TaxTMI 
TaxTMI 
2023 (7) TMI 464
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....n of the case, the Worthy CIT(A) in Appeal No. 10429/2/2017-18 has erred in passing that order in contravention of the provisions of S. 250(6) of the Income Tax Act, 1961. 2. That on law, facts and circumstances of the case, the Worthy CIT(A) has erred in confirming the action Ld. AO wherein he had erred in making the impugned additions beyond the issues for which the case was selected under "Limited Scrutiny guidelines" and therefore the impugned additions deserves to be deleted. 3. That on law, facts and circumstances of the case, the Worthy CIT(A) has erred in confirming the action Ld. AO wherein he had erred in making addition of Rs. 2,12,45,569/- by enhancing the declared closing stock value by said amount which is 51....
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....f assessment proceedings and the assessee has duly filed its submission stating that it is following Percentage Completion Method for valuation of closing stock. It was submitted that the AO never disputed the method of valuation of stock implied by the assessee. Therefore, once this verification was done, the scope of limited scrutiny was completed and no further proceedings were warranted. However, the AO has gone beyond the scope of limited scrutiny and proceeded to revalue the stock without converting limited scrutiny into complete scrutiny. As per the Board's Instruction No.20/2015 dated 29.12.2015, it was submitted that in the instant case, the case was selected under Limited Scrutiny Guidelines and the AO never sought permission from....
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....evenue have to be recognized which in turn will also show the work-in-progress and the closing stock. It was submitted that the assessee has reworked the revenue recognition as per the Percentage Completion Method as per the Guidance Note issued by the ICAI whereby the closing stocks works out to Rs. 4,94,01,649/- and the sales works out to Rs. 5,98,62,570/- and after taking into consideration the opening stock of Rs. 20,41,000/- and purchases of Rs. 9,64,19,577/- it will show gross profit of Rs. 1,08,03,643/-. It was, accordingly, submitted that basis the Percentage Completion Method as per the Guidance Note issued by ICAI, there would be change in the value of the closing stock, in addition there would be change in the value of the sales ....
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....d upon the facts that the assessee's counsel had conceded that it was not maintaining a stock register and that the stock in trade can't be quantified. He had also held that apportioning different rates of construction to different categories of flats was not logical and this-tactic did not lead to calculation of stock on a reasonable basis. The submission also reveal that the assessee claims that since closing stock has been tweaked that should be matched by a corresponding updation of sales/ turnover. The logic if applied would lead to a further enhancement of the profits for the year. Without prejudice it is also the case that revenue recognition under percentage completion method is based on a proportionate basis of the....