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2023 (9) TMI 372 - ITAT CHANDIGARHProfits estimation on sale of expired stock - difference in opening stock by applying GP rate of 17.63% - HELD THAT:- The factum of the stock having expired has been accepted by the AO as well as by the ld CIT(A) which in turn means that such stock has crossed its expiry date and therefore, the same cannot be sold to the customers. There is nothing on record that such expired stock has been sold by the assessee. We therefore find that mere non-accounting of the expired stock as part of the opening stock wouldn’t have any impact on the profitability so declared by the assessee for the reason that such expired stock would again form part of the closing stock at the end of the financial year. Similarly, whether such stock has been destroyed or returned will not have any impact on the profitability so declared and what efforts have been taken by the assessee or should have been taken by the assessee are not relevant consideration for the reason that the same doesn’t affect the profitability so declared by the assessee as the assessee has not claimed any loss on account of writing off of such expired stock which otherwise it is entitled to. In light of aforesaid discussions and in the entirety of facts and circumstances of the case, there is no basis to impute profits on the alleged sale of expired stock and the addition so made is directed to be deleted.Appeal of the assessee is allowed.
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