Tribunal rules in favor of partnership firm in appeal against Income Tax Commissioner.

The Tribunal ruled in favor of the appellant, a partnership firm in the brick manufacturing business, in an appeal against the Commissioner of Income Tax-(A)-6, Kolkata's order for the assessment year 2015-16. The Tribunal deleted the addition related to the under-valuation of closing stock, citing that the valuation by the survey team was arbitrary and erroneous. Additionally, the Tribunal declared the assessment order invalid due to jurisdictional issues, as the assessing officer did not have the authority to issue the notice. Consequently, the Tribunal allowed the appeal and ruled in favor of the assessee on both issues.

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Issues:
1. Valuation of closing stock.
2. Jurisdiction of assessing officer.

Valuation of Closing Stock:
The appeal was against the Commissioner of Income Tax-(A)-6, Kolkata's order regarding the assessment year 2015-16. The assessee, a partnership firm in the brick manufacturing business, faced additions to its income due to under-valuation of closing stock and disallowance of certain expenses. The CIT(A) upheld the addition related to under-valuation but deleted the disallowance of expenses. The assessee challenged the decision, arguing that the valuation by the survey team was based on rough estimates and should not have been relied upon. The appellant contended that the stock should have been valued as per the books of account since no defects were found in them. The Tribunal agreed with the appellant, stating that the survey team's method of valuation was arbitrary and erroneous, especially considering the lack of expertise and manpower for accurate counting. As the books of account were accepted and not rejected, the Tribunal ruled in favor of the assessee and deleted the addition.

Jurisdiction of Assessing Officer:
The additional ground raised by the assessee questioned the jurisdiction of the assessing officer who issued the notice u/s. 143(2) of the Income Tax Act, 1961. The assessee argued that the assessing officer did not have jurisdiction over the case, as it belonged to a different circle. The assessing officer from a different circle completed the assessment without issuing a notice u/s. 143(2) of the Act. The Tribunal referred to previous decisions and held that the assessment order was invalid in law due to the lack of jurisdictional authority issuing the notice. Citing judgments from the Lucknow and Kolkata benches of the Tribunal, the Tribunal ruled in favor of the assessee, declaring the assessment order as bad in law.

In conclusion, the Tribunal allowed the appeal of the assessee, deleting the addition related to the valuation of closing stock and ruling the assessment order as invalid due to jurisdictional issues.

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