exaggerates the profit and consequence

This query is : Resolved

Amit (Querist)
Follow

31 July 2007 If one exaggerates his profit by appreciating the closing stock value, Does it amount to any contravention of Income Tax Act and if the case would come under scrutiny, what is the maximum consequence of it ?
Whether any justification can be given.

ravi kanth

ravi kanth (Expert)
Follow

31 July 2007 There is no loss to the department as such.. if it comes for scrutiny and if he wants to value it in proper way.. he can assess and give a refund u/s 143(3).
Since there is no loss to the government i think there will not be any consequence against the Assessee.

CA Mani

CA Mani (Expert)
Follow

01 August 2007 Yes, Ravi is right.

But one thing If you strictly read the provisions, Over valuation is also a contravention, even though it is generating more revenue to dept.

But, If A.O scrutinises in such a way that there is some fraud involved.(Bcoz window dressing amounts to fraud and it's needed to be avoided as per AAS4)

So, If you read the provisions carefully, I think, there is some scope for penalzing.

Late CA Sampat Jain

Late CA Sampat Jain (Expert)
Follow

01 August 2007 Exaggeration of closing stock in one year means overvalution of opening stock in next year .To that extent there is concealment of income in the next year .Penalty for concealment may come in the next year .

CA Mani

CA Mani (Expert)
Follow

02 August 2007 Yes, I too agree with Mr.Sampat

You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now

Summarize this with AI

ChatGPT Perplexity Claude Google AI Grok

Similar Resolved Queries

Unanswered Queries

Popular
Recent

Trending Online Classes

Direct Tax Laws & International Taxation May 26,Sept 26 & Jan 27

CA Arvind Tuli

Enroll Now
Audit Fast Track Recorded Batch For May 26,Sept 26 & Jan 27

CA Aarti Lahoti

Enroll Now
DT & Audit (Exam Oriented Fastrack Batch) - For May 26 Exams and onwards Full English

CA Bhanwar Borana & CA Shubham Keswani

Enroll Now

view all classess

Meet our CAclubindia PRO Members

Dhairya Sanghvi

mohammad.asraf

sriram deven

mahendra zaveri

nilesh

Subscribe Now

exaggerates the profit and consequence

Similar Resolved Queries

Trending Online Classes

Meet our CAclubindia PRO Members

Quick Links

Browse by Category

Latest Job Openings

GST CONSULTANT

GST CONSULTANCY

CA Final

Accountant

Article Assistant

Senior execiutive

Manager- Finance and Compliance