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Issues involved: The appeal concerns the addition made by the Assessing Officer for a sum of Rs. 2,46,552 as a result of a survey conducted on the premises of the assessee for the assessment year 1989-90.
Summary of Judgment: Issue 1: Addition made based on survey findings The assessee's appeal contested the addition of Rs. 2,46,552 by the Assessing Officer due to a stock discrepancy found during a survey. The assessee argued that the difference in stock indicated sales made outside the books, which was admitted during the survey. The gross profit calculated by the Assessing Officer was disputed by the assessee, who maintained that the profit rate was consistent with previous years. Citing a similar case, the assessee contended that only a percentage of the stock should be added as income. The Tribunal agreed with the assessee, finding no justification for the addition and directed the Assessing Officer to delete the amount. Issue 2: Discrepancies in maintaining stock register The Departmental Representative argued that the assessee did not maintain a day-to-day stock register, pointing out discrepancies found in two consecutive surveys. However, the assessee clarified that physical stock counting was done at the end of the year, disputing the claim of not maintaining proper records. In conclusion, the Tribunal allowed the assessee's appeal, ruling in favor of deleting the addition made by the Assessing Officer.
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