9911796707
TMI Blog1983 (1) TMI 177X X X X Extracts X X X X X X X X Extracts X X X X ..... ts. In this set, certain purchases and sales are noted. But, it appears that the books are not closed and profit not ascertained. On 11th September, 1974 the assessee s business premises were surveyed by the department. It was on survey that the department found two sets of accounts being maintained. On the date of survey the departmental officials found on the premises of M/s. Ashok Bhagar Mills, wherein the processing of goods are done, there were 335 quintals of Warai and 103 quintals of Bhagar. 3. Following the survey by the department, the assessee decided not to keep two separate sets. From that date onwards, all the transactions were brought into the first set of accounts. However, it would appear that this required certain adjustm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e better yield of Bhagar and calculated the suppressional yield at 208 quintals. Its value at the average sale rate was fixed at Rs. 47,908. This was added. On appeal, the CIT(A) confirmed the addition. 6. Shri Inamdar appearing for the assessee submitted that the addition is unwarranted. He pointed out that the ITO had accepted that adjustments to the stock in the regular books have to be made. Once it is accepted that adjustments have to be made, it means that the purchases and sales reflected are not correct and therefore, the yield should not be judged by bifurcating the two periods artificially. He submitted that even in normal circumstances in a case where there is continuous business activity, it would be fallacious to break the pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ase would become clear if we reproduce the working as per the ITO by bifurcating the year into two : Working as per ITO by bifurcating period upto 11th September 1974, Warai A/c . Qtls. Nil . Qtls. To Opening Stock By trans. To Warai 9905 "Purchases 14082 Bhagar A/c (yield 70.3%) . . 14082 "Closing Stock 355 . . "Difference 3622 . . . 14082 From 12-9-1974 to 13-11-1974, Warai A/c To Opening Stock 355 By Transfer to Warai . "Purchases 2382 Bhagar A/c 1507 . . . 247(being 70% of 355) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... quintals of Warai. The letter goes on further to say that if the last purchase of 400 quintals of Warai is excluded, the yield would be much more. 9. Now there is evidence which had been accepted by the ITO himself that certain purchases made in the subsequent period actually relates to the first period and the goods having been received earlier, the ITO himself accepts that 355 quintals relate to this. But he also found another figure of the same amount i.e. 355 quintals which were found to be the stock at the Ashok Bhagar Mills. As we understand the stock of both sets of accounts would be found in this mill. When 355 quintals of Warai are recorded there, it could conceivably include the stock of both sets of accounts. The ITO had procee ..... X X X X Extracts X X X X X X X X Extracts X X X X
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