Income Tax Appellate Tribunal - Chandigarh
Asstt. Cit vs X.L. Petrochem (P) Ltd. on 3 May, 2004
Equivalent citations: (2004)87TTJ(CHD)827
ORDER
M.A. Bakshi V.P. The appeal of the revenue for assessment year 1996-97 is directed against the order, dated 16-3-1999 of Commissioner (Appeals), Patiala. The only dispute involved in this appeal is relating to the addition of Rs. 1,40,500 deleted by the Commissioner (Appeals) out of addition of Rs. 1,53,360.
2. Parties have been heard and record perused. The relevant facts, briefly stated, are that the assessing officer had noticed a discrepancy in sales of Rs. 1,53,360 in the account of ICL. When confronted, the assessee explained that the goods had been sold to ICL in the year under appeal but the same had been rejected. While preparing the trading account, the assessee had reduced the sales by Rs. 1,53,360 but credited the closing stock by Rs. 1,40,600. Since the goods have been returned in the subsequent year by ICL, the assessing officer was of the view that the assessee had suppressed the sales to the tune of Rs. 1,53,360. He accordingly, made the addition of the said amount. The learned Commissioner (Appeals) had accepted the explanation of the assessee that at best the profit attributable to the sales of Rs. 1,53,360 could be assessed to tax in the year under appeal in so far as it is not disputed that the goods had been returned by ICL in the subsequent assessment year. In our considered view, the facts not being in dispute, there is no justification for making the entire addition of Rs. 1,53,360 on account of sales made to ICL. The fact that the assessee had debited the sales by an amount of Rs. 1,53,360 and credited the closing stock by an amount of Rs. 1,40,500, is not disputed. Therefore, assuming for argument sake that the assessee ought to have reflected the sales of Rs. 1,53,360 made to ICL in the year under appeal, the addition to the closing stock of Rs. 1,40,500 on account of the returned goods was to be reduced. As a result of these entries, there would be a profit of Rs. 12,860 only to be assessed on account of the said sales to ICL. This is exactly what the Commissioner (Appeals) has done. He has sustained the addition of Rs. 12,800, against which the assessee is not in appeal. The Commissioner (Appeals) has also referred to RG-1 register maintained by the assessee under Excise Rules. Since the facts stated by the assessee have been verified with reference to the excise records and satisfactory explanation has been furnished by the assessee in regard to the discrepancy in the sales made to ICL, the Commissioner (Appeals), in our view, is justified in reducing the addition of Rs. 12,860 from Rs. 1,53,360. Finding no merit in the appeal of the revenue, we dismiss the same.
3. In the result, revenue's appeal is dismissed.