TMI Blog2013 (7) TMI 539X X X X Extracts X X X X X X X X Extracts X X X X ..... vities for the entire period, to project by way of extrapolation the facts found during the brief period of about four months would not be permissible - Decided against Revenue. Excess stock - Tribunal deleted addition holding that stock was properly accounted - Held that:- Assessee has received the goods on approval basis and the same was lying in the stock at the time of search - When two authorities concurrently found that the stock was duly explained - no substantial question of law arise - Decided against Revenue. - Tax Appeal No. 966 of 2010 - - - Dated:- 4-4-2013 - AKIL KURESHI AND MS. SONIA GOKANI, JJ. For the Appellant : M.R. Bhatt and Mrs. Mauna M. Bhatt. For the Respondent : J.P. Shah and Manish J. Shah. REP : ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he business of processing and selling tea through various sources. For such business, the assessee makes large scale purchases through various sources. During the search operations carried out on 29th July 1998, the Revenue authorities seized several documents and materials. On the basis of such documents and materials, the Assessing Officer examined the question of the purchase price paid by the assessee for various grades of tea purchased through different sources. He painstakingly analyzed the material and came to the conclusion that the assessee had on various occasions paid unusually high purchase price when such commodity was purchased through Pratima Traders. He compared the purchase price paid by the assessee for such goods of the s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... projected the possible purchases through such agency and the resultant possible tax suppression. It was this element of the Assessing Officers order which the CIT (Appeals) reversed. The Tribunal also upheld the order of the CIT (Appeals). We may notice the observations of the Tribunal in this regard: 19. We find that as a result of amendment made (w.e.f. 1.07.1995) in section 1558BB by the Finance Act, 2002, the provisions in Chapter VI-A should be taken into consideration in determining the undisclosed income of the block period and the section 158BB(1) has been amended to clarify that the block assessment of undisclosed income is based on the evidence found in the search and material, or information gathered in post search inquir ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... relatable to the evidences and information. Accordingly, the Assessing officer at the best can estimate the inflation in price on the basis of seized material for the year starting from April to the datge of search as there is relatable material, which is found during the course of search. Even from mere reading of amendment made (w.r.e.f. 1.07.1995) in section 158BB by the Finance Act, 2002, the provisions in Chapter VI-S is very clear that while determining the undisclosed income of the block period, the provisions of section 158BB(1) has been amended to clarify that the block assessment of undisclosed income is based on the evidence found in the search and material, or information gathered in post search inquiries made on the basis of e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as simply not permissible. The Assessing Officer, presumed several things such as, the continued purchase by the assessee through the same agency at artificially inflated price. He also projected the rate at which such higher purchases were made for the said period about four months in absence of any evidence that such activities continued for the entire block period. In other words, in absence of any documents found during search to even link the assessees activities for the entire period, to project by way of extrapolation the facts found during the brief period of about four months would not be permissible and rightly so held by the Tribunal. Similar facts arise with respect to question B, but with respect to different commodity. No se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... goods are accepted separate GRN is prepared and thes ame entered into stock register. He also noted that the assessee has slao submitted a statement showing the details of goods received on approval basis which indicate Jangad slip number, receipt date, quantity in kgs. etc. and the assessee has also submtited that such Jangad slip number are between 9851 to 9950. He noted the argument of the assessee that in many cases the Jangad goods are accepted subsequent but before the date of search and the some were reflected in the stock at the time of search. The AO, accordingly considered the submissions of the assessee and stated that he assessee may be flowing a regular system of accepting goods on approval basis and maintaining such records b ..... X X X X Extracts X X X X X X X X Extracts X X X X
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