9911796707
TMI Blog1990 (7) TMI 174X X X X Extracts X X X X X X X X Extracts X X X X ..... f Rs. 8,57,664 aggregating to Rs. 11,18,095 on which it had disclosed gross profit of Rs. 3,03,003 which gave a g.p. rate of Rs. 26.85 per cent as against sales of Rs. 12,35,685 with a profit of Rs. 3,08,181 giving a gross profit rate of 24.94 per cent in the preceding year. On scrutiny the ITO found that the assessee has not correctly valued the closing stock. The valuation of the closing stock was on estimate basis. Therefore, he rejected the valuation of the closing stock. He revalued the closing stock at the rate of 49.79 per carat as against 26.56 per ct. estimated by the assessee. That resulted in an addition of Rs. 3,15,875. 4. Being aggrieved the assessee carried the matter before the CIT(A). The CIT(A) has also sustained the addi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng stock is left with the sweet will of the assessee, there will be no check. It can show the profits it likes. Therefore, the book results cannot be accepted. The proviso to s. 145(1) is applicable and average value adopted by the ITO at 49.79 per cent is just and reasonable. The addition was justified. She further relied on the order of the CIT(A). 6. We have heard the rival submissions and considered the material on record. The defects are not in dispute that in books purchases and sales are fully vouched. But valuation of the closing stock is on estimate basis. The details in respect of sales, gross profit, g.p. rates are given as under: Asst. yr. Sales Gross Profit G.P. Rate 1982-83 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ate is the only method left to the ITO. The assessee adopted the average value per carat at 33.87 per cent. The ITO has estimated the same at 49.79 per ct. Neither the ITO has any base for that rate nor the assessee has any sufficient material to support his rate. To avoid injustice to both the sides, then considering the profits or the reasonable average rate for valuing closing stock and to cover up the escaped income, we sustain the addition of Rs. 50,000 as against Rs. 3,15,875. 7. The next issue for consideration is whether the CIT(A) erred in not accepting the genuineness of the cash credit of Rs. 17,150 in respect of Smt. Anita Bindal and Rs. 17,150 in the name of Smt. Amita Bindal and doubted the genuineness of the cash credits in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... spect of cash credits. 12. The next issue for consideration is whether the CIT(A) erred in sustaining the addition of Rs. 27,300 in respect of low withdrawals and household expenses. The relevant facts are that the partners had withdrawn Rs. 20,700 for household expenses. The family consists of 17 members. The ITO took the view that taking into account the number of family members, and standard of living, the household withdrawals are too low. He added Rs. 27,300. 13. Being aggrieved, the assessee carried the matter before the CIT(A). The CIT(A) has upheld the addition. 14. Being aggrieved, the assessee is in appeal before us. The learned counsel for the assessee submitted that if the household withdrawals are low, the addition should ..... X X X X Extracts X X X X X X X X Extracts X X X X
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