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2019 (5) TMI 1767 - AT - Income TaxSuppression of closing stock - difference in the value of closing stock shown in the books of accounts as on 31st March 2009 viz a viz value of the stock furnished to the bank as on 31st March 2009 - Sole basis of making the impugned addition was the stock statement furnished to the bank - HELD THAT:- The stock shown by the assessee in its books of accounts is the result of purchases and sales made during the year under consideration. As such, we are of the view that the value of the closing stock cannot be disturbed without pointing out any defect in purchases and sales. There was no whisper about any defect/infirmity in the books of accounts of the assessee by the AO. Therefore we are of the considered opinion that no addition on account of such difference to the total income of the assessee is warranted. Hence we uphold the finding of the learned CIT-A. Thus the ground of appeal of the Revenue is dismissed. Inflated current liabilities in the books of account - excessive sundry creditors in the books of accounts - HELD THAT:- AO in respect of the above items of the current liabilities has not pointed out any defect during the assessment proceedings. In our considered view the AO before making any reliance on the statement furnished to the bank was to point out the defects/infirmities in the current liabilities and the provisions shown by the assessee in its balance sheet. We also note that the learned CIT (A) has given a finding that the creditors shown by the assessee in its books of accounts exist in the books of accounts. The learned DR for the Revenue has not disputed this finding of the learned CIT (A). In view of the above, we do not find any reason to disturb the finding of the learned CIT (A). Hence the ground of appeal of the Revenue is dismissed. Cession of liability u/s 41(1) - AO during the assessment proceedings noticed that the assessee has not entered into a transaction with certain sundry creditors in the last three years - HELD THAT:- Liabilities as discussed above were not written off in the books of accounts of the assessee. Accordingly, in our considered view, the same cannot be treated as income under the provisions of section 41(1) of the Act on account of the cessation of liabilities.. In the present case also, the liabilities were not written off by the assessee in its books of accounts. Therefore we are of the considered opinion that no addition on account of the cessation of liabilities to the total income of the assessee is warranted. Hence we uphold the finding of the learned CIT-A. Thus the ground of appeal of the Revenue is dismissed.
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