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TMI Blog2022 (9) TMI 1311X X X X Extracts X X X X X X X X Extracts X X X X ..... sment Year 2012-13. 2. The assessee has raised the revised grounds of appeal: "1.0 The grounds of appeal mentioned hereunder are without prejudice to one another: 2.0 The learned Commissioner of Income-tax (Appeals), Jamnagar [hereinafter referred to as the ld. "CIT(A)"] erred on facts as also in law by holding that the issue raised as per ground of appeal is not relevant for the year under consideration. The action of ld. CIT(A) is totally unjustified on facts as also in law. 3.0 The ld. CIT(A) erred on facts as also in law by accepting AO's argument which has considered only income part of impounded material amounting to Rs. 2,01,50,000/- and ignored application of income/expenditure part of impounded material amounting to Rs. 1, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... expense of Rs. 1,35,80,000/- representing the construction expenses which were also added in the work-in-progress shown at the end of the financial year under consideration. As per the AO, such WIP will become the opening stock of next year which will certainly be set off against the sales to be made by the assessee. Accordingly, he was of the view that the assessee will get the benefit of Rs. 1,35,80,000/- against the income disclosed during the survey proceedings. 5. Besides the above, the AO also found that the impugned amount of expenditure of Rs. 1,35,80,000/- was incurred in cash and therefore, the same cannot be allowed as deduction by virtue of the provision of Section 40A(3) of the Act. Thus, the AO disallowed the same and added ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted expenses. Therefore, the same cannot be made subject to be disallowance under the provisions of Section 40(A)(3) of the Act. 9. On the other hand, the Ld. DR vehemently supported the order of the authorities below. 10. We have heard the rival contentions of both the parties and perused the materials available on record. There is no dispute to the fact that the assessee in the course of survey proceedings dated 22.03.2012 under Section 133A of the Act has admitted unaccounted income to the tune of Rs. 2,01,50,000/- which was duly disclosed in the profit and loss account of the assessee which are placed on Page 33 of the Paper Book. The nature of income disclosed by the assessee during the survey operation was also explained by it in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ote that the Delhi Tribunal involving identical facts and circumstances in the case of Shri Dinesh Chand Jain vs. ACIT, reported in 116 Taxman 225 has decided the issue in favour of assessee. The relevant extract of the order is reproduced below: "On facts as they emerged from the material placed, the inference of the authorities below that as a result of entries in respect of stock of Rs. 4,65,000, the effect of surrender was nullified, was misconceived. If the excess stock was not introduced in the trading account, sales of Rs. 3,57,703 could not be effected in the post-search period and yet leaving a closing stock of Rs. 2,26,785 the stock on the date of search, as per books, being only Rs. 1,81,700. The Assessing Officer had not drawn ..... X X X X Extracts X X X X X X X X Extracts X X X X
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