TaxTMI Login
Just a moment...
Press 'Enter' to add multiple search terms. Rules for Better Search
of 
of 
No Folders have been created
Are you sure you want to delete "My most important" ?
NOTE:
of of 
All Case Laws
of of All Case Laws
Note
Bookmark
Share
Don't have an account? Register Here
of <h1>Revenue appeal dismissed as Tribunal upholds CIT(A)'s decision in favor of assessee</h1> The Revenue's appeal against the deletion of Rs. 26,00,000 addition by the Commissioner of Income-tax (Appeals) for assessment year 2005-06 was dismissed. ... Addition - Survey u/s 133A - Held that: it is clear from the assessment order itself that this firm M/s. Vishal Jewellers stood dissolved with effect from 6-5-2004, and the closing stock as on 6-5-2004 was taken over by the company, M/s. Vishal Gold and Precious Stones Ltd - It is also not in dispute that the survey under section 133A was conducted on 24-2-2005 at the business premises certainly belonging to M/s. Vishal Gold and Precious Stones (P.) Ltd., as the present firm was not existing at that point of time - Therefore, any discrepancy in the stock can be considered in the hands of the company, but not in the hands of the present firm - Decided in favour of assessee. Issues:- Appeal against deletion of addition of Rs. 26,00,000 by the Commissioner of Income-tax (Appeals) for assessment year 2005-06.Analysis:1. Background and Assessment by AO:- The Assessing Officer conducted a survey under section 133A revealing the dissolution of M/s. Vishal Jewellers and its takeover by M/s. Vishal Gold and Precious Stones (P.) Ltd.- Discrepancy of Rs. 26 lakhs in stock valuation was noted during the survey.- Assessee voluntarily surrendered Rs. 60 lakhs for taxation, including Rs. 26 lakhs by one of the partners.- AO added Rs. 26 lakhs to the present assessee-firm's income.2. Decision of CIT(A):- CIT(A) observed that the firm was dissolved before the survey and stock was taken over by M/s. Vishal Gold and Precious Stones (P.) Ltd.- No variation in stock quantity was found.- Letters to AO regarding stock position were not considered.- Addition of Rs. 26 lakhs was deleted by CIT(A).3. Appellate Tribunal's Decision:- Tribunal noted the dissolution of M/s. Vishal Jewellers and the takeover by M/s. Vishal Gold and Precious Stones (P.) Ltd.- Survey conducted at premises of M/s. Vishal Gold and Precious Stones (P.) Ltd., not the present firm.- Value of closing stock should be at cost price or market price, whichever is lower.- Addition not warranted as stock did not belong to present partnership firm.- Upheld CIT(A)'s decision to delete the addition.4. Conclusion:- Revenue's appeal against deletion of Rs. 26,00,000 addition dismissed.- Addition not justified as stock discrepancies pertained to a different entity.- Tribunal upheld CIT(A)'s decision, ruling in favor of the assessee.
TaxTMI 
TaxTMI 
