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2017 (5) TMI 360 - AT - Income TaxAddition on account of lower profit rate - Held that:- Assessing Officer adopted a method, which is not in accordance with the accounting standard. Further, none of the items in the closing stock was found to be valued at the lower rate than the opening stock rate and the ld. CIT(A) has recorded that most of the items were valued at higher rate. The assessee has provided closing stock value/rate of each item, which is higher than the opening stock value/rate of corresponding item. Further, if DEPB sales amounting to ₹ 25,90,518/- and foreign exchange gains of ₹ 10,21,906/- is added to the gross profit then the ratio comes to 21.08% for the year under consideration. The Assessing Officer’s allegation that the assessee has undervalued the closing stock by ₹ 64,93,830/- is not factually established. The Assessing Officer applied average basis only on the closing stock to enhance its value but he has not adopted the same for the opening stock. Thus, it is not correct and consistent in valuing in opening and closing stock. The assessee has adopted the same method of inventory since last 15 years. The net sales for the year under appeal are higher than the preceding year. - Decided against revenue Addition u/s 68 - Held that:- It is undisputed fact that these credits were received during F.Y. 1997-98 and 1998-99. The Assessing Officer has made addition by invoking the provisions of Section 68 of the Act in the year under consideration. These amounts were opening balance at the first day of F.Y. under consideration, hence provision of Section 68 of the Act are not attracted. At the most, addition could have been made by invoking the provisions of Section 41(1) of the Act. The assessee itself has written back these loans amounts and paid taxes for the assessment year 2013-14. Considering all these facts, we do not find any infirmity in the order of the ld. CIT(A) - Decided against revenue Addition on account of differenence between gross turnover as per sales tax return and gross turnover as per balance sheet - CIT-A deleted addition - Held that:- D.R. was not able to controvert the finding recorded by the ld. CIT(A) with regard to clerical mistake while preparing the VAT-10 return of 4th quarter and the mistake was apparent from the record. The turnover declared in the P&L account was correct. Therefore, we concur with the finding of the ld. CIT(A) on this issue and the same is hereby uphold. - Decided against revenue Addition on account of lower profit rate - Held that:- We find that the provisions of Section 145(3) of the Act were invoked without any basis. It was based only on assumptions and presumptions. Assessee has not undervalued the closing stock nor any specific defect was found in claim of expenses debited to the P&L account. Considering all these facts and circumstances of the case, we do not find any infirmity in the order of the ld. CIT(A), therefore, we sustain the order of the ld. CIT(A).- Decided against revenue
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