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2023 (2) TMI 110 - ITAT AHMEDABADDifference in stock noticed on the date of survey - difference of stock between stock as per books of accounts as on the date of survey and stock physically found on the date of survey was found - HELD THAT:- CIT(A) has not taken into account the conciliation statement which was filed before the authority. The assessee pointed out to the authorities that in view of existence of all the units in the common compound inter mingling of stock among the units was possible and the partner’s statement cannot be the sole criteria for making addition to that extent. From the perusal of the records related to the reconciliation filed by the assessee it appears that the excess stock claimed by the Revenue / Assessing Officer is not properly verified. Therefore, it will be appropriate to remand back this issue to the file of the Assessing Officer for proper adjudication of the issues - Ground No. 1 is partly allowed for statistical purpose. Sales made out of books - A.R. submitted that when the purchases were fully accepted during the survey the sale cannot be doubted. In fact, sales are higher than the loose papers and in that respect correct Gross Profit should have been taken into account - HELD THAT:- From the perusal of records and the reconciliation filed by the assessee the CIT(A) has not taken the cognizance of the same, hence this issue also needs verification. Therefore, we remand back this issue to the file of the Assessing Officer for proper adjudication after taking into account all the evidences as well as reconciliation statement filed by the assessee and decide accordingly. Needless to say, the assessee be given opportunity of hearing by following principle of natural justice. Thus, Ground No. 2 is partly allowed for statistical purpose. Addition on account of debit of cash discount pertaining to prior period - A.R. submitted that the CIT(A) as well as the AO ignore this fact that said claim crystallized during the year only - HELD THAT:- It is pertinent to note that the debit of cash discount pertaining to prior period has been crystallized during the year only and not prior or any subsequent year, therefore, the addition made by the Assessing Officer and CIT(A) is not correct. Hence, Ground No. 4 is allowed. Rejection of book of accounts u/s 145 - addition by estimating gross profit rate - HELD THAT:- It is pertinent to note that the assessee has taken cognizance of the sales and the G.P. rate followed accordingly was taken into account by the assessee. The rejection of book was no proper as the assessee has already followed the method of accounting which was continuously followed in the previous and subsequent years. In fact, inflation brokerage and transportation brokerage not claimed separately so there was no reopening made on earlier occasions. The comparable which was cited by the Assessing Officer were never confronted to the assessee. Thus, this needs verification and therefore, the entire issue is remanded back to the file of the Assessing Officer for proper adjudication - Ground Nos. 1 & 2 are partly allowed for statistical purpose. Unexplained credits/unaccounted sales noticed in the impounded material and not found recorded in the books of accounts - HELD THAT:- It is pertinent to note that the assessee has given the details of purchase and the subsequent sales in entirety and the evidences placed before the Assessing Officer was not taken into account by both the authorities. Therefore, this issue needs verification and we remand back this issue to the file of the Assessing Officer for proper adjudication. Needless to say, the assessee be given opportunity of hearing by following principle of natural justice. Ground No. 3 is partly allowed for statistical purpose. Discrepancy in stock found on the date of survey on the basis of statement of director - A.R. submitted that this addition was contrary on the basis of statement and no proper adjudication was made by the assessee - HELD THAT:- It is pertinent to note that the alleged discrepancy in the stock found on the date of survey on the basis of statement of director was never established by the Assessing Officer with the proper reasoning that the statement of director was verifiable from the said stocks available at a survey premises. There was no independent finding given by the Assessing Officer related to the said addition and therefore, this addition does not sustain. Ground No. 4 is allowed. Addition u/s 68 for unexplained credit in the name of Mehta Kantilal Nandlal - A.R. submitted that the assessee has already filed confirmation related to the same and also filed repayment details - HELD THAT:- As perused all the relevant material available on record. The assessee has also filed confirmation of the parties and also filed the repayment in respect of these credits of Rs. 80,000/- and the same was not taking into account by the Assessing Officer as well as CIT(A) while confirming the addition. Hence, Ground No. 1 is allowed. Understatement of Net Profit without finding any defect in the books - HELD THAT:- It is pertinent to note that in similar type of addition in another group case involved relating to survey of the same date the Tribunal has deleted the similar addition - Besides these books of accounts were never rejected by the Assessing Officer and the requisite trading account up to the date of survey was also before the Assessing Officer, therefore, the CIT(A) as well as Assessing Officer was right in making this addition. Hence, the Ground No. 2 is allowed.
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