2011 (3) TMI 1662 - AT - Income Tax

Summary

Issues involved: Revenue's appeal against the order of Commissioner of Income tax (Appeals)-XI, Ahmedabad regarding the deletion of addition of excess stock found during a survey taxed u/s.69B of the I.T. Act for the assessment year 2005-06.

Summary:
The Revenue appealed against the order of the Commissioner of Income tax (Appeals)-XI, Ahmedabad, which deleted the addition of excess stock found during a survey and taxed u/s.69B of the I.T. Act. The assessee, engaged in retail trading of garments, disclosed unaccounted stock of &8377; 12,03,462 during a survey operation. The Assessing Officer made a further addition of the same amount, contending that the disclosed stock was squared up in the trading account. The Ld. CIT(A) deleted the addition after considering the trading account produced by the assessee, which clearly showed the additional income offered towards excessive stock. The Revenue's appeal was dismissed as the disclosed income was found to be correctly accounted for in the trading account, upholding the Ld. CIT(A)'s decision.

The Ld. CIT(A) observed that the disclosed income made by the appellant towards additional income was reflected in the trading account, despite debiting and crediting the closing stock of &8377; 12,03,462. The entries made by the assessee in its books of account accurately represented the additional income offered towards excessive stock. Therefore, the Ld. CIT(A) decided to delete the addition made by the Assessing Officer, as the disclosed income was appropriately accounted for in the trading account. The order passed by the Ld. CIT(A) was upheld, and the Revenue's appeal was dismissed.

Order pronounced in Open Court on 15/03/2011.