The ITO,S.K.Ward-1, Himatnagar V. Ambica Ginning & Pressing Pvt.Ltd., Sabarkantha

ITA 2609/AHD/2009

• Counselvise Citation: [2009] 115 COUNSELVISE.COM (IT) 0410 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-11-2009
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Assessment Year: 2006-2007
• Appeal Filed On: 18-09-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: C K MISHRA
• Assessee Lawyers: S N DIVETIA
• Keywords: Opportunity of being heard; Principle of natural justice
• Section: 43B

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL : D BENCH : AHMEDABAD (BEFORE HONBLE SHRI T.K. SHARMA, J.M. & HONBLE SH RI N.S. SAINI, A.M.) I.T.A. NO. 2609/AHD./2009 ASSESSMENT YEAR : 2006-2007 INCOME TAX OFFICER, S.K. WARD-1, HIMATNAGAR VS.- AMBICA GINNING & PRESSING PVT. LTD., SABARKANTHA (P.A. NO. AACCA 8533 B) (APPELLANT) (R ESPONDENT) APPELLANT BY : SHRI C.K. MISHRA, SR. D.R. RESPONDENT BY : SHRI S.N. DIVETIA O R D E R PER SHRI T.K. SHARMA, JUDICIAL MEMBER :- THIS APPEAL FILED BY THE REVENUE IS AGAINST THE ORDER DATED 29.06.2009 OF LEARNED COMMISSIONER OF I NCOME TAX (APPEALS) -X, AHMEDABAD FOR THE ASSESSMENT YEAR 2006-07. 2. THE GROUNDS RAISED IN THIS APPEAL ARE AS UNDER : - (1) THE LD. C.I.T.(A) HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS.21,60,660/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF SUPPRESSED SALES BY HOLDING THAT THE ASSESSEE HAS CLAIMED EXCE SS SHORTAGE. (2) THE LD. C.I.T.(A) HAS ERRED IN LAW AND ON FACTS IN HOLDING THAT THE DATA PUBLISHED BY RESPECTABLE RESEARCH INSTITUTE LIKE AT IRA AND THE INFORMATION GIVEN IN THE DEPARTMENTAL MANUAL INVES TIGATION OF ACCOUNTS NOT RELIABLE. 3. THE FACTS IN BRIEF ARE THAT THE ASSESSEE IS A PR IVATE LIMITED COMPANY ENGAGED IN GINNING AND PRESSING OF COTTON. FOR THE ASSESSMENT YEAR UND ER APPEAL, IT FILED RETURN OF INCOME DECLARING TOTAL INCOME AT RS.3,52,743/-. DURING THE ASSESSMEN T YEAR UNDER CONSIDERATION, THE A.O. NOTED THAT THE ASSESSEE HAS CLAIMED FOR THE RELEVANT PERI OD AT 4.23% AS AGAINST 2.41% DISCLOSED IN THE IMMEDIATELY PRECEDING YEAR. IN RESPONSE TO QUERIES RAISED BY THE A.O. REGARDING SUCH A HIGH PERCENTAGE OF CLAIM FOR WASTAGE, IT WAS EXPLAINED O N BEHALF OF THE ASSESSEE THAT ITS MAIN RAW MATERIAL WAS RAW COTTON, WHICH WAS A NATURAL AGRICU LTURAL PRODUCT AND WAS MAINLY DEPENDENT ON ATMOSPHERE. IT WAS FURTHER EXPLAINED THAT WHEN THE RAW MATERIAL IS PURCHASED IN MIDTERM, IT CONTAINED HIGH PERCENTAGE OF MOISTURE THAN OTHER SE ASONS. SINCE DURING