The Proviso to section 113 imposing surcharge on block assessments is retrospective in operation

Rupa & Co. Ltd. Versus CIT (Calcutta HC)- Honorable High Court has held that  in the absence of any finding that any portion of the books of account maintained by the assessee was fictitious or contained wrong entry, the Assessing Officer was not entitled to make an average of discount without discarding the actual discount given by the assessee for the relevant year as appearing from the books of account. An assessee has a right to give different rates of discount to his different customer depending upon his relation with such customer or on the basis of business policy depending upon the time of sale, particular item of sale or the region or the place of sale and unless, any of the entries relating to such discounts is found to be wrong, the Assessing Officer is bound to accept the actual discount given by the assessee.

It was also held that If AO accepts the physical quantity of the stock and also the books, no undisclosed income can be determined under section 158(b) read with Section 158BB on the allegation of undervaluation of stock in the absence of any material and/or finding that the books of account were not correct.

IN THE HIGH COURT AT CALCUTTA
Special Jurisdiction (Income-Tax)

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