2011 (2) TMI 1480 - AT - Income Tax

Summary

Issues involved: Appeal against deletion of addition u/s 153A/C of the Income Tax Act for assessment years 2007-08 & 2008-09.

Summary:
1. The appeals by Revenue were against the CIT (A)'s order deleting the addition u/s 153A/C of the Act.
2. A search operation under section 132 revealed incriminating material related to the assessee company.
3. The assessing officer disagreed with the assessee's accounting method, leading to losses in both years.
4. CIT (A) found the assessing officer's addition improper as similar accounting methods were accepted in other group cases.
5. Revenue appealed CIT (A)'s decision.
6. Departmental representative argued for regular additions based on accounting standards and potential tax liability.
7. Assessee's counsel defended the consistent accounting policy followed by the group companies.
8. ITAT Hyderabad found the assessing officer's rejection of the accounting method unjustified and upheld CIT (A)'s decision.
9. Both appeals by Revenue were dismissed.

This judgment highlights the importance of consistent application of accounting methods and the need for clear findings to support additions made by assessing officers.