DCIT, Ludhiana V. M/s Stelco Strips Ltd., Ludhiana

ITA 89/CHANDI/2013

• Counselvise Citation: [2016] 121 COUNSELVISE.COM (IT) 2515 (ITAT-CHANDIGARH)
• Duration Of Justice: 2 year(s) 11 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-01-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 17-12-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 04-02-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Depreciation; Period of limitation; Revised return; Unabsorbed depreciation
• Section: 143(3); 139(5)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH,CHANDIGARH BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND MS.RANO JAIN, ACCOUNTANT MEMBER ITA NO. 89/CHD/2013 ASSESSMENT YEAR: 2009-10 THE DCIT, VS M/S STELCO STRIPS LTD., CENTRAL CIRCLE-II, C-122, PHASE-V, LUDHIANA. FOCAL POINT, LUDHIANA. PAN: AACCS5084K (APPELLANT) (RESPONDENT) DEPARTMENT BY : SHRI SUSHIL KUMAR RESPONDENT BY : SHRI ASHWANI KUMAR DATE OF HEARING : 17.12.2015 DATE OF PRONOUNCEMENT : 05.01.2016 O R D E R PER BHAVNESH SAINI,JM THIS APPEAL BY REVENUE IS DIRECTED AGAINST THE ORDER OF LD. CIT(APPEALS)-I LUDHIANA DATED 02.11.20 12 FOR ASSESSMENT YEAR 2009-10. 2. WE HAVE HEARD LD. REPRESENTATIVES OF BOTH THE PARTIES, PERUSED THE FINDINGS OF AUTHORITIES BELOW AND CONSIDERED THE MATERIAL AVAILABLE ON RECORD. 3. ON GROUND NO. 1, 2 AND 3, REVENUE CHALLENGED TH E DELETION OF ADDITION OF RS. 7,26,81,174/- ON ACCOUN T OF REVALUATION OF THE STOCK. 2 4. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE COMPANY FILED ITS RETURN OF INCOME FOR THE YEAR UND ER CONSIDERATION AT AN AMOUNT OF RS.4,14,33,640/- ON 30.09.2009. THE SAID RETURN WAS REVISED ON 30.03.20 11 SHOWING NET BUSINESS LOSS OF RS.14,08,340/- AND CAR RIED FORWARD UNABSORBED DEPRECIATION OF RS.2,98,38,194/- . THE ASSESSING OFFICER, DURING THE COURSE OF ASSESSM ENT PROCEEDINGS, OBSERVED THAT THE ASSESSEE HAD CLAIMED DEDUCTION ON ACCOUNT OF MISTAKE IN THE VALUATION OF STOCKS AMOUNTING TO RS.7,26,81,174/-. THE ASSESSEE CLAIMED BEFORE THE ASSESSING OFFICER THAT THE CLOSI NG STOCK HAD BEEN MISTAKENLY OVERVALUED EVEN THOUGH TH E PHYSICAL QUANTITIES WERE THE SAME. THE ASSESSING OF FICER DID NOT ACCEPT THE DECREASE IN VALUATION OF THE CLO SING STOCK IN THE REVISED RETURN ON THE BASIS OF FOLLOWI NG OBSERVATIONS: I) THE ASSESSEE HAS DULY VERIFIED PARTICULARS OF INCOME SHOWN IN THE INCOME TAX RETURN FILED BY IT ON 30.09.2009 UNDER SIGNATURES OF MANAGING DIRECTOR, AS CORRECT AND COMPLETE FURTHE R CERTIFYING THAT THE AMOUNT OF TOTAL INCOME AND OTHE R PARTICULARS