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TMI Blog2022 (2) TMI 374X X X X Extracts X X X X X X X X Extracts X X X X ..... , accordingly set aside the finding of Ld. CIT(A) and held that Ld. AO erred in making the addition for undisclosed cost profit of ₹ 9,43,234/-. Ground No.1 of the assessee s appeal is allowed. Claim of education cess and secondary higher education cess - HELD THAT:- The Hon'ble High Court of Bombay in the case of Sesa Goa Ltd.[ 2020 (3) TMI 347 - BOMBAY HIGH COURT] was pleased to hold that the Education Cess is an allowable expenditure as per the provision of the I.T. Act - Thus we allow this ground of the assessee claiming the deduction for payment of Education Cess as business expenses u/s 37(1) - Decided in favour of assessee. - ITA No.304/Ind/2020 - - - Dated:- 30-11-2021 - Shri Mahavir Prasad, Judicial Member And Shri Manish Borad, Accountant Member For the Appellant : S/Shri Anil Kamal Garg Arpit Gour, ARs For the Revenue : Shri S.S. Mantri, CIT-DR ORDER PER MANISH BORAD, A.M.: The above captioned appeal filed at the instance of the Assessee for Assessment Year 2018-19 is directed against the order of Ld. Commissioner of Income Tax(Appeals) (in short Ld. CIT]-3 Bhopal dated 13.08.2020 which is arising out of the ord ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 43(3) of the IT Act, 1961 2 Date of passing the Assessment Order 30-12-2019 3 Income assessed under section 143(3) ₹ 2,00,85,130/- 4 Total Additions made by AO and reason thereof Total Additions of ₹ 21,49,770/- (i) ₹ 12,06,536/- on account of interest expenses (ii) ₹ 9,43,234/- on account of alleged undisclosed business profit in respect of shortage of inventories. [Para (13.7) on page no. 62 63] 5 Relief granted by the ld. CIT (Appeals) Total Relief of ₹ 17,21,434/- (i) ₹ 12,06,536/- on account of interest expenses (ii) ₹ 5,14,898/- on account of alleged undisclosed business profit in respect of shortage of inventories. 6 Addition confirmed by the ld. CIT(A) [subject matter before the Hon ble Bench] (i) ₹ 4,28,336/- on account of alleged undisclosed business profit in respect of shortage of inventorie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Addition made/sustained - - 9,43,234 4,28,336 2. Justification for inventories as per books taken at ₹ 19,62,74,025/- in the Computation of Total Income instead of ₹ 19,85,00,000/- adopted by the Search Party: 2.1 Stock as per the books of account as on the date of search i.e. on 27-07-2017 was taken by rounding off to a higher sum of ₹ 19,85,00,000/-. The actual value of stock as on 27-07-2017 was at ₹ 19,62,74,025/- [kindly refer PB Page No. 261]. The comparison of actual stock value and round-off stock figures is given in a tabular form as under: S. No. Particulars Quantity Rate Value (Rs.) Round-off (Rs. In Lacs) 1 Finished Goods i) Box 327712 45.63 1,49,53,004 150.00 ii) C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... duction of stock on account of Sales made on 26-07-2017 for ₹ 14,23,489/- immediately one day before the date of search which was pending for recording was not considered by the Search Party [PB Page No. 234 to 256]. 3.4 Remaining difference of ₹ 8,62,245/- is owing to incorrect valuation of inventories adopted by the search party. Such fact was duly brought to the notice of the ld. DDIT (Inv.)-II, Indore, post search, by the head of the Group namely Shri Anand Bangur through his letter dated 19-08-2017 [kindly refer PB Page No. 222 to 226]. 3.5 Reconciliation of the recomputed physical inventories of ₹ 10,25,27,932/- with that adopted by the search party at ₹ 8,70,66,973/-: S. No. Particulars Amount Remarks 1 Craft Paper Reels (Grade-A) 2,96,32,948 As per Inventory Sheet at PB Page No. 220 2 Craft Paper Reels (Grade-B) 1,76,50,074 PB Page No. 219 3 Craft Paper Reels (Grade-C) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eal of the assessee may kindly be allowed fully and oblige. 6. Per contra ld. Departmental Representative (DR) supported the order of Ld. CIT(A). 7. We have heard rival contentions and perused the records placed before us and carefully gone through the submissions filed by the assessee. Ground no.1 of the assessee s appeal challenges the finding of Ld. CIT(A) partly confirming the addition for alleged undisclosed business profit at ₹ 4,28,336/- as against the addition made by the ld.AO at ₹ 9,43,234/-. 8. Brief facts relating to this issue are that during the course of search physical verification of inventories was done. Ld. AO adopted value of inventories as per books of account at ₹ 19,85,00,000/- and made few adjustment for the inventories physically found and then computed gross profit @ 13.87% at ₹ 1,39,45,817/-and against this amount gave deduction to the income shown by the assessee in the return of income under this head at ₹ 1,30,02,583/- and the remaining amount i.e. ₹ 9,43,234/- was added to the income. 9. When the matter came up before the Ld. CIT(A) he noticed certain error in the computation made by the Ld. AO, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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