TMI Blog2012 (11) TMI 843X X X X Extracts X X X X X X X X Extracts X X X X ..... lowed. - I.T.A. No.419(Asr)/2012 - - - Dated:- 1-6-2012 - SH. H.S. SIDHU, AND SH. B.P.JAIN, JJ. Appellant By: Sh. Surinder Mahjan, CA Respondent By: Sh. Tarsem Lal, DR ORDER PER BENCH: This appeal of the assessee arises from the order of the CIT(A), Jalandhar, dated 27.07.210 for the assessment year 2005-06. 2. The assessee has raised following grounds of appeal: 1.(a) That on the facts circumstances of the case, Ld. CIT(A) has grossly erred in confirming addition of Rs.22,36,320/- to make the taxable income of Rs.2,00,000/- as against loss returned at Rs.20,36,320/-. Addition confirmed is illegal and bad in law. (b) That addition of Rs.22,36,320/- has been made on the basis of undertaking given by the assessee at the time of surrender of Rs.2,00,000/- as additional income. Addition confirmed is illegal and bad in law because there is no estoppel against statute. (c) That addition confirmed is without any material on records and is based on assumptions and presumptions. 2. That the assessee requests for leave to add or amend the grounds of appeal before the appeal is heard or disposed of. 3. The brief facts of the case are that a survey un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that goods sold in lots have been sold at 30% of MRP approx. as against cost 63% of MRP. As such, instead of making any gross profit on these sales, in fact, company has suffered heavy loss. It was explained that cost of goods sold at RS.17,14,295/- is Rs.36 lacs. Trading a/c by taking these figures were also provided which shows gross loss of Rs.14,98,737/-. (18,85,705 minus 3,86,968) and closing stock of Rs.29,87,321/-. This gives a shortage of stock amounting to Rs.17,92,817/-. We are unable to explain shortage in stocks at the moment. It may be done due to sale of other defective, old fashioned stock on loss or otherwise. However, to buy peace of mind and to avoid litigation with the department, we offer addition income of Rs.two lacs. being gross profit on filing of income tax returns and return to be filed for assessment year 2005-06 will not be less than 2 lacs (Two lacs only). I further promise to pay advance tax by 31.03.2005. It is further submitted that this surrender is subject to no penalty and prosecution. However, a cheque amounting to Rs.70,000/- is being given as security. 3.2. The assessee reiterated its willingness to file the return of not below Rs. 2 lacs in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sions made in para 1.3 page 7 of the appellate order wherein assessee submitted that stocks of defective goods went on increasing from first year i.e. 1999-2000 to the year under appeal and were approx. to the extent of cost of sales. It was also explained that sales in lots were made prior to survey on 09.03.2005 no sales in lots were made in the past. He further stated that the ld. CIT(A) relied upon judgment in the case of Dr. S.C. Gupta vs. CIT 248 ITR 782 (All) that income surrendered during statement cannot be retracted. In fact, ld. CIT(A) has lost sight of the fact that statement of the assessee consists of two parts (i) Additional income offered Rs.2,00,000/- credited the same to profit loss account, but filed the return of loss as per profit loss account did not file the return of income of Rs.2,00,000/-. Judgment relied upon by the ld. CIT(A) is not applicable to second limb of the statement since there can never be waiver of right otherwise available to the assessee in law. It was further stated that it is an established law that what is otherwise not taxable cannot become taxable because of admission of assessee nor there can be waiver of the right otherwise ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... T(A) has held that the assessee made an offer for filing of return of income of not less than R. 2 lacs in his statement recorded u/s 133A and further that the loss on sale of goods in lots could not be claimed. During the assessment proceedings the appellant has not shown that the loss was actually incurred since the particulars of the goods sold and the cost thereof have not been placed on record. The appellant s version is also not acceptable because even after the impugned claim, there still remain shortage in stock which the assessee has not been able to explain. The assessee s explanation is, therefore, not tenable and thus not acceptable. It is submitted that the ld. CIT(A) has passed a well reasoned and speaking order. It is further submitted that on almost identical facts where a surrender had been made voluntarily, the Hon ble Punjab Haryana High Court in the case of S.K. Traders vs. CIT reported at 237 CTR 46 has held that Surrender being voluntary, same can be made the basis of addition without any further evidence. The Ld. DR further submitted that in view the above judgment of Hon ble Jurisdictional High Court, the assessee s appeal be rejected and the order of th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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