SHOWN THEREIN AS TRULY STATED AND IN ACCORDANCE WITH THE PROVISIONS OF THE INCOME TAX ACT, 1961. II) THE ACCOUNTS OF THE ASSESSEE COMPANY HAVE BEEN SUBJECTED TO STATUTORY AUDIT UNDER COMPANIES ACT,1956 AND THE AUDIT REPORT DATED 30.09.2009 DULY AUDITED BY M/S M.P GOYAL & CO. AND SIGNED BY SH.RAJNISH GOYAL, .F.C.A. AND THEREFORE THE FIGURES OF BALANCE SHEET AND MANUFACTURING & TRADING ACCOUNTS CANNOT BE ALTERED. III) THE VALUATION OF STOCK AND OPENING AND CLOS ING BALANCE OF THE STOCK HAS BEEN DULY CHECKED AND CERTIFIED BY THE AUDITORS IN THE AUDIT REPORT. 3 IV) THE BOOK PROFIT HAS BEEN FREEZED UNDER THE COMPANIES ACT, 1956 AND THERE IS NO SCOPE FOR ITS ALTERATION. V) THE RESERVES OF THE COMPANY ALREADY STAND INCREASED WITH THE CORRESPONDING PROFITS SHOWN DURING THE YEAR. VI) THE ASSESSEE HAS REVISED HIS RETURN AFTER ALMOS T 18 MONTHS AND THE ASSESSEE HAS NOT FILED ANY PROOF IN THE FORM OF ANY BILLS TO JUSTIFY REVISING THE VALUATION OF STOCK, BY GIVING ITS QUANTITY AND RATE S OF THE GOODS AS ON THE DATE OF VALUATION. VII) DURING THE COURSE OF ASSESSMENT PROCEEDINGS TH E ASSESSEE DID NOT FILE ANY PROOF BY WAY OF BILLS TO JUSTIFY REVALUATION OF STOCK. 4(I) THE ASSESSING OFFICER, THEREFORE, P ROCEEDED TO ASSESS THE APPELLANT BY MAKING AN ADDITION O F RS.7,26,81,174/-. 5. THE ASSESSEE CHALLENGED THE ADDITION BEFORE LD. CIT(APPEALS) AND WRITTEN SUBMISSION OF THE ASSESSEE IS REPRODUCED IN THE APPELLATE ORDER IN WHICH THE ASSE SSEE EXPLAINED AS UNDER : RETURN DECLARING AN INCOME OF RS. 4,14,33,640/- WAS FILED ON 30.09.2009, WHICH WAS SUBSEQUENTLY REVISED ON 30.03.2011 DECLARING A NET LOSS OF RS. 14,08,340/-. THE RETURN WAS REVISED ON THE BASIS OF VALUATION OF CLOSING STOCK OF WORK IN PROCESS OF HR. COILS. THE ASSESSEE COMPANY HAVE TWO UNITS ONE AT C-122 FOCAL POINT, LUDHIANA AND THE SECOND ONE AT JASPALON. BOTH THESE UNITS ARE LIABLE TO EXCISE AND THE STOCK IS PROPERTY MAINTAINED AS PER GUIDELINES OF THE EXCISE DEPARTMENT. THE QUANTITY OF CLOSING STOCK OF HR COIL WAS TAKEN IN 4 THE AUDIT REPORT AS PER EXCISE DEPARTMENT, BUT VALUATION MADE WHILE FURNISHING THE FIGURE TO THE AUDITOR WAS TAKEN ON THE HIGHER SIDE BY THE PERSON WHO WAS MADE RESPONSIBLE FOR THE SAID JOB AND SUBSEQUENTLY THE SAID PERSON WAS DISMISSED FROM THE SERVICE FOR SUCH A BLUNDER WHICH SUBSEQUENTLY EFFECT THE IMAGE OF THE COMPANY. VALUATION OF CLOSING STOCK SO MADE WAS SUBMITTED DURING THE COURSE OF ASSESSMENT PROCEEDINGS. PHOTOCOPY-OF THE SAME IS AGAIN ENCLOSED FOR YOUR KING PERUSAL. THE LEARNED ASSESSING OFFICER DID