Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2017 (1) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2017 (1) TMI 56 - AT - Income TaxAdditions made towards difference in value of stock in process - Held that:- We find merits in the arguments of the assessee for the reason that the value of stock submitted to the bank cannot be taken to be the exact value of the stock. This is the usual practice adopted by the businessmen by inflating the stock of the assets in order to avail better financial help from the banks. The A.O. has not mentioned or observed any deviation from accounting principles adopted by the assessee for valuation of closing stock. He had also not found any defects in the books of accounts of the assessee or any bogus purchases and sales to come to the conclusion that the books of accounts along with stock registers maintained by the assessee are incorrect. In so far as stock in process, though there was a difference in quantity between the figure shown to the bank and figure shown in the books of accounts, the assessee claims that stock in process cannot be taken accurately because the items of stock in process cannot be counted accurately. The A.O. could not controverted the claim of the assessee with any positive findings to the effect that stock and financial books of accounts were found with discrepancies. Therefore, we are of the view that without any findings as to the correctness of books of accounts and stock registers, additions towards stock difference solely based on the stock statement filed with the bankers is incorrect. In view of the above, the A.O. has wrongly added the difference in the valuation as declared in the books of accounts and one which was recorded in the statements produced before the bank. Hence, the addition made by the A.O. towards stock difference is deleted. - Decided in favour of assessee Disallowance of amount paid to gratuity fund - assessee failed to furnish the copy of approval of gratuity fund from the competent authority - Held that:- As contended that its gratuity fund has been approved by the Principal Commissioner of Income-Tax-2, Visakhapatnam vide his order dated 29.3.2016 and the full benefit had been given w.e.f. 7.1.2001. To this effect, it has furnished copy of order approving the gratuity fund by the competent authority. We find that the gratuity fund of the assessee has been approved by the competent authority vide its order dated 29.3.2016 w.e.f. 7.1.2001. Therefore, we are of the view that the A.O. was erred in disallowing contribution to gratuity fund.- Decided in favour of assessee
|