Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2022 (3) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2022 (3) TMI 1066 - AT - Income TaxDifference in closing stock held by the assessee as on the date of search, when compare to book stock - HELD THAT:- Assessee has substantiated average mark-up of 32% with necessary evidences including sample purchase invoices, as per which, the average mark-up on various products ranges from 32% to 47.5%, whereas, the AO has taken average mark-up of 25% on the basis of mark-up allowed in other group concerns' case, but such rate is not supported with any evidences. There is no reason for the AO to deviate from the method followed by the Investigation Wing to quantify excess stock held by the assessee as on the date of search by allowing mark-up on tag price of 32% when the assessee has justified mark-up of 32% on tag price of closing stock held as on the date of search. The estimations made by the AO on difference in mark-up price of closing stock is purely on suspicion and surmises basis, without any evidence to suggest that the assessee is having average mark-up of 25% on all goods. Therefore, we are of the considered view that the AO is erred in making additions towards difference in mark-up price of closing stock by allowing 25% average mark-up of closing stock on tag price to determine closing stock as on the date of search. CIT(A) after considering relevant facts has rightly directed the AO to allow average mark-up of 32% to arrive at cost price of closing stock as on the date of search. Hence, we are inclined to uphold the findings of the Ld. CIT(A) and reject the ground taken by the Revenue. Disallowance of employees' contribution to PF u/s. 36(1)(va) r.w.s. 43B - HELD THAT:- The coordinate Bench in the case of M/s. Adyar Anand Bhavan Sweets India Pvt. Ltd. v. ACIT [2021 (12) TMI 558 - ITAT CHENNAI] had considered an identical issue and the Tribunal after considering the amendments to Sec. 36(1)(va) of the Act by the Finance Act, 2020 w.e.f. 01.04.2021, held that amendment inserted to Sec. 36(1)(va) of the Act, is prospective in nature which is applicable from the AYs 2020-21 onwards - we are of the considered view that there is no error in the findings given by the Ld. CIT(A) to delete the additions made towards disallowance of employees' contribution to PF u/s. 36(1)(va) r.w.s. 43B of the Act. Hence, we are inclined to uphold the findings of the Ld. CIT(A) and reject the ground taken by the Revenue.
|