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2016 (2) TMI 456 - AT - Income TaxEnhancing addition relating to discrepancy in stock - Held that:- First of all, stock shortage of ₹ 37.87 lakhs has been arrived on estimated basis i.e. book stock has been estimated by adopting GP ratio of 29.6%. There is also merit in the submissions of the assessee that the effect of stock shortage was not properly understood by the partner of the assessee firm. We have earlier noticed that the additional income surrendered in the original assessment proceedings is more than the Gross profit that should have been earned on sale of Stock shortage. Hence, we are of the view that the assessee has proved that the admission of ₹ 30.00 lakhs made by it was wrong. Hence, we are of the view that the admission of ₹ 30 lakhs made by the assessee cannot be given credence in the facts and circumstances of the case. Disallowance of deduction u/s 40(b) - Held that:- After hearing the parties, we are of the view that this issue should be examined afresh by the AO, by duly considering the instrument of partnership, entries made in the books of accounts and explanations that may be furnished by the assessee. Accordingly, we set aside the order of ld. CIT(A) on this issue and restore the same to the file of the AO.
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