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2012 (8) TMI 712 - HC - Income TaxDisallowance of reconciliation loss - whether the said figure of 3.46% of the purchases did or did not include gas in the pipeline ? - Held that:- As AO following the directions of the Tribunal furnished for this year accordingly restored the matter to the file of the AO for this year also ignoring a clear finding that loss of about 4% of purchases is reasonable subject to verification - As the loss of 3.4% is borne out by audited accounts, which is lower than the average loss of about 4%. Therefore, there seems to be no reasonable cause to make the disallowance of reconciliation loss by stating that the details of stock lying in pipe lines were not furnished in qualitative or quantitative terms as what had to be verified was whether the loss was in the vicinity of 4%, which has been held to be reasonable by the Tribunal. The matter be remitted to the AO for the purposes of determining / verifying as to whether gas in the pipeline in respect of the assessment year 2005-2006 has been included in the figure of closing stock or not. If the Assessing Officer finds that there is gas in the pipeline, which has not been included in the closing stock, to that extent, the same shall be added back to the closing stock and insofar as the figure of 3.46% of the purchases is concerned, the same shall be modified accordingly.
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