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Officer by referring to the relevant supporting documents. In view of the aforesaid, we uphold the order of the learned Commissioner (Appeals) by dismissing the ground raised.

18. In ground no.4, the Revenue has challenged the deletion of addition of ` 2,29,64,845, made on account of sale of waste biscuits / biscuit powder / broken biscuit.

19. Brief facts are, from the details of other income of ` 228.18 lakh shown in the Profit & Loss account, the Assessing Officer found that the assessee has sold waste biscuit powder, weighing 660.500 MTs for an amount of ` 9,77,569 at 1.47 per kg. The Assessing Officer, however, did not find the claim of the assessee acceptable. He observed, any prudent manufacturer will not sell broken and burnt biscuit and biscuit powder at a low rate of ` 1.47 per kg. instead of re- using part of such biscuit for manufacture as followed by contract manufacturing units. From the details submitted, the Assessing Officer found that the assessee had accounted for waste biscuit weighing 664.600 MTs while reconciling the production of 31007.300 MTs disclosed in RT-12 register to Excise Department. He also noticed that the assessee had paid full Excise duty on the biscuit produced at an uniform rate of 10% on the total production of 31007.300 MTs. On consideration of the aforesaid facts, the Assessing Officer concluded M/s. Parle Products Ltd.

difference in consumption of coco vita oil was on account of clerical mistake and the actual consumption was 1860 MTs. Thus, on the basis of difference found in the percentage of yield as per tax audit report and the statements filed by the assessee as well as the information obtained from the contract manufacturing units regarding percentage of yield, the Assessing Officer called upon the assessee to submit further details and also the standard formula applicable for consumption and production. In response, the assessee submitted, itemwise details of consumption and production cannot be filed as it was manufacturing various items and the details submitted before the Assessing Officer were as per books of account. The assessee also submitted, quantity of itemwise ingredients for various items of confectionary was taken as a whole and no separate records were available. To explain reason for difference in percentage of yield between its manufacturing unit at Mumbai and the contract manufacturing units assessee submitted, its unit at Mumbai was manufacturing various items of biscuits and confectionary for many years while the contract manufacturing unit have started recently and were mainly manufacturing ParleG biscuit. The assessee, though, admitted that there is a standard formula but the theoretical form is not scientific and practical for working out consumption and production. Further, the assessee submitted, the standard formula M/s. Parle Products Ltd.

vii) The assessee being the mother unit effort is put on new formulas and research and development;

viii) Part of biscuit produced are consumed by the employees, therefore, cannot be reflected in the accounts; and

ix) Waste before production takes place on account of wheat flour remaining in jute bags, grinding loss M/s. Parle Products Ltd.

sweepage, etc., compared to the loss suffered by contract manufacturing units.

decision of the Co-ordinate Bench we uphold the disallowance made by the Assessing Officer and confirmed by the learned Commissioner (Appeals). This ground is dismissed.

61. In ground no.3, the assessee has challenged the disallowance of depreciation of ` 14,18,541 on certain plant and machinery.

62. Brief facts are, during the assessment proceedings, the Assessing Officer for verifying the claim of depreciation on plant and machinery called for necessary details. He found that the assessee had shown addition to the plant and machinery for an amount of ` 1,13,48,325 on which depreciation of ` 14,18,541 was claimed. From the details submitted, he found that the particular machine was actually imported by Parle Biscuits Ltd., a subsidiary of assessee in January 1991, since, it wanted to go into manufacturing of chocolate and other permitted items. However, as Parle Biscuits Ltd., could not finalise the idea of manufacturing of chocolate the machine was not used and lying idle until they were sold to Parle Products Ltd. on 26 th February 1996. To verify the authenticity of assessee's claim, the Assessing Officer made a physical enquiry by visiting the factory premises of the assessee on 15th March 1999. In the course of physical enquiry, when the assessee was called upon to produce the documentary evidence in respect of installation of machinery in the factory premises and its use, as alleged M/s. Parle Products Ltd.