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Income Tax Appellate Tribunal, “C” BENCH: KOLKATA
Before: Shri Mahavir Singh, JM & Shri M. Balaganesh, AM]
Per Shri Mahavir Singh, JM:
This appeal by assessee is arising out of order of CIT(A)-XII, Kolkata vide Appeal No. 526/CIT(A)-XII/11/11-12 dated 05.02.2013. Assessment was framed by Addl. CIT, Range-11, Kolkata u/s. 143(3) of the Income Tax Act, 1961 (hereinafter referred to as “the Act”) for Assessment Year 2008-09 vide his order dated 30.12.2011.
The only issue in this appeal of revenue is against the order of CIT(A) confirming the disallowance made by AO on account of reversal of provision for slow moving stores amounting to Rs.31,82,801/-.
Briefly stated facts are that the assessee is engaged in the business of manufacturing professional grade printed circuit boards. During the course of assessment proceedings, the AO noticed that the assessee in its computation of income claimed total deduction of Rs.78,80,232/- on account of provision for slow moving stores. The assessee before AO explained that the provision was treated as income for earlier year but the AO was not convinced and on examination of computation of total income for AY 2007-08 noted that the provision for stores added to the total income was Rs.46,97,431/- and accordingly, he added the excess claim of deduction to the tune of Rs.31,82,801/- to the returned income of the assessee. Aggrieved, assessee preferred appeal before CIT(A) who also confirmed the action of AO. Aggrieved, now assessee is in second appeal before Tribunal. 4. We have heard rival submissions and gone through facts and circumstances of the case. We find that the assessee has claimed deduction towards reversal of provision of slow
AT&S India Pvt. Ltd., AY 2008-09 moving stores amounting to Rs.78,80,232/- during the previous year 2007-08 relevant to this assessment year 2008-09. The assessee claimed that it had added back the provisions of slow moving stores as taxable income of the previous years in which provision is created and the provision for slow moving stores taxed by adding back to the taxable income in earlier years. When these provisions were created and the same has been claimed as deduction on reversal of such provision for arriving at taxable income in the respective years, the assessee filed complete details in respect to disallowance of these items in AY 2006-07 and 2007-08 and corresponding claim of amount reversed from AY 2008-09 which is as under: Assessment Amount disallowed while Amount claimed while Year computing taxable income computing taxable income AY 2006-07 13,931,535 Nil AY 2007-08 4,697,431 Nil AY 2008-09 Nil (-) 7,880,232 Total 18,628,966 (-) 7,880,232 We find that the assessee has rightly reverse the provision for slow moving stores to the extent of Rs.78,80,232/- and added back this provision in AY 2007-08 and 2006-07 which is clearly evident from the above table and claimed the same while computing taxable income for the relevant assessment year. Ld. Counsel for the assessee drew our attention to page 18 of assessee’s paper book in respect to provisions for store for AY 2007-08 and 2006-07. According to Ld. Counsel, these details were produced before the AO and for this a letter was written to him on 19.12.2011 which is enclosed in assessee’s paper book at pages 14 to 16 and the relevant reply vide para 4 at page 15 is given giving the details which are narrated abve. In view of these facts, we find no infirmity in the claim of the assessee and accordingly, the same is allowed. The appeal of assessee is allowed.
In the result, appeal of assessee is allowed. Order pronounced in the open court on 09.03.2016
Sd/- Sd/- (M. Balaganesh) (Mahavir Singh) Accountant Member Judicial Member
Dated : 9th March , 2016 Jd. Sr. P.S