M/s Basu & Hajra Builders, Rajarhat V. A.C.I.T., Circle-50(1), Kolkata

ITA 2240/KOL/2019

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 4502 (ITAT-KOLKATA)
• Duration Of Justice: 4 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-02-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2015-2016
• Appeal Filed On: 01-10-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCH (SMC), KOLKATA [BEFORE SHRI P.M. JAGTAP, VICE PRESIDENT (KZ)] I.T.A. NO. 2240/KOL/2019 ASSESSMENT YEAR: 2015-16 M/S. BASU & HAJRA BUILDERS..............................................................APPELLANT K.C. PAUL APARTMENT (NAR RAJARHAT P.S.) RAJARHAT, KOLKATA 700 135. [PAN: AAHFB 5060 E] VS ACIT, CIR-50(1), KOLKATA....................................RESPONDENT UTTARAPAN BUILDING, MANICKTALA CIVIC CENTRE, KOLKATA. APPEARANCES BY: SHRI K.M. ROY, FCA APPEARING ON BEHALF OF THE ASSESSEE. SHRI JAYANTA KHANRA, JCIT, SR. DR APPEARING ON BEHALF OF THE REVENUE. DATE OF CONCLUDING THE HEARING : JANUARY 15, 2020 DATE OF PRONOUNCING THE ORDER : FEBRUARY 26, 2020 ORDER THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF LD. CIT(A) 15, KOLKATA DATED 22.08.2019 AND THE SOLITARY ISSUE INVOLVED THEREIN RELATES TO THE ADDITION OF RS. 1,59,573/- MADE BY THE AO AND CONFIRMED BY THE LD. CIT(A) ON ACCOUNT OF ALLEGED UNDER VALUATION OF CLOSING STOCK. 2. THE ASSESSEE IN THE PRESENT CASE IS A PARTNERSHIP FIRM WHICH IS ENGAGED IN THE BUSINESS OF PROPERTY DEVELOPMENT. THE RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATION WAS FILED BY IT ON 24.09.2015 DECLARING A TOTAL INCOME OF RS. 41,58,900/-. AS NOTED BY THE ASSESSING OFFICER, CLOSING STOCK AS REFLECTED IN THE PROFIT AND LOSS ACCOUNT OF THE ASSESSEE WAS RS. 2,55,30,499/- WHEREAS THE CLOSING STOCK AS SHOWN IN THE TAX AUDIT REPORT WAS RS. 2,56,90,072/-. THIS DIFFERENCE OF RS. 1,59,573/- WAS TREATED BY THE AO AS UNDER VALUATION OF CLOSING STOCK BY THE ASSESSEE AND THE SAME WAS ADDED BY HIM TO THE TOTAL INCOME OF THE ASSESSEE. ON APPEAL, THE LD. CIT(A) CONFIRMED THE SAID ADDITION 2 I.T.A. NO. 2240/KOL/2019 ASSESSMENT YEAR: 2015-16 M/S. BASU & HAJRA BUILDERS MADE BY THE AO. AGGRIEVED BY THE ORDER OF THE LD. CIT(A), THE ASSESSEE HAS PREFERRED THIS APPEAL BEFORE THE TRIBUNAL. 3. I HAVE HEARD THE ARGUMENTS OF BOTH THE SIDES AND ALSO PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. AS POINTED OUT BY THE LEARNED COUNSEL FOR THE ASSESSEE FROM THE RELEVANT PORTION OF THE TAX AUDIT REPORT PLACED AT PAGE NO 12 OF THE PAPER BOOK, THERE WAS AN INADVERTENT MISTAKE COMMITTED BY THE AUDITOR IN GIVING THE FIGURE OF CLOSING STOCK AT RS. 2,56,90,072/- INSTEAD OF THE CORRECT FIGURE OF RS. 2,55,30,499/- AND THIS POSITION GETS FURTHER SUPPORTED FROM THE FACT THAT THE OPENING STOCK FOR THE SUBSEQUENT YEAR WAS TAKEN BY THE ASSESSEE AT RS. 2,55,30,499/- AS REFLECTED IN THE PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31.03.2016 I.E. A.Y. 2016-17. IT IS THUS CLEAR THAT THE CLOSING STOCK AS REFLECTED IN THE PROFIT AND LOSS ACCOUNT OF THE ASSESSEE FOR THE YEAR UNDER CONSIDERATION AT RS. 2,55,30,499/- WAS A CORRECT FIGURE AND THERE WAS NO UNDER VALUATION OF CLOSING STOCK AS ALLEGED BY THE AO ON THE BASIS OF WRONG FIGURE INADVERTENTLY REPORTED IN THE AUDIT REPORT. THE ADDITION MADE BY THE AO AND CONFIRMED BY THE LD. CIT(A) ON ACCOUNT OF THE ALLEGED UNDER VALUATION OF CLOSING STOCK THUS IS NOT SUSTAINABLE AND DELETING THE SAME, I ALLOW THIS APPEAL OF THE ASSESSEE. 4. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 26 TH FEBRUARY, 2020. SD/- (P.M. JAGTAP) VICE PRESIDENT DATED: 26/02/2020 BISWAJIT, SR. PS 3 I.T.A. NO. 2240/KOL/2019 ASSESSMENT YEAR: 2015-16 M/S. BASU & HAJRA BUILDERS COPY OF ORDER FORWARDED TO: 1. SHRI RANAJIT CHAUDHURI, 75, HEM CHANDRA NASKAR ROAD, 2 ND FLOOR, KOLKATA 700 010. 2. ACIT, CIR-45, KOLKATA. 3. THE CIT(A) 4. THE CIT 5. DR TRUE COPY, BY ORDER, ASSISTANT REGISTRAR / H.O.O. ITAT, KOLKATA