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2014 (3) TMI 323 - AT - Income TaxReduction made on unaccounted stock – Held that:- The stock belonging to BDC was claimed by it in the return filed by it and same was assessed in its hands – thus, there is no reason to hold that stock belonging to BDC was not lying at the business premises of the assessee –Revenue could not controvert the findings given by the FAA - AO had made no inquiry about the claim made by the assessee , though documentary evidences were produced by the assessee – thus, the order of the FAA does not suffer from any factual or legal infirmity. The fact that goods having tag price of 1.01 Crores were sold for Rs. 52.4 lakhs clearly shows that assessee was offering hefty discount to the customers - FAA has held that adopting the tag price as base price for calculating the value of stock was not proper as it would give absurd results – thus, no fault can be found in his observations - cash sales do not prove that transactions entered in to by the assessee were not genuine - FAA has found that in the case under consideration cash sales were more than the cheque- sales – thus, genuineness of the cash sales has rightly been accepted by the FAA - FAA had committed no mistake in accepting the submission of the assessee that tag price could not be taken as base price for arriving at difference in stock – Decided against Revenue. Additions sustained by FAA - Method of valuation of stock - Goods belonging to BDC were lying at the business premises of the assessee – Held that:- FAA has to follow the same rules which an AO is supposed to follow - addition has been sustained, though partially, by making general observations - He adopted GP@50%, as against the 42% shown by the asessee for computing the difference, but basis for rejecting the gross profit rate of the is missing in his order - for adopting the selling price of the stock, found during survey, at 70 % of the tag price of and 50% of GP - FAA has not given any reasons - if he had evidence of excess stock, he should have confronted the asessee with evidences – the order of the FAA set aside – Decided in favour of Assessee.
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