M/S. FASHION STUDIO,AGARTALA vs. INCOME TAX OFFICER, WARD-1, AGARTALA

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ITA 368/GTY/2018Status: DisposedITAT Guwahati22 July 2020AY 2015-162 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal held that only the profit element of the excess stock should be added, not the entire amount. A lumpsum of Rs. 40,000/- was directed to be added as profit.

What were the facts?

During a survey, excess stock of Rs. 1,87,910/- was found. The assessee's appeal challenged the addition of the entire excess stock amount.

What were the issues?

Whether the entire value of excess stock found during a survey is to be added to income, or only the profit element thereof.

Which sections of the Income-tax Act were involved?

Section 143(3)

AI-generated summary — verify with the full judgment below

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Income Tax Appellate Tribunal, GAUHATI ‘E-COURT’AT KOLKATA

Before: Shri S.S, Godara, JM & Dr. A.L. Saini, AM

आदेश /O R D E R This assessee’s appeal for assessment year 2015-16 arises against the Commissioner of Income-tax (Appeals), Shillong’s order dated 10.10.2018 passed in case No.CIT(A)/Shg/10061/2017-18 involving proceedings u/s 143(3) of the Income Tax Act, 1961; in short ‘the Act’. Heard both the parties. Case file perused.

2.

It transpires during the course of hearing that the assessee’s sole substantive grievance challenges correctness of both the lower authorities’ action adding an amount of Rs.1,87,910/- allegedly representing excess stock found during the course of survey. Learned counsel is fair enough in not pressing the excess stock addition in principle. His only case is that as per hon’ble Calcutta high court’s decision in PCIT vs. Subarna Rice Mills (2018) 257 Taxman 509 (Cal.)(HC) only the profit element needs to be added than the entire excess stock. We therefore decline the Revenue’s vehement contentions supporting the impugned addition in entirety and direct the M/s. Fashion Studio Assessment Year:2015-16 Page 2 Assessing Officer to add a lumpsum amount of Rs.40,000/- as profit element in the impugned excess stock without treating the same as precedent in any other assessment year. Necessary computation to follow as per law.

3.

This assessee’s appeal is partly allowed in above terms.

Order pronounced in open court on 22/06/2020.

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