THE RELEVANT PERIOD, THE ASSESSEE MADE PURCHASES MOSTLY IN MID-TERM THE RAW MATERIAL CONTAINED HIGH PERCENTAGE OF MOISTURE WHICH HAD RESULTED INTO HIGH WASTAGE IN CO MPARISON TO THE EARLIER YEAR. BEFORE THE A.O., 2 THE ASSESSEE ALSO FILED CERTIFICATES FROM IDAR SAHA KARI GIN. MILLS LTD., IDAR AND JADAR VIBHAGIYA SAHAKARI GIN. MILL LTD., JADAR. AS PER CERTIFICATES , THE PERCENTAGE OF SHORTAGE IN SUCH TYPE OF MANUFACTURING ACTIVITY WAS DECLARED AT 3 TO 4%. 4. THE A.O. FOUND THE AFORESAID SUBMISSIONS OF THE ASSESSEE NOT CONVINCING. THE A.O. OBSERVED THAT IN THE INVESTIGATION MANUEL VOLUME-II ISSUED BY THE INCOME TAX DEPARTMENT, AS PER THE STUDY CONDUCTED BY AHMEDABAD TEXTILE INDUST RIES RESEARCH ASSOCIATION (ATIRA), THE MAXIMUM SHORTAGE IN ROLLER GINNING PROCESS (RGP) WA S AT 1.5%. THE A.O. ALSO FOUND THAT M/S. SHREEJI COTTON COMPANY, VADALI, SABARKANTHA AND M/S . LAXMI GINNING FACTORY, VADALI, WHICH WERE DOING THE SAME BUSINESS, HAD DISCLOSED SHORTAG E AT 2.3% AND 2.14% RESPECTIVELY IN THE ASSESSMENT YEAR 2006-07. HE ACCORDINGLY DOUBTED THE WASTAGE CLAIMED BY THE ASSESSEE AND ALSO REJECTED THE CERTIFICATES OF IDAR SAHAKARI GIN. MIL LS, IDAR AND JADAR VIBHAGIYA SAHAKARI GIN. MILL LTD., JADAR. THE REASONS FOR REJECTING THE SAME AS RAISED IN THE ASSESSMENT ORDER ARE THAT THE ASSESSEE HAD NOT ADDUCED ANY EVIDENCE WITH THE CERT IFICATES TO SHOW THAT THESE CONCERNS WERE ENGAGED IN SIMILAR BUSINESS. THE A.O. ON THE BASIS OF THE ANALYSIS GIVEN IN THE ASSESSMENT ORDER ALLOWED SHORTAGE AT 3% AND REJECTED THE CLAIM FOR R EMAINING 1.23%. ON THIS BASIS THE A.O. HELD THAT THE ASSESSEE HAD SOLD THE COTTON OUTSIDE THE B OOKS OF ACCOUNTS CLAIMED IN THE GARB OF EXCESS SHORTAGE. HE WORKED OUT THE SUCH AMOUNT AT RS.21,60 ,660/- AND ADDED THE SAME IN THE INCOME OF THE ASSESSEE FOR THE ASSESSMENT YEAR UNDER APPEAL. 5. ON APPEAL BEFORE THE LEARNED COMMISSIONER OF INC OME TAX(APPEALS), THE ASSESSEE OBJECTED TO THE AFORESAID ADDITION OF RS.21,60,660/ - AS UNDER :- '1. OUR COMPANY IS ENGAGED IN THE BUSINESS OF GINNING AND PRESSING OF COTTON . THE PLANT IN WHICH THIS ACTIVITY IS GAINED OUT IS F ULLY AUTOMATIC, IT PRODUCES MORE REFINED COTTON. 2. RAW COTTON IS PURCHASED DIRECTLY FRONT THE FARMERS THERE ARE MANY VERITIES OF COTTON. DURING THE YEAR UNDER APPEAL, W E PURCHASED COTTON NAMED SHANKER BRAND AND ST. COTTON (BIO- TECHNOLOGY). B.T. COTTON CONS/SIS OF MORE THAN 60 BRANDS, 3. AT THE TIME OF PURCHASE OF COTTON, ITS QUALITY IS MANUALLY CHECKED IF IT IS FOUND TO BE OF OUR REQUIREMENT, THE BILL IS I SSUED IN THE NAME OF FARMER. THIS BILL CONTAINS NAME OF THE FARMER, HIS VILLAGE, QUANTITY OF COTTON, RATE 3 OF COTTON, AMOUNT PAYABLE. COTTON PURCHASED IS ENTERED IN WEIGHT REGISTER. THUS THERE IS COMPLETE CHECK ON PURCHASES OF COTTON . 