HK Dutta & Co Vs ACIT (ITAT Kolkata)
ITAT Kolkata held that making the addition for under valuation of closing stock for not adding making charges specifically for the year under appeal cannot be held to be justified unless and until corresponding adjustment is made for the opening stock. Accordingly, addition deleted.
Facts- The assessee is a partnership firm engaged in the business of manufacturing and sale of gold jewellery through showroom located at Bowbazar and Garia. Return of income, e-filed for Assessment Year 2013-14 on 29/09/2012 declaring income of Rs. 2,31,95,241/-. Case selected for scrutiny through CASS followed by issuing notice u/s 143(2) and 142(1) of the Act. Various additions/ disallowances were made which included disallowance u/s 35(1)(ii) made towards donation given to School of Human Genetics and Population.
Conclusion- Held that the issue stands squarely covered against the assessee by the decision of this Tribunal in the case of Hiralal Bhandari ITO wherein the donations given to School of Human Genetics and Population, have been held as bogus.
Held that making the addition for under valuation of closing stock for not adding making charges specifically for the year under appeal cannot be held to be justified unless and until corresponding adjustment is made for the opening stock. It is also evident that the assessee is consistently maintaining books of account and not including making charges in opening stock. Thus we are of the considered view that the addition of ₹ 339,000/-, is uncalled for and the same is hereby deleted.
FULL TEXT OF THE ORDER OF ITAT KOLKATA
1. The present appeal is directed at the instance of the assessee against the order of the Learned Commissioner of Income Tax (Appeal)-11, Kolkata, (hereinafter the “ld. CIT(A)”) dt. 30/08/2019, passed u/s 250 of the Income Tax Act, 1961 (“the Act”) for the Assessment Year 2013-14 which is arising out of the assessment order framed u/s 143(3) of the Act dt. 23/02/2016.
2. The assessee has raised the following grounds of appeal:-
“1. That on the facts and in the circumstances of the case, Ld. CIT(A) has erred in confirming the action of AO who disallowed claim of assessee for weighted deduction u/s 35(1)(ii) amounting to Rs. 26,25,000/- @ 175% in respect of donation of Rs. 15,00,000/- to School of Human Genetics and Population.
2. That on the facts and in the circumstances of the case, Ld. CIT(A) has erred in partly allowing the addition on account of under valuation of closing stock made by AO and confirming the addition of Rs. 8,77,921/- by making his own calculation.
3. That on the facts and circumstances of the case, Ld. CIT(A) has erred in confirming the addition of Rs. 1,05,57,773/- u/s 69 of the Income Tax Act, 1961 on account of gold loan obtained from partner Mr. Pradip Kumar Gupta and carried forward from earlier years.
4. That on the facts and in the circumstances of the case, Ld. CIT(A) has erred in confirming the disallowance of Rs.1,74,745/- made by AO u/s 40A(3) of Income Tax Act, 1961
5. That on the facts and in the circumstances of the case, Ld. CIT(A) erred in not adjudicating the additional grounds raised in course of hearing in respect of addition on account of making charges of Rs.3,39,000/- included in closing stock by AO.
6. That the appellant craves leave to add, alter, adduce or amend any ground
or grounds on or before the date of hearing of the appeal.”
3. Brief facts of the case as culled out from the records are that the assessee is a partnership firm engaged in the business of manufacturing and sale of gold jewellery through showroom located at Bowbazar and Garia. Return of income, e-filed for Assessment Year 2013-14 on 29/09/2012 declaring income of Rs. 2,31,95,241/-. Case selected for scrutiny through CASS followed by issuing notice u/s 143(2) and 142(1) of the Act. Various informations were called for in the questionnaire issued u/s 142(1) of the Act. Submissions were filed and income assessed at Rs. 5,87,39,440/- after making following
