| The Tax Publishers2020 TaxPub(DT) 4886 (Pune-Trib) INCOME TAX ACT, 1961
Section 70
As assessee claimed that due to mistake of its accountant, wrong opening stock was taken from previous year's closing stock, however, AO did not look into assessee's financial statements rectifying the mistake showing wrong opening stock; the AO's action of restricting the assessee's claim of brought forward loss deserved proper verification and hence, the matter was remanded to the AO to determine the actual loss for the year under consideration and subsequent assessment years.
|
Loss - Allowability - Wrong valuation of opening stock by accountant -
Assessee claimed brought forward loss at Rs. 92,79,353. However, AO on examination of the assessee's return of income found that the assessee showed the loss at Rs. 22,69,353. Accordingly, the AO restricted the excess loss of Rs. 70,00,000 to Rs. 22,69,353. Assessee submitted that there was a mistake of the accountant, who valued the opening stock less by Rs. 70,00,000 by taking previous year's closing stock at Rs. 60,43,800 instead of Rs. 1,30,43,800. It was further submitted that the assessee re-casted the trading and profit and loss account with opening stock at Rs. 1,30,43,800. Held: It was found that AO and CIT (A) did not look into assessee's financial statements rectifying the mistake showing wrong opening stock. Further, the assessee raised the same before the CIT (A) but however he found that the assessee filed no such materials to demonstrate as to which caused such gross inadvertent mistake of not disclosing a huge amount of Rs. 70,00,000. Therefore, the matter was remanded to the AO for proper verification of the assessee's account and to determine the actual loss for the year under consideration and subsequent assessment years.
REFERRED :
FAVOUR : Matter remanded
A.Y. : 2012-13 & 2014-15
 SUBSCRIBE FOR FULL CONTENT
|