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TMI Blog2016 (5) TMI 1089X X X X Extracts X X X X X X X X Extracts X X X X ..... same by this common order. 2. Let us first take up the Revenue's appeal I.T.A.No. 350/Mds/2014. 3. Shri MSVM Prasad, ld. Departmental Representative submitted that the first ground of appeal is with regard to unaccounted cash transactions. The ld. DR submitted that the assessee-company engaged itself in the manufacture and sale of kraft papers. There was a search in the premises of the assessee u/s 132 of the Act on 13.3.2009. A simultaneous survey was also conducted u/s 133A of the Act. During the course of survey operation, the Revenue Authorities found unaccounted cash transactions. Shri M. Ramamurthy, Managing Director of the assessee-company was examined on 13.3.2009. In response to Question Nos.51, 52 & 53, the said Shri M. Ramamurt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ount has to be taken as income and not the peak credit. 4. On the contrary, Shri N. Devanathan, ld. Counsel for the assessee submitted that the seized material discloses the day-to-day transaction of receipts and payments. The Assessing Officer was not able to identify the expenditure which relates to the business of the assessee. The ld. Counsel further submitted that the material found during the course of survey operation shows the cash transactions of the entire group and it is not confined to the assessee-company alone. Therefore, the CIT(A) found that the transaction outside the books of account needs to be set off against the receipts. The CIT(A) has also found that since the monies paid and received, only peak credit has to be take ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uments. This is what held by the CIT(A). However, after considering the alternative contention of the assessee, the CIT(A) found that peak credit needs to be calculated. Accordingly, he directed the Assessing Officer to calculate the peak credit for the purpose of making addition. As rightly found by the CIT(A), the payment made by the assessee needs to be set off against the receipts and taxable income needs to be computed only after giving set off. In view of the above, this Tribunal do not find any reason to interfere with the order of the CIT(A). Accordingly, the same is confirmed. 6. The next ground of appeal is with regard to deficit stock. 7. Shri MSVM Prasad, ld. Departmental Representative submitted that during the course of surv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd that the actual difference in the stock is only at Rs. 71,61,652/-. The ld. Counsel further pointed out that it is impossible to take the physical inventory of all the raw material, work-in-progress and finished goods in a short span of time. The entire raw material and finished goods were spread over several acres of land, therefore, it is impossible to take the physical stock. The Assessing Officer has simply estimated the stock without any basis. Since the estimation was made without physical verification of the entire stock, the Assessing Officer is not justified in making any addition with regard to deficit stock. Therefore, according to the ld. Counsel, the CIT(A) ought to have deleted the entire addition made by the Assessing Offi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 652/-. Hence, the order of the CIT(A) is confirmed. 10. Now coming to the assessee's appeal I.T.A.No.2324/Mds/ 2013, the first ground is with regard to confirmation of deficit stock at Rs. 71,61,652/-. 11. We heard the ld. Counsel for the assessee and the ld. DR. 12. While considering the Revenue's appeal, this Tribunal found that the CIT(A) has rightly restricted the deficit stock at Rs. 71,61,652/- on the basis of the working filed by the assessee. Therefore, this Tribunal do not find any infirmity in the order of the CIT(A). Accordingly, the same is confirmed. 13. Now, coming to the addition of gross profit, Shri N. Devanathan, ld. Counsel for the assessee submitted that the Assessing Officer made addition of Rs. 26,27,200/- towards ..... X X X X Extracts X X X X X X X X Extracts X X X X
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