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2022 (1) TMI 625 - AT - Income TaxComputation of closing stock - retrieval of stock - addition was made by the AO on the reason that the retrieval stock is not shown in the trade as well as in the profit and loss account - Whether the stock of 14990MT retrieved is included in the closing stock, and if already included, whether it is permissible to tax it again invoking section 41(1)? - HELD THAT:- As seen from the above table, if we do not consider retrieval stock in closing stock, the quantity of closing stock will be 109419 MT. If we consider retrieval stock in the closing stock figure, then quantity of closing stock is 1,24,409 MT. Thus, there was difference of 14,990 MT whereby, closing stock has been increased to this extent. Being so, the contention of the ld.DR is that this retrieval stock is not included in the closing stock is not correct. In our opinion, unless the AO is able to point out that this closing stock has been left to be entered in the books of accounts, the books of account cannot be rejected without ascertaining the specific reasons. Closing stock as on 31/3/2012 has been arrived at after adding retrieval stock of 14,998 MT to the opening stock. Thus, the closing stock has been increased by this amount of quantity of retrieval stock. AO is not justified in observing that retrieval stock has given into manufacturing and P&L account. Therefore there is no justification in recalling the claim of the assessee that retrieval stock has already gone into computation of income. We find no infirmity in the claim of the assessee. As the above statement produced by the tax auditor report u/s 44AB of the Act clearly demonstrate that retrieval stock has been gone into computation of closing stock and it has been included in the closing stock. The closing stock would only be 109419 MT instead of 124409 MT if it is not included in the closing stock arrived on 31.03.2012. As noticed from the G.P rate in the A.Y under consideration is it at 32.61% as against G.P rate at 16.62% in A.Y 2013-14. The Grosss profit rate in this A.Y 2012-13 has been increased due to retrieved stock gone in to computation of income. On this count also addition made by AO on this count to be deleted. Merely because the assessee agreed even after the retrieval stock included in the closing stock and considered for computation income in this Assessment year, then the department has no jurisdiction to tax that income in this assessment year, since legally such income do not gone out of income declared by the assessee. Therefore, the same income cannot be taxed twice by the Department. There cannot be any estoppel against statute. Article 265 of the Constitution of India in unmistakable terms provides that no tax shall be levied or collected except by the authority of law. Acquiescence cannot take away from a party relief the that he is entitled to where the tax, levied or collected without authority of law. The assessee cannot be disentitled to file appeal against the addition made by the AO on account of retrieval stock. Accordingly, this ground of appeal of the assessee is allowed. Addition towards net valuation of closing stock - Assessee wants to consider closing stock as on 31/3/2012 as opening stock as on 1/4/2012 - HELD THAT:- Once the AO included a sum of ₹ 46,25,232 in the closing stock as on 31.03.212, the figures to be taken as opening stock as 01.04.2012 . This is the fair proposition for which the Revenue cannot have any grievance. Order accordingly. This ground of appeal is allowed. Treatment of amount due to SRMT Logistics, Bellary, as income on account of cessation of liability - HELD THAT:- CIT(A) has given categorical findings and directed the AO to verify whether said credit was written off in the book of account in A.Y 2013-14 and treated as income for the asst. year 2013-14 and if so delete the addition. In view of this findings of the CIT(A), we do not find any infirmity in the order of CIT(A) and same is confirmed and this ground of appeal of the assessee is dismissed.
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