NOT ACCEPT THE REVISED RETURN AND COMPUTATION OF TAXABLE INCOME AND ASSESSMENT UNDER SECTION 143(3) OF THE INCOME TAX ACT 1961 WAS MADE TAKING THE ORIGINAL RETURNED INCOME. ON THE BASIS OF CHANGE OF VALUATION OF CLOSING STOCK, THE RETURN FOR THE ASSESSMENT YEAR 2009-2010 WAS REVISED ON 30.03.2011 DECLARING NET LOSS OF RS. 14,08,340/-. THE LEARNED ASSESSING OFFICER DID NOT ACCEPTED THE REVISED RETURN AND MADE THE ASSESSMENT UNDER SECTION 143(3) OF THE INCOME TAX ACT,1961 TAKING THE INCOME ORIGINALLY DECLARED WHICH IS NOT BASED ON THE FACTS AND CIRCUMSTANCES OF THE CASE. THE LEARNED ASSESSING OFFICER NEVER ASKED THE ASSESSEE COMPANY TO PRODUCE THE SPECIFIC BILL ON ACCOUNT OF PURCHASE OF HR COIL. COMPLETE BOOKS OF ACCOUNTS ALONG WITH SUPPORTING VOUCHERS ETC. WERE PRODUCED DURING THE COURSE OF THE ASSESSMENT PROCEEDINGS AS IS APPARENT FROM THE BODY OF THE ASSESSMENT ORDER. MONTH WISE DETAILS OF PURCHASE/SALE OF FINISHED GOODS ALONGWITH DETAILS OF CLOSING STOCK WERE SUBMITTED DURING THE COURSE OF ASSESSMENT PROCEEDINGS. ORIGINAL BILLS ON ACCOUNT OF HR COIL WAS NOT TAKEN IN ACCORDANCE WITH THE PURCHASE BILLS WHILE FURNISHING THE 5 SAID DETAIL TO THE AUDITOR. THE LEARNED ASSESSING OFFICER NOWHERE ASKED THE ASSESSEE COMPANY TO PRODUCE THE ORIGINAL BILLS FOR PURCHASE OF HR COIL. HOWEVER, COMPLETE BOOKS OF ACCOUNTS ALONGWITH THE SUPPORTING VOUCHERS WERE PRODUCED DURING THE COURSE OF ASSESSMENT PROCEEDINGS AND THE LEARNED ASSESSING OFFICER NEVER POINTED OUT ANY DISCREPANCY BEFORE FINALIZING THE ASSESSMENT. THE LEARNED ASSESSING OFFICER HAS ALSO NOT POINTED ANY DISCREPANCY ON THE REVISED CALCULATION OF CLOSING STOCK BASED ON THE EXCISE RECORDS. THE HON'BLE SUPREME COURT HAS ALSO HELD IN THE CASE OF CHAINRUP SAMPATRAM V. COMMISSIONER OF INCOME TAX REPORTED IN 24 ITR(1953) AS UNDER: 'IT IS MISCONCEPTION TO THINK THAT ANY PROFIT ARISES OUT OF THE VALUATION OF THE CLOSING STOCK AND THE SITUS OF ITS ARISING OR ACCRUAL IS WHERE THE VALUATION IS MADE. VALUATION OF UNSOLD STOCK AT THE CLOSE OF AN ACCOUNTING PERIOD IS A NECESSARY PART OF THE PROCESS OF DETERMINING THE TRADING RESULTS OF THAT PERIOD AND CAN IN NO SENSE BE REGARDED AS THE SOURCE OF SUCH PROFIT. NOR CAN THE PLACE WHERE SUCH VALUATION IS REGARDED AS THE SITUS OF THEIR ACCRUAL. THE SOURCE OF THE PROFIT AND GAINS OF A BUSINESS AND THE PLACE OF THEIR ACCRUAL IS WHERE THE BUSINESS IS CARRIED ON. AS SUCH PROFIT CAN BE CORRECTLY ASCERTAINED ACCORDING TO THE METHOD ADOPTED BY THE ASSESSEE ONLY AFTER BRINGING INTO THE TRADING ACCOUNT HIS CLOSING STOCK WHEREVER IT MAY EXIST AND THE WHOLE OF THE PROFIT MUST BE TAKEN TO ACCRUE OR ARISE AT THE PLACE OF CARRYING ON THE BUSINESS.' HENCE, KEEPING IN VIEW THE FACTS, CIRCUMSTANCES AND LEGAL POSITION OF THE CASE, IT IS REQUESTED THAT THE APPEAL OF THE ASSESSEE ON THIS ISSUE MAY KINDLY BE ACCEPTED AND THE ASSESSING OFFICER MAY BE DIRECTED TO ADOPT THE REVISED RETURN.' 