2012 (12) TMI 1051 - AT - Income Tax

Summary

Issues involved: Appeal against the order of Ld. Commissioner of Income Tax (Appeals)-XXVI, New Delhi dated 24.2.2011 pertaining to assessment year 2007-08.

Issue 1: Excess Cash Found
- During survey, cash of Rs. 842161 was found, but cash book recorded only Rs. 39461.
- Assessee surrendered excess cash but did not disclose it in the return.
- Ld. Commissioner of Income Tax (A) deleted the addition as no detailed inventory of cash found was presented.
- Appellate Tribunal found the inventory of cash was duly prepared and signed by the assessee, upholding the addition.

Issue 2: Renovation Expenses
- Assessing Officer made an addition of Rs. 18,20,000 for shop renovation based on survey statement.
- Ld. Commissioner of Income Tax (A) deleted the addition as no evidence supported the expenditure.
- Appellate Tribunal upheld the deletion, citing lack of corroborative material for the addition.

Issue 3: Excess Stock Found
- Discrepancy of Rs. 8,36,677 in stock valuation was determined during survey.
- Ld. Commissioner of Income Tax (A) allowed a further deduction of 20% on MRP value, reducing the excess stock amount.
- Appellate Tribunal upheld Ld. Commissioner's decision, stating it was reasonable to allow the deduction.

In conclusion, the appeal filed by the Revenue was partly allowed, with the Appellate Tribunal upholding the Ld. Commissioner of Income Tax (A)'s decisions on the issues of excess cash found and renovation expenses, while also supporting the adjustment made in the valuation of excess stock found during the survey.