2016 (2) TMI 1111 - AT - Income Tax

Tribunal affirms CIT(A) decision, dismisses Revenue's appeal.

The A.C.I.T. Circle – (22) New Delhi Versus Shri Jagdish Prasad Gupta

The Tribunal upheld the CIT(A)'s decision to delete additions in both grounds. The Revenue's appeal was dismissed, with the Tribunal finding the CIT(A)'s ... Addition on account of difference in details of closing stock - Held that:- CIT(A) deleted the addition by coming to the conclusion that the accounts of the assessee had been audited and the closing stock of ₹ 31,53,914/- appears therein, the AO had no basis for making an addition of ₹ 24,143,676/- only on the basis of a working submitted on behalf of the assessee during the assessment proceedings. The ld. CIT(A) further held that as the assessee had pleaded clerical error, the AO was not justified in making the addition only on the basis of closing stock summary submitted by the ld. AR of the assessee and supposedly drawn up by the office accountant while ignoring the audit report and audited accounts. The ld. CIT(A) concluded that no reliable material forms the basis of the addition of ₹ 24,14,676/- and the same deserves to be deleted. We find that the ld. CIT(A) was correct in arriving at the conclusion Issues:1. Deletion of addition by CIT(A) based on Tribunal order2. Deletion of addition on account of difference in details of closing stockAnalysis:1. The Revenue appealed against the CIT(A)'s order deleting an addition of Rs. 2,76,21,682, following a Tribunal order in the assessee's own case for A.Y 2008-09. The Tribunal found the CIT(A)'s decision in line with the Tribunal order and upheld it, dismissing Ground No. 1 raised by the Revenue.2. The second ground involved the deletion of an addition of Rs. 24,14,676 made by the AO due to a mistake in the details of closing stock. The accounts of M/s Jindal Service Station were audited, showing a closing stock of Rs. 31,53,914. An error was acknowledged by the accountant, leading to the addition by the AO. The CIT(A) deleted this addition, which was challenged by the Revenue. The Tribunal upheld the CIT(A)'s decision, noting that the AO lacked a basis for the addition and that the audit report and audited accounts were ignored. The Tribunal found the CIT(A)'s reasoning valid, leading to the dismissal of Ground No. 2 raised by the Revenue.In conclusion, the Tribunal dismissed the Revenue's appeal, upholding the CIT(A)'s decision to delete the additions in both grounds.