9911796707
TMI Blog2014 (1) TMI 1367X X X X Extracts X X X X X X X X Extracts X X X X ..... 9,95,812/- in respect of gross profit 2. not agreeing with the Assessing Officer that the income surrendered during survey is assessable u/s 69 not as business income. 3. The Rival contentions have been heard and records perused. Facts in brief are that the assessee is engaged in the business of cotton ginning. During the year, there was survey at assessee's business premises on 06.10.2009. During survey, the assessee surrendered Rs. 95,94,251/- towards unaccounted stock and Rs. 90,00,749/- towards unaccounted cash. Thus, there was total surrender of Rs. 1,04,95,003/-. During the course of scrutiny assessment, the Assessing Officer observed that the assessee has shown surrendered income of Rs. 1,04,95,003/-. This included excess stock (C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s justified on the basis of low gross profit rate. The Assessing Officer has made addition of gross profit without examining the veracity of expenses claimed. As a result, the gross profit addition of Rs. 9,95,812/- made by the Assessing Officer is hereby deleted. This ground of appeal is allowed." 5. Against this order of CIT(A), the Revenue is in further appeal before us. 6. It was argued by the ld. Sr. D.R., Shri R. A. Verma that additional income surrendered during the course of survey was not going to increase the gross profit of assessee and that the Assessing Officer was justified in rejecting the books of accounts and applying gross profit rate shown by the assessee in the immediately preceding year, after pointing out defects in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hermore, the Assessing Officer has also pointed out certain instances, which indicated discrepancies/defects in the books of accounts. Accordingly, the Assessing Officer's action in rejecting books of accounts was correct. The ld. CIT(A) has deleted the addition by observing that unaccounted stock if taken in manufacturing account, the gross profit rate of current year will be substantially higher than 2.83 %. In view of these observations, the ld. CIT(A) has deleted the gross profit addition made by the Assessing Officer. We do not find any justification in CIT(A)'s order in so far as even if unaccounted stock is taken in manufacturing account, the gross profit rate is not going to increase because there will be corresponding increase in c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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