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2019 (9) TMI 374 - AT - Income TaxExcess stock of paddy allegedly found during the course of survey - survey u/s 133A - CIT-A deleted the addition - HELD THAT:- appreciated the same in the right perspective and keeping in view that the case of the assessee was duly supported by a certificate given by the Chartered Engineer to establish the maximum storage capacity of the godown of the assessee, he rightly held that the procedure adopted by the Survey Team for physical verification of stock was unreliable. Moreover, the ld. CIT(Appeals) also analysed the quantitative details of paddy furnished by the assessee and found on such analysis that the position of stock as on the date of survey was correctly reflected in the books of account of the assessee. He also noted that no material defect was pointed out by the Assessing Officer either in the books of account of the assessee or the stock register regularly maintained by the assessee and held that in the absence of any such defect and without rejecting the book result of the assessee, the addition made by the Assessing Officer on account of the alleged excess stock found during the course of survey was not sustainable. - Decided against revenue Addition on account of excess stock of gunny bags - CIT-A restricted the addition - HELD THAT:- After taking into consideration the opening stock, the purchases made by the assessee and the quantity of gunny bags used during the year under consideration, the stock of gunny bags available with the assessee was found to be 15,481 by the ld. CIT(Appeals). On the basis of this working, the difference in gunny bags found during the course of survey was determined at 3,479 by the ld. CIT(Appeals) and the addition made by the Assessing Officer on this issue was restricted by the ld. CIT(Appeals) to ₹ 97,412/- calculated at the rate of ₹ 28/- per gunny bag. Keeping in view all these facts and figures given by the ld. CIT(Appeals), which have remained undisputed by the ld. D.R., we find no infirmity in the impugned order of the ld. CIT(Appeals) on this issue - Decided against revenue. Addition on account of capital introduction by the partners of the assessee-firm - gifts in question given to the partners - HELD THAT:- It is observed that the gifts in question given to the partners were confirmed by the respective donors and affidavits to that effect were also filed by them. The source of funds utilized for giving such gifts was explained as the sale proceeds of gold ornaments by the concerned donors. Keeping in view the relationship between the donors and the donees CIT(Appeals) held that the gifts could be accepted as genuine if the source explained by the donors as sale of gold ornaments was established. As required the AO to make necessary enquiries with the concerned parties, who had claimed to have purchased the gold ornaments from the donors. CIT(Appeals) found that the only transaction that did not stand prove was that of the sale of gold ornaments to Hiralal & Sons. He accordingly restricted the addition of ₹ 23,89,500/- made by the Assessing Officer on this issue to ₹ 2,21,756/-. No infirmity in the impugned order of the ld. CIT(Appeals) allowing a relief of ₹ 21,67,744/- to the assessee on this issue since the source of funds for giving the gifts in the hands of the donors to that extent was duly established. - Decided against revenue.
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