COMMISSIONER OF INCOME TAX Vs. MAN STRUCTURALS LIMITED

JUDGEMENT

(1.) IN the assessment of Man Structural Ltd., Jaipur, for the assessment year 1976-77, the INcome-tax Officer, Company Circle I, Jaipur, by his order dated November 24, 1977, made an addition of Rs. 60,000 on account of excessive consumption of zinc during the previous year relatable to the aforesaid assessment year.

(2.) THE assessee company carried on the business of manufacture of high transmission towers which were supplied to various State Electricity Boards and in the case of those supplies, raw material was supplied by the buyers and the assessee company did the job work. THE Income-tax Officer was of the view that the assessee company did not maintain complete records showing the day to day requirement and consumption of zinc and the assessee has not been able to explain excessive wastage of 7.30 tonnes of zinc valued at about Rs. 60,000. THE finding recorded by the Income-tax Officer in this respect was affirmed on appeal by the Commissioner of Income-tax (Appeals), Rajasthan, Jaipur, by his order dated November 2, 1979, THE Commissioner held that, according to the contract, the consumption of zinc was estimated at 7%, which made sufficient allowance for wastage and in actual practice, the consumption was less than 7% and that the assessee was unable to point out any cogent reasons for a very heavy increase in the consumption of zinc during the accounting year relevant to the assessment year in question.

(3.) WE have considered the order passed by the Income-tax Appellate Tribunal and we find that the Tribunal has come to its conclusion after consideration of the material on record that the rate of 8.8% regarding consumption of zinc as claimed by the assessee could not be held to be excessive, but was reasonable. This was essentially a finding of fact and the Income-tax Appellate Tribunal was right in refusing to make a reference to this court.