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2014 (5) TMI 935 - AT - Income TaxIncome offered for taxation during survey u/s 133A - Deletion being the difference between income disclosed - Unaccounted income out of unaccounted investment – Held that:- In a situation when few letters were written by CIT(A) to the AO to submit the remand report but no compliance was made although a final date was given - there was reference of additional evidence but in fact in true sense there was no additional evidence placed before the CIT(A) - The assessee’s submission was that the correct rate of valuation ought to have been adopted by the AO - there was no infringement of the provisions of Rule 46A of IT Act - The AO’s action to adopt the market value appears to be incorrect being in contrast to the consistent method adopted by the assessee, i.e., weighted average cost method - when the valuation of the gold is required a weighted average cost is being taken because of the reason that the rate of the gold keeps on fluctuating frequently - the difference in the weight as found at the time of survey was concerned the same has not been disputed by the assessee - The excess weight was found at 9935.264 gms on which the value adopted by the AO at Rs.7780/- which was found by CIT(A) as excessive and in contradiction of the average cost method consistently adopted by the assessee – the order of the CIT(A) is upheld – Decided against Revenue. Deletion of bogus purchases – Held that:- A chart has been placed according to which the physical stock of gold was found at the time of survey weighing 11481.390 gms - as against that the weight of the gold as per books was only 1540.126 gms, there was a difference of 9941.264 gms - to cover up the difference in weight the assessee has tried to procure the purchase bills from those parties - that attempt had failed because after survey it was detected that those purchase bills were bogus bills and there was no actual delivery of gold ornaments - the assessee had thought proper to reverse the entry in the trading account and simultaneously offered the value of the weight difference in the income tax return - Once, the assessee has accepted the mistake and paid the tax on the difference amount then it is not reasonable on the part of the Revenue to tax the assessee - CIT(A) has rightly held that the amount was not required to be taxed in the hands of the assessee once the corresponding contra entry has been passed in the books of account of the assessee – Decided against Revenue.
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