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TMI Blog2013 (12) TMI 658X X X X Extracts X X X X X X X X Extracts X X X X ..... ame. 3. Ld. 'DR', on the other hand, vehemently contended that there does not exist any mistake, apparent from record within the meaning of provisions of section 254(2) of the Income-tax Act,1961 ( in short 'the Act') and the ratio laid down by the jurisdictional High Court, Hon'ble Supreme Court, in plethora of decisions. The assessee has not raised any issue in the impugned M.A., which can be construed as the existence of factual and legal error, apparent from the record within the contemplation of section 254(2) of the Act. The appeal has been adjudicated by the Bench, on merit, by way of passing a detailed and well reasoned order. Consequently, the M.A. does not fall under the provisions of section 254(2) of the Act. The assessee appel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uation thereof and in such case no additions are called for as the Deptt. has valued the stocks on estimated cost, whereas the assessee has valued the stocks on the basis of actual purchase bills has not been decided by the Hon'ble Bench by giving specific reasoning and speaking order. 2. The assessee has submitted at the time of hearing that the stock found at the time of survey was lower than the stock recorded in the books of accounts as on that date and therefore, it was not open to the A. O. to make addition in this behalf as the valuation of stock recorded in the books of accounts was higher and therefore, it has higher element of profit embedded in it and the assessee also relied upon the judgement of CIT Vs. Lalsons Enterprises 324 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... valued at cost. By taking 11.24% as G. P. on sales which has been applied by the Ld. A. O., if we calculate the G. P. rate on cost of goods sold (which in the present case is Rs. 14,21,168/-) the same comes 12.66% (11.24 x 100/88.76 ) and if we apply 12.66% on 14,21,168/-, the amount of addition will be Rs. 1,79,920/- and not Rs. 2,02,300/- as has been made by Ld. A. O. and the addition of Rs. 22,380/- ( Rs. 2,02,300 -1,79,920) is to be deleted, whereas the Hon'ble Bench has not decided the said issue by giving the specific reasoning and speaking order. Keeping in view the abovesaid facts & circumstances of the case, we pray that the order passed by Hon'ble Bench be re-called and the submissions of the assessee be decided by giving specifi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e and valued at Rs. 11,44,881/- on the date of survey. The position of stock on the date of survey as per books of the assessee was Rs.25,65,249/-. Thus, the value of stock as physically found at the time of survey was short by Rs. 14,21,168/- than the value of stock recorded in the books. The fact that the inventory of stock was taken and the valuation thereof made in the presence of the representatives of the assessee is not disputed. The assessee did not raise any dispute regarding correctness of the value of stock taken at the time of survey either at the time of survey or at any time thereafter till the matter came up for hearing before the AO. 9. At the time of hearing before me, the learned Authorized Representative for the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tock found at the time of survey was short by Rs.14,21,168/-. The fact that the stock at the time of survey was substantially lower that the stock as per books confirms the finding of the AO that such sales must have been made outside the books. The action of the AO in estimating the sales outside the books at Rs. 18.00 lakhs, does not seem to be arbitrary or unreasonable on the facts of the case. The AO has applied the same rate of profit on sales estimated by him to have been made outside the books as declared by the assessee herself on sales recorded in the books. The approach of the AO in this behalf is fair and reasonable. 11. In view of the foregoing, the order passed by the Ld. CIT(A) is confirmed. Consequently, the appeal filed by ..... X X X X Extracts X X X X X X X X Extracts X X X X
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