Decided on February 15,2008



H.S. Sidhu, Judicial Member - (1.) THIS appeal of the Revenue is directed against the order of the C.I.T.(Appeals)-X, Chennai dated 11.9.2006. The assessment year involved in this appeal is 2003-04.
(2.) The only effective issue in this appeal is against the deletion of addition of Rs. 1.5 crores made under Section 69C of the Act. The facts of the case are that the Assessee is a dealer in textiles readymade garments and dress materials. There was a survey in the premises of the Assessee under Section 133A of the Act on 6.11.2002. During the course of survey some discrepancies were found in the stock with regard to the valuation. Due to discrepancy, the Assessee offered an additional income of Rs. 1.15 crores representing the value of such undisclosed stock The Assessee was agreed to offer the said sum of Rs. 1.15 crores in two assessment years i.e. Rs. 55 lakh for the assessment year 2002-03 under the head 'income from other sources' and balance of Rs. 60 lakhs as business income in assessment year 2003-04. Thereafter, the Assessee filed a revised return for the assessment year 2002-03 offering the said additional income of Rs. 55 lakhs under the head 'income from other sources. This was done by crediting the profit and loss account with the purchases of Rs. 55 lakhs and the corresponding debit for the same reflected under "advance for purchase an asset" in the balance sheet as on 31.3.2002. The Assessee vide her letter dated 31.12.2002 filed with the return for the assessment year 2002-03 stated that the said sum of Rs. 55 lakhs pending in the advance for purchases would be accounted for as purchases in the subsequent financial year relevant to assessment year 2003-04. The assessment for the assessment year 2002-03 was completed under Section 143(3) of the I.T. Act on 12.3.2003 accepting and assessing the additional income of Rs. 55 lakhs offered as stated above. The Assessee had filed a return of income for the assessment year 2003-04 declaring total income of Rs. 59,74,279/- which included the business income of Rs. 59,28,279/-. In the profit and loss account filed with the return, the Assessee had increased the purchases by Rs. 55 lakhs as already stated above and the closing stock as on 31 3.2003 by Rs. 1.15 crores. The Assessing Officer however, did not accept the accounting treatment given to the additional income offered during survey and added a further sum of Rs. 1.15 crores to the returned income vide the impugned order dated 24.2.2006 under Section 143(3) of the Act. Aggrieved, the Assessee preferred an appeal before the C.I.T.(Appeals) who deleted the addition of Rs. 1.15 crores. Against this order of the C.I.T.(Appeals), the Revenue has filed the present appeal before the Tribunal.
(3.) AT the time of hearing, the ld. Departmental Representative argued that as per the inventory taken at the time of survey under Section 133A of the Act, the excess stock found was Rs. 1.15 crores which was actually to be brought to tax for the assessment year 2003-04. Further he argued that there was underestimation of closing stock and the assessment was thus prejudicial to the interest of revenue He further argued that it is open to the appellate authority to correct the Assessing Officer not only with regard to a matter raised by the Assessee but also with regard to a matter which has been considered by the Assessing Officer and determined in the course of assessment. Therefore, he requested that the appeal may be remitted back to the file of the C.I.T.(Appeals) for a fresh consideration of all facts according to law.;

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