TMI Blog2006 (10) TMI 254X X X X Extracts X X X X X X X X Extracts X X X X ..... Assessing Officer was to accept the disclosed trading results. We are therefore satisfied that in the instant case the assessee has been able to discharge the heavy burden that rested upon him while retracting from offer of additional income at the time of survey. As we have pointed out earlier even at that stage the case of the assessee was that the offer was made to buy peace and not because of any concealment of income or discrepancy in accounts detected by survey authorities. Thus, we delete the addition made by the Assessing Officer and upheld by the learned CIT(A) - In the result, this appeal is allowed. - HON'BLE R.K. GUPTA, JUDICIAL MEMBER AND S.C. TIWARI, ACCOUNTANT MEMBER For the Appellant : K. Shivram and Paras Savla For th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... herefore added an income of Rs. 25 lakhs to the income as declared by the assessee in the return of income filed by it. On assessee s appeal the learned CIT(A) upheld the reasoning of the Assessing Officer. Still aggrieved the assessee is in appeal before us. 4. It would be appropriate to begin with the relevant question and answer during the course of survey proceedings that are as follows: Q.4 On the basis of the figures of sales and purchase opening stock and applying the G.P. rate of 7.26 per cent a trading account as on 30-3-1999 was drawn. This exercise resulted in the derivation of closing stock as per books at Rs. 14,28,952 as per Annexure-A. Today the inventory of physical stock purported to be lying in the hired godown of M/s. Lad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ring the course of survey proceedings i.e., in the event of the assessee not being able to explain away any discrepancy in the books of account. During the course of assessment proceedings the assessee furnished complete particulars of its business transactions. The assessee demonstrated that the very premise that there was average gross profit of 7.26 per cent of the survey authorities was totally incorrect and there was wide fluctuation from time to time in the margin of profit earned by the assessee as was obvious from the detailed factual statements filed during the course of assessment proceedings. The authorities below were totally unjustified in ignoring the voluminous data filed by the assessee during the course of assessment procee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ffer of additional income the assessee clearly protested that the working of value of closing stock as made by the survey party was not proper and a much higher gross profit rate had been adopted for deriving the value of closing stock. The offer as made by the assessee is not because of any admission of undisclosed income but on the ground that the assessee would like to put an end to the controversy and avoid litigation. 8. The legal position regarding whether or not an assessee who makes an offer of additional income during the course of an enquiry by income-tax authorities is entitled to retract from that offer subsequently has been subject-matter of a plethora of Tribunal decisions and court pronouncements. For the purpose of this orde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urse of assessment proceedings. That being so the only course open to the Assessing Officer was to accept the disclosed trading results. We are therefore satisfied that in the instant case the assessee has been able to discharge the heavy burden that rested upon him while retracting from offer of additional income at the time of survey. As we have pointed out earlier even at that stage the case of the assessee was that the offer was made to buy peace and not because of any concealment of income or discrepancy in accounts detected by survey authorities. 9. In view of the discussion in the foregoing paragraphs we delete the addition of Rs. 25 lakhs as made by the Assessing Officer and upheld by the learned CIT(A). 10. In the result, this appe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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