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of <h1>High Court upholds Tribunal's decision on income tax appeal, emphasizing accounting consistency.</h1> <h3>The Commissioner of Income Tax, Jalandhar II, Jalandhar Versus M/s Srishti Construction</h3> The Commissioner of Income Tax, Jalandhar II, Jalandhar Versus M/s Srishti Construction - TMI Issues:1. Addition of closing work in progress2. Disallowance of interest on interest-free loansIssue 1: Addition of Closing Work in ProgressThe appeal was filed by the revenue under Section 260A of the Income Tax Act against an order passed by the Income Tax Appellate Tribunal. The Assessing Officer had made additions on account of closing stock/WIP, including material, wages, earth filling, and fuel expenses. The Commissioner of Income Tax (Appeals) partly allowed the appeal but confirmed additions for closing work in progress and disallowance of interest on interest-free loans. The Tribunal partly allowed the appeal, noting that the assessee had consistently followed the same accounting method for many years. The Tribunal held that the Assessing Officer was not justified in making additions on account of closing work in progress as the method of accounting had not been rebutted by the revenue. The Tribunal emphasized the principle of consistency in accounting methods and the need for justification for adopting a different methodology. The Tribunal found no grounds to support the Assessing Officer's decision and ruled in favor of the assessee.Issue 2: Disallowance of Interest on Interest-Free LoansRegarding the disallowance of interest on interest-free loans, the Tribunal noted that this issue was not pressed before them. The Tribunal's order dated 27.12.2012 clearly stated that the second issue was not pursued, indicating that it did not require further consideration. As a result, the Tribunal did not address this issue, and it was not deemed to be a substantial question of law. Therefore, the matter of disallowance of interest on interest-free loans was not further discussed or analyzed in the judgment.In conclusion, the High Court dismissed the appeal as no substantial question of law arose from the issues raised by the revenue. The judgment highlighted the importance of consistency in accounting methods and the need for authorities to justify any departure from established practices. The Tribunal's findings were upheld as they were deemed to be factual and not legally flawed.
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