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Income Tax Appellate Tribunal, PUNE BENCH “SMC”, PUNE
Before: SHRI R.S. SYAL
आदेश / ORDER
PER R.S.SYAL, VP : This appeal by the assessee arises out of the order passed by the CIT(A)-2, Kolhapur on 20-12-2018 in relation to the assessment year 2010-11.
This appeal is time-barred by 42 days. The assessee has placed on record a letter dated 28-03-2019 explaining the reasons which led to the late filing of appeal. I am satisfied with such reasons. The delay is condoned and the appeal is admitted for hearing on merits.
2 ITA No.509/PUN/2019 Shri Saidarshan Builders
The only issue raised in this appeal is against the
confirmation of addition of Rs.3,32,827/- on account of
increase in the value of closing stock.
Briefly stated, the facts of the case are that the assessee is
engaged in the business as Developer. A survey was
conducted u/s.133A of the Income-tax Act, 1961 (hereinafter
also called `the Act’) on 24-02-2010 in which the assessee
declared certain additional income which was promptly
offered for taxation. During the course of assessment
proceedings, the Assessing Officer (AO) observed the details
of opening stock which included an item of work-in-progress (WIP) of Rajarampuri 13th Lane Site at Rs.22,35,746/-. The
AO noticed that the closing valuation of this WIP was taken at
Rs.25,68,573/-. As the assessee did not undertake any
construction activity during the year in respect of this
property, the AO held that the additional WIP amounting to
Rs.3,32,827/- (Rs.25,68,573 – Rs.22,35,746) was chargeable
to tax u/s. 69C of the Act as unexplained expenditure. The ld.
CIT(A) confirmed the addition, against which the assessee has
come up in appeal before the Tribunal.
3 ITA No.509/PUN/2019 Shri Saidarshan Builders
I have heard both the sides and gone through the relevant
material on record. The ld. CIT(A) has drawn the assessee’s
Trading profit and loss account on page 3 of the impugned
order, in which the figure of opening stock is Rs.72,09,071/-
and the amount of closing stock is Rs.1,05,85,200/-. There are
certain Purchases and Direct expenses as well and the amount
of gross profit has been declared at Rs.12,05,408/-. The figure
of opening WIP at Rs.22,35,746/- is apparently included in the
overall figure of the opening stock of Rs.72,09,071/- and the
figure of closing WIP at Rs.25,68,573/- is included in the
overall figure of the closing stock of Rs.1,05,85,200/-. Once
the position is such, I fail to comprehend as to how there can
be any question of addition towards the increase in the value
of closing WIP because the assessee by showing the enhanced
value has already shown the corresponding profit and offered
it for taxation. The case of the assessee is that he revalued the
WIP at the end of the year and adopted the enhanced value of
Rs.25.68 lakh and included it in the value of total closing stock
and offered income for taxation accordingly at the enhanced
value. In my considered opinion, the authorities below have
erred in making a separate addition when the amount of
4 ITA No.509/PUN/2019 Shri Saidarshan Builders
enhancement in the value of closing stock of the WIP was
already offered for taxation. I, therefore, overturn the
impugned order and order to delete the addition.
In the result, the appeal is allowed.
Order pronounced in the Open Court on 30th April, 2019.
Sd/- (R.S.SYAL) उपा�य�/ VICE PRESIDENT उपा�य� उपा�य� उपा�य�
पुणे Pune; �दनांक Dated : 30th April, 2019 सतीश आदेश क� क� क� �ित क� �ित �ितिलिप �ित िलिप अ�ेिषत अ�ेिषत अ�ेिषत / Copy of the Order is forwarded to : अ�ेिषत आदेश आदेश आदेश िलिप िलिप 1. अपीलाथ� / The Appellant; 2. ��यथ� / The Respondent; आयकर आयु�(अपील) / 3. The CIT (Appeals)-2, Kolhapur 4. The Pr. CIT-2, Kolhapur िवभागीय �ितिनिध, आयकर अपीलीय अिधकरण, पुणे “SMC” / DR ‘SMC’, 5. ITAT, Pune; गाड� फाईल / Guard file. 6. // True copy // आदेशानुसार आदेशानुसार आदेशानुसार/ BY ORDER, आदेशानुसार
// True Copy // Senior Private Secretary आयकर अपीलीय अिधकरण ,पुणे / ITAT, Pune
ITA No.509/PUN/2019 Shri Saidarshan Builders
Date 1. Draft dictated on 30-04-2019 Sr.PS 2. Draft placed before author 30-04-2019 Sr.PS 3. Draft proposed & placed before JM the second member 4. Draft discussed/approved by JM Second Member. 5. Approved Draft comes to the Sr.PS Sr.PS/PS 6. Kept for pronouncement on Sr.PS 7. Date of uploading order Sr.PS 8. File sent to the Bench Clerk Sr.PS 9. Date on which file goes to the Head Clerk 10. Date on which file goes to the A.R. 11. Date of dispatch of Order. *