9911796707
TMI Blog2012 (12) TMI 628X X X X Extracts X X X X X X X X Extracts X X X X ..... rgarh vide order dt. 05.04.2010 determining the total income at Rs. 3,39,767. While completing the assessment, the A.O. made the following additions to the returned income: i) Rs. 1,24,896 towards stock shortage. ii) Rs. 1,50,000 towards unexplained investment in construction of factory building. iii) Rs. 50,000 towards estimated disallowance out of expenses claimed towards printing and stationary, truck and other maintenance, repairs and maintenance of vehicles, fuel expenses and repairs and maintenance of others for want of proper bills and vouchers. 2. On the appeal by the assessee praying to quash the order u/s.263 being illegal, uncalled for, unwarranted, the learned Counsel for the assessee has submitted a copy of the learned CIT(A)'s order dt.11.10.2011 when the order of the learned CIT u/s.263 is dt.11.1.2012. The learned Counsel for the assessee argued whether the learned CIT could adjudicate the issues already dealt with by the learned CIT(A) after giving a direction to the Assessing Officer to redo as per his observation without pointing out any error prejudicial to the interest of Revenue in the assessment order stands settled by the order of the learned CIT(A) coul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... course of assessment proceedings did not call for details of various accounts and neither verified nor cross verified the same. This was not a issue before the CIT(A). Therefore this issue remains within revisional power." The learned Counsel for the assessee pointed out all these issues have been dealt with by the learned CIT(A) insofar as on the issue regarding verification of certain accounts it was not the case of the learned CIT to ask the Assessing Officer to make a roving enquiry when the ultimate result was to disallow on assumption a sum of Rs.50,000 claimed as expenditure which was sustained by the learned CIT(A) at Rs.25,000. It was not the case that a valuatino of a property has to be resorted for valuation under the provisions of Section 50C was also considered by the learned CIT himself fit for deletion. He submitted that estimation of gross margin is the culmination of purchase, sales and opening stock along with the valuation of closing stock cannot be disturbed for want of fixing the gross margin was the basis for assuming to compute the quantity of stock found at the time of survey ought to have been adjudicated by the Assessing Officer in the manner so as to det ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the subsequent year. Therefore, we are of the considered view that this issue could not be dealt with by the learned CIT u/s.263 on having considered the decision of the learned CIT(A) who adjudicated the issue vide order dt.11.10.2011. 4.1. On the next issue in respect to the valuation here again assumption or presumption was predominantly in the mind of the learned CIT. After verifying or observing the error, the learned CIT deleted the issue for reconsideration rightly noted that the revisional power cannot be extended to the issue. In other words, both the issues having been dealt with by the learned CIT was on a view that the issue regarding valuation of stock in the middle of the year on account of survey had not been dealt with by the learned CIT(A) when he confirmed the very amount on the basis of facts and circumstances which is in appeal before us and therefore cannot be considered as a direction to the Assessing Officer by holding a different view alone on which revisional power can be extended to. 4.2. With respect to the last issue, we are unable to satisfy with the contention of the learned CIT-DR that details of various accounts were to be called for when the d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fficer to obtain the details and verify has been taken care of in this order by the learned CIT(A) who has sustained the ad hoc disallowance of Rs.25,000. Ground No.2 raised by the assessee is dismissed as not pressed. 8. After hearing the rival parties on issue of sustenance of addition of Rs.1,24,896, we are of the considered view that the Assessing Officer as well as the learned CIT(A) have conspicuously considered the case of the assessee for taxation for the Assessment Year under consideration as if the business of the assessee had closed on 17.1.2008. Importing assumption of estimating the gross margin either of the earlier years or the impugned Assessment Year incorporating the purchases, sales and opening stock remaining same has infused an error in the computation of the figure of Rs.1,24,896 for taxation when the assessee himself has held the same as stock on 31.3.2008. It was not the ghost stock which suddenly appeared on 31.3.2008 but was on the basis of the assessee involved in purchase of essential commodities which commodities were verified either by other statutory body or for milling, by either of the Principals namely FCI, NAFED,NCMSL, PACS, OSCSC. Therefore, it ..... 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