Priyo Gopal Bishoyi Grandson Vs ACIT (ITAT Kolkata)
We find that Revenue has erred in comparing two accounting statements, which are un-comparable to each other because Revenue has taken book stock on the basis of Tally Software, whereas physical stock on the basis of ORIEL Software. It is also observed that ld. Assessing Officer failed to appreciate the explanation of the assessee in right perspective. The assessee with the help of audited accounts explained to the ld. Assessing Officer that taxable income is being computed on the basis of ORIEL POS Software details. During the course of hearing, this fact has been demonstrated before us from the audited accounts. For Financial Year 2011-12, i.e. Assessment Year 2012-13, the assessee has shown Closing Stock at Rs.3,39,87,692/-, whereas as per Tally Software, this Closing Stock was of Rs.2,33,48,269/-. In the Audited Accounts for A.Y. 2012-13, which is prior to the date of survey, Closing Stock has been shown equivalent to the amount declared in ORIEL Software. The ld. Counsel for the assessee took through all these details available in the paper book on pages no. 30 to 50. Thus we are satisfied that excess stock has been worked out by the ld. Assessing Officer on the basis of an erroneous mathematical exercise. This stock has been worked out not on account of particular items, rather on account of valuation difference, which has been worked out by appreciating two different Softwares for the purpose of book stock, vis-a-vis actual stock and if some exercise is being carried out in this manner, then difference is bound to happen. The ld. Assessing Officer failed to appreciate this aspect during the assessment proceedings, when it was duly explained by the assessee. We have made reference to Closing Stock for A.Y. 2012-13 simply for the reason that these details are not being put up before us as a consequence to the survey, rather these details were put up before the Revenue prior to the survey. Therefore, in our opinion, addition is not sustainable.
FULL TEXT OF THE ORDER OF ITAT KOLKATA
The assessee is in appeal before the Tribunal against the order of ld. Commissioner of Income Tax (Appeals)-13, Kolkata dated 28.06.2019 passed for Assessment Year 2013-14.
2. The assessee has taken 3 grounds of appeal, out of which peripheral arguments are being taken in Grounds No. 2 & 3, which do not call for recording any specific finding separately.
3. The substantial grievance of the assessee has been raised in Ground 1, wherein it is pleaded that the ld. CIT(Appeals) has erred in confirming the addition of Rs.44,06,108/- on account of alleged difference in the stock found during the course of survey.
3. Brief facts of the case are that the assessee has filed its return of income on 29.09.2013 disclosing total income of Rs.85,22,230/-. The assessee at the relevant time was engaged in the business of retailer of H/L Cotton & Art Silk, hosiery & readymade garments under the name & style of M/s. Priya Gopal Bishoyi Grandson. A survey under section 133A of the Income Tax Act was conducted at the business premises of the assessee on 11.12.2012. According to the facts emerging out from the assessment order, during the course of survey, the survey team computed the physical stock available in the store and worked out its valuation on the basis of ORIEL POS (Software System). According to the Revenue, the assessee has been maintaining its accounts in Tally Software and when the stocks were matched by the Survey Team by taking figures from the accounts maintained and under Tally Software, vis-a-vis physical stock taken under ORIEL POS Software, then a huge difference was found. During the course of assessment proceeding, the assessee was asked for an explanation. In order to appreciate all these aspects more scientifically, we take note of the assessment order where all these details are being noticed by the ld. Assessing Officer in a tabular form. The relevant part reads as under:-
“In response to this, the assessee has furnished his explanation on 26.02.2016 raising certain points in support of his claim as below”
(a) The assessee has explained that there was casing by the Deptt. of mistakes of Rs.18,75,185/- while calculating the physical stock valuation. The details of physical stock valuatin as per survey tem and by the assessee are as follows:-
