TMI Blog2018 (8) TMI 1623X X X X Extracts X X X X X X X X Extracts X X X X ..... itors in accounting package, therefore there are two ledgers of Sundry creditors appearing in assessee's books. We note that A.O. had called for the books of account and other details. As a result of survey the accounts maintained in tally was found showing two ledgers of Sundry debtors indicating advance from customers and credit sales. Similarly,two ledgers of sundry creditors were maintained containing advance payment for purchase and credit purchase. We note that assessee has himself pointed out the difference in the appellate proceedings, stating that if the total debit balance and credit balance is added up, the only difference as appearing in the accounts impounded during Survey and as filed in the return of income is difference in Sundry creditor of ₹ 2,28,193/- and ₹ 2,20,000/- on account of Advance from parties. Therefore, addition made on account of overstated of liability was restricted by ld CIT(A) to the tune of Rs ₹ 4,48,000/- (Rounded off amount) ( ₹ 2,28,193 + ₹ 2,20,000). Before us, the ld Counsel filed paper book to explain the said difference, but we note that said difference, could not be explained properly. So far, this iss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he circumstances of the case, the Ld. C.I.T.(Appeals) is wrong and unjustified in confirming the action of Assessing Officer who made an addition of ₹ 49,88,155/- towards undervaluation of closing stock. 2. That on the facts and in the circumstances of the case, the Ld. C.I.T.(Appeals) has erred in holding that liability towards sundry creditors and advance from parties was overstated by aggregate figure of ₹ 4,48,000/- and thereby sustaining addition to that extent. 3. That the appellant craves leave to add, alter, adduce or amend any ground or grounds on or before the date of hearing of the appeal. 5. Ground No.1 raised by the Revenue and Ground No.1 raised by the assessee relate to undervaluation of closing stock amounting to ₹ 49,88,155/-. 6. The brief facts qua the issue are that a survey operation u/s 133A(1) of the I.T. Act, 1961, was conducted in the business premises of the assessee on 13.11..2013. During the course of survey operation the Central Processing Unit (CPU) of the computer installed in the said business premises was impounded. Within seven days of concluding the survey operation, the assessee had applied for the copy of ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the computerized accounts of the computer installed in the business premises of the assessee, which are as follows: Sl. No. Particulars As per e-filing return As per computerized accounts maintained in the installed computer in the business premises 1. Diesel Generator Set 5,77,793.00 10,77,793.00 2. Electric Motor 59,25,231.00 93,33,914.28 3. Machinery Spare parts 8,00,026.88 8,14,714.67 4. Engine 2,35,410.00 4,55,917.19 5. Oil Filter Machine 8,81,260.00 18,81,260.00 6. Plant Machinery 48,80,181.60 58,80,181.60 7. Starter 45,921.00 2,42,159.48 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... med the addition made by Assessing Officer to the tune of ₹ 49,88,155/-. 8. Aggrieved by the order of the ld. CIT(A), the Assessee, as well as Revenue both arein appeals before us. 9. The ld. Counsel for the assessee begins by pointing out that the ldA.O had no concrete material/evidence on record to prove that the assessee had undervalued its closing stock which was physically verified and estimation made. The assessee was migrating the data from tally 6 to tally 9 and in this process of migration most of the stock were data lost and irrelevant data crept in the software, hence the difference between the physical stock and computerized stock occurred. The assessee has in his possession, the complete details of stock vide Paper book page 48 to 51. Therefore, the closing stock shown by the assessee in its profit and loss account and balance sheet to the tune of ₹ 2,97,78,896/- should be taken as correct value of closing stock. 10. On the other hand, the ld. DR for the Revenue has primarily reiterated the stand taken by the Assessing Officer which we have already noted in our earlier para and is not being repeated for the sake of brevity. 11. We have given a c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ermined by the survey team was to the tune of ₹ 49,88,155 (Rs.3,47,67,051- ₹ 2,97,78,896). We note that the said difference is admittedly between the figures available in assessee`s computer and figure mentioned in the profit and loss account of the assessee for the year ending 31st March 2011.We also note that during the course of Survey from the computerized account extracted from the computer, it was seen that closing stock as on the end of the year had been suppressed by ₹ 49,88,155/-. The plea taken by assessee that the difference between closing stock was due to migration from one generation of Tally package to anothergeneration (Computer).Therefore, we are of the view that a reconciliation statement may be submitted by the assessee to reconcile the numbers written in the profit and loss account and the numbers written in the computer on the date of survey explaining the data lost during migration of Tally package. Considering entirety of the facts and circumstances of the case and the material on record, we direct the assessee to submit reconciliation statement before the ld AO, showing reconciliation between stock shown in the profit and loss account ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ; 267.90 lakhs; after taking into account the Grouping of Sundry debtors a total debit balance of ₹ 402.50 lakhs along with total credit balance of ₹ 265.71 lakhs.The credit balance in Sundry Debtors account also represents Advance from parties. The Credit balance of ₹ 265.71 lakhs has been added with the total figure of Advance from parties. This Credit balance of ₹ 265.71 lakhs has been added with the total figure of Advance from parties making it to ₹ 469.34 lakhs before audit and final entries. Subsequently after finalization and audit the figure arrived at was ₹ 471.53 lakhs. However, the assessing officer rejected the claim of the assessee made addition on account of overstated liability to the tune of ₹ 3,39,55,396/- [i.e., ₹ 71,64,606 + ₹ 2,67,90,790], 15 Aggrieved by the stand so taken by the Assessing Officer, the assessee carried the matter in appeal before the ld. CIT(A) who has restricted the disallowance to the extent of ₹ 4,48,000/. Aggrieved by the order of the ld. CIT(A), the Revenue as well as assessee is in appeal before us.The Ld. DR for the Revenue has primarily reiterated the stand taken by the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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