4. PAYMENT OF PURCHASE PRICE IS GIVEN BY CHEQUE. 5. COTTON PURCHASED IS STORED IN OPEN SHED THEN IT IS SENT TO CENTER PLATFORM IN GIN HOUSE THROUGH PNEUMATIC SYSTEM. THIS PROCESS IS CARRIED OUT TO REMOVE DUST AND MOISTURE FROM THE COTTON. AF TERWARDS, THE COTTON IS PUT IN DOUBLE ROLLER GIN FOR SEPARATION OF COTTON LINT AND COTTON SEED . AFTER THIS PROCESS IS OVER, COTTON IS STORED IN SHED KNOWN AS PATE HOUSE. AFTERWARDS IT I S PRESSED IN COTTON BATES. LASTLY IT IS SOLD TO MILERS. 6. COMPLETE RECORD RIGHT FROM PURCHASE OF RAW COTTON, TILL IT IS SOLD SO THE MILER IS MAINTAINED BY THE COMPANY. XEROX COPIES OF SOME OF THE BILLS FOR EACH PROCESS WERE GIVEN TO THE ASSESSING OFFICER. THE BOOKS OF ACCOUNTS AND OTHER RELEVANT DOCUMENTS WERE PRODUCED DURING THE COURSE OF ASSESSMENT PROCEEDINGS. EVEN A REQUEST WAS MADE TO REMAIN PRESENT DURING THIS PROCESS WAS CARRIED OUT SO THAT OUR STA TEMENT COULD BE VERIFIED. 7. OUR BOOKS OF ACCOUNTS ARE AUDITED U/S.44AB OF TH E ! T. ACT. IT IS ACCEPTED EVEN BY SATES TAX DEPARTMENT NO ADDITION O N ACCOUNT OF EXCESS SHORTAGE WAS MADE IN OUR CASE EVEN IN SCRUTINY ASSE SSMENT. 8. DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE A.O. WANTED TO REJECT SHORTAGE OF 4.23% ON THE BASIS OF LITERATURE OF ATIRA. AS PER THIS LITERATURE SHORTAGE OF 1.5% TO 2.5% WAS CONSIDERED TO BE REASONABLE, AS INFORMED TO US. 9. IN RESPONSE TO SHOW CAUSE NOTICE GIVEN BY THE A. O., WE EXPLAINED OUR ENTIRE PROCESS AS WELL AS FURNISHED TWO CERTIFICATES FROM IDAR SAHKARI GIN MILL LTD. AND JADAR VIBHAGIYA SAHKARI GIN MILL LTD THESE CERTIFICATES CONFIRMED MINIMUM 3% TO 4% OF SHORTAGE. 10. THE A O. RELIED ON THE YIELD OF OTHER TWO ASSESSES OF DIFFERENT AREAS WITHOUT GIVING ANY PROOF, MATERIAL, EVIDENCE ETC. T O US. EVEN THE LITERATURE OF ATIRA WAS NOT FURNISHED TO US. NO CHANCE OF CROS S EXAMINATION WAS GIVEN TO US. 11. RELYING ON THE EVIDENCE AND MATERIAL OF THE TH IRD PARTY WITHOUT FURNISHING IT TO US, THE A.O. ESTIMATED SHORTAGE AT 3% AND REJECTED SHORTAGE OF 1.23% AND MADE ADDITION OF RS.21,60,660/-. 12. THE ACTION OF THE ASSESSING OFFICER IS IN GROS S VIOLATION OF PRINCIPLE OF NATURAL JUSTICE AND WITHOUT CONSIDERING THE COGE NT MATERIAL, EVIDENCES, PROOF ETC. FURNISHED TO HIM DURING THE COURSE OF AS SESSMENT PROCEEDINGS. 