Validity of addition as a result of difference in the valuation of the Stock as per the Tally ERP vis a vis as computed by Income Tax Department Survey Team
Recently, the Kolkata ITAT in the case of Priyo Gopal Bishoyi Grandson VS. ACIT has deleted the addition done by AO during assessment proceeding pursuant to survey operation U/s 133A.
This matter pertaining to an addition emanating from post survey (u/s. 133A) proceedings dealt with the single issue related to undisclosed stock wrongly inferenced & computed by the survey team and accordingly, assessed by the Ld. A.O. by comparing the physical valuation of stock to the value of stock as per Tally ERP as on the date of survey whereas the assessee consistently had been valuing its stock based on the Specific Identification Method through barcoding using the Oriel POS software. As per the Oriel POS software and the method of valuation of stock (declared in its audited books) consistently deployed by the assessee, there was no discrepancy in stock as on the date of survey operations. The Hon’ble Bench vide it’s order dated 30.09.2022 observed:
“Thus we are satisfied that excess stock has been worked out by the ld. Assessing Officer on the basis of an erroneous mathematical exercise…Therefore, in our opinion, addition is not sustainable. We allow this ground of appeal and delete the addition…”
The copy of the order is as under:
