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TMI Blog2018 (8) TMI 664X X X X Extracts X X X X X X X X Extracts X X X X ..... of the same in the valuation of closing stock as per section 145A of the Act. Hence we hold that there is no violation of section 145A of the Act. All these details were duly available before the ld AO himself which has been duly appreciated by the ld AO while framing the assessment by not making any addition towards the same. The order of the ld AO is neither erroneous nor prejudicial to the interests of the revenue warranting revisionary jurisdiction u/s 263 of the Act. - Decided in favor of assessee. - I.T.A No. 716/Kol/2017 - - - Dated:- 1-8-2018 - Shri S. S. Godara, JM And Shri M. Balaganesh, AM For The Appellant : Shri Vinod Kumar Jain, AR For The Respondent : Shri P.K. Srihari, CIT DR ORDER Per M.Balaganesh, AM 1. This appeal by the assessee arises out of the order of the Learned Principal Commissioner of Income Tax-3, Kolkata [in short the ld. CIT] in Memo no. Pr. CIT, Kol/u/s.263/AC,Cir-8(2)/2016-17/14935-14938 dated 23.02.2017 passed u/s 263 of the Act against the order passed by the DCIT, Circle-8(2), Kolkata [in short the ld. AO] under section 143(3) of the Income Tax Act, 1961 [in short the Act ] dated 22.03.2015 for the Assessm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed in Sales but the same was also deducted from Sales which resulted in under assessment of sales to the extent of Sales Tax of ₹ 94,99,332/-. Hence, Sales Tax of ₹ 94,99,332/- debited to Sales was required to be disallowed and added back. Omission to do so resulted in under assessment of income of ₹ 94,99,332/-. B. TCS is a prepaid tax and the assessee is eligible for claiming credit of the same while computing tax payable. Accordingly, the assessee claimed TDS/TCS credit of ₹ 1,16,597/- and the same was allowed in the assessment. Further, the assessee claimed deduction of TCS of ₹ 1,14,270/- from sales. TCS is not deductible from Sales but deduction of the same from sales resulted in reduction of income. Deduction of TCS of ₹ 1,14,270/- claimed by the assessee was required to be disallowed and added back. Omission to do so resulted in under assessment of income of ₹ 1,14,270/-. 5. The assessee stated that there were clerical errors in the Notes to Accounts in Point No. 2.6. related to Revenue Recognition wherein it was mentioned as under:- Sales are recognized , net of returns and trade discounts, on transfer of signi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s was cleared. 5. That above facts could be verified from the assessments records of the company. 6. That on facts there is no under statements of income as pointed out in our cause notice therefore we request you kindly drop the proceedings. Thanking You, Yours Faithfully V.K. Jain (AR) 6. The ld CIT however ignored the entire contentions of the assessee together with the details and explanations offered in response to show cause notice and proceeded to set aside the order of the ld AO treating the same as erroneous in as much as it is prejudicial to the interests of the revenue and passed an order u/s 263 of the Act. Aggrieved, the assessee is in appeal before us. 7. We have heard the rival submissions. From the facts available on record, we find that the ld AO had issued a notice u/s 154 of the Act dated 2.7.2015 to rectify the mistake apparent from record in the assessment completed u/s 143(3) of the Act on 27.3.2015 for the Asst Year 2012-13 on the following ground:- Sales Tax and TCS wrongly allowed The assessee gave a reply dated 14.7.2015 stating that in the Balance Sheet Note No. 18, Gross Sales includes Excise Duty, Sales Tax a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2,62,59,695/- ( B) Total Sale of Services 1,62,26,674/- ( C ) Less: Excise Duty 67,44,948/- Sales Tax 94,99,332/- Tax Collected at Source 1,14,270/- Service Tax 15,15,274/- 1,78,73,824/- Net Revenue from Operations (A) + (B) (C ) 2,46,12,545/- 7.2. We find that the tax collected at source of ₹ 1,14,270/- represents TCS collected from buyers as per section 206C of the Act. In the case of sale of alcoholic beverages for human consumption, the Act authorize the seller to collect from the buyer , the applicable TCS which is included in the invoice raised on the buyer and the said TCS was duly remitted by the assessee to the account of the Central Government. The assessee also had placed the entire date wise and party wise s ..... X X X X Extracts X X X X X X X X Extracts X X X X
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