Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2022 (8) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2022 (8) TMI 1267 - AT - Income TaxAddition in respect of closing construction work-in-progress (WIP) - difference in valuation in two sets - According to assessee, it has valued the construction WIP for the purpose of MIS financial statement at a higher value for the purpose of consolidation with the financial statement of joint venture partner i.e. M/s HCC Ltd.- HELD THAT:- We find that the Revenue has not disputed the fact of examination of books of accounts by the Assessing Officer. In our opinion, if in books of account any expenditure corresponding to the additional amount of construction of WIP is not found debited, then the amount is only in the nature of notional valuation which has been carried out by the joint venture partner for the purpose of consolidating in its books of account and which cannot be made a basis for addition in the hands of the assessee. When there is no change in number of items of inventory of construction WIP as shown in the first set of financial statement as well as second set (MIS account) of financial statement, then only difference is that in MIS account construction WIP has been valued higher by the amount of Rs.32.29 crores only, for the purpose of consolidated account of the venture partner. As in the case of CIT v. Laxmi Engineer Industries [2008 (3) TMI 288 - RAJASTHAN HIGH COURT] held that no addition could be made for higher valuation of the stock hypothecated to Bank if the AO had not been able to point out any discrepancy in the quantity of stock hypothecated to the Bank and the quantity of stock as per books of account. In this case also there is no observation of the AO that quantity of construction work-in-progress is more than the quantity valued as per first set of financial statement. In view of the above, we set aside the order of the Ld. CIT(A) on the issue-in-dispute and delete the addition made by the Assessing Officer. Disallowance u/s 40(a)(ia) - non-deduction of tax at source on reimbursement of employee cost/salary by the assessee to related party - CIT(A) has sustained the disallowance in view of no evidence submitted by the assessee that same was taxed in the hands of the employees either on the payment made by it or by the related party - HELD THAT:- In view of submission of the assessee, the matter is restored back to the file of the Ld. Assessing Officer for verification, whether tax has been deducted by the employer M/s Alphine Samsung HCC JV in respect of salary amount reimbursed by the assessee in relation to employee Mr. Srivastav or tax has already been paid by the seconded employee on reimbursement amount. The ground raised by the assessee is accordingly allowed for statistical purpose.
|