Case Law Details
Nickunj Eximp Enterprises Pvt. Ltd. Vs ACIT (ITAT Mumbai)
ITAT Mumbai held that addition under section 69 of the Income Tax Act based on tally data having various inherent discrepancy is unsustainable as AO failed to verify or ask the assessee to reconcile the same from actual books of accounts or physical stocks.
Facts- A survey action u/s. 133A of the Act was carried out in the case of the assessee and M/s. Nickunj EDM Wires and Consumables P. Ltd on 16.11.2017. Statement of Shri Vithal Gopal Patil was recorded u/s 133A of the Act on 16.11.2017. During the course of the survey, details of the stock of raw materials and finished goods and tally data extracted from the stock register were provided.
AO issued notice stating that there is a huge discrepancy in stock and the closing balance maintained in the computer accounting system as against the actual calculation of the closing balance. AO was of the view that the value of the closing balance has to be calculated by applying the formula; opening balance + purchases -sales. Thus, AO was of the view that difference of Rs. 3,17,90,089/- should be added u/s 69 of the Act. CIT(A) had simply upheld the order of AO. Being aggrieved, the present appeal is filed.
Conclusion- The entire inference which has been drawn by the AO is based on seized tally data which has been demonstrated before us, by Ld. Counsel could not have been relied due to various discrepancies and the figures could not tallied due to entry errors. Nowhere there is any defect or discrepancy in the physical stock found and the entries in the regular books of account.
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