M. A. A. KHAN, J. M. : - (1.) THIS is an appeal from CIT(A)s order dt. 8th Jan., 1990 for asst. yr. 1986-87 challenging the following additions/disallowances :
(2.) (1) Trading addition of Rs. 5,00,000 The assessee is a private limited company engaged in manufacture and sales of Electric Conductors and Aluminium Redraw Rods since 1973. Manufacturing activities are carried in two separate units called "Conductor Division" and "Rolling Division". The licensed capacity of Conductor Division is 8492 MT against which the assessee-company has installed machines of 1000 MT capacity. The raw material required for manufacturing conductors are aluminium rod and steel wire. Though the aluminium wire is not a controlled item yet its supply is regulated by the Aluminium Controller, Govt. of India. The producers and suppliers of aluminium rods include Hindustan Aluminium Corporation Ltd., Renukot (HACL), Bharat Aluminium Co. Ltd., Korba (BACL), Indian Aluminium Co. Ltd., (IACL) Madras Aluminium Co. Ltd. (MACL), which are Government of semi Government undertakings. The buyers are State Electricity Boards. The finished goods is subject to rewinding process before sales and is an excisable item.
(3.) THE raw material required for manufacture of cables in the Rolling Division are aluminium and steel/iron. This Division has 300 bobins on which wire is wrapped for strandering purposes. THE wrapping process on all the 300 bobins require 7 days time. Strandering is done in different sizes. It takes 3 to 4 hours for making 4-5 kilometre of wires. THE manufacturing process involved drawing of the melted material into wire and strandering on the bobins. Drawing and strandering process are done simultaneously. THE manufacture of cables is also done on job basis. THE manufacturing process in both the divisions require electric energy which is supplied by the Electricity Board and is also produced by generators.;