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2022 (1) TMI 1092 - ITAT MUMBAIAddition u/s 68 - additional income declared by the appellant in the course of survey action u/s. 133A - disallowing the sum of 6 crores debited to the profit and loss account under the head "WIP declared u/s. 133A survey - Assessee submitted that addition has been made on estimated basis without 1st rejecting the books and assessee has actually declared as additional income, the sum of ₹ 6 crores declared during survey. He submitted that the additional amount of ₹ 6 corers, which has been debited to the profit and loss account as a stock declared in survey is duly reflected in the closing work in progress - HELD THAT:- We are inclined to agree with the submission of assessee that the veracity of the factual submissions made by him may be examined at the level of AO to resolve the issues in this case. Firstly, we note that as regards, the finding of the authorities that the profit declared is less than ₹ 6 crores will not be correct if the assessee submissions that before the debit of partners remunerations and interest on partners capital account the profit is more than ₹ 6 crore. Secondly, Ld. CIT(A) has rejected the assessee's claim that the increased figure of ₹ 6 crore reflected as declaration in survey by debit to stock in the profit and loss account is reflected in corresponding closing work in progress. CIT(A) has rejected the submission of assessee for having included the aforesaid sum of ₹ 6 crores in the closing work in progress on the basis of certification of the audited account, which did not show that the closing stock includes this increased figure. We find that this aspect can be verified by the AO. The components of closing work in progress are to be examined by him to arrive at the veracity of assessee's factual submission that closing work in progress includes this as a corresponding effect of stock of ₹ 6 core to declared in survey debited to profit and loss. As assessee submission regarding wrong application of section 68 is concerned, we are of the considered opinion that the said issue will arise only, if the above submissions of the Ld. Counsel of the assessee are not found to be correct by the AO. In any case, it is settled law that quoting a wrong section is not fatal to the assessment, if the addition is justified and warranted on the facts and circumstances of the case - Accordingly, we remit the issue to the file of AO.
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