4 6. BEFORE THE LEARNED COMMISSIONER OF INCOME TAX(AP PEALS), THE LD. COUNSEL OF THE ASSESSEE ALSO PLACED RELIANCE ON THE FOLLOWING DECI SIONS :- '1. C.B.I. VS.-. V.C. SHUKLA 3, S.C. PG. 410 (1998); IN THIS CASE, IT WAS HELD THAT THIRD PARTY EVIDENCE COULD NOT BE RELIED UNLESS THE ASSESSEE WAS GIVEN AN OPPORTUNITY TO CROSS EXAMINE SUCH PERSON. 2. INTERNATIONAL FOREST CO. VS.- . CIT (1 01 !TR 721) (J &K); ORISSA FISHERIES DEVELOPMENT CORP. LTD. VS.- C!T (111 ITR 923) (ORI.) AS HELD IN THESE CASES, BOOKS OF ACCOUNTS CAN NOT B E REJECTED ON THE GROUND OF LESSER OUT TURN SHOWN IN COMPARISON TO PREVIOUS YEA R. 3. CIT V/S. MARGADARSI CHIT FUNDS PVT. LTD. (155 I TR 442)(ANDHRA PRADESH); AS HELD IN THIS CASE, BEFORE REJECTING THE SYSTEM O F ACCOUNTING FOLLOWED BY THE ASSESSEE, THE INCOME TAX OFFICER MUST REFER TO THE INHERENT DEFECT IN THE SYSTEM AND RECORD A CLEAR FINDING THAT THE SYSTEM OF ACCOU NTING FOLLOWED BY THE ASSESSEE IS SUCH THAT CORRECT PROFITS CAN NOT BE DEDUCED FRO M THE BOOKS OF ACCOUNTS MAINTAINED BY THE ASSESSEE.' BEFORE THE LEARNED COMMISSIONER OF INCOME TAX(APPEA LS), IT WAS ALSO ALLEGED THAT THE ASSESSEE WAS NOT GIVEN PROPER OPPORTUNITY OF BEING HEARD WIT H REGARD TO MATERIAL USED BY THE A.O. AGAINST IT WHILE DRAWING CONCLUSION FOR SUPPRESSION OF PROD UCTION AND SALES THEREOF. KEEPING IN VIEW THE SURROUNDING CIRCUMSTANCES AND IN THE INTEREST OF NA TURAL JUSTICE, THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) ASKED THE A.O. TO PROVIDE RELEV ANT DOCUMENTS TO THE APPELLANT WHICH WERE UTILIZED BY HIM WHILE MAKING THE ADDITION OF RS.21, 60,660/-. THE A.O. CALLED THE REMAND REPORT FROM THE A.O. AND THEREAFTER COMMENTS OF THE ASSESS EE THEREON. THE COMMENTS OF THE ASSESSEE WERE AGAIN FORWARDED TO A.O. FOR HIS FURTHER COMMEN TS. AFTER OBTAINING THE FURTHER COMMENTS OF A.O., IN THE IMPUGNED ORDER THE LEARNED COMMISSIONE R OF INCOME TAX(APPEALS) DELETED THE ADDITION FOR THE DETAILED REASONS GIVEN IN PARA 5.1 1 TO 5.16, WHICH ARE RE-PRODUCED AS UNDER :- 5.11. I HAVE CONSIDERED THE FACTS OF THE CASE AND SUBMISSIONS OF THE LD. AR. CAREFULLY. I HAVE ALSO GONE THROUGH THE REMAND REPO RT SENT BY THE A.O. IT IS SEEN THAT THE A.O. HAS REJECTED APPELLANT'S CLAIM FOR SH ORTAGE IN THE PRODUCTION PROCESS ON THE BASIS OF A REPORT PREPARED BY AHMEDABAD TEXT ILE INDUSTRIES RESEARCH ASSOCIATION (ATIRA) AND REFERRED TO IN THE INVESTIG ATION MANNUAL II. FURTHER, HE HAS RELIED ON THE RESULTS OF OTHER TWO ASSESSEES OF SABARKANTHA RANGE, NAMELY M/S. SHREEJI COTTON COMPANY, VADALI, SABARKANTHA AN D M/S. LAXMI GINNING 5 FACTORY, VADALI ENGAGED IN SIMILAR KIND OF BUSINESS WHO HAD SHOWN THE SHORTAGE IN THE PRODUCTION PROCESS AT 2.3% AND 2,14% RESPECT IVELY IN THE A.Y.2006-07. 