DEEPAK GARG,PANCHKULA vs. ACIT, PANCHKULA CIRCLE, PANCHKULA

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ITA 1667/CHANDI/2017Status: DisposedITAT Chandigarh11 July 2018AY 2007-082 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal noted that the Assessing Officer did not consider the reason for using different balance sheets, such as for obtaining bank loans. The case was restored to the Assessing Officer for fresh assessment.

What were the facts?

During a survey, two balance sheets with a significant difference in closing stock valuation were found at the assessee's premises. The Assessing Officer made an addition based on this discrepancy.

What were the issues?

Whether the addition on account of closing stock discrepancy was justified without considering the assessee's explanation regarding the use of different balance sheets for bank purposes.

Which sections of the Income-tax Act were involved?

Section 133A

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DIVISION BENCH’A’, CHANDIGARH

Before: SMT. DIVA SINGH & DR. B.R.R. KUMAR

For Appellant: Shri. Atul Goyal
For Respondent: Shri. Kultej Singh Bains
Hearing: 10/07/2018Pronounced: 11/07/2018

IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH’A’, CHANDIGARH BEFORE SMT. DIVA SINGH, JUDICIAL MEMBER AND DR. B.R.R. KUMAR, ACCOUNTANT MEMBER ITA No.1667/Chd/2017 Assessment Year: 2007-08

Shree Deepak Garg, Vs. The ACIT Plot No. 9, Industrial Area Panchkula Circle Phase-1, Panchkula Panchkula

PAN No. ABGPG2325M

(Appellant) (Respondent)

Assessee By : Shri. Atul Goyal Revenue By : Shri. Kultej Singh Bains

Date of hearing : 10/07/2018 Date of Pronouncement : 11/07/2018

ORDER PER DR. B.R.R. KUMAR, A.M:

The present appeal has been filed by the Assessee against the order of the Ld. CIT(A), Panchkula dt. 04/10/2017.

2.

Assessee has raised only one effective ground of appeal which reads as under:

“1. That the Ld. CIT(A) erred on facts and law in upholding the addition of Rs. 14,55,637/- on account of difference of closing stock and ignoring the submissions and documents filed by the assessee before the Ld. A.O.” 3. Brief facts o f the case are that the assessee filed the return of income on 02/11/2007 declaring total income of Rs. 308780/-. A survey under section 133A of the Income Tax Act,1961 was conducted at the business premises of the assessee on 28/09/2017.

4.

During the survey two Audit Reports have been duly signed by two different Auditors were found at the premises wherein the closing stock varied to the tune of Rs. 14,55,537/- among the two balance sheets.

5.

During the survey proceeding it was submitted that the other balance sheet was used for the purpose of availing bank limit, based on which the

Assessing Officer has taken the valuation of stock at Rs. 56,99,023/- against the stock of Rs. 42,43,386/-.

6.

The Ld. CIT(A) confirm the addition on the grounds that the assessee has not explained the discrepancy in the figures of closing stock.

7.

Before us the Ld. AR argued that the assessee’s unit was an excisable unit and maintain stock record in respect of finished goods. Hence, the discrepancy of the stock cannot be attributed to.

8.

The Ld. DR relied on the order of the authorities below.

9.

We have perused the matter on record. The factum of utilization of the either of the balance sheet for obtaining bank loan has not been bought by the Assessing Officer on record. Hence, in fitness of things we restore the case to the file of the Assessing Officer for assessment denovo by taking into cognizance of the stock register and the balance sheet / audit report which has been submitted to the bank, based on which cash credits / OD / loan has been obtained.

10.

As a result, appeal of the assessee is allowed for statistical purposes.

Order pronounced in the open Court. Sd/- Sd/- (DIVA SINGH) (DR. B.R.R. KUMAR) JUDICIAL MEMBER ACCOUNTANT MEMBER

Dated : 11/07/2018 AG Copy to: 1. The Appellant 2. The Respondent 3. The CIT 4. The CIT(A) The DR 5.

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