6 4. THE WRITTEN SUBMISSIONS FILED BY THE APPELLANT WERE SENT TO THE ASSESSING OFFICER TO VERIFY THE CLAIM THAT THE VALUATION OF STOCKS AS PER THE REVIS ED RETURN WAS BASED UPON THE DOCUMENTARY EVIDENCE IN THE FORM OF PURCHASE INVOICES AND BOOKS OF ACCOUNTS. IT IS IMPORTANT TO APPRECIATE THAT THE ASSESSING OFFICER IN THE ASSESSMENT ORDER HAD REMARKED AT PAGE NO.3 THAT THE ASSESSEE DID NOT FILE ANY PROOF BY WAY OF BILLS TO JUSTIFY THE REVALUATION OF STOCKS. THE IMPUGNED OBSERVATION OF THE ASSESSING OFFICER WAS HOWEVER CONTESTED BY THE AR OF THE APPELLANT BY SUBMITTING THAT COMPLETE BOOKS OF ACCOUNTS ALONG WITH SUPPORTING VOUCHERS WERE PRODUCED DURING THE COURSE OF ASSESSMENT PROCEEDINGS AND THE ASSESSING OFFICER HAD NEVER POINTED OUT ANY DISCREPANCY ON THE REVISED CALCULATION OF STOCKS BASED UPON EXCISE RECORDS. IT WAS THEREFORE CONSIDERED VITAL TO VERIFY THE CLAIM OF THE APPELLANT WITH REGARD TO THE MISTAKE IN VALUATION AND FOR THIS THE ISSUE WAS REMANDED TO THE ASSESSING OFFICER. THE ASSESSING OFFICER VIDE HIS REPORT DATED 27.09.2012 SUBMITTED HIS COMMENTS AS UNDER: IN THIS CONTEXT, IT IS SUBMITTED THAT IN PURSUANCE OF YOUR DIRECTION, THE ASSESSEE WAS ASKED TO PRODUCE THE RELEVANT BOOKS OF ACCOUNTS AND SUPPORTING DOCUMENTS FOR VERIFICATION AT THIS END. ACCORDINGLY, THE RELEVANT RECORDS, AS PRODUCED BY THE ASSESSEE, WERE VERIFIED VIS-A-VIS THE SUBMISSIONS, FILED WITH YOUR GOODSELF AND FORWARDED TO THIS OFFICE. THE RECONCILED FIGURE, WHEREVER DISCREPANCIES WERE FOUND, HAS BEEN PREPARED. IT MAY HERE BE MENTIONED THAT THE SUBMISSION OF THE ASSESSEE IS BACKED BY THE DOCUMENTS, PRODUCED FOR VERIFICATION AT THIS END. HOWEVER, IT WILL NOT BE OUT OF PLACE HERE TO MENTIO N THAT THE THEN ASSESSING OFFICER WHILE MAKING IMPUGNED ADDITION OF RS.7,26,81,174/-RELIED MORE ON LEGAL ASPECT OF THE CASE WHICH WAS ELABORATELY DISCUSSED AT PARA 4.2 OF THE IMPUGNED ASSESSMENT ORDER. BASICALLY, THE THEN ASSESSING OFFICER TOOK THE STAND THAT SINCE THE ORIGINAL RETU RN WAS FILED ON THE BASIS OF DATA, VERIFIED BY BOTH TH E 7 MANAGEMENT AND THE AUDITOR OF THE ASSESSEE COMPANY AND THERE WAS NO ROOM FOR REVISION OF THAT AUDIT OBSERVATION LATER