5.12. THE A.O. WHILE REJECTING THE APPELLANT'S CLA IM FOR SHORTAGE HAS NOT ANALYSED THE DETAILS AND THE PRODUCTION PROCESS COM PREHENSIVELY WHILE MAKING THE COMPARISON FROM THE REPORT PREPARED BY THE ATIR A AND THE RESULTS DISCLOSED BY THE AFORESAID TWO PARTIES. HE HAS ALSO NOT ELABO RATED THAT HOW THE APPELLANT'S PRODUCTION PROCESS IS SIMILAR TO THE CONDITIONS LAI D DOWN IN THE REPORT OF ATIRA AND THE PRODUCTION PROCESS OF AFORESAID TWO PARTIES . THIS CLEARLY SHOWS THAT THE A.O. HAS COMPARED TO FIGURES IN AN ACADEMIC WAY AND NOT INVESTIGATED THE MATTER FURTHER AS TO HOW APPELLANT'S RESULTS WERE UNREALIS TIC AND EXCESSIVE IN COMPARISON TO NORMAL TRENDS IN THE BUSINESS. 5.13 THE GENERAL TRENDS INDICATED IN THE ATIRA'S RE PORT AS REFERRED TO IN THE INVESTIGATION MANUAL OF THE DEPARTMENT PROVIDES A L EAD TO THE A.O. TO INVESTIGATE THE MATTER FURTHER IF THE ASSESSEE CLAIMS HIGHER PE RCENTAGE IN COMPARISON TO GENERAL TREND. THUS, IT COULD BE A STARTING POINT F OR THE A.O. FOR A FURTHER INVESTIGATION IN THE MATTER. HOWEVER, SUCH TRENDS A S INDICATED IN INVESTIGATION MANUAL DO NOT JAY A THUMB RULE FOR REJECTION OR OTH ERWISE AN ASSESSEE'S CLAIM IN THE RELEVANT FIELDS OF BUSINESS. THE A.O. WITHOUT I NVESTIGATING THE MATTER FURTHER DREW THE CONCLUSION ON THE BASIS OF ATIRAS REPORT. SIMILARLY, HE HAS NOT DISCUSSED IN DETAIL THE BOOK RESULTS OF TWO CONCERN S NAMELY M/S. SHREEJI COTTON COMPANY, VADALI, SABARKANTHA AND M/S. LAXMI GINNING FACTORY, VADALI AS TO HOW THEIR MANUFACTURING PROCESS, TURNOVER ETC. ARE ON THE SAME FOOTING AS OF THE APPELLANT BEFORE RELYING ON THE PERCENTAGE DISCLOSE D BY THESE CONCERNS AND USING AGAINST THE APPELLANT. THESE DETAILS WERE NOT PROVI DED TO THE APPELLANT DURING THE PROCEEDINGS CARRIED OUT BY THE A.O, WHEN THE MATTER WAS REMANDED TO HIM. 5 14. THE A.O. HAS NOT FOUND ANY FAULT WITH THE BO OKS OF ACCOUNTS OF THE APPELLANT FOR THE RELEVANT PERIOD. HE HAS NOT QUEST IONED THE PURCHASES AND SALES MADE BY THE APPELLANT DURING RELEVANT PERIOD. THERE FORE, WHEN HE HAS NOT FOUND ANY FAULT WITH THE BOOKS OF ACCOUNTS OF THE APPELLA NT FOR THE RELEVANT PERIOD, THERE DOES NOT APPEARS TO BE ANY JUSTIFICATION FOR REJECT ION OF ITS SHORTAGE IN THE PRODUCTION PROCESS WHICH IS SUPPORTED BY SUCH BOOKS AS MAINTAINED BY THE APPELLANT. 5.15 HON'BLE CALCUTTA HIGH COURT IN THE CASE OF SI DDHESWARI COTTON MILLS PVT. LTD. VS.- CIT (117 ITR 953) (CAL) IN THE SIMILAR C IRCUMSTANCES HAS HELD THAT - ' TEXTILE MILLPRODUCTION ACCOUNT INDICATING MORE W ASTAGE THAN IN PRECEDING YEAR--EXPLANATION OF ASSESSES REJECTED AND AMOUNT ADDED TO INCOME RETURNED-NO REJECTION OF ACCOUNTS-N O BASIS FOR AMOUNT ADDED BY TRIBUNAL ON ASSUMED PRODUCTION OF C LOTH- ADDITION NOT JUSTIFIED.' 5.16. THEREFORE, KEEPING IN VIEW THE FACTS SURROUN DING THE CASE AND THE LEGAL POSITION AS DISCUSSED ABOVE, I DO NOT FIND ANY JUST IFICATION FOR THE ADDITION OF 6 RS.21,60,660/- ON ACCOUNT OF ALLEGED SUPPRESSED SAL ES. IN VIEW OF THIS, THE ADDITION MADE BY THE A.O. IS HEREBY DELETED. 7. AGGRIEVED BY THE ORDER OF LEARNED COMMISSIONER O F INCOME TAX(APPEALS), THE REVENUE IS IN APPEAL BEFORE US. 8. AT THE OUTSET, SHRI S.N. DIVETIA ON BEHALF OF TH E ASSESSEE APPEARED AND FILED A DECISION OF ITAT, B BENCH, AHMEDABAD DATED 09.01.2009 IN THE CASE OF AMBICA COTTON CO. VS.- ITO, WHEREIN THE ASSESSEE WAS DOING SAME LINE OF BUSINES S AND TRIBUNAL HAS ACCEPTED THE YIELD RATE OF 32.86%. THE LD. COUNSEL OF THE ASSESSEE EXPLAINED T HAT IN THE ASSESSMENT YEAR UNDER APPEAL, THE YIELD RATE OF THE ASSESSEE IS 34% ,WHICH IS EVIDENT FROM THE FOLLOWING CHART :- ASSTT, YEAR CONSUMPTION OF COTTON (IN QTL.) COTTON LINT (INQT!,) YIELD OF COTTON LINT (%AGE) COTTON SEEDS PRODUCTION 2004-05 58087 19951 34,35% 35357 QTL. [60.86%) 2005-06 4314 1541 3572% 2667 QTL, (61.89%) 2006-07 77463 26306 34% 47884 QTL. (61,81%) 2007-08 71173 24809 34.85% 44686 QTL. [60%) THE LD. COUNSEL OF THE ASSESSEE FURTHER EXPLAINED T HAT IN THIS LINE OF BUSINESS, THE PRODUCTION OF COTTON LINT FROM RAW COTTON AND NOT THE SHORTAGE BE CAUSE LESSER PRODUCTION OF COTTON LINT WOULD MEAN HIGHER COTTON SEEDS. THE SHORTAGE CONSIDERED B Y THE A.O. IS THE SHORTAGE FROM GINNING OF RAW COTTON AND IT INCLUDES BOTH COTTON LINT AND COT TON SEEDS. THE LD. COUNSEL SUBMITTED THAT IN THE PROCESS, THE ASSESSEE IS PRODUCING COTTON LINT AS W ELL AS COTTON SEEDS AND BOTHER WERE SHORT. IN THE CASE OF AMBICA COTTON COMPANY (SUPRA), THE BOOKS OF ACCOUNTS WERE REJECTED WHEREAS IN THE CASE OF ASSESSEE NO BOOKS OF ACCOUNTS HAVE BEEN REJ ECTED. SINCE IN CASE WHERE BOOKS OF ACCOUNTS ARE REJECTED BY ITAT, B BENCH, AHMEDABAD IN THE C ASE OF AMBICA COTTON COMPANY (SUPRA), WHEREIN IT WAS HELD THAT COTTON YIELD OF 32.86% IS FAIR AND REASONABLE AND, THEREFORE, COTTON YIELD OF 34% DECLARED BY THE ASSESSEE IS RIGHTLY ACCEPTED BY THE LEARNED COMMISSIONER OF INCOME 7 TAX(APPEALS) IN THE IMPUGNED ORDER. THEREFORE, THE LD. COUNSEL PLEADED THAT THE VIEW TAKEN BY THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) BE UPHELD. 