Income Tax Appellate Tribunal - Rajkot
Vijay Timber Industries Pvt. Ltd.,, ... vs The Additional Commissioner Of Income ... on 30 July, 2019
IN THE INCOME TAX APPELLATE TRIBUNAL
RAJKOT - RAJKOT BENCH
BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER
& SHRI AMARJIT SINGH, ACCOUNTANT MEMBER
आयकरअपीलसं.ITA No. 431/Rjt/2016
नधा रणवष /Asstt. Year: 2005-06
Vijay Timber Industries Vs. Addl. CIT
Pvt. Ltd. Gandhidham Range,
Klapesh S. Doshi & Co. Gadhidham
Chartered Accountants
411, Cosmo Complex Mahila
College Circle,
Rajkot 360001
थायीले खासं . /जीआइआरसं . /PAN/GIR No.: AAA CV7 089 B
अपीलाथ / (Appellant) तयथ /
् (Respondent)
Assessee by : Shri Kalpesh Doshi, AR
Revenue by : M/s. Namita Khurana, Sr. DR
सन
ु वाईक तार!ख/Date of Hearing : 16/07/2019
घोषणाक तार!ख/Date of Pronouncement: 30/07/2019
आदे श/O R D E R
PER AMARJIT SINGH - AM:
The appeal filed by the assessee for A.Y. 2005-06, arise from order of the
CIT(A)-XX, Ahmedabad dated 04.04.2012, in proceedings under section 143(3) of
the Income Tax Act, 1961; in short "the Act".
2. The fact in brief that return of income declaring income of Rs. 10,23,800/-
was filed on 21.10.2006. The case was subject to scrutiny. During the course of
assessment proceeding the AO has noticed that assessee has failed to deduct tax at
source and also defaulted in depositing the TDS in time as prescribed in the
Income Tax Act. Therefore, the AO has made disallowance of Rs. 2,03,991/- u/s.
40(a)(ia) of the Act.
ITA No. 431/Rjt/2012
A.Y. 2005-06
3. The assessee filed appeal before the Ld. CIT(A). Ld. CIT(A) has restricted
the addition to the extent of Rs. 17,587/- on which the tax was not deducted and
other addition was deleted as the TDS amount deducted was deposited before the
due date of filing the income tax return in accordance with amendment made by
the Finance Act, 2008. The other addition of Rs. 1,16,571/- was made for not
deducting as per sec. 195 of the Act on payment of interest income to the non-
resident.
4. The third addition was made by the AO was to the amount of Rs.
94,52,468/- on account of under valuation of stock. During assessment the AO has
noticed that assessee has shown closing stock at Rs. 10,42,26,955/-, however, the
AO has computed the valuation of stock on basis of valuation of material as per
FIFO method to the amount of Rs. 10,51,79,423/-. The assessee could not explain
the variation in the valuation of stock therefore, difference of stock of Rs.
9,52,468/- was added to the total income of the assessee.
5. The assessee has filed appeal before the Ld. CIT(A). Ld. CIT(A) has
dismissed the appeal of the assessee on the ground that assessee could not
controvert the finding of the AO and directed the AO for adopting the revised
closing stock as opening stock of succeeding year.
We have heard rival contention and perused the material on record.
Regarding first ground of appeal pertaining to disallowance of Rs. 17,587/- on
account of non-deduction of tax, it is noticed that the Ld. CIT(A) has deleted all
the addition wherein the assessee has furnished evidence of depositing the amount
of TDS collected before the due date of filing of income tax return, however, in
respect of interest amount of payment of Rs. 17,587/- the assessee has not made
any deduction of tax, therefore, the Ld. CIT(A) has restricted the disallowance to
the extent of Rs. 17,587/- only.
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ITA No. 431/Rjt/2012
A.Y. 2005-06
6. During the course of appellate proceeding before us the assessee could not
substantiate with supporting document of any compliance to the TDS provision in
respect of the payment of RS. 17,587/-. Therefore, we do not find any substance in
this ground of appeal of the assessee. The same is dismissed.
Regarding other disallowance of Rs. 1,16,571/- the Ld. Counsel has brought
to our notice that assessee has duly deducted TDS as payment of interest and
contended that AO has wrongly disallowed the claim of the assessee. We restore
this issue to the file of the AO for deciding afresh after verification of the
supporting material to be produced by the assessee in support of its claim that TDS
was duly deducted on the payment of interest of Rs. 1,16,571/-. Therefore, this
ground of appeal of the assessee is allowed for statistical purpose.
7. The third ground of appeal of the assessee is pertained to addition of Rs.
9,52,468/- on account of under valuation of stock.
During the course of assessment the AO has computed the value of closing
stock on the basis of material on record according to FIFO method adopted by the
assessee and noticed that there was under valuation of stock to the extent of Rs.
9,52,648/- and same was added to the total income of the assessee.
8. The Ld. CIT(A) has sustained the addition as assessee has failed to
controvert the finding of the AO and made a request for adopting the closing stock
of the year under consideration as opening of the succeeding year.
During the appellate proceeding before us the assessee could not controvert
the finding of the AO with any relevant supporting material. In the light of above
facts and after taking into consideration the material on record we do not find any
error in the decision of the CIT(A). However, the AO is directed to adopt the
closing stock computed by him for the year under consideration as opening stock
of the succeeding year. Therefore, the alternative plea of the assessee to consider
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ITA No. 431/Rjt/2012
A.Y. 2005-06
the closing stock as opening stock has been allowed. Therefore, this ground of
appeal of the assessee is partly allowed.
9. In the result, appeal of the assessee is partly allowed.
[Order pronounced in the Court on 30-07-2019.]
Sd/- Sd/-
(RAJPAL YADAV) (AMARJIT SINGH)
JUDICIAL MEMBER TRUE COPY ACCOUNTANT MEMBER
Ahmedabad; Dated 30/07/2019
TANMAY
आदे श क त ल प अ े षत / Copy of Order Forwarded to:-
1. अपीलाथ / The Appellant
2. +यथ / The Respondent.
3. संबं(धतआयकरआय,
ु त/ Concerned CIT
4. आयकरआयु,त(अपील) / The CIT(A)
5. -वभागीय त न(ध, आयकरअपील!यअ(धकरण/ DR, ITAT,
6. गाड फाईल / Guard file.
आदे शानुसार/ BY ORDER
उप/सहायकपंजीकार (Dy./Asstt.Registrar) आयकरअपील!यअ(धकरण, अहमदाबाद / ITAT, Rajkot
1. Date of dictation : 25-07-2019
2. Date on which the typed draft is placed before the : 25-07-2019 Dictating Member.
3. Date on which the approved draft comes to the : 30-07-2019 Sr.P.S./P.S
4. Date on which the fair order is placed before the :
Dictating Member for pronouncement.
5. Date on which fair order placed before Other Member :
6. Date on which the fair order comes back to the : 31 -07-2019 Sr.P.S./P.S.
7. Date on which the file goes to the Bench Clerk. : 31-07-2019
8. Date on which the file goes to the Head Clerk. :
9. The date on which the file goes to the Assistant :
Registrar for signature on the order.
10. Date of Despatch of the Order :
4