Mere Non Production of Stock Register cannot be ground to reject declared Trading Results: ITAT [Read Order]

Income Tax Appellate Tribunal (ITAT), New Delhi held that mere none production of stock register cannot be ground to reject declared trading results.

The assessee company, Rakesh Global Steel Pvt Ltd filed return of income declaring loss of Rs. 3,47,94,641/-, the same was selected for scrutiny and statutory notices were issued, assessment proceedings have been initiated against the assessee. The assessee’s representative has participated in the assessment proceedings. The assessment order came to be passed on 29/12/2016 against the assessee, wherein it is held that, the loss reported by the assessee cannot be verified and the trading result shall be rejected u/s 145 of the Income Tax Act.

The Assessing Officer looking into the nature and size of the business of the assessee, considering the possible price fluctuation of the traded commodity and the past trading results, the gross profit of the assessee has been estimated at 2.98% of the turnover.

The GP of the estimation purposes has been taken at the same rate as in the preceding year, considering the turnover of the Company which has been increased in comparison to preceding year. Accordingly, an addition of Rs. 3,56,52,420/- has been made.

Aggrieved by the assessment order dated 29/12/2016, the assessee has preferred an Appeal before the CIT(A). The CIT(A) allowed the appeal hence the assessee is in appeal before the Tribunal.

The bench consisting of Dr BRR Kumar, Accountant Member and Yogesh Kumar US, Judicial Member observed that “In our view, mere none production of stock register particularly when the quantitative details of opening stock, purchase, sales and closing stock is available cannot be ground to reject the declared trading results and the submission is supported by judgments. The CIT(A) has considered all the above factual aspects and came to a just conclusion in deleting the additions made by the A.O.”

To Read the full text of the Order CLICK HERE

Support our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates