AND IMPORTANT INGREDIENT IN TERMS OF COST, THE APPELLANT ENTERED INTO FUTURE CONTRACT IN NICKEL TO SAFEGUARD FROM LOSS FROM PRICE FLUCTUATION IN WASTED SCRAP. IN FACT, THE APPELLANT ENTERED INTO SUCH FUTURE CONTRACT IN RESPECT OF NICKEL ONLY FOR THE REASON THAT THERE IS NO SUCH CONTRACT SO FAR AS WASTED SCRAP IS CONCERNED. THUS TO HEDGE THE PRICE FLUCTUATION OF WASTED SCRAP T HE APPELLANT ENTERED INTO THIS FUTURE CONTRACT AND IF PROVISO TO SECTION 43(5) IS READ PROPERLY, THE CONTRACT ENTERED INTO BY THE APPELLANT WOULD FALL UNDER EXCEPTION TO A SPECULATIVE TRANSACTION. SO FAR AS THE CLAIM OF APPELLANT THAT TRANSACTIONS ARE N OT THROUGH RECOGNIZED STOCK EXCHANGE IS CONCERNED , THIS SITUATION WOULD COME INTO PLAY ONLY WHEN THE TRANSACTIONS ARE NOT COVERED UNDER PROVISO (A), (B) OR (C) OF SECTION 43(5). IN THE CASE OF APPELLANT, THESE TRANSACTIONS ARE COVERED UNDER PROVISO (A) OF SEC.43(5). THEREFORE, TRANSACTION THROUGH RECOGNIZED STOCK EXCHANGE IS IMMATERIAL AND CONTRACT ENTERED INTO BY THE APPELLANT HAS TO BE TAKEN AS HEDGING CONTRACT AGAINST LOSS AGAINST LOSS THROUGH FUTURE PRICE FLUCTUATION. THE TRANSACTIONS HAVE BEEN ROUTE D THROUGH RECOGNIZED BROKER AND THE AO HAS NOT RAISED ANY DOUBT ABOUT GENUINENESS OF THE TRANSACTION. SINCE THE APPELLANT IS A MANUFACTURER AND THE COMMODITY DEALT WITH, IS AN ESSENTIAL INGREDIENT, THE LOSS INCURRED BY THE APPELLANT CANNOT BE TREATED TO B E A SPECULATIVE LOSS AND THE SAME IS DIRECTED TO BE ALLOWED AS BUSINESS LOSS TO THE APPELLANT. 4. THE FACTS RELATING TO DISALLOWANCE OF BURNING LOSS ARE THAT IN UNDER THE APPEAL, THE ASSESSEE CLAIMED THE SAME 10.06% AS AGAINST 9.06% AND 9.21% IN THE IMM EDIATELY PRECEDING YEARS. ACCORDING TO AO, THE BURNING LOSS CLAIMED BY THE ASSESSEE IS EXCESSIVE. HE ACCORDINGLY, DISALLOWED 1% EXCESS SHORTAGE AND ITA 1 313 - 201 0 3 WORKED OUT THE ADDITION OF RS.8,02,375/ - . ON APPEAL, IN THE IMPUGNED ORDER , THE LD. CIT (A) DELETED THE A DDITION AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE WHICH ARE CONTAINED IN PARA - 8 OF THE IMPUGNED ORDER. THE REASONING GIVEN BY LD. CIT (A) FOR DELETING THE ADDITION IS CONTAINED IN PARA - 9, WHICH READS AS UNDER: - 9. I HAVE CONSIDERED THE ISSUE CAR EFULLY. I FIND THAT IN THE LINE OF BUSINESS OF APPELLANT, SUCH LOSS CANNOT REMAIN CONSTANT. IT IS ALSO SEEN THAT DAY TO DAY CONSUMPTION OF RAW MATERIAL PRODUCTION, FINISHED GOODS AND OTHER MANUFACTURING PROCESS OF THE APPELLANT ARE SUBJECT TO CHECK AND A UDITED BY CENTRAL EXCISE AUTHORITIES AND A COPY OF SUCH CERTIFICATE OF THE CENTRAL EXCISE DEPARTMENT ALONGWITH A COPY OF FINAL AUDIT REPORT HAS ALSO BEEN PRODUCED. THERE IS NO ADVERSE COMMENTS ON THE MANUFACTURING PROCESS IN SUCH REPORT. THUS, WHEN CENTR AL EXCISE AUTHORITIES HAVE NOT FOUND ANYTHING WRONG IN THE ENTIRE MANUFACTURING PROCESS, THE ADDITION MADE BY THE AO IS NOT PROPER, AS HELD BY HONBLE ALLAHABAD HIGH COURT IN THE CASE OF CIT VS. J. K. SYNTHETICS LTD. REPORTED IN 296 ITR PAGE 501. THEREFOR E, ADDITION MADE BY THE AO IS DELETED. AGGRIEVED WITH THE ORDER OF LD. CIT (A), THE REVENUE IS IN APPEAL BEFORE THIS TRIBUNAL ON THE FOLLOWING GROUNDS: - 1 ) THE LEARNED CIT (A) - I, RAJKOT HAS ERRED IN LAW AND ON FACTS IN DELETING ADDITION OF RS.16,92,640/ - MADE ON ACCOUNT OF DISALLOWANCE OF LOSS. 2 ) THE LEARNED CIT (A) - I, RAJKOT HAS ERRED IN LAW AND ON FACTS IN DELETING ADDITION OF RS.8.02,375/ - MADE ON ACCOUNT OF DISALLOWANCE OF BURNING LOSS. 5. AT THE TIME OF HEARING BEFORE US, ON BEHALF OF REVENUE, SHRI K . C. MATHEWS, DR , APPEARED AND POINTED OUT THAT LD. CIT (A) HAS NOT APPRECIATED THE FACTS STATED BY AO IN THE ASSESSMENT ORDER CORRECTLY. HE SUBMITTED THAT LOSS IN QUESTION IS SPECULATIVE LOSS WHICH CANNOT BE ALLOWED AGAINST THE BUSINESS PROFIT. THE LD. DR FURTHER SUBMITTED THAT THE ASSESSEE USED TO MAKE THE TRANSACTION S IN FORWARD CONTRACT FOR THE COMMODITY NICKEL I N THIS TRANSACTION S WERE REGULARLY SQUARED UP WHICH RESULTED INTO LOSS. THIS MODUS OPERANDI OF THE ASSESSEE WAS NOTHING BUT IN THE NATURE OF SPECULATION AND PROTECTING HIS BUSINESS INTEREST. HE FURTHER SUBMITTED THAT HAD THE ASSESSEE ANY INTENTION TO PROTECT ITS BUSINESS INTEREST, IT WOULD HAVE PREFERRED TO MAKE PHYSICAL PURCHASE AND SALE OF NICKEL INSTEAD OF INDULGING IN SPECULATION THROUGH BROKER. IN THE IMPUGNED ORDER, THE LD. CIT (A) FAILED TO APPRECIATE THE FACT THAT THE KEY WORDINGS OF SUB - PARA (A) OF SEC.43(5) SAYS THAT . TO GUARD AGAINST LOSS THROUGH FUTURE PRICE FLUCTUATION IN ITA 1 313 - 201 0 4 RESPECT OF HIS CONTRACTS FOR ACTUAL DELIVERY OF GOODS MA NUFACTURED BY HIM OR MERCHANDISE SOLD BY HIM ; 6. ON THE BASIS OF ABOVE, THE LD. DR POINTED OUT THAT A PERSON IS ELIGIBLE FOR ENJOYING BENEFITS OF PROVISIONS OF PARA (A) TO SECTION 43(5) OF THE I. T. ACT , ONLY IF CONTRACT IS ENTERED FOR ACTUAL DELIVERY O F GOODS MANUFACTURED BY HIM OR MERCHANDISED SOLD BY HIM. THE LD. CIT (A) FAILED TO APPRECIATE THE FACT THAT THE ASSESSEE IS NOT PRIMARILY ENGAGED IN MANUFACTURING OR SELLING OF N ICKEL. THEREFORE, HIS CASE IS NOT COVERED UNDER THE PURVIEW OF THIS SECTION AND THE AO HAD RIGHTLY DISALLOWED THE CLAIM OF THE ASSESSEE AFTER GIVING ELABORATE FINDING IN SUB - PARA (6) OF THE ASSESSMENT ORDER. 7. ON THE OTHER HAND, SHRI M. J. RANPURA, CA, APPEARED ON BEHALF OF THE ASSESSEE VEHEMENTLY SUPPORTED THE ORDER OF LD. CIT (A). THE COUNSEL OF THE ASSESSEE EXPLAINED THAT ASSESSEE ENTERED INTO FUTURE CONTRITE IN RESPECT OF N ICKEL, ONE OF INGREDIENTS OF WASTE SCRAP, TO SAFEGUARD AGAINST FUTURE PRICE FLUCTUATION IN RESPECT OF ITS MANUFACTURED GOODS, FOR WHICH IT HAS CONTRACTS F OR ACTUAL DELIVERY. THUS, IT IS VERY CLEAR THAT INTENTION WAS PURELY OF HEDGING AND NOT OF PROFIT MAKING IN DOING SUCH TRANSACTIONS. THE TRANSACTION IN NICKEL CLEARLY FALLS UNDER EXCEPTION PROVIDED IN CLAUSE (A) OF PROVISO TO CLAUSE 5 OF SECTION 43 OF TH E ACT. THEREFORE, LOSS RESULTING FROM SUCH TRANSACTIONS IS ALLOWABLE AS NON - SPECULATIVE LOSS AGAINST ITS INCOME FROM BUSINESS. IN SUPPORT OF THIS, RELIANCE IS PLACE ON THE JUDGMENT OF HONBLE MADRAS HIGH COURT IN THE CASE OF CIT VS. SRI RAMALINGA CHHODAMB IGAI MILLS LTD. 239 ITR 120 (MAD) . HE FURTHER SUBMITTED THAT IN ORDER TO FALL FORWARD TRANSACTION INTO CLAUSE (A) OF PROVISO TO SECTION 43(5) OF THE ACT, RAW MATERIALS IN WHICH THE FORWARD TRANSACTIONS HAVE BEEN ENTERED INTO MUST HAVE A DIRECT CONNECTION WITH GOODS MANUFACTURED BY IT. THE ASSESSEE IS MANUFACTURING INVESTMENT CASTING IN WHICH WASTE SCRAP, COMPRISING OF NICKEL TO THE EXTENT OF 70%, IS PRIME RAW MATERIALS AND THE LATTER HAS DIRECT AND IMMEDIATE CONNECTION WITH FINAL GOODS MANUFACTURED BY IT. THUS, THE CASE OF THE ASSESSEE CLEARLY FALLS UNDER EXCEPTION PROVIDED BY THE ACT AND THEREFORE, ANY LOSS OR PROFIT ARISING FROM SUCH EXCEPTIONAL TRANSACTIONS HAVE TO BE CONSIDERED ITA 1 313 - 201 0 5 AND TREATED AS PROFIT OR LOSS UNDER HEAD PROFIT AND GAINS OF BUSINESS O F PROFESSION AND TAXABLE UNDER SECTION 28 OF THE ACT. IN SUPPORT OF THIS, RELIANCE CAN BE PLACED ON THE JUDGMENT OF HONBLE ANDHRA PRADESH HIGH COURT IN THE CASE OF M. G. BROS. VS. CIT (1985) 154 ITR 695 AND ALSO ON THE BOARD S CIRCULAR NO. 23 OF 1960. TO SUM UP, COUNSEL OF ASSESSEE PLEADED THAT VIEW TAKEN BY THE LD. CIT (A) BE UPHELD. 