2013 (1) TMI 978 - AT - Income Tax

Summary

Issues involved: Revision order u/s 263 of the Income Tax Act for AY 2000-01, discrepancy in purchase valuation, application of wrong conversion factor for dettol soap.

Revision Order u/s 263:
The appeal challenged the revision order by the CIT u/s 263 of the IT Act for AY 2000-01, focusing on discrepancies in purchase valuation. The CIT found a stock difference of 1737.45 mt ton unaccounted for in the assessment, directing the Assessing Officer to tax this value less 5% for breakerages. The CIT highlighted factual errors in quantitative figures of opening stock, purchases, and sales, indicating more sales quantity than available stock. The lack of inquiry by the Assessing Officer was deemed a clear case of non-application of mind, justifying the CIT's jurisdiction u/s 263.

Application of Wrong Conversion Factor:
The Hon'ble Supreme Court identified a mistake by the assessee in applying the wrong conversion factor for dettol soap, which was not communicated to the Assessing Officer. The Court remanded the matter for re-examination by the ITAT to determine the correct conversion factor applicable to the soap. The assessee acknowledged the mistake in stock details and accepted the need for examination. The ITAT directed the Assessing Officer to verify this aspect based on relevant records and submissions for a just resolution.

Conclusion:
The appeal was allowed for statistical purposes, emphasizing the need for a thorough examination of the conversion factor issue by the Assessing Officer. The judgment highlighted the importance of accurate valuation and application of correct factors in assessments to ensure fairness and compliance with tax laws.