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2019 (6) TMI 652 - AT - Income TaxValidity of Summons issued u/s 131 - additions during the survey proceedings u/s 133A - addition made solely on the basis of statement taken during survey - HELD THAT:- Assessee's Ground has no merit because the survey team and the jurisdictional Assessing Officer are well within their powers to issue the summon u/s 131 of the Act in order to complete the survey proceedings in the interest of revenue. Validity of retraction of the statement made in survey proceedings u/s 133A - HELD THAT:- The assessee has within a reasonable period of 3 months, after analysing various documents relating to purchase and sale of the stock, market price vis-a-vis the cost price of the products, deduction for defective goods and also on observing the stock of another sister concern M/s. Gayatri Coating Pvt. Ltd which was lying in the same premises and was wrongly included by the survey team in the unaccounted stock even when the stock of the sister concern M/s. Gayatri Coating Pvt. Ltd was duly disclosed in their regular books of accounts filed a retraction statement on 28.4.2014. It is always open for the revenue authorities to examine the correction of the retraction statement and should point out the errors in such retraction statement (if any). Therefore the action of Ld. A.O of outrightly rejecting the assessee’s retraction statement without pointing out any mistake in such retraction statement is devoid of merit and is uncalled for. We therefore allow Ground No.2 raised by the assessee . Unaccounted/ unexplained investment made in excess stock - HELD THAT:- The assessee has successfully demonstrated with the help of various documentary evidence in the form of the invoices for selling of goods post survey, quotations of grey cloth regularly purchased by the assessee, financial statement showing the gross profit rate, proof of the stock belonging to Ms/ Gayatri Coating Pvt. Ltd wrongly included in the unaccounted stock of the assessee and the fact that no other discrepancy has been pointed out in the regular books of accounts maintained by the assessee, we are therefore inclined to hold that the assessee has rightly valued the unaccounted stock at ₹ 1,82,15,777/- which has been offered to tax and Ld. A.O erred in making the addition for ₹ 2,09,44,333/- and the same deserves to be deleted. We therefore set aside the findings of both the lower authorities and allow the assessee’s Ground of the instant appeal.
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