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TMI Blog2019 (11) TMI 197X X X X Extracts X X X X X X X X Extracts X X X X ..... the opportunity by the Assessing officer to explain the difference and thereafter, even before the ld CIT(A) and before us, no such working is submitted to support the 15% average variation. The physical stock being less than the book stock effectively means out of book sales to the extent of ₹ 31,96,346 and applying gross profit so declared by the assessee @ 6.39%, the addition comes to ₹ 204,246 (as against ₹ 217,260 determined by the AO) which is hereby confirmed. - Appeal of the assessee is partly allowed. - ITA No. 524/JP/2018 - - - Dated:- 2-9-2019 - Shri Vijay Pal Rao, JM And Shri Vikram Singh Yadav, AM For the Assessee : Shri P.C. Parwal (CA) For the Revenue : Shri V ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion which was provided to him. Vide reply dated 17.10.2013, the A/R submitted that book stock as on the date of survey was ₹ 19,97,54,11/-. For value of stock found and valued by the survey team, the A/R submitted that inventories were not properly valued and totalled. He pointed out various defects in the stock inventories prepared by the survey team. Specifically he pointed out that valuation was done on the basis of MRP instead of actual cost price, various items in the inventory left without any valuation and many items of high value were counted and valued on lump sum/estimate basis rack wise instead of actual counting and correct valuation. The A/R furnished the assessee s own working of valuation of physical stock found at ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has failed to do so. Under such circumstances, the claim/argument of the A/R was not accepted and gross profit on short stock of ₹ 34 Lacs is estimated at current GP rate of 6.39% and an addition of ₹ 217,260 was made in hands of the assessee. 6. On appeal, the ld CIT(A) has upheld the findings of the Assessing officer stating that the valuation of stock was done by the assessee herself in presence of two independent witnesses. 7. During the course of hearing, the ld. AR reiterated the submissions made before the lower authorities and our reference was drawn to the submission dated 17.10.2013 filed during the course of assessment proceedings, wherein it was stated as under:- 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cise in respect of around 100 items wherein their MRP (as taken in the inventory list prepared at the time of survey) is compared with the purchase price of such item. Such list along with copy of purchase bills is enclosed. Variation between the MRP and the purchases price ranges between 15% to 68%. On an average, 25% of the value worked out on MRP is reduced then the cost of stock physically found in survey works out to ₹ 1,67,75,411/-. As against this the book stock as on the date of survey works out to ₹ 1,99,71,757/- as below:- Trading Account as on 08.06.2011 Particulars Amount Particulars ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The value of stock found in survey is more or less verifiable with that as per books of accounts after considering the defect in valuation as stated above, Thus stock found in survey is fully explained. 8. Per contra, the ld. DR relied on the findings of the lower authorities. It was submitted that the assessee has been provided adequate opportunity by the Assessing officer to explain the difference in stock and where as per the assessee s own working, the short stock of ₹ 34 lacs has been determined by the Assessing officer and on which gross profit rate has been applied, there is no infirmity in the order of the Assessing officer which has rightly been confirmed by the ld CIT(A). ..... X X X X Extracts X X X X X X X X Extracts X X X X
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