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TMI Blog2016 (10) TMI 582X X X X Extracts X X X X X X X X Extracts X X X X ..... d 13.12.2011 for assessment year 2009-10. Grounds raised by Revenue per its appeal are as under:- "1. That on the fact and circumstances of the case and in law the Ld. C.I.T.(A)-VIII, Kolkata has erred in not appreciating the fact that the assessing officer has rightly computed the value of closing stock where the assessee did not furnish the qualitative analysis of closing stock and as such is coming under the ambit of section 145 of the IT Act, 1961 and deleted the addition of Rs. 30,37,993/- under the head "Undisclosed Sales" holding that the calculation of valuation of closing stock is not done properly by the Assessing Officer as well as arbitrarily held that the assessee has shown the value of closing stock at a price more than avera ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ore the cost of each item of the stock cannot be determined. Accordingly the AO applied the average pricing method and worked out cost of the goods sold on the basis of per saree which comes to Rs. 1516.45 (2,86,30,758/- 18880 =1516.45). The cost of goods sold was worked out at Rs. 2,86,30,758.00 ( 24,30,650+3,72,95,387-1,10,95,279.00). The AO further applied this average rate of per saree to determine the value of the closing stock in terms of quantity by dividing the value of closing stock with the average rate which comes out 7319 pieces of sarees (1,10,95,729/1516.45= 7319). As per the AO the closing quantity of the saree should have been 7319 but the assessee has shown the same at 5584 pieces of saree as closing stock. So the differenc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... losing stock along with their respective values in the tax audit report. During the proceedings the details were furnished by the assessee but the AO rejected the same and worked out the undisclosed sale as discussed above. At the outset, we find that AO has made the addition on surmise and conjecture without pointing out any defect in the audited financial statement. The AO has failed to bring any defect in the submission of the assessee. In the case of deviation of the Accounting standard the AO should have rejected the books of accounts but he chose not to do so. In view of above we find no infirmity in the order of Ld. CIT(A). Accordingly, we uphold the same. Ground raised by Revenue is dismissed. 7. Next issue raised by Revenue is tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0. Before us Ld. DR relied on the order of AO whereas Ld. AR relied on the order of Ld. CIT(A). 11. We have heard the rival contentions and perused the materials available on record. At the outset, we find that assessee claimed to have made the investment in the aforesaid properties by paying composite amount. However, this fact has not been brought on record by Ld. AR whether it was composite payment for the land & building. In the instant case the AO has relied in the order of CIT Vs. AIPS Theatre 65 ITR 377 and DCIT Vs Capital Car Private Limited reported, supra for disallowing the depreciation. However in our view the facts were different in that case because the value for the building and land was separately available but this is no s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the case of DCIT Vs Capital Car Private Limited reported. However we find that on similar facts where the rates of the building are composite with the land then the Hon,ble Tribunal of Bangalore has decided the issue in favour of the assessee in the case of CIT Vs. Rajesh Exports Ltd. (2006) 9 SOT 28. The relevant extract is reproduced below:- "Where the assessee purchase a building and the purchase price (as per sale deed) is a composite one (sale deed does not indicate the prices of land and building separately), then no distinction at least in the consideration paid to the vendor can be made and the entire amount is qualified for depreciation. However, if there is a clear cut identity in respect of price paid to the land and building ..... X X X X Extracts X X X X X X X X Extracts X X X X
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