TMI Blog2015 (12) TMI 1282X X X X Extracts X X X X X X X X Extracts X X X X ..... uring survey or on the basis of stock inventory whose copy was never provided to the assessee. In the remand report, the Assessing Officer has not countered the allegations of the assessee that copy of the inventory was not provided to him. Thus concur with the finding of the Learned CIT(Appeals) that additions have been made without following the due process of law and principles of natural justice. The Assessing Officer either in the assessment order or in the remand report, has not revealed the procedure adopted for physically verifying the stock. Keeping these material aspects of the case, Learned CIT(Appeals) has rightly deleted the addition - Decided in favour of assessee - ITA No. 903/Del/2014, Cross Objection No. 225/Del/2015 - - - ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The assessee was subjected to survey operation under sec. 133A of the Income-tax Act, 1961 at its business premises. During the course of survey, the survey team verified the stock of the assessee and found discrepancy. On the basis of the same, the Assessing Officer worked out the excess stock at ₹ 13,76,673 and shortage of stock of ₹ 3,60,132. The survey team had also recorded the statement of Shri Pramod Jain, Director of the assessee company and on the query raised regarding discrepancy found in the stock. He had surrendered an amount of ₹ 13,76,676 as his undisclosed income for the financial year 2008-09 on account of excess stock found during the course of survey on 29.4.2008. He also undertook to pay taxes on the s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... letter to Director General of Investigation stating therein that due to mental pressure and duress, Mr. Pramod Jain, the Director of the Co. had signed to pay taxes on surrendered amount. Again, vide letter dated 18.7.2008 in response to the notice issued by the DIT(Inv.), the assessee reiterated the earlier stand taken by it vide letter dated 30.6.2008, the assessee had made a request to the DDIT to provide it the copies of seized document as well as impounded document with this further submission that no discrepancy in the books of account maintained by the assessee were found and that elaborate explanation in respect of difference of 4,805 kgs. of supari was submitted. It was contended that the assessee had made a request to the Assessi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the accounts and worked out the stock or simply G.P. rate was applied to find out the stock on a particular day. In absence of expiration of procedure adopted for working out the stock as per books, the stock so mentioned by the A.O. being as per books for comparing with physical stock cannot be treated as correct, therefore, difference worked out on that basis cannot be accepted as correct. Secondly, negative difference in stock cannot be treated as undisclosed income like positive difference in stock as held in ITO vs. Jewels Emporium - 48 ITD 164 (Indore) relied by the appellant. Section 69 and section 69B only support the proposition that if actual expenditure or investment incurred by the appellant is ore than the expenditure or invest ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 77; 13,76,676 and of ₹ 3,60,132 made by the Assessing Officer is deleted. 7. I agree with the view of the Learned CIT(Appeals) that once the surrender during survey was retracted immediately, then it was incumbent upon the Assessing Officer to provide to the assessee the inventory showing the alleged difference in stock and if no such inventory is provided to the assessee then it is not only a violation or principles of natural justice but also casts doubt on the veracity of stock taking itself. There cannot be an automatic addition either on t he basis of statement recorded during survey or on the basis of stock inventory whose copy was never provided to the assessee. In the remand report, the Assessing Officer has not countered ..... X X X X Extracts X X X X X X X X Extracts X X X X
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