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2021 (2) TMI 1129 - AT - Income TaxAddition towards excess stock - GP estimation - HELD THAT:- As examined the trading account of the assessee split in two parts, i.e. before survey and after survey. If the amount of surrender of ₹ 5.76 lakh is excluded, the rate of gross profit in both the periods comes to roughly 17% each. In order to bring down the value of closing stock as on the date of survey from market price to cost price, the amount of gross profit is required to be unloaded from the market price taken by the survey team for ascertaining the excess value of stock purchased by the assessee. If such gross profit rate of 17% is applied to the market value of stock determined by the authorities as on the date of survey to ₹ 27.08 lakh, a reduction in the value of stock would be warranted to the tune of ₹ 4,60,360/- for finding out its cost price to the assessee. This amount of ₹ 4.60 lakh is, therefore, directed to be excluded from the addition of ₹ 8,81,692/- made and confirmed by the authorities in this regard. Addition being difference in cash as per cash book and physical cash found at the time of survey - HELD THAT:- The survey team counted physical cash and tallied it with the cash in hand as per cash book. There was excess cash of ₹ 73,228/- which was accepted by the assessee as an additional income, but not offered for taxation in the return of income. The assessee made up the cash book later on to present that there was no difference. However, nothing of this sort was stated at the time of survey that the cash book was not complete or certain transactions were omitted to be recorded.Contention of the assessee for the acceptance of books of account produced after the date of survey, cannot be countenanced. Thus, the resultant addition on account of excess stock is hereby confirmed.
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