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2016 (2) TMI 162 - AT - Income TaxPenalty u/s 271(1)(c) - enhanced value of closing stock - Held that:- The assessee has submitted that the value of ₹ 682/- sq.mtr is computed by the assessee himself and is appearing in the detail stock valuation and it is simply a calculation mistake on his part, wherein he had considered the value of ₹ 488/- sq.mtr instead of ₹ 682/ sq.mtr. The assessee has however not provided any explanation regarding the basis/criteria for working out the value at ₹ 488/- s.mtr and why it was adopted at first place. The so called calculation mistake an be accepted where the same is apparent from the valuation working as submitted by the appellant and where by mistake, the appellant ha taken a particular value instead of another value. However, there is no such calculation/working determining value at ₹ 488/sq.mtr which is on record. Thus, the value of s. 488/- sq.mtr. is surrounded in mystery and explanation of the appellant does not inspire confidence that it was simply calculation mistake. In light of that, the explanation of the assessee is not substantiated and the bonafide of the case is thus not proved. Hence, the penalty levied on enhanced value of closing stock to extent of ₹ 1,61,400/- is confirmed.- Decided against assessee Regarding valuation of old marble slabs and old tiles at 25% of the average rate instead of 50% of the average cost - Held that:- it is clear that the submission of the assessee regarding the method of valuation s well as estimation of 50% of the closing stock of inferior quality has been duly accepted and confirmed by the Coordinate Bench. As far as matter of valuing the stock of inferior quality is concerned the assessee has valued the stock at 2% of the average cost confirm4d by the Coordinate Bench. Hence it would be relevant to note that the Coordinate Bench has accepted the submission and explanation of the assessee that the said inferior stock has been sold during the subsequent financial year at a lower price which is evident from sale bills of the subsequent period. But the opinion the Coordinate Bench, even though the said sale value is supported by the sale bills of the subsequent period but the same appears to be a lower side. Based on that, the coordinate Bench confirmed the valuation of inferior stock at 50% of the average stock as against 25% average cost taken by the assessee. The findings of the Coordinate Bench thus have a direct bearing on the subject levy of penalty and will equally apply in the present proceedings. It is therefore not a case where the assessee’s explanation can be said to be incorrect or false. The basis of taking the value of inferior stock has been duly supported by sale invoices of the subsequent period and thus it cannot be said that the assessee does not have a basis for such valuation to stand. It is purely a matter of opinion and judgement where the ld. CIT(A) and Coordinate Bench has taken a view which differs from that of the assessee on examination of same set of facts which have been duly disclosed. It is therefore not a matter which calls for levy of penalty under the provisions of section 271(1)(c) of the Act. - Decided in favour of assessee
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