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TMI Blog2018 (1) TMI 1107X X X X Extracts X X X X X X X X Extracts X X X X ..... As we can see that appellant’s profit in earlier year was less than the year under consideration meaning thereby his Gross Profit was higher than earlier years. Therefore, in such circumstances assessee’s contentions cannot be denied. In the result, this ground of appeal is allowed. - ITA No. 2809/Ahd/2013 And ITA No. 3088/Ahd/2013 - - - Dated:- 22-1-2018 - Shri N. K. Billaiya, Accountant Member And Shri Mahavir Prasad, Judicial Member For the Assessee : Shri S. N. Soparkar with Parin Shah, AR For the Revenue : Shri Mudit Nagpal, Sr. DR ORDER PER MAHAVIR PRASAD, JUDICIAL MEMBER:- These cross appeals by the assessee and Revenue are directed against the order of the Commissioner of Income-Tax (Appeals)-IV, Ahmedabad dated 15.10.2013 for Assessment Year 2010-11. 2. The assessee has taken following grounds in its appeal vide ITA No.2809/Ahd/2013: 1. On facts and in law and in the circumstances of the appellant's case, the CIT(Appeals) has erred in confirming the addition to the extent of ₹ 35,23,941/- on account of difference in stock found as on the date of search and stock as per books of accounts as unaccounted income in the case of app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... us submissions furnished by the appellant are reproduced as under: At the outset, the appellant vehemently objects the addition made by the assessing officer. It is submitted that the entire addition has been made without appreciating the facts of the present case. The entire addition has been on the basis of statement of Shri Arvindbhai Patel (Partner) recorded u/s.132(4), wherein the discrepancy in stock found by the department was accepted and the amount of excess stock was offered as undisclosed income. Apart from that there was no any other basis for making addition by the assessing officer. Further, it is also stated that no incriminating materials/documents pertaining to purchase or sale out of books of accounts were found in support of the alleged addition made by the assessing officer. It is further submitted that statement of Arvindbhai recorded during the course of search referred by Assessing Officer for making impugned addition was received by assessee firm during the course of Assessment Proceedings hence affidavit of Shri Arvindbhai explaining the fact that there was no unaccounted stock of WIP as stated instatement recorded under Section 132(4) of the Ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... regaining his state of mind, Shri Arvindbhai Patel realized the mistake made by him by accepting the discrepancy which was actually non existent, and henceforth detailed explanation along with reconciliation was furnished by him to the department to prove his contention so that the discrepancy noticed by the department can be explained. Even during the course of Assessment Proceedings affidavit of Arvind Patel was also filed, which also clarifies that during the course of search, alleged excess stock found by the Department is fully explained and reconciled by appellant However, the assessing officer did not pay heed to the intention of the Shri Arvindbhai Patel and overlooked the facts of the case solely on the basis of statement recorded, which is unjustified for the reasons stated hereinabove. The appellant also relies on following decisions in support of its contention that when alleged excess stock found during the course of search is fully reconciled; no further addition is called for. ( i) Commissioner of Income-tax v. Dhingra Metal Works [2011] 196 TAXMAN 488 (Delhi) where it has been held that the statement during the course of survey is not binding as evidence. Fur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ai Patel the partner of the firm accepted ₹ 60 lakhs as unaccounted income of the appellant 8. The ld. AO has observed that stock found during the course of search of ₹ 60,91,883/- as per book is Nil, which cannot be accepted as any entity cannot have zero stock and that to at the mid of the financial year when the business activities are at its peak. This stock of ₹ 60,91,883/- was semi-finished goods and hence not recorded in its books. 9. On the other hand, appellant submitted that during the course of assessment proceedings as well as in appellate proceedings assessee submitted a detailed quantitative reconciliation for each item of stock as under: Particulars (Each item of stock) Amount (in Rs.) Quantity as on 1/4/2009 [As per stock statement given to bank which tallies with audited accounts and accepted by Assessing Officer in assessment order for A.Y. 2009-2010] XXX Add: Production upto 31/08/2009 XXX Less: Sale up to 31/08/2009 XXX Stock as on 31/8/2009 which tallies with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 309 9729238 5619716.00 July 09 31/07/09 6640207.00 10020797.00 2004159 8016638 4243285.00 Aug 09 31/08/09 8932318.00 11589680.00 2317936 9271744 3903859.00 Sept 09 30/09/09 11627849.00 12141956.00 2428391 9713565 5818143.00 Oct 09 31/10/09 8880200.00 11406200.00 2281240 9124960 5573383.00 Production Sales GP 20% Stock of SF 01/04/2009 7893131.00 20% Net S.F. April 09 30/04/09 7715408.00 12424401.00 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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