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2015 (6) TMI 886 - ITAT AHMEDABAD

2015 (6) TMI 886 - ITAT AHMEDABAD - TMI - Addition on account of stock discrepancy - CIT(A) deleted the addition of ₹ 23,38,317/- on the ground that it was covered by disclosure of additional income of ₹ 35 lakhs made by the assessee - Held that:- DR could not cite any reason as to why the discrepancy of ₹ 23,38,317/- found by the AO on assessment could not be covered by the additional income of ₹ 35 lakhs, which was already offered by the assessee for taxation in the ret .....

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is hereby confirmed and the ground of appeal of the Revenue is dismissed. - Decided in favour of assessee. - IT (SS) A No. 2/Ahd/2012, CO No. 68/Ahd/2012 - Dated:- 8-5-2015 - N S Saini, AM And S S Godara, JM,JJ. For the Appellant : Shri S L Meena, CIT-DR For the Respondent : Shri Vijay Ranjan, AR ORDER Per N S Saini, Accountant Member This is an appeal filed by the Revenue and CO filed by the assessee against the order of the CIT(A)-III, Ahmedabad dated 24.10.2011 2. The sole ground of appeal t .....

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ng the course of search, under section 132 of the Act, the difference in the physical stock at the factory premises and stock as per books of accounts was found. The AO made addition of ₹ 23,38,317/- as under: Particulars as per Assessing Officer Amount (Rs.) Value of raw material stock found in lesser in search and added as deemed sales proceeds 5,93,121 Excess stock of raw material treated as unexplained investment 1,79,741 Value of finished goods found in lesser in search and added as d .....

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cess and shortage of finished goods. Further, the addition of ₹ 5,28,872/- was made by the AO after taking the market rate of the quantity of the finished goods issued by the assessee for samples and the addition of ₹ 8,00,116/- was made by the AO on the basis of the yield. The AO compared the yield of Asstt.Year 2008-09 with the yield of 125 days of the current assessment and made the addition of ₹ 8,00,116/-. The CIT(A) held that as regards the addition on account of shortage .....

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figure of ₹ 1,85,550/- was wrongly taken by the AO as excess stock of finished goods as against shortage. It was submitted that bill dated 6.10.2008 for ₹ 1,06,602/- was produced before the CIT(A) in respect of the samples. Thus, in respect of the same quantity of the stock, the assessee has accounted for the samples vide bill dated 6.10.2008 at ₹ 1,06,602/- by crediting the purchase account and debiting the sales account. Therefore, it was contended that the AO was not justifi .....

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varies from finished product to finished product, depending upon the width of the produce, and therefore, the AO was not justified in comparing the yield of the previous Asstt.Year 2008-09 with the yield of 15 days of the current assessment year. 6. In the alternative, it was submitted by the assessee that the assessee has declared additional income of ₹ 35 lakhs in the return of income as other business income. In the Notes to the return of income the assessee has mentioned as under: Whi .....

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wn litigations arising there from and to buy peace." 7. The CIT(A) observed that even if there was some discrepancy on account of stock, the same is covered by the disclosure of ₹ 35 lakhs as the assessee has not claimed any benefit of this disclosure in the return of income. Therefore, the CIT(A) held that in his view, since total addition of ₹ 23,38,317/- was less than the additional income of ₹ 35 lakhs disclosed by the assessee in the return of income, and the assessee .....

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tion of ₹ 23,38,317/-, the details of which are as follows: Particulars as per Assessing Officer Amount (Rs.) Value of raw material stock found in lesser in search and added as deemed sales proceeds 5,93,121 Excess stock of raw material treated as unexplained investment 1,79,741 Value of finished goods found in lesser in search and added as deemed sales proceeds 50,908 Excess stock of finished goods treated as unexplained investment 1,85,559 Quantity issued as sample and treated as deemed .....

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