TMI Blog2019 (11) TMI 1055X X X X Extracts X X X X X X X X Extracts X X X X ..... 018 for the assessment year 2011- 2012. 2. The grounds raised by the Revenue read as under:- 1. The order of the Commissioner of Income tax I (Appeals), Thiruvananthapuram is opposed to law on the facts and circumstances of the case. 2. The Learned Commissioner of Income tax (Appeals), Trivandrum erred in concluding that quantitative details of closing stock as mentioned in Form 3CD of the audit report need not be relied upon ........................................................................... 3. The basis of addition of ₹ 13,47,71,926/- is the closing stock value of 775398 Kg of shrimp stated in schedule 28b-B of Form No. 3CD. In para 10.3, the CIT(A) stated that the quantitative details of the closing stock as mentioned in Form 3CD of the audit report need not be relied upon since a mistake had crept inadvertently as a result of which the same has wrongly been mentioned as 7,75,398 Kg instead of 90,620 Kg. In this connection, the CIT(A) ought to have noticed the scope and effect of the provisions of section 44AB of the Income tax Act 1961, at the time of insertion of this section, which is explaine ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is totally against the facts of the case. The CIT(A) ought to have noticed that as per Annexure B submitted by the appellant along with the return of income, the value adopted by the assessee for the closing stock of shrimp is only ₹ 32.19/Kg. (₹ 2,49,56,300 / 7,75,398 Kg) Considering the facts, the accounts produced by the appellant before the CIT(A) cannot be relied upon and the AO had rightly relied on Auditors report. 6. The CIT(A) ought to have verified the ledger for purchase of raw material, ledger for sales and percentage of yield as the quantitative figures for purchase and sale and percentage of yield vary in the original and revised auditor's report. 7. The CIT(A) ought to have noticed that in the revised report filed before him, the assessee suppressed the quantity of shrimp purchased, by 3,69,516 Kg (1459106-1089590) and inflated the quantity of shrimp sold, by 4,84,481 Kg (859705- 375224) without changing the purchase and sale values in the P L account. This ought to have been taken as a wilful attempt to suppress the quantity of shrimp at the closing stock. 8. For these and other grounds that may be a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d to the Assessing Officers during the course of original and reassessment proceeding as claimed by the assessee, has also been filed during the course of appeal hearing as well which in turn confirms the fact of closing stock of 90,620 kg as under:- 3.2 The item wise production and sales detailed filed to the Assessing Officer during the course of re-assessment proceeding as claimed by the assessee, has also been filed during the course of appeal hearing as well which in turn confirms the fact of closing stock of 90,620 kg as under:- Shrimp Total 1) PUD Opening Stock (kg.) Production Sales Balance (kg.) April 2010 81000 108000 50000 139000 May 2010 139000 11880 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... April 2010 106612 19515 9000 117127 May 2010 117127 10000 35928 91199 June 2010 91199 32335 27500 96034 July 2010 96034 18378 30400 84012 August 2010 84012 73261 24542 132731 September 2010 132731 37200 32750 137181 October 2010 137181 1612 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tually purchased + 11,07,711 kg equivalent to 7,75,398 kg of closing stock to be purchased), they can have closing stock of 7,75,398 kg. In the absence of no such additional purchases ever been made by the assessee, no additional income to the tune of ₹ 13,47,71,926 towards suppressed closing stock could be brought to tax. It is not the case of the Assessing Officer that the assessee really had purchased during the year under consideration raw shrimps of 21,97,301 kg. It is also not the case of the Assessing Officer that the quantity considered for opening stock, production and export sales are in dispute and never been taken into account. Even from the item wise production and sales details filed during the course of appeal hearing as mentioned in the above last two charts, it could be made out that no additional quantity of raw shrimps had ever been purchased by the assessee and therefore, no possibility of having 7,75,398 kg of closing stock during the year under consideration could ever be thought of. In the background of foregoing, I am also convinced with the figures of production and sales furnished originally were wrong and the total production and sales as per the co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uation of closing stock. 4. Aggrieved by the order of the CIT(A), the Revenue is in appeal before us. The learned Departmental Representative supported the order of the Assessing Officer. The learned Counsel for the assessee, on the other hand, supported the order of the CIT(A). 4.1 The learned AR filed a quantitative statement. The details of which are as follow:- As per Original Quantitative Statement Shrimpe (kg.) Other products (kg.) Total Qty. (kg.) Opening stock as on 01.04.2010 1,87,612 Nil 1,87,612 Production during the year 2010-2011 (wrongly shown) 9,63,010 3,51,801 13,14,811 11,50,622 3,51,801 15,02,423 Less : Export Qty wrongly shown during 2010-11 (FY) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6,48,778 kg. Quantity of Shrimp Production quantity of shrimp as per original return 90,63,010 kg. Actual quantity of production of shrimp (Ref. revised claim) during the year (-)7,62,713 kg. Excess quantity shrimp of production disclosed originally. (A) 2,00,297 kg. Quantity of shrimp exported shown wrongly as per original return 3,75,224 kg. Actual quantity of shrimp exported (Ref. revised claim) (-)8,59,705 kg. Export quantity of shrimp short accounted in original return (B) 4,84,481 kg. Excess stock of shrimp originally shown as on 31.03.2011 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the reassessment order. In fact, after verifying the purchase bills , export bills, production register, sales register and the bank stock statement, the A.O. was convinced that the quantitative particulars furnished in Form No. 3CD was a mistake itself. In para 5, page 4 and 5 , the A.O. specifically mentioned about this, however, as the Revenue Audit Party did not drop their Audit Query, he was compelled to proceed with the re-assessment, which is evident from page 5 of his reassessment order itself. Further, the registers maintained in respect of production and exports along with bills, were produced as additional evidence to prove that the quantitative particulars in Form No. 3CD was wrong. The A.O's admission in the re-assessment order is also valid evidence in support of the assessee s contentions and it was only because of compelling situations, the re-assessment was completed by him making an addition of ₹ 13,47,71,926/- to the income already assessed as per order dated 06/03/2014. The learned AR concluded that as there was no change in the closing stock value as per the original return and as per the return filed U/s 147, the re-assessment was its ..... X X X X Extracts X X X X X X X X Extracts X X X X
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