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2018 (5) TMI 1642 - AT - Income TaxNet profit estimation - CIT-A granted substantial relief to the assessee and sustained the addition towards difference in closing stock - Held that:- The survey team itself had made physical valuation of inventories and had arrived at the value as on 30.3.2010 at ₹ 34,71,533/- only. The difference between purchases and sales thereafter worked out to ₹ 23,61,057/- (35,25,479-11,64,422) as observed by both the AO and CIT-A would lead to further increase in closing stock by ₹ 23,61,057/-. Total closing stock as on 31.3.2010 should be ₹ 58,32,590/- as against the closing stock of ₹ 54,26,130/- declared by the assessee in the balance sheet filed in support of return of income, thereby leading to a difference of ₹ 4,06,460/- which has been rightly added by the CIT-A. The survey team valued the closing stock as on 30.3.2010 based on physical verification of inventories at ₹ 34,71,533/-, whereas the closing stock that was reflected in the computerized profit and loss account was ₹ 1,52,97,868/-. Hence the computerized statement in the instant case cannot be relied upon as it contained deficiencies due to system getting corrupted. Assessee had also given the statement on oath at the time of survey that the total income for the whole year would be approximately ₹ 35 lacs for which due taxes would be paid by him. The returned profit by the assessee was ₹ 34,63,940/-. Hence there is no much variation in the approximation done by the assessee on the date of survey vis a vis the actual profit. We also find from the Gross Profit and Net Profit Chart of earlier years that assessee had reported higher GP and NP during the year under appeal despite the huge reduction in turnover. The ld CITA had rightly sustained the addition only towards difference in closing stock and the same does not require any interference.- Decided against revenue
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