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2015 (7) TMI 694 - GUJARAT HIGH COURT

2015 (7) TMI 694 - GUJARAT HIGH COURT - [2015] 376 ITR 561 (Guj) - Stock of raw material disclosed at the time of survey - Whether can be added both u/s 69B as well as 69C of the Act? - Held that:- It is an undisputed fact that during scrutiny, the assessee himself has disclosed the fact that in his books of account, he had shown less stock to the tune of ₹ 10,06,987/-. It is also an admitted fact that when the physical stock was examined by the authority, the value of the said stock was & .....

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sessing Officer as well as the CIT (Appeals) have rightly observed that the case of the assessee would fall under the proviso of Section 69(b) of the act.

Disallowance of set off of business loss with income from other sources for the same year? - Held that:- We are also of the opinion that the submissions made by the learned advocate is that the case would fall under the proviso of Section 69(c) of the act does not apply to the facts of the present case. It is not the case of the rev .....

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per Section 14 of the Act and therefore, the assessee would be entitled for the set off under proviso of section 71 of the act. Therefore, we are of the opinion that the CIT (Appeals) as well as the ITAT have committed error in refusing giving set off to the assessee under Section 71 of the act - Decided in favour of assessee. - Tax Appeal No. 1454 of 2005, Tax Appeal No. 1846 of 2005 - Dated:- 14-7-2015 - A. J. Desai And A. G. Uraizee,JJ. For the Appellant : Mrs Swati Soparkar, Adv. For the Res .....

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peals) Ahmedabad (herein after referred to as 'the CIT (Appeals)' for short) is confirmed and the claim made by the assessee with regard to set off of undisclosed stocks against his losses for the assessment year 2001-02 has not been accepted and enhancement made by the CIT (Appeals) vide order dated 07.07.2004 is confirmed. 2. The following two substantial questions of law were framed at the time of admission of the appeal. [1] Whether, in the facts and circumstances of the case, the In .....

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s accounts are regularly audited along with relevant material. The assessee was used to submit the same while filing return under the provisions of the Incometax Act, 1961 (herein after referred to as 'the act' for short). For the assessment year 2001-02, the assessee filed return under the provision of the act on 29.10.2001 declaring total income of ₹ 3,06,984/- together with audit report as provided under the provision of section 44(AB) of the act. The return of the income of the .....

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essee had declared gross profit of ₹ 49,60,845/- on the total turn over of ₹ 9,62,63,584/-. It was worked out at 5.15% of the total turn over. It was also noticed that the value of closing stock was to the tune of ₹ 33,21,944/- shown in the trading account, which included excess stock amounting to ₹ 10,06,987/-. The said stock was disclosed by the assessee himself during the course of survey operation carried out under Section 133(A) of the act on 30.11.2000. Therefore, i .....

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e assesse was accepted by the Assessing Officer. 3.4. The assessee challenged the order of the Assessing Officer with regard to nongranting of certain set off claimed by the assessee apart from ₹ 10,06,987/- with regard to excess stock. 3.5. The CIT (Appeals), by an order dated 07.07.2004, dismissed the appeal. However, enhanced the income by ₹ 10,06,987/treating the same as deemed income under Section 69(B) of the act and also issued notice under Section 271(1)(c) of the act on the .....

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ion 71 of the act as well as his claim with regard to losses incurred during the said assessment year. Hence, the present appeal. 4. Mr.B.S.Soparkar, learned advocate for the assessee would submit that the CIT (Appeals) as well as the ITAT have committed error of law not allowing the set off to the tune of ₹ 10,06,987/- against the losses under Section 71 of the act. He would further submit that during scrutiny, the assessee had disclosed the income with regard to the undisclosed stock to .....

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t the CIT (Appeals) has treated the case that the assessment falling under Section 69(B) of the Act and the CIT (Appeals) has erred in not allowing set off of business expenses out of unexplained investments. 5. He would further submit that the Assessing Officer had rightly given set off against the losses caused by the assessee against the said undisclosed stock relying upon the provisio of Section 71 of the act read with section 69(B) of the act. He would further submit that the observation ma .....

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ome Tax V. Shilpa Dyeing & Printing Mills (P.) Ltd. reported in [2013] 219 Taxman 279 (Gujarat) delivered by the Division Bench of this Court and would submit that the present case is covered under the said decision and therefore, the appeal be allowed and the orders passed by the CIT (Appeals) as well as ITAT be quashed and set aside. 7. On the other hand, Ms. Mauna Bhatt, learned advocate for the revenue has opposed this appeals. By taking me through the orders passed by the CIT (Appeals) .....

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nexplained expenditure not to be given set off under the proviso of Section 71 of the Act. Learned advocate would further submit that for the assessment year 2001-02, the closing stock was to the tune of ₹ 10,06,987/-, which might have carried forward by the assessee of the nonassessment year of 2002-03, which the assessee might have taken advantage of the next year. Hence, the appeals be dismissed. 8. We have learned advocates for the respective parties. Perused the orders of the CIT (App .....

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orded in the books of account. However, it is admitted by the assessee himself that he has not completely disclosed the stock in the books of account. Now, considering the proviso of Section 69(B) of the act, we are of the opinion that the assessee had not fully disclosed the stocks in the books of account and therefore, the Assessing Officer as well as the CIT (Appeals) have rightly observed that the case of the assessee would fall under the proviso of Section 69(b) of the act. We are also of t .....

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