Stock Addition Deleted

The Hyderabad Bench of the Income Tax Appellate Tribunal (ITAT) deleted an addition of ₹36.50 lakh made on account of an alleged difference in closing work-in-progress (WIP), holding that the Assessing Officer had incorrectly relied upon unaudited Tally-generated financial statements instead of the audited financial statements forming part of the return of income. 

The Tribunal found that the alleged discrepancy arose from a mistaken treatment of opening work-in-progress and that the assessee had adequately reconciled the figures through audited accounts. 

Consequently, the addition towards difference in stock-in-trade was held to be unsustainable.