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TMI Blog2014 (5) TMI 466X X X X Extracts X X X X X X X X Extracts X X X X ..... served that the assessee in its return of income offered for taxation the sale value of undisclosed stocks discovered during survey and not the full value of investment in undisclosed stock – it makes no difference to the income which would ultimately arise to the appellant during the year from unexplained stocks discovered during survey - The Revenue has not brought any material on record suggesting that the claim of the assessee is false or without any basis. Therefore, we do not find any infirmity in the order of the ld.CIT(A), the same is hereby upheld. Thus, this ground of Revenue’s appeal is dismissed. Deletion on account of fall in GP rate – Held that:- CIT(A) was rightly of the view that the argument of the assessee is found to b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nces of the case and in law, the CIT(A)- IV, Surat ought to have upheld the order of the Assessing Officer. 4) It is therefore, prayed that the order of the CIT-IV, Surat may be set aside and that of the Assessing Officer restored. 2. Briefly stated facts are that a survey u/s.133A of the Income Tax Act, 1961 (hereinafter referred to as the Act ) was conducted at the business premises of the assessee on 13/02/2008. During the course of survey proceedings, a statement u/s.133A of the Act was recorded of Shri Bansilal Madanlal Jain, one of the partners of the assessee-firm, who accepted that the finished stock of 4,80,915 meters and unfinished stock of 2,19,738 meters was unaccounted. The value of unfinished stock @ Rs. 13/- per meter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ition. 4. On the contrary, ld.counsel for the assessee Shri J.P. Shah submitted that there is no dispute in respect of the quantity of stock but dispute is with regard to valuation adopted by the Revenue and the value declared by the assessee by furnishing the requisite documentary evidence. He submitted that during the course of survey, the value of the stock was worked out on the basis of estimation only. He further submitted that the AO was not justified in not appreciating the submissions of the assessee. He submitted that during the course of survey, the assessee clearly discharged the onus of proving the fact that the excess stock found during the course of survey fetched a value of Rs.1,09,19,609/- and the value of the said stock ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed the supporting evidences in respect of the sale value of the unaccounted stock. The AO has not made any enquiry on the evidences given by the assessee. The Hon ble Apex Court in the case of CIT vs. Raman Co. reported at 67 ITR 11 has held that the law does not oblige a trader to make the maximum profit that he can out of his trading transactions. Income which accrues to a trader is taxable in his hands : income which he could have, but has not earned is not made taxable as income accrued to him. We find that the ld.CIT(A) has observed that the assessee in its return of income offered for taxation the sale value of undisclosed stocks discovered during survey and not the full value of investment in undisclosed stock. This has been treate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n a short span of time which gives rise to suspicion. This argument of the Revenue is not acceptable in view of the fact that no enquiry has been made by the AO to ascertain whether the unaccounted stock was sold to the parties and at a value as declared by the assessee. The Revenue has not brought any material on record suggesting that the claim of the assessee is false or without any basis. Therefore, we do not find any infirmity in the order of the ld.CIT(A), the same is hereby upheld. Thus, this ground of Revenue s appeal is dismissed. 6. Ground No.2 is against the deletion of addition of Rs.1 lac made on account of fall in GP rate. 6.1. The ld.Sr.DR supported the order of the AO, whereas the ld.counsel for the assessee supported ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as also submitted that any proposed addition on account of fall in GP be telescoped I the disclosure of income of Rs.1,09,19,609/-. The A.O. mentions that the argument of the assessee is found to be broadly acceptable but fall in G.P. indicates suppression of income and therefore made a lump sum addition of Rs.1,00,000/-. During the course of appeal proceedings similar arguments as in assessment were forwarded. Having gone through the facts of the case, the reasons given by the A.O. and submissions of the appellant, it is held that no such addition on account of fall in GP was warranted because the explanation given by the assessee was broadly acceptable to the A.O. and he has not given any reason for partial non-acceptance nor has he sho ..... X X X X Extracts X X X X X X X X Extracts X X X X
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