ON, ANY RETURN FILED SUBSEQUENTLY ON THE BASIS OF REVISE D DATA WAS SIMPLY NON EST AND INFRUCTUOUS. ON THIS BASIS, HE REFUSED TO TAKE COGNIZANCE OF THE REVISED RETURN AND MADE THE IMPUGNED ADDITION, RELYING ON THE DATA, REVEALED IN THE ORIGINAL RETURN. EVEN THE ASSESS, IN COURSE OF REMAND PROCEEDIN GS, COULD NOT COME OUT WITH ANY PLAUSIBLE EXPLANATION IN A BID TO REBUT THE OBSERVATION OF THE THEN ASSESSING OFFICER.' 6. THE LD. CIT(APPEALS) CONSIDERING THE SUBMISSIONS OF THE PARTIES, MATERIAL ON RECORD AND REMAND REPORT F ILED BY THE ASSESSING OFFICER, DELETED THE ENTIRE ADDITION. HIS FINDINGS IN PARA 5 OF THE APPELLATE ORDER ARE REPRO DUCED AS UNDER : 5. I HAVE CONSIDERED THE BASIS OF ADDITIONS MADE BY ASSESSING OFFICER AND ARGUMENTS OF AR ON THE ISSUE AS WELL AS THE VERIFICATION REPORT OF THE ASSESSING OF FICER DURING THE REMAND PROCEEDINGS. IT IS APPARENT THAT THE APPELLANT HAD REVISED HIS RETURN OF INCOME TO CORRE CT THE MISTAKE THAT HAD CREPT IN THE ORIGINAL RETURN O N ACCOUNT OF WRONG VALUATION. THE REVISED RETURN HAS BEEN FILED WITHIN THE TIME PERMISSIBLE IN SECTION 139(5). THE PROVISIONS OF SECTION 139(5) READ AS UN DER: IF ANY PERSON HAVING FURNISHED A RETURN UNDER SUB-SECTION (1) OR IN PURSUANCE OF A NOTICE ISSUED UNDER SUB SECTION (L) OF SECTION 142, ANY OMISSION OR ANY WRONG STATEMENT THEREIN, HE MAY A REVISED RETURN AT ANY TIME BEFORE THE EXPIRY OF ONE YEAR FROM THE END OF THE RELEVANT ASSESSMENT YEAR OR BEFORE THE COMPLETION OF THE ASSESSMENT, WHICHEVER IS EARLIER. 8 SINCE THE REVISED RETURN FILED BY THE ASSESSEE FULF ILLS THE REQUISITE CONDITIONS STIPULATED IN THE STATUTE AS CONTAINED IN SECTION 139(5), THE SAME TAKES THE PLA CE OF THE ORIGINAL RETURN FILED UNDER SECTION 139(1). FURTHER IT IS OPEN TO THE ASSESSING OFFICER TO VERI FY WHETHER THE REDUCTION/INCREASE IN INCOME IN THE REVISED RETURN VIS-A VIS THE ORIGINAL RETURN IS GEN UINE OR MANIPULATION. THE ASSESSING OFFICER IN THIS REGA RD DID NOT LOOK INTO THIS ASPECT AS TO WHETHER THE VALUATION OF STOCKS WAS BASED UPON THE PURCHASE INVOICES AND BOOKS OF ACCOUNTS OR NOT. THE ASSESSIN G OFFICER HAS HOWEVER RECORDED THAT THE ASSESSEE DID NOT PRODUCE THE REQUISITE EVIDENCE TO SUPPORT HIS C LAIM BUT THE SAME HAS BEEN EFFECTIVELY CONTRADICTED BY T HE APPELLANT AS DETAILED ABOVE. THE ASSESSING OFFICER, THEREFORE, HAD BEEN DIRECTED TO VERIFY THE VALUATIO N AND THE RESULTANT FIGURE OF CLOSING STOCK DURING TH E COURSE OF APPELLATE PROCEEDINGS AND THE SAME HAS BEEN ACCEPTED TO BE CORRECT ON THE BASIS OF ASSESSE 'S BOOKS OF