2012 (12) TMI 1050 - AT - Income Tax

Summary

Issues Involved:
1. Addition of Rs. 5,72,03,933/- as premium short accounted.
2. Addition to closing stock for AY 2006-07 amounting to Rs. 1,17,71,039/- to be treated as part of opening stock for AY 2007-08.
3. Acceptance of revised return and allowance of deductions claimed therein.
4. Deletion of interest levied u/s 234A, 234B, and 234C.
5. Deletion of addition of Rs. 47,97,19,585/- and Rs. 2,26,03,642/- on account of difference between sales recorded in the books and sales revenue.

Summary:

(i) Addition of Rs. 5,72,03,933/- as premium short accounted:
No arguments were raised by both parties during the hearing. The CIT(A) directed the Assessing Officer to check the return of income for the subsequent year and delete the inclusion if the addition made in the current year is offered to tax in the subsequent year. This issue raised by the assessee is dismissed.

(ii) Addition to closing stock for AY 2006-07 amounting to Rs. 1,17,71,039/- to be treated as part of opening stock for AY 2007-08:
The assessee argued that the addition of Rs. 1,17,71,039/- confirmed in respect of closing stock as on 31.3.2006 should form part of opening stock as on 01.04.2006. The CIT(A) rejected this additional ground, stating that the shortage of stock claimed by the appellant does not warrant accounting for such shortage as opening stock for AY 2007-08. The assessee's appeal on this ground is dismissed.

(iii) Acceptance of revised return and allowance of deductions claimed therein:
The assessee filed a revised return claiming deduction of Rs. 98,03,505/- on account of arrears of salary and wages and rent. The Assessing Officer held the revised return invalid as it was filed after one year from the end of the assessment year. The CIT(A) upheld this decision. However, the Tribunal restored the issue to the file of the CIT(A) to consider the claim of deduction on merits, allowing this ground for statistical purposes.

(iv) Deletion of interest levied u/s 234A, 234B, and 234C:
The levy of interest is mandatory and consequential. Therefore, this ground is dismissed.

(v) Deletion of addition of Rs. 47,97,19,585/- and Rs. 2,26,03,642/- on account of difference between sales recorded in the books and sales revenue:
The CIT(A) deleted the addition made by the Assessing Officer, stating that the sales were supported by invoices and entries in the books audited by Chartered Accountants. The Tribunal upheld this decision, noting that the addition was not warranted as there was no evidence of realization beyond what was recorded in the books. The department's appeal on this ground is dismissed.

Conclusion:
The appeal filed by the assessee is partly allowed for statistical purposes, and the department's appeal is dismissed.