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2012 (11) TMI 843 - AT - Income TaxSet off of Loss and Shortage of Stock – retraction of surrendered income - Held that:- the assessee having declared the sales of Rs.17.92 lacs in the trading account and inspite of the fact that shortage of stock amounting to Rs.17.92 lacs has not been explained will not make any effect on the profitability of the assessee. Once there is no defect in the books of account pointed out by the AO and the surrender made is proved to be false, then the assessee has right to retract from the statement made during the course of survey and declare the correct income as per books of account. In the present case, having not pointed out any defect by the AO in the accounts of the assessee, assessee has rightly declared the income by claiming the loss as per books of account. In such facts and circumstances of the case, even if the assessee accepts any invalid addition, he is at liberty to challenge the same - AO is not justified in making any addition either of loss or stock - order of CIT(A) is reversed - grounds of appeal of the assessee are allowed.
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