Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2018 (10) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2018 (10) TMI 280 - AT - Income TaxPenalty levied u/s 271(1)(c) - addition made on difference in closing stock - AO alleges that assessee has undervalued its closing stock - Held that:- Assessee during the assessment proceedings has duly explained the difference in the quantity of closing stock as discussed above but the AO has not pointed out any defect/infirmity in the submission of the assessee. It is a fact that the penalty proceedings are different with the assessment proceedings. To levy the penalty, there has to be some deliberate act on the part of the assessee either for concealing of the income or furnishing the inaccurate particulars of income. It is an undisputed fact that the closing stock of one year becomes the opening stock of the subsequent year. Thus, it can be inferred that if the assessee has shown less amount of closing stock then the assessee will carry forward the same to the next year at lesser value which shows there will be no effect on the tax liability of the assessee except the fact that the tax liability of one year will shift to another year. We also note that the assessee cannot be benefited by showing less amount of closing stock as it will become opening stock of the subsequent year. Therefore we are of the view that the act of the assessee for showing less closing stock cannot be said as deliberate. Closing stock for the year under consideration was shown less as pointed out by the AO. Thus, the assessee has to bear more burden of tax in the year under consideration. If the assessee has not made any adjustment, then it will bear more burden of the tax. It is because the assessee in the year under consideration has declared the higher amount of closing stock, but in the subsequent year, the assessee has shown less amount of opening stock which will lead in the enhancement of the profit of the assessee. Thus, we can conclude that there cannot be a deliberate act on the part of the assessee in declaring less amount of closing stock. - Decided in favour of assessee.
|