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2010 (1) TMI 935 - AT - Income TaxAddition in respect of the stock - addition in respect of surrender of stock made by the assessee during the course of survey - Held that:- The assessee wanted these materials to be taken as scrap simply by saying that scrap was also purchased in this year. It is not the case of the assessee that assorted or mixed pipes were not purchased at all by the assessee and, therefore, such items cannot be there in the stock. As mentioned earlier, the inventory was authenticated by the assessee on the date of survey and the corresponding amount was also offered for taxation. The assessee did not retract from the statement and also did not point out the error in the inventory at any point of time. However, the statement and the inventory were disputed indirectly for the first time while filing the return and that too without making any mention in respect of the variation in value of stock made by him. We are of the view that a very heavy burden lied on the assessee for changing the value drastically in respect of two items. However, the fact is that no credible or reliable evidence was filed to show that cost or market price of either of these two items was substantially lower than the rate mentioned in the inventory. Therefore, on facts we are not in a position to accept the argument of the ld. counsel. CIT(Appeals) was right in holding that the reduction in the value of the inventory by an amount of Rs. 5,18,289/- was not justified. As no adverse material except non-maintenance of stock book has been pointed out by the lower authorities, which has not been considered sufficient for rejection of books. The discrepancy in stock has already been held to be unaccounted income. Therefore, no reason as to why the trading results for the second period should be rejected Depreciation allowance under section 10(2)(vi) of the Act - argued on behalf of the appellant that the action of the Tribunal in remanding the case is not strictly justified by the language of rule 27 or rule 12 – Held that:- Tribunal has got sufficient power under section 33(4) of the Act to entertain the argument of the department with regard to the application of paragraph 2 of the Taxation Laws Order and remand the case to the Income-tax Officer in the manner it has done. It is necessary to state that rules 12 and 27 are not exhaustive of the powers of the Appellate Tribunal. The rules are merely procedural in character and do not, in any way circumscribe or control the power of the Tribunal under section 33(4) of the Act, Tribunal had jurisdiction to entertain the argument of the department and to direct the Income-tax Officer to find whether any depreciation was actually allowed under the Industrial Tax Rules and whether such depreciation should be taken into consideration for the purpose of computing the written down value, appeal is partly allowed.
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