TaxTMI 
TaxTMI 
2018 (8) TMI 1623
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.... "In the instant case, A.O. in course of assessment included Rs. 49,88,155/- on account of undervaluation of closing stock and Rs. 3,39,55,396/- on account of overstated S/Creditors and Advance from parties in computing the total income of the assessee. Aggrieved by the order of assessing Officer, the assessee preferred an appeal before the Ld CIT(A)-XXXVI, Kolkata. Ld. CIT(A) called for the remand report from the A.O. on both issues and the erstwhile A.O. confirmed the additions in a remand report. On the basis of said remand report CIT(A) has confirmed the additions of Rs. Rs. 49,88,155/- on account of undervaluation of closing stock. On the other ground, Ld. CIT(A) has observed that the differences of S/Creditors and advance from parties between the accounts impounded during survey and the return filed by the assessee are only Rs. 2,28,193/- and Rs. 2,20,000/-respectively. Accordingly, he confirmed the addition of Rs. 4,48,000/- granted relief of Rs. 3,35,07,396/-." 4. The grievances raised by the assessee in ITA No.87/Kol/2015 Assessment Year 2011-12 are as follows: "1. That on the facts and in the circumstances of the case, the Ld. C.I.T.(Appeals) is wron....
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.... 1,62,720.00 Partner's remuneration 2,40,000.00 2,40,000.00 Closing Stock 2,97,78,896.93 3,47,67,051.85 The assessing officer compared the differences in valuation of a fewitems of closing stock which were physically countable easily between the e-filed return and that of the computerized accounts of the computer installed in the business premises of the assessee, which are as follows: Sl. No. Particulars As per e-filing return As per computerized accounts maintained in the installed computer in the business premises 1. Diesel Generator Set 5,77,793.00 10,77,793.00 2. Electric Motor 59,25,231.00 93,33,914.28 3. Machinery & Spare parts 8,00,026.88 8,14,714.67 4. Engine 2,35,410.00 4,55,917.19 5. Oil Filter Machine 8,81,260.00 18,81,260.00 6. Plant & Machinery 48,80,181.60 58,80,181.60 7. Starter 45,921.00 2,42,159.48 8. Transformer 2,22,450.00 27,84,883.34 After going through the above mentioned chart, the ld AO noted that it is easily understandable that the assessee had intentionally understated the valuation of closing stock in ....
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....ve that the assessee had undervalued its closing stock which was physically verified and estimation made. The assessee was migrating the data from tally 6 to tally 9 and in this process of migration most of the stock were data lost and irrelevant data crept in the software, hence the difference between the physical stock and computerized stock occurred. The assessee has in his possession, the complete details of stock vide Paper book page 48 to 51. Therefore, the closing stock shown by the assessee in its profit and loss account and balance sheet to the tune of Rs. 2,97,78,896/- should be taken as correct value of closing stock. 10. On the other hand, the ld. DR for the Revenue has primarily reiterated the stand taken by the Assessing Officer which we have already noted in our earlier para and is not being repeated for the sake of brevity. 11. We have given a careful consideration to the rival submissions and perused the materials available on record, we note that a major portion of the assessee`s business consist of purchasing scrap materials from different parties and organizations and sale them to different parties and in most of scrap purchases through auction stock remai....
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....e course of Survey from the computerized account extracted from the computer, it was seen that closing stock as on the end of the year had been suppressed by Rs. 49,88,155/-. The plea taken by assessee that the difference between closing stock was due to migration from one generation of Tally package to anothergeneration (Computer).Therefore, we are of the view that a reconciliation statement may be submitted by the assessee to reconcile the numbers written in the profit and loss account and the numbers written in the computer on the date of survey explaining the data lost during migration of Tally package. Considering entirety of the facts and circumstances of the case and the material on record, we direct the assessee to submit reconciliation statement before the ld AO, showing reconciliation between stock shown in the profit and loss account and stock shown in computer and we also direct the ld AO to examine the reconciliation and adjudicate the issue in accordance with law, therefore, we allow this issue raised by the assesseein ground No. 1 in ITA No.87/kol/2015 and ground No.1 raised by the Revenue in ITA No. 36/Kol/2016, for statistical purposes. 13. Ground No.2 raised....
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....1,64,606 + Rs. 2,67,90,790], 15 Aggrieved by the stand so taken by the Assessing Officer, the assessee carried the matter in appeal before the ld. CIT(A) who has restricted the disallowance to the extent of Rs. 4,48,000/. Aggrieved by the order of the ld. CIT(A), the Revenue as well as assessee is in appeal before us.The Ld. DR for the Revenue has primarily reiterated the stand taken by the Assessing Officer, which we have already noted in our earlier para and is not being repeated for the sake of brevity. On the other hand, ld Counsel for the assessee submitted that assessee has submitted reconciliation of various credit balances therefore, the addition restricted by ld CIT(A) to the tune of Rs. 4,48,000/- should also be deleted. 16. We have given a careful consideration to the rival submissions and perused the materials available on record, we note that sundry debtors consist of Credit balance when advance from customers is received, normally to whom credit sales is made. The nomenclature of debtors is given when the transaction is of sales. Therefore, there are two ledgers of Sundry debtors which is being maintained by the assessee. Sundry Creditors consists of Normal t....