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2015 (1) TMI 509 - ITAT KOLKATARevision u/s 263 - whether CIT erred in concluding that the assessment was completed in hasty manner without making necessary enquiry - whether CIT(A) erred in presuming that nothing was mentioned regarding the method for valuation in 3CD report - whether CIT(A) erred in holding the view that the AO did not examine the stock details with regard to the secured loans and the payment of commission Held that:- In respect to the first issue of understatement of stock, we find that the assessee has valued the stock at cost on the basis of cost price or market price whichever is less. The assessee has maintained complete stock records in its computer system item wise containing full details of opening stock, purchases made, sales made and closing stock giving quantity, quality, rate and value. Once these facts are very much available before the AO during the course of assessment proceeding and even before CIT during the revision proceeding, but CIT has failed to verify the factum of closing stock that there is no difference while valuing closing stock and no average can be taken when the exact facts are before him. The stock statement submitted to bank and stock as per stock register is exactly matching in term of quality and quantity and rate. Once this is the position, how the CIT can propose a possible understatement and can give a finding that “likewise the AO accepted the closing stock declared by the assessee without calling any detail of making the required verification thereof. As find that the AO has carried out verification of commission paid by issuing notices u/s. 133(6) of the Act to 17 parties, who admitted to have received the commission from the assessee in its communication in response to notices u/s. 133(6) of the Act. The assessee covered almost 80% of commission paid at ₹ 5,53,54,513/- out of the total commission paid at ₹ 6,94,43,342/-. The assessee has also explained the nature of services rendered by these parties to whom commission is paid during the course of assessment proceedings and even during revision proceedings u/s. 263 of the Act. The AO has also verified the sundry creditors on account of commission payable outstanding as on 31.03.2009, which was paid in the subsequent financial year 2009-10 relevant to AY 2010-11 and the details were also filed before CIT during revision proceedings and even now before Tribunal in its paper book. In the present case the AO has made enquiries and the assessee replied to the enquiries, the order passed by the AO in the present case cannot be said to be either erroneous or prejudicial to the interest of revenue. Accordingly, we quash the revision order passed u/s.263 of the Act by CIT. - Decided in favour of assessee.
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