ACCOUNTS/PURCHASE INVOICES. IT MEANS THAT THE REVISION IN THE RETURNED INCOME HAD BEEN DONE B Y THE APPELLANT UNDER SECTION 139(5) TO RECTIFY THE MISTAKE THAT HAD CREPT IN THE VALUATION OF STOCKS. IN THE CIRCUMSTANCES THE ACTION OF THE ASSESSING OFFIC ER IN TREATING THE .REVISED RETURN AS NON EST AND INVA LID IS WITHOUT ANY LEGAL BASIS. THE ADDITION MADE ON TH E BASIS OF VALUATION OF CLOSING STOCK AS PER THE ORIG INAL RETURN IS THEREFORE DIRECTED TO BE DELETED. 7. THE LD. DR RELIED UPON ORDER OF THE ASSESSING OFFICER AND SUBMITTED THAT EVEN IF REVISED RETURN U NDER SECTION 139(5) OF THE INCOME TAX ACT WAS FILED WITH IN TIME BUT RETURN CANNOT BE REVISED IN ALL THE CIRCUMSTANCES. HE HAS RELIED UPON DECISION OF MADH YA 9 PRADESH HIGH COURT IN THE CASE OF DEEPNARAIN NAGU A ND COMPANY V CIT 157 ITR 37 IN WHICH THE AUTHORITIES BELOW HELD THAT AS THE ACCOUNTS IN THE ACCOUNTING YEAR WERE MAINTAINED ON MERCANTILE BASIS, THE ASSESSEE C ANNOT BE PERMITTED TO RE-WRITE THE ACCOUNTS AFTER TWO YEA RS AND FURNISH FRESH ACCOUNTS ON CASH BASIS . THE REFERENCE WAS ANSWERED AGAINST THE ASSESSEE. HE HAS ALSO RELIED UPON DECISION OF DELHI HIGH COURT IN THE CASE OF GOLDEN INSULATION AND ENGINEERING LTD. V CIT 305 ITR 427 I N WHICH IT WAS HELD THAT, THE RESULT OF CHANGE IN METHOD OF VALUATION WAS THAT THE ASSESSEE SHOWED THE LOSS WHI CH IS AN INCREASE FROM THE EARLIER LOSS SHOWN. THIS WAS CLEARLY NOT A LEGALLY VALID REASON NOR IT WAS BONAFIDE. ON THE OTHER HAND, LD. COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE AUTHORITIES BELOW AND SUBMITTED THAT ASSESSEE MAINTAINED SAME METHOD OF VALUATION OF STOCK. WHEN THE ASSESSEE DISCOVERED OMISSION AND WRONG STATEMENT THEREIN, ASSESSEE FURNISHED REVISED RETURN WHICH WAS SUPPORTED BY COMPLETE RECORD AND THE BOOKS OF ACCOUNT. THE ASSESSING OFFICER IN THE REMAND PROCEEDINGS ACCEPTE D THE FACTUAL THINGS IN FAVOUR OF THE ASSESSEE THEREFORE, DEPARTMENTAL APPEAL HAS NO MERIT AND SAME MAY BE DISMISSED. HE HAS ALSO RELIED UPON DECISION OF THE GUJRAT HIGH COURT IN THE CASE OF CIT V HIMGIRI FOOD S LTD. 333 ITR 508 IN WHICH IT WAS HELD THAT THE VAL IDITY OF RETURN FILED UNDER SECTION 139(5) OF THE ACT CAN NOT BE GONE INTO, IF THE REVISED RETURN IS FILED WITHIN TH E 10 PRESCRIBED PERIOD OF LIMITATION. HE HAS ALSO RELIE D UPON DECISION OF HON'BLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF CIT VS REMCO INTERNATIONAL 332 ITR 306. 