2017 (3) TMI 985 - HC - Income Tax

Deduction of excess stock found on the date of survey - Karta of HUF liability - Held that - CIT(A) as well as the Tribunal have rendered a concurrent finding of fact that the stock found on the date of survey to the extent of the value of ₹ 79.91 lakhs did not belong to the respondent assessee but to its karta in his individual capacity. Thus, to the above extent, it could not be added to its closing stock. This concurrent finding of fact has not been shown to be perverse in any manner.Thus, the proposed questions do not give rise to any substantial question of law. Thus, not entertained. Non accepting the sale price of furniture - Value of closing stock at lower than the tag price - Held that - On the basis of the above facts, we find that the value of closing stock at lower than the tag price of the furniture by 50% so held by the Tribunal is a possible view. No substantial question of law.

Summary

Issues:
Challenge to order under Section 260A of the Income Tax Act, 1961 for Assessment Year 2006-07. Reframed questions of law regarding statements recorded during survey u/s 133A, valuation of stock, and sale price of furniture.

Analysis:
1. The appeal challenged the order by the Income Tax Appellate Tribunal (the Tribunal) for Assessment Year 2006-07. The Revenue raised reframed questions of law regarding the Tribunal's treatment of statements recorded during a survey under section 133A of the Income Tax Act, 1961, the valuation of stock, and the sale price of furniture.

2. During the survey in August 2005, a difference was found in physical inventory and stock recorded in the books of account. The respondent explained that excess stock belonged to associated concerns. However, the Assessing Officer added the difference in stock value to the income, not accepting the explanations provided.

3. The Commissioner of Income Tax (Appeals) partially allowed the respondent's appeal, concluding that excess stock belonged to the karta of the respondent HUF. The valuation of stock at a lower price was also addressed, disagreeing with the respondent's claims.

4. Both the Revenue and the respondent appealed to the Tribunal. The Tribunal upheld the findings regarding the excess stock not belonging to the respondent. It also supported the valuation of furniture at a price lower than the tag price based on industry practices.

5. The Tribunal dismissed the appeal, noting that the concurrent findings of fact regarding stock ownership and the valuation of furniture were reasonable and not perverse. The proposed questions of law were deemed unsubstantial and not entertained.

6. The Tribunal's decision on the valuation of stock and furniture was upheld, and the appeal was dismissed with no order as to costs.