8. HAVING HEARD BOTH SIDES, WE HAVE CAREFULLY GONE THROUGH THE AUTHORITIES BELOW. FROM THE COMPOSITION OF SCRAP, IT CAN BE SEEN THAT MAJOR PORTION OF COST OF SCRAP IS THA T OF NICKEL. NICKEL IS AN IMPORTANT INGREDIENT IN TERMS OF COST, THE ASSESSEE HAS ENTERED INTO FUTURE CONTRACT IN NICKEL TO SAFEGUARD FROM THE LOSS FROM PRICE FLUCTUATION IN WASTED SCRAP. THE ASSESSEE HAS ENTERED INTO SUCH FUTURE CONTRACT IN RESPECT OF NI CKEL ONLY FOR THE REASON THAT THERE IS NO SUCH CONTRACT SO FAR AS WASTED SCRAP IS CONCER N ED. THEREFORE, TO HEDGE THE PRICE OF FLUCTUATION OF WASTED SCRAP, THE ASSESSEE ENTERED INTO THIS FUTURE CONTRACT AND KEEPING IN VIEW THE PROVISO TO SECTION 43(5), THE CONTRACT ENTERED ONLY BY THE ASSESSEE WOULD FALL EXCEPTION TO A SPECULATIVE TRANSACTION. SINCE THESE TRANSACTIONS ARE COVERED UNDER PROVISO (A) OF SECTION 43(5), THEREFORE CONTRACT ENTERED BY THE ASSESSEE IS RIGHTLY TAKEN BY THE LD. CIT (A) AS HEDGING CONT RACT AGAINST THE LOSS THROUGH FUTURE PRICE FLUCTUATION. THE AO HAS NOT RAISED ANY DOUBT ABOUT THE GENUINENESS OF THE TRANSACTION. FURTHER, ASSESSEE IS A MANUFACTURER AND THE COMMODITY DEALT WITH, IS AN ESSENTIAL INGREDIENT, THE LOSS INCURRED BY THE ASSESS EE CANNOT BE TREATED TO BE A SPECULATIVE LOSS AND WE ARE THEREFORE OF THE VIEW THAT LD. CIT (A) IS LEGALLY AND FACTUALLY CORRECT IN DIRECTING THE AO TO ALLOW THE SAME AS BUSINESS LOSS. WE THER EFORE, DECLINED TO INTERFERE. GROUND NO.1 IS REJECTED. 9. IN R ESPECT OF BURNING LOSS, LD. DR POINTED OUT THAT LD. CIT (A) FAILED TO APPRECIATE THAT IN THE ASSESSMENT YEAR UNDER APPEAL, THERE IS NO CHANGE IN PROCESS, THUS THE MANUFACTURING AND STYLE AND NATURE OF PRODUCT IS SAME IN THE LAST YEAR THEREFORE, THERE CANNO T BE HUGE VARIATION IN THE PROPORTION OF BURNING LOSS. WITH REGARD TO FINDING OF LD. CIT (A) IN RESPECT OF CENTRAL EXCISE AUTHORITIES, ITA 1 313 - 201 0 6 IT MAY BE POINTED OUT THAT THE NORMS OF CENTRAL EXCISE AUTHORITIES CANNOT HAVE OVER RULE THE INCOME - TAX DEPARTMENT PROVI SIONS. THEREFORE, IT CANNOT BE SAID THAT IF ANYTHING WRONG IS NOT FOUND BY CENTRAL EXCISE AUTHORITY IN MANUFACTURING PROCESS, THE AO CANNOT MAKE ADDITION. THE DECISION QUOTED BY THE LD. CIT (A) IS NOT SQUARELY APPLICABLE IN THE INSTANT CASE. THE FACTS A RE QUITE DIFFERENT . HE ACCORDINGLY CONTENDED THAT THE ADDITION OF RS.8,02,375/ - ON ACCOUNT OF BURNING LOSS OF 1% MADE BY