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Income Tax Appellate Tribunal, MUMBAI BENCH “SMC”, MUMBAI
Before: SHRI D.T. GARASIA
Per D.T. Garasia, Judicial Member:
The present appeal has been preferred by the assessee against the order dated 21.09.2016 of the Commissioner of Income Tax (Appeals) [hereinafter referred to as the CIT(A)] relevant to assessment year 2011-12.
The short facts of the case are that assessee is in business of gold and silver ornaments. The assessee is doing business of sales and purchase of gold and silver and from the information filed not a single bill of sales and purchases are from any bogus dealer or from any non genuine dealer. The Assessing Officer (hereinafter referred to as the AO) has verified the books of accounts and found that return of income was filed on 28.09.2012. The AO has processed the return under section 143(3) read with section 147 and made the addition on account of recasting trade of Rs.28,07,892/-. The AO has 2 M/s. Sumermal Pukhraj Shanklesha verified the closing and opening stock of the assessee and AO has made the addition on account of undervaluation of closing stock by observing as under: “14. In view of these facts the AO re-computed the value of closing stock as under – Description Quantity of gold in Value in Rs. Average rate per grams gram of gold Opening stock 8643.000 95,93,730 Rs. 1100 Purchase during 7515.200 1,31,11,310 Rs. 1745 the year Total 16158.200 2,27,05,040 Rs. 1405.17 Quantity sold 7056.600 99,15,732 Rs. 1405.17 Closing Stock 9101.600 1,27,89,308 Rs. 1405.17
The AO thereafter re-casted the Trading and Profit & Loss account of the appellant and made the addition of Rs.28,07,892/- to the appellant's income as under- Value I cost Particular Quantity Value / Particular Quantity in grams cost in grams Opening 8643.000 95,93,730 Sales 7056.600 1,48,17,896
Purchase 7515.200 1,31,11,310 Closing Stock 9101.600 1,27,89,308
Gross 16158.200 49,02,164 16158.200 Profit
The actual profit as per re-casted valuation of closing stock Rs. 49,02,164 Less: The assessee has shown profit at Rs. 20,94,272
Difference in gross profit shown Rs.28,07,892”
The show cause notice was given and after reworking of opening and closing stock the Ld. CIT(A) has reworked the addition by calculating the same as under: Particulars Rs. Particulars Rs. To Opening 95,93,730/- By Sales 1,48,17,896/- Stock To Purchases 1,31,11,310/- By Closing Stock 1,13,22,390/- To Gross Profit 34,35,246/- 2,61,40,286/- 2,61,40,286/- According to the appellant even by this method the addition works out to Rs.14,66,378/- only.”
3 M/s. Sumermal Pukhraj Shanklesha 4. The assessee is in appeal before me. During the course of hearing, the Ld. A.R. submitted that the issue in controversy is covered by the decision of Tribunal in the case of ITO vs. Kasturi Construction (2012) 54 SOT 384. The Ld. A.R. submitted that issue may be restored to the file of AO to decide it afresh.
Ld. D.R. has no objection.
I, therefore, restore the matter back to the file of AO to decide it afresh as per the decision.
In the result, the appeal of the assessee is allowed.
Order pronounced in the open court on 29.08.2017.