| |
| The Tax Publishers2019 TaxPub(DT) 5128 (Ahd-Trib) INCOME TAX ACT, 1961
Section 143(3)
Where both the increase in trading purchases and the reduction in amount of raw materials consumption was occurring on the debit side of the profit and loss account, it did not have any cascading effect on the overall expenses claimed or debited in profit and loss account. Thus, that mistake was considered to be a bona fide and as there was no loss to the revenue, no addition could be made on account of variation in quantity of purchase of cloth not shown in the audit report.
|
Assessment - Additions to income - Addition on account of variation in quantity of purchase of cloth not shown in the audit report -
AO made addition on account of variation in quantity of purchase of cloth not shown in the audit report. Assessee contended that some of the bills of trading purchases, that was consumed for manufacturing purpose was wrongly taken in trading account was corrected by transferring that quantity from trading account purchase to Grey purchase account and list of such bills were also filed. However, transfer was made in quantity account but in presentation effect of such transfer in value was not given. But it would not have any effect on financial results, i.e., on profit/loss account as even if the entries would have been passed the value of raw material consumption would have increased in Schedule 'K' of the audited accounts and the value of Trading Purchases in Schedule 'L' would have been reduced by the same amount. Held: Since increase in trading purchases and the reduction in amount of raw materials consumption was occurring on the debit side of the profit and loss account, therefore it did not have any cascading effect on the overall expenses claimed or debited in profit and loss account. Thus, that mistake was considered to be a bona fide and there was no loss to the revenue. Accordingly, the addition could not be made on account of variation in quantity of purchase of cloth not shown in the audit report.
REFERRED :
FAVOUR : In assessee's favour
A.Y. : 2002-03
IN THE ITAT, AHMEDABAD BENCH
PRADIP KUMAR KEDIA, A.M. & MAHAVIR PRASAD, J.M.
ACIT v. Neptune Textile Mills Ltd.
ITA No. 2826/Ahd/2013
24 April, 2019
Against Revenue.
Appellant by: B.L. Meena, Sr. D.R.
Respondent by: C.N. Shah
Mahavir Prasad, J.M.
1. This appeal filed by the Revenue is directed against the order of the learned Commissioner (Appeals)-XI, Ahmedabad dated 5-9-2013 pertaining to assessment year 2002-03 and following grounds have been taken:
1. The learned Commissioner (Appeals) has erred in law and on facts in deleting the addition of Rs. 73,77,700 on account of variation in purchase of cloth not shown in the audit report.
2. The learned Commissioner (Appeals) has further erred in ignoring the fact that the assessee failed to comply with the directions given by the Hon'ble ITAT for furnishing bills and vouchers in support of the claim that there was a mistake transferring the quantity from purchase to consumption without giving a matching effect n monetary and has revenue neutral effect.
 SUBSCRIBE FOR FULL CONTENT
|