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2013 (8) TMI 659 - AT - Income TaxDeemed sale - Addition of income from dispatches to sub-contractors - percentage completion method - Difference between the concluded sales and estimated sales - Held that:- There seems to be a prima facie mistake committed by the Assessing Officer in treating the difference between the concluded sales and estimated sales on despatches made to sub-contractors as not accounted, whereas both the streams of income were already taken to the Profit & Loss Account. If this aspect is found to be correct, there is no need to make any addition, as the assessee has offered both the streams of income in the respective Profit & Loss Accounts. Since there seems to be a mistake committed in the course of assessment proceedings and also first appellate proceedings, in the interests of justice, we set aside the issue to the file of the Assessing Officer to examine the contentions of the assessee and in case it is found that the assessee has already accounted for the income as stated above, the question of making any further addition does not arise at all. With these directions, we restore the respective additions in the three years to the file of the Assessing Officer for examination of facts and to decide accordingly. Assessee should be given due opportunity for explaining the above contentions - Decided in favour of assessee. Addition towards incorrect accounting of stock - Held that:- The MOU between the assessee and the VSSC, a Government organization, was examined and there is no dispute with reference to the fact that assessee is maintaining a metal bank for procuring strategic raw-material and using them as and when there was order from VSSC for its supply. It is also on record that the VSSC is providing funds and assessee only procures them on behalf of the VSSC and keeps sufficient stock in its godown. Just because the stock was procured by the assessee, it does not mean that it has ownership on the stock, which pertained to VSSC - While accepting that the assessee is maintaining the stock of material on behalf of others and only charging fixed amount for this service, and as such, apparently, there is no need to admit the same in their books as stock in trade, he confirmed the same holding that the assessee did not specify how the balance figures are shown in the books of VSSC and what is the effect of this confirmation. This reasoning given by the CIT(A) cannot be accepted because VSSC has certified the stock under consideration belongs to it and in no way the ownership of the stock pertains to the assessee. Just because the stock is kept with the assessee the same cannot be treated as the stock of the assessee, as it belongs to a third party, viz. VSSC in this case - Decided in favour of assessee.
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