Go AD-Free with CAclubindia Pro and Daily WhatsApp Updates. Subscribe Now!

Is that addition in GP and Stock in Scrutiny Assessment in Income Tax allowed as opening stock in next year scrutiny assessment

1281 views 1 replies

CA Sitaram Agrawal

Professional

86 Points Joined June 2007

Dear Members,

If in scrutiny assessment of a company assessee ITO made addition on behalf of Lower GP as well as Lower WIP Stock in a particular (2003-04) assessment year.

same as above ITO further made addition on behalf of same contention in the next (2004-05) assessment year Lower GP as well as Lower WIP Stock in scrutiny assessment.

Question is that is the ITO or CIT(Appeal) will allow the previous assessment years addition total amounting equal to Lower GP as well as Lower WIP Stock in the next assessment year.

Thanking you,

CA Sitaram Agrawal

Replies (1)

Income assessment of each year is independent of other year. However, closing stock should be the opening stock of the next year. In the scruitiny of the next year the same may be claimed. if it is not under scruitiny then an application may be made u/s 154 for rectification of the mistae. Here the mistake apparent from the records is opening balance is not correct when compared with the closing stock as per IT record itself.