9. ON THE OTHER HAND, SHRI C.K. MISHRA, LD. DEPARTM ENTAL REPRESENTATIVE SUPPORTED THE ORDER OF AUTHORITIES BELOW. HE SUBMITTED THAT LOOKI NG TO THE PREVIOUS HISTORY OF THE ASSESSEES BUSINESS, YIELD DECLARED IN THE ASSESSMENT YEAR UND ER APPEAL IS LESS THAN IN THE EARLIER AND SUBSEQUENT YEARS. THEREFORE, THE ADDITION MADE BY T HE A.O. WAS FAIR AND REASONABLE AND PLEADED THAT THE ADDITION OF RS.21,60,660/- BE RESTORED. 10. HAVING HEARD BOTH THE SIDES, WE HAVE CAREFULLY GONE THROUGH THE ORDERS OF AUTHORITIES BELOW AND PERUSED THE MATERIAL PLACED ON RECORD. IT IS PERTINENT TO NOTE THAT THE ASSESSEE IS MAINTAINING REGULAR BOOKS OF ACCOUNTS. ITS BOOKS OF ACCOUNTS ARE AUDITED UNDER SECTION 43B OF THE INCOME TAX ACT. PROFIT & LOSS A/C, BALANCE-SHEE T, TAX AUDIT REPORT IN FORM NO. 3CD, ETC. WERE DULY FURNISHED ALONGWITH THE RETURN OF INCOME. THE A.O. MADE THE ADDITION MAINLY ON THE BASIS OF INVESTIGATION MANUEL VOLUME-II ISSUED BY T HE INCOME TAX DEPARTMENT, WHEREIN IT IS MENTIONED THAT MAXIMUM SHORTAGE IN ROLLER GINNING P ROCESS (RGP) IS AT 1.5% AS PER THE STUDY CONDUCTED BY AHMEDABAD TEXTILE INDUSTRIES RESEARCH ASSOCIATION (ATIRA).WE HAVE CAREFULLY GONE THROUGH THE REMAND REPORT AND COMMENTS OF THE A.O. AS WELL AS ASSESSEE, WHICH ARE RE- PRODUCED BY THE LEARNED COMMISSIONER OF INCOME TAX( APPEALS) IN THE IMPUGNED ORDER. KEEPING IN VIEW THE TOTALITY OF THE FACTS AND CIRCU MSTANCES OF THE CASE AND THE DECISION DATED 01.01.2009 OF ITAT, B BENCH, AHMEDABAD IN THE CAS E OF AMBICA COTTON CO. IN ITA NO. 3410/AHD./2004 RELIED BY THE LD. COUNSEL FOR THE AS SESSEE, WE ARE OF THE VIEW THAT THE VIEW TAKEN BY THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) IN DELETING THE ADDITION OF RS.21,60,660/- IS FAIR AND REASONABLE. WE, THEREFORE, DECLINE TO I NTERFERE. 11. IN THE RESULT, THE APPEAL OF THE REVENUE IS DIS MISSED. THE ORDER PRONOUNCED IN THE COURT ON 20.11.2009 SD/- SD/- (N.S. SAINI) (T.K. SHARMA) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 20 / 11 / 2009 8 COPY OF THE ORDER IS FORWARDED TO : 1) THE ASSESSEE (2) THE DEPARTMENT 3) CIT(A) CONCERNED; (4) CIT CONCERNED, (5) D.R., ITAT, AHMEDABAD. TRUE COPY BY ORDER DEPUTY REGISTRAR, ITAT, AHMEDABAD LAHA/SR.P.S.