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TMI Blog2019 (2) TMI 173X X X X Extracts X X X X X X X X Extracts X X X X ..... d to as "IT Act") was carried out by the department on the business premises of the appellant on 05.10.2006. 4- It is submitted by learned counsel for the appellant that during such search appellant was forced to make a declaration to the tune of Rs. 24,50,200/- on account of difference in the stock along with Rs. 25,000/- on account of the expenses found recorded in the loose papers but not in the books of account, therefore a total surrender of Rs. 24,75,000/- has been recorded in the statement on 16.10.2006. 5- It is appellant's contention that since such declaration was obtained under coercion, he had subsequently retracted his statement of surrender vide communication dated 05.10.2007 and since such declaration is not on oath, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appeal vide order dated 24.07.2015 holding that the addition cannot be said to be solely based on the statement of disclosure but it was also based on the stock and as such taking book value of the stock partly allowed the appeal of Revenue restricting the addition to the tune of Rs. 10,00,000/-. 9- Learned counsel for the appellant submits that the law has already been settled by the Apex Court in case of Dhakeshwari Cotton Mills Ltd. V CIT 26 ITR 775 (S.C), wherein Supreme Court has held that the gross profit rates on sales is not based on any material but when is based on pure guess and suspicion cannot be allowed. Placing reliance on such judgment of the Supreme Court, it is submitted that the addition made by the Appellate Tribunal to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g that there was no justification for making the addition on account of stock and the addition was made solely and wholly on the basis of statement recorded on 16.10.2006 and the surrender made there-under by the assessee." 11- This reveals that the value of the stock was worked out at the time of survey on the basis of physical verification and this is a finding of fact. The Appellate Tribunal has accepted the explanation of assessee that supervisor of the assessee was not having knowledge of the particulars of the stock so physically verified, and therefore, has taken value of the stock at Rs. 10 Lacs by way of estimate and preponderance of probability as against Rs. 24,09,475/- made by the A.O. 12- In case of Dialust v. Deputy Commissi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation given by the assessee that the supervisor present at the time of survey was not knowing the value of the goods, and therefore, treating the book value of goods approximately at 40 percent of the MRP cannot be said to be an arbitrary guess work taking into consideration the traits of the industry, and therefore, there being no other material to prove to contrary, restriction of addition to a sum of Rs. 10 Lacs by way of estimate and preponderance of probability cannot be said to be arbitrary and illegal. 15- In fact ratio of the decision of the Supreme Court in case of Dhakeshwari Cotton Mills Ltd. (Supra) is not applicable because the gross profit rates were not based on any estimates or preponderance but were treated to be based on ..... X X X X Extracts X X X X X X X X Extracts X X X X
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