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2017 (3) TMI 1298 - ITAT BANGALOREReopening of assessment - addition made on account of excess stock found in the year under appeal (after setting off income offered by the assessee in the asst. year 2011-12) - Held that:- As per the sworn statement of Sri E.V. Subbiah, partner of the assessee firm which was recorded during the course of survey conducted on 14.6.2011, he had voluntarily agreed that ‘the total book stock was 48276.885 gms, but, as per physical inventory taken, it was 50963.82 gms. The excess stock of 2686.935 gms was voluntarily admitted as unexplained investment and offered as additional income [Rs.45,67,900/-] for the assessment year 2011-12. which shall be in addition to the regular book profit. The above additional income of ₹ 45,67,900/- was quantified by the assessee on the basis of adopting the rate at ₹ 1700/gms at the time of survey operation. Based on the established scheme of valuation of stock, the AO was of the view that the value of gold should have been adopted at the then prevailing market value in Bangalore on the date of survey i.e., on 14.6.2011 which was around ₹ 2105/gm as against the valuation adopted/agreed upon by the partner of the assessee firm at ₹ 1700/gm at the time of survey (supra). Accordingly, the AO had valued the excess stock found at the time of survey at ₹ 2105/gm which worked out to Rs,56,55,999/- [2686.9354 x ₹ 2105] and the same was brought to tax as additional income of the assessee for the AY 2012.13. However, while concluding the assessment, the AO took care and also fair in giving a deduction of ₹ 45,67,790/- [being the income declared by the assessee for the AY 2011-12 in adopting the value of excess stock of 2686.9354 gms only at the rate of ₹ 1700/gm]. This very fact has not been refuted by the assessee either. Thus, we are of the view that the stand taken by the AO and, subsequently, confirmed by the CIT (A) doesn’t require any interference by this Bench. With regard to the assessee’s objection to the effect that the reopening of the assessment u/s 148 of the Act was bad in law and requires to be quashed etc., we find that the issue has been elaborately deliberated upon by the CIT (A) in his impugned order which, in our view, doesn’t warrant any intervention. In essence, this ground of the assessee firm is dismissed.
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