8. WE HAVE CONSIDERED RIVAL SUBMISSIONS AND DO NOT FIND ANY MERIT IN THIS GROUND OF APPEAL OF THE REVE NUE. THE ASSESSING OFFICER HAS GIVEN THE REASONS FOR NOT ACCEPTING THE VALUATION OF THE CLOSING STOCK IN THE REVISED RETURN BECAUSE THE EARLIER PARTICULARS WER E VERIFIED BY THE MANAGING DIRECTOR AND ACCOUNTS WERE AUDITED AND VALUATION OF THE STOCK HAVE BEEN VERIFI ED BY THE AUDITOR. HOWEVER, THE ASSESSING OFFICER ULTIMA TELY HELD THAT THE RE-VALUATION OF THE STOCK MADE BY THE ASSESSEE IN THE REVISED RETURN WITHOUT ANY EVIDENCE IS NOT ACCEPTED. THE ASSESSEE, HOWEVER, SUBMITTED BEF ORE THE LD. CIT(APPEALS) THAT QUANTITY OF THE CLOSING S TOCK OF H.R. COILS WAS TAKEN IN THE AUDIT REPORT AS PER EXC ISE DEPARTMENT BUT VALUATION MADE WHILE FURNISHING THE FIGURES TO THE AUDITOR WAS TAKEN ON HIGHER SIDE BY THE PERSON WHO WAS MADE RESPONSIBLE FOR THE SAID JOB AN D SUBSEQUENTLY DISMISSED FROM THE JOB FOR COMMITTING THE BLUNDER. THE ASSESSEE, THEREFORE, EXPLAINED THAT IT WAS A OMISSION AND MISTAKE IN THE DATA GIVEN FOR VALUATIO N OF THE CLOSING STOCK WHICH WAS RECTIFIED. THE ASSESSE E PRODUCED COMPLETE DETAILS SUPPORTED BY THE BOOKS OF ACCOUNT ALONGWITH BILLS AND VOUCHERS. THE SUBMISSI ONS OF THE ASSESSEE AND MATERIAL WERE SUBMITTED TO THE ASSESSING OFFICER FOR FILING A REMAND REPORT. THE 11 ASSESSING OFFICER IN THE REMAND REPORT ACCEPTED THE CLAIM OF ASSESSEE THAT EXPLANATION OF THE ASSESSEE IS BACKED BY THE DOCUMENTS AND EVIDENCES FILED IN THE REMAND PROCEEDINGS. THUS, THE SOLE OBJECTION OF TH E ASSESSING OFFICER THAT THE RE-VALUATION OF THE STOC K MADE BY THE ASSESSEE IN THE REVISED RETURN WITHOUT ANY EVIDENCE WAS WITHOUT ANY JUSTIFICATION AND BASIS AN D THE OBSERVATION OF THE ASSESSING OFFICER HAVE BEEN SPECIFICALLY MET BY THE ASSESSEE IN THE REMAND PROCEEDINGS BEFORE ASSESSING OFFICER. THEREFORE, N OTHING SURVIVES IN FAVOUR OF THE REVENUE. THE ASSESSEE, THEREFORE, RIGHTLY CONTENDED THAT THE REVISED RETUR N WAS FILED TO CORRECT THE MISTAKE THAT HAS CREPT IN THE ORIGINAL RETURN OF INCOME ON ACCOUNT OF WRONG VALUATION. TH US, THERE WAS NO CHANGE IN METHOD OF VALUATION OF CLOSI NG STOCK. NO DEFECTS IN THE ACCOUNTS OF THE ASSESSEE HAVE BEEN POINTED OUT AT THE REMAND PROCEEDINGS, THEREFO RE, THE DECISIONS RELIED UPON BY LD. DR ARE CLEARLY DISTINGUISHABLE ON FACTS OF THE CASE. THE ASSESSEE WAS, THEREFORE, JUSTIFIED IN FILING REVISED RETURN WITHI N TIME WHEN ASSESSEE DISCOVERED OMISSION OR WRONG STATEMEN T MADE IN THE ORIGINAL RETURN OF INCOME. 9. CONSIDERING THE ABOVE DISCUSSION IN THE LIGHT OF THE MATERIAL ON RECORD, PARTICULARLY WHEN THE ASSESSING OFFICER DID NOT OBJECT TO THE EVIDENCE OF THE ASSES SEE IN REMAND REPORT, WE DO NOT FIND ANY MERIT IN THIS GRO UND OF APPEAL OF THE REVENUE, THE SAME IS ACCORDINGLY DISM ISSED. 