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2016 (3) TMI 21 - AT - Income TaxAddition on account of unaccounted stock - CIT(A) deleted the addition - Held that:- CIT(A) while deciding the issue in favour of the Assessee has noted that A.O has not disputed daily stock and daily production register which are maintained by the Assessee and that the manufacturing of finished goods being refined kapasia tel from the raw material being kapasia wash tel is a continuous process and for such process pipeline for both raw material and finished goods are interconnected with each other. He has further noted that A.O has accepted the plea of the Assessee regarding shortage of stock was worked out only because stock found during the course of search was counted at 8.00 P.M. which was compared with opening stock of raw material in the books without giving the effect of consumption made during the day up to 8.00 P.M. and if such adjustment is provided, no material shortage would be worked out. He has further noted that the shortage of stock and excess stock if considered together would result in excess of only 4131 kg. which can be considered to have been covered by the disclosure made by the Assessee. Before us, Revenue has not pointed out any fallacy in the findings of ld. CIT(A). In view of the these facts, we find no reason to interfere with the order of ld. CIT(A) - Decided against revenue Addition on account of quality allowance - Held that:- We find that ld. CIT(A) while deciding the issue in favour of the Assessee has given a finding that the Assessee had claimed similar expenditure in A.Y. 07-08 which was allowed by the A.O. in the assessment order passed u/s. 153A of the Act and further the deterioration of finished goods had led to quality allowance that was given by the Assessee to its customers and such expenditure was supported by third party evidences and were duly recorded in the books of accounts and the expenditure claimed was only 0.46% of turnover and therefore the expenditure could not have been treated as unexplained expenditure. Before us, Revenue has not brought any material on record to controvert the findings of ld. CIT(A) nor could point out any fallacy in his findings - Decided against revenue Addition made on account of brokerage - Held that:- We find that ld. CIT(A) while granting the relief has given a finding that the claim of brokerage expenses is supported by third party evidences and the payment have been made after deduction of TDS from such brokerage expenses and the addition has been made simply on the basis of comparison of expenditure. He has further given a finding that none of the parties to whom Assessee has made payments were related party covered u/s. 40A (2b) of the Act and the A.O has not questioned the genuineness of entire expenditure. He has further given a finding that the entire explanation regarding higher brokerage payment in comparison to earlier years has been fully explained. Before us, Revenue could not controvert the findings of ld. CIT(A). - Decided against revenue Treatment of loss on shares - Held that:- We find that ld. CIT(A) while deciding the issue against the Assessee has given a finding that Assessee has treated the shares transaction as investments in F.Y. 06-07 & 07-08 and the Assessee by passing a journal entry on 31.03.2009 accounted for the notional loss of value of closing inventory of shares. Before us, Assessee could not controvert the findings of ld. CIT(A). In view of the aforesaid facts, we find no reason to interfere with the order of ld. CIT(A) - Decided against assessee
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