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2018 (5) TMI 1171 - HC - Income TaxReopening of assessment - Whether no additions are made by the AO in the order of assessment, he cannot make additions on some other grounds which did not form part of the reasons recorded by him? - Reasons to believe - Held that:- In the present case, the reason for reopening the assessment was described in the stock reported by the assessee in its books of account, as compared to the stock reported to the bank. Assessee’s contention before the AO was that this discrepancy was on account of transit of stock. Contrary to what was canvassed before us, we do not find that the AO accepted such explanation of the assessee. He merely recorded it and thereafter, examined the materials on record. Two things emerge from such exercise; firstly, he did not accept the assessee’s declared evaporational loss of raw materials and secondly, he noticed that the assessee was unable to produce the books of accounts on the ground that the Sales Tax Department had impounded them. He, therefore, proceeded to frame the best judgment assessment. He was of the opinion that the Gross Profit shown by the assessee was low. He made adjustments by citing reasons, which resulted into the additions being made. No where can we see that the Assessing Officer accepted the assessee’s contention that the stock discrepancies stood explained. AO noted that in view of the Gross Profit addition, the evaporational loss has not been separately added. Gross Profit addition, being global in nature, would also include the stock discrepancy. No where do we find that the AO dropped his prime objection to the stock discrepancy cited as a reason for reopening the assessment. - No question of law arise.
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