TaxTMI 
TaxTMI 
2014 (5) TMI 542
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....t of variation in closing stock. 2. Whether Ld. CIT (A) was correct on facts and circumstances of the case and in law in deleting the disallowance of Rs.5,00,000/- made by the AO on account of fuel expenses. 3. Whether Ld. CIT (A) was correct on facts and circumstances of the case and in law in deleting the disallowance of Rs.6,00,000/- made by the AO on account of stores and spares expenses." 2. As per the record, the assessee company is engaged in the business of manufacturing, trading, export and import of chemicals. It filed its return of income for the year on 29.9.09, declaring income of Rs. 1,40,07,659/-. Subsequently, on 26.11.09, it filed revised return, declaring income of Rs. 1,43,11,522/-. Still later, on 14.12.09, it f....
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....turn was on account of mistake in taking the value of the closing stock at a higher figure of Rs. 37,68,727/-, as contended before the AO. The said mistake had been committed by the staff of the assessee company while filing the original e-return. In column 4 of Part A - P&L, of the return of income, the closing stock had wrongly been mentioned as Rs. 2,65,61,073/-, instead of Rs. 2,27,92,346/-. It was as a result of this mistake, that the income shown in the return had been taken at Rs. 1,40,07,659/-, on which, the assessee company had paid a total tax of Rs. 47,61,204/-. The mistake came to the notice of the management later, when the concerned employee had left the services of the company. The original return and the tax filed had also b....
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....e above that there had been no change in the original stock figures of the assessee as audited and as contained in the revised return filed on 14.12.09. Further, the assessee also submitted the following documents before the ld. CIT (A) in support of its claim as had been done before the AO:- a) Printed Audited Balance Sheet showing the value of inventory as per schedule no.6 to be Rs.227,92,346/-. b) Daily stock statement received from the works and as per the excise records as on 31.03.2009 submitted to Central Excise Department and State Bank of India, New Delhi. c) Statement of closing stock of finished goods and work-in-progress as on 31.03.2009 submitted to department of Central Excise, Bhiwadi. d) Consumption chart as on ....
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....(A) is correct in holding that the AO wrongly took the value of stock of the assessee, as shown in the original return of income. Therefore, the ld. CIT (A) rightly directed the AO to adopt the figure of the assessee's closing stock at Rs. 2,27,92,346/-, as declared in the revised return filed on 14.12.09, as against the value of closing stock of Rs. 2,65,61,073/-, as taken by the assessee in its original return of income. 12. In view of the above, finding no error therein, the CIT (A)'s order on this issue is confirmed. Ground No.1 is rejected. 13. Addressing Ground No.2, the AO compared the fuel expenses of the assessee for the year under consideration with those of the immediately preceding assessment year and found that there was ....
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....egard also remained un-rebutted. Accordingly, the CIT (A)'s order in this regard is also upheld. Ground No.2 is rejected. 19. Coming to Ground No.3, on comparing the stores and spares expenses of the assessee for the year under consideration with those for the immediately preceding year, the AO found there to be a substantial increase. Holding that the bills/vouchers produced by the assessee were not fully verifiable, out of the total expenses of Rs. 23,90,280/-, the AO made a disallowance of Rs. 6 lac. 20. The ld. CIT (A) deleted the disallowance considering that during the year, the assessee company had purchased various items of spares and equipment required for repair and maintenance. It was the assessee's explanation, which was n....
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.... cheque payment, but for some small purchases done on urgent basis at the plant itself, in cash, through regular cash memos, entry qua which was duly made in the assessee's books of account. Further, the assessee had not claimed this stock as expense u/s 37(1) of the IT Act. Rather, an asset was created in the inventory to be claimed in the next year. The expenditure of Rs. 23,90,280/- was, thus, found by the ld. CIT (A) to be the figure of closing stock as per the assessee's books of account. The financial statement produced showed that the assessee had incurred an expenditure of Rs. 22,44,950/- during the year on stores and spares as against a similar expenditure of Rs. 43,21,655/- in the immediately preceding year. The books of account s....