TaxTMI 
TaxTMI 
2013 (8) TMI 659
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....ng the income regarding despatches to sub-contractors and made the additions under dispute accordingly. He has discussed various principles of accounting and based on the statements given by the assessee, he arrived at the amounts which were added. These additions were also contested before the CIT(A), mainly relying on the legal principles and further stating that the assessee was consistently accounting the income; and this method was being followed year after year and not found fault with in any of the earlier years, and therefore, question of making additions in respect of these three years alone does not arise. The CIT(A), however, confirmed the additions made in the respective assessment years. 5. Before us, the learned counsel for the assessee submitted that there were some factual errors committed in the assessment stage, thereby incomes which were already offered on the concluded contracts was mistaken to be despatches to the sub-contractors and accordingly the Assessing Officer brought the same to tax. It was informed that the assessee has recognized income on concluded contracts during the year and also income on estimated basis on despatches to sub-contractors on per....
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....urse of the assessment for the Assessment Year 2008-09 is on Page-25 of the Paper Book. It contains concluded sales in respect of few items. The statement showing the full details of the sales concluded are available on Page-27 of the Paper Book. The part statement on Page-25 is shown separately in the statement on Page27. As can be seen from the Assessment Order for the Assessment Year 2008-09, the Assessing Officer felt that the statement showing "Midhani Despatches Details Against DAs" is the same as "Despatches to Sub-contractors". These can be seen from the Para-3.1 on Page-2 of the Assessment Order for the Assessment Year 2008-09 which reads as under:- "3.1. On verifying the Profit & Loss Account, the assessee has added to sales sum of RS.23.89 crores towards Income from Despatches to Subcontractors. However, during the course of assessment proceedings, it is found that the actual despatches to sub-contractors is of RS.29.14 crores. During the course of assessment proceedings, the assessee-company was asked about the discrepancy of RS.5.25 crores regarding despatches to sub-contractors." 4. The amount of RS.29.14 crores is not the amount of despatches to sub- contractor....
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....ed statements from the sales accounts which can be found in the sales account of the appellant- company 8. From these details, it is clear that the addition made is only a difference between the amount of deemed sales in the Profit & Loss Account and final sales recognised also credited to the Profit & Loss Account in the same year. Therefore, the additions made by the Assessing Officer represent only the difference between two independent and different items which are already in the same Profit & Loss Account." Therefore, it was submitted that the two streams of income were already offered to tax and in the circumstances, the question of the Assessing Officer bringing the difference of the two incomes on legal principles, does not arise at all. 6. We have considered the issue and seen the respective enclosures and sales invoices. There seems to be a prima facie mistake committed by the Assessing Officer in treating the difference between the concluded sales and estimated sales on despatches made to sub-contractors as not accounted, whereas both the streams of income were already taken to the Profit & Loss Account. If this aspect is found to be correct, there is no need to....
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....d by them in their books of account. However, the CIT(A) rejected the contentions of the assessee by stating as under- "8.4. The assessment order, submissions of the appellant, copy of MOU with VSSC and the additional evidence filed by the appellant from VSSC confirming that the stocks were recorded in their books are gone through. The issue for consideration is that when the appellant is maintaining stocks of metals on behalf of others and only charging a fixed amount for these services, apparently there is no need to admit the same in their books as stock-in-trade. However, going by the treatment given by the appellant, there appears reason in the assessment made. Admittedly, the appellant is showing the amounts received from M/s. VSSC as advances and reducing this advance amount by the value of supply of metals. Then the closing tock of metals should invariably be brought into books and the value of the stocks should be credited. As pointed out by the Assessing Officer, the closing value of stocks is being shown neither in the books of appellant nor in the books of M/s. VSSC. The present confirmation filed by the appellant form M/s.VSCC show that the item-wise quantity of sto....