AO BE RESTORED. AS AGAINST THIS, COUNSEL OF THE ASSESSEE POINTED OUT THAT BURNING LOSS IS A MECHANICAL MATTER S AND IT CANNOT BE CO - RE LATED WITH ANY PAST RECORD S AS IT IS EFFECTED BY QUALITY OF RAW MATERIALS I.E. SCRAP IN THIS CASE. IF SCRAP IS OF INTERIOR QUALITY, THIS WILL RESULT IN MORE BURNING LOSS. IT CANNOT REMAIN CONSTANT AND IN THE LINE OF BUSINESS , ASSESSEE IS ENGAGED IN THIS LINE OF BUSINESS , B URNING LOSS OF 8 TO 11% IS NORMAL. THE HISTORY OF THE ASSESSEE INDICATES THAT BURNING LOSS IS 9 TO 11% WHICH IS ACCEPTED BY THE DEPARTMENT IN SUCCEEDING ASSESSMENT YEAR S WITHOUT ANY MODIFICATION. HE ACCORDINGLY CONTENDED THAT VIEW TAKEN BY LD. CIT (A) BE UPHELD AS THE BOOKS OF ACCOUNT ARE AUDITED . THE CONSUMPTION OF RAW MATERIAL, PRODUCTION OF FINISHED GOODS AND OTHER MANUFACTURING PROCESS ARE SUBJECT TO CHECK BY THE CENTRAL EXCISE RULES. PRESCRIBED RECORDS UNDER THE CENTRAL EXCISE RUL ES WERE DULY MAINTAINED BY THE ASSESSEE. THESE RECORDS ARE SUBJECT TO PERIODICAL CHECK AND AUDIT. KEEPING IN VIEW OF THESE FACTS, THE ORDER OF LD. CIT (A) DELETING THE ADDITION OF RS.8.02,375/ - BE UPHELD. 10. HAVING HEARD BOTH SIDES, WE HAVE CAREFULLY G ONE THROUGH THE ORDERS OF AUTHORITIES BELOW. IT IS PERTINENT TO NOTE THAT BURNING LOSS CANNOT REMAIN SAME. THE BOOKS OF ACCOUNT OF THE ASSESSEE ARE DULY AUDITED U/S.44AB OF THE I.T. ACT, 1961 . THE ASSESSEE HAS MAINTAINED THE PRESCRIBED RECORD U N DER THE CENTRAL EXCISE ACT/RULE. KEEPING IN VIEW OF THESE FACTS, WE ARE OF THE VIEW THAT THE LD. CIT (A) IS LEGALLY AND FACTUALLY CORRECT IN DELETING THE ADDITION OF RS.8,02,375/ - WHICH WAS MADE BY AO ON DOUBT AND SUSPICION IN RESPECT OF EXCESS BURNING LOSS . GRO UND NO.2 IS ACCORDINGLY REJECTED. 11. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMISSED. 12. THIS O RDER PRONOUNCED IN O PEN COURT ON THE DATE MENTIONED HEREINABOVE. SD/ - SD/ - ( . . D. K. SRIVASTAVA ) ( . . R / T. K. SHARMA) / ACCOUNTANT MEMBER / JUDICIAL MEMBER / ORDER DATE 26 - 0 7 - 2013. /RAJKOT NVA/ - ITA 1 313 - 201 0 7 6 RJO 0 O / COPY OF ORDER FORWARDED TO: - 1 . / APPELLANT - THE DCIT, CIRCLE - 1, RAJKOT 2 . / RESPONDENT - PREVAIL CASTING PVT. LTD., PLOT NO.G/925, LODHIKA GIDC, KALAWAD ROAD, LODHI K A, METODA 3 . W T / CONCERNED CIT - I, RAJKOT. 4 . T - / CIT (A) - I, RAJKOT. 5 . W , W , / DR, ITAT, RAJKOT 6 . R / GUARD FILE. / BY ORDER TRUE COPY SENIOR PRIVATE SECRET ARY, ITAT, RAJKOT