- (1.) Affidavit of service filed today be taken on record.
(2.) This appeal has been filed under section 260-A of the Income Tax Act (hereinafter referred to as the Act) in which the Revenue has proposed the following substantial question of law which is said to be arising against the order of Income Tax Appellate Tribunal dated 5.8.2008: "Whether on the facts and in the circumstances of the case, the Hon'ble I.T.A.T. was correct in holding that the Assessing Officer had wrongly taken the consumption and subsequent processing loss without appreciating the fact that the production results as declared by the assessee were never supported or evidenced from any stock register or manufacturing record/relevant books of accounts as the same were never produced before the Assessing Officer."
(3.) Briefly stated that facts giving rise to the present appeal are as follows: The appeal relates to the assessment year 1997-98.The respondent assessee is a private ltd. company. It had filed its return on 1.12.1987 showing the total income at Rs. 4,46,629/- against which brought forward losses of equal amount were set off. The remaining brought forward losses for Assessment Year 1995-96 and 96-97 at Rs. 27,80,063/- was carried forward. The book loss of Rs. 3,92,395/- was computed under section 115JA of the Income Tax Act. The return was processed under section 143(1)(a) of the Act. Subsequently proceeding under section 143(3) of the Act was initiated and the Assessing Officer determined the total income at Rs. 68,04,363/-. The Assessing Officer computed suppressed production of 211.54 metric tonne which resulted in addition of Rs.32,37,797/-. This figure was arrived at as the shortage claimed was 19% as compared to previous year of 13%. The assessee preferred an appeal before the Commissioner of Income Tax who deleted the addition on the ground that the shortage is on account of some mistake in the audit report. The Revenue preferred an appeal before the Tribunal. The Tribunal has dismissed the appeal with the following observations: "We have considered the submissions of both the parties and carefully gone through the materials available on record. In the instant case, it is noticed that the Assessing Officer, while working out the manufacturing loss at 19% had wrongly taken the consumption at 3430.430 M.T. while the actual consumption, as per record, was 3240.190 M.T. which gave the yield of 88.36%. The said yield was more than the yield shown at 87.43% in the immediately preceding year. As such, the processing loss in year under consideration was lesser then the earlier year's loss. Considering the totality of the facts, we do not see any valid ground to interfere with the findings of CIT (A) on this issue. Accordingly we do not see any merit in this departmental appeal. ";