12 10. ON GROUND NO. 4, REVENUE CHALLENGED THE DELETIO N OF ADDITION OF RS. 5 LACS ON ACCOUNT OF DISALLOWANC E OF SALARY/WAGES PAID. 11. THE ASSESSING OFFICER OBSERVED THAT ASSESSEE HA D DEBITED AN AMOUNT OF RS. 18,45,553/- AND RS. 37,01,618/- AS SALARY FOR THE MONTH OF FEBRUARY,200 9 AND MARCH, 2009 RESPECTIVELY. THE ASSESSING OFFICE R OPINED THAT SALARY SO DEBITED WAS HIGHER AS COMPARE D TO THE PRECEDING YEAR WHICH WAS EXPLAINED BY ASSESSEE BEING ON ACCOUNT OF INCREMENT AND BONUS AT THE END OF THE FINANCIAL YEAR. THE ASSESSING OFFICER OBSERVED THAT ASSESSEE DID NOT PRODUCE THE ATTENDANCE REGISTER/VOUCHERS OF SALARY AND WAGES, THEREFORE, R S. 5 LACS WERE DISALLOWED CONSIDERING ON HIGHER SIDE. 12. THE ADDITION WAS CHALLENGED BEFORE LD. CIT(APPE ALS) AND IT WAS SUBMITTED THAT COMPLETE DETAILS OF SALAR Y AND WAGES ALONGWITH BOOKS OF ACCOUNT AND SUPPORTING VOUCHERS WERE PRODUCED BEFORE ASSESSING OFFICER. INCREASE IN THE SALARY AND WAGES WAS DUE TO THE REA SON THAT ANNUAL INCREMENTS, BONUS AND PROVISION FOR GRA TUITY WAS PROVIDED AT THE END OF THE FINANCIAL YEAR. PRO VISION OF GRATUITY OF RS. 5 LACS WAS AT THE END OF THE FIN ANCIAL YEAR WHICH WAS ADDED BACK TO THE INCOME. THE LD. CIT(APPEALS) ACCEPTED THE EXPLANATION OF THE ASSESS EE AND FOUND THAT ADDITION WAS MADE MERELY NOTING THAT SALARY AND WAGES WAS HIGHER AS COMPARED TO EARLIER YEARS. THE ADDITION WAS ACCORDINGLY DELETED. 13 13. AFTER CONSIDERING THE RIVAL SUBMISSIONS, WE DO NOT FIND ANY MERIT IN THIS GROUND OF APPEAL OF THE REVE NUE. THE ASSESSING OFFICER, WITHOUT POINTING OUT AS TO W HICH OF THE SALARY AND WAGES WAS ON HIGHER SIDE MADE THE ADHOC ADDITION. THE ASSESSEE HAS GIVEN SPECIFIC REA SONS FOR ENHANCEMENT IN THE SALARY AND WAGES AND THE PROVISION FOR GRATUITY MADE AT THE END OF THE YEAR IN WHICH NO DEFECTS HAVE BEEN POINTED OUT BY THE ASSES SING OFFICER. THE ASSESSING OFFICER HAS NOT POINTED OUT AS TO WHICH OF THE EXPENDITURE WAS NOT ALLOWABLE DEDUCTIO N. THE LD. CIT(APPEALS), THEREFORE, CONSIDERING THE IS SUE IN TOTALITY, HAS RIGHTLY DELETED THE ADDITION. THIS GR OUND OF APPEAL OF THE REVENUE FAILS AND IS DISMISSED. 14. IN THE RESULT, DEPARTMENTAL APPEAL IS DISMISSED . ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- (RANO JAIN) (BHAVNESH SAINI) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 5 TH JANUARY, 2016. POONAM COPY TO: THE APPELLANT, THE RESPONDENT, THE CIT(A), THE CIT, DR ASSISTANT REGISTRAR, ITAT/CHD