9911796707
TMI Blog2022 (5) TMI 835X X X X Extracts X X X X X X X X Extracts X X X X ..... erefore, we are satisfied that the assessee at the very first instance, told truth to the Revenue Authorities without any agitation or resistance. During the first appeal proceedings, the assessee submitted a detailed submission explaining the facts and circumstances and compelling situation to show higher figure of opening stock as on 01.04.2013. The assessee also submitted a chart there under showing GP and NP rates. On perusal of said submissions and the chart showing sales, GP and NP clearly observe that the net profit shown by the assessee is 1.44% of turnover which is lesser than the average NP rate of immediately preceding two years No addition has been made by the Assessing Officer on account of low NP rate, but he took up the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... spondent : Sh. Om Prakash, Sr. DR ORDER This appeal filed by the assessee is directed against the order dated 29.08.2018 passed by ld. CIT(A)-16, New Delhi for the assessment year 2014-15 on the following grounds : 1. Because the action is being challenged on facts and law for making addition of Rs.39,50,000/- due to difference between opening stock of relevant year closing stock of preceding financial year. 2. Because the action is being challenged on facts and law for making addition of Rs.39,50,000/- overlooking that both the years i.e. impugned year preceding year books of accounts of assessee were audited u/s. 44AB of the Income Tax Act, 1961. 2. Learned counsel for the assessee submitted that the Assessing O ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ifference amount as unexplained investment u/s. 69 of the Act. Ld. Counsel submitted that before the ld. CIT(A), the assessee has submitted the detailed submissions which were not considered and appreciated in right perspective and the ld. CIT(A) dismissed the explanation as well as the appeal of the assessee at the threshold, which is not a correct and justified approach. Ld. Counsel submitted that it was a bona fide change in figure of opening and closing stocks and the same cannot be alleged as manipulation in accounts. Therefore, the addition may kindly be deleted. 3. Replying to the above, the ld. DR vehemently supported the assessment as well as first appellate order and submitted that the assessee has shown higher figure of openin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 01.04.2013, which provoked the Assessing Officer to make addition u/s. 69 of the Act. However, during the assessment proceedings, at the very first instance, the assessee explained the cause of said inflation of opening stock and submitted that the assessee wanted to take loans from banks to repay the loan amount taken from SIDBI and just to satisfy the bank officials, he made such inflation in the opening stock without any malfunction. Therefore, I am satisfied that the assessee at the very first instance, told truth to the Revenue Authorities without any agitation or resistance. 6. At the same time, from careful reading of the first appellate order, we observe that during the first appeal proceedings, the assessee submitted a detaile ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... clusion that the Assessing Officer was not correct and justified in making addition in the hands of assessee merely on the basis of difference in the two figures, i.e., closing stock as on 31.03.2013 and opening stock as on 01.04.2013. However, to cover all possible leakages of revenue, I am of the considered opinion that the addition is required to be made in the hands of assessee on account of low NP rate. Therefore, the Assessing Officer is directed to make addition in the hands of assessee taking NP rate of total sale turnover as 2% of sales/turnover. The Assessing Officer is directed to recalculate the addition accordingly. 8. In the result, the appeal of the assessee is partly allowed. Order pronounced in the open court on 13.05 ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
