TMI Blog2009 (1) TMI 856X X X X Extracts X X X X X X X X Extracts X X X X ..... account of the assessee cannot be held to be properly maintained in view of the fact that the survey transpired the discrepancy in the stock as per the books of account and that found on physical verification. The books of account are said to be properly maintained when correct income can be deduced there from. It is not only the arithmetical inaccuracy in the books of account which would call for the resorting to the provisions of section 145(3). Obviously in the face of the fact that the stock physically found was not tallying with the books of account, in our considered opinion it cannot be said that the books were properly maintained. We therefore, overturn the finding given by the ld. CIT (A) on this issue. Going by the verdict of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ther discrepancy. Under these circumstances we are of the considered opinion that there is no basis for sustaining the addition in question. In the light of the foregoing discussion, we hold that the view taken by CIT (A) is unimpeachable, which is hereby upheld. In the result, the appeal is dismissed. - Shri RS Syal, AM and Smt. Asha Vijayaraghavan, JM For the Appellant: Shri Pitamber Das For the Respondent: Shri Reepal Tralshawala ORDER Per RS Syal (AM) This appeal by the Revenue arises out of the order passed by the Commissioner of Income Tax (Appeals) on 7.6.2006 in relation to the assessment year 2003-2004. 2. The only grievance raised in this appeal is against the deletion of addition of ₹ 28 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... closing stock. The remaining portion of ₹ 28.85 lakhs agreed by the assessee at the time of survey was not offered for taxation. Here it is important to mention another significant development taking place after the close of survey but he fore the close of the year that the assessee retracted from the surrender made during survey vide its later letter dated 24.3.2003. The Assessing Officer held that the retraction made was an afterthought. He further observed that the assessee had not maintained quantitative stock register, He further observed of which it was not possible to check the sales and purchases of different items dealt in by it. He further noted that the accounting of sales was such that it was open to manipulation as no qu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are said to be properly maintained when correct income can be deduced there from. It is not only the arithmetical inaccuracy in the books of account which would call for the resorting to the provisions of section 145(3). Obviously in the face of the fact that the stock physically found was not tallying with the books of account, in our considered opinion it cannot be said that the books were properly maintained. We therefore, overturn the finding given by the ld. CIT (A) on this issue. 7. The real question before us is about the deletion of addition of ₹ 28 85 lakhs which was made by the Assessing Officer on the ground that the assessee had not offered such amount in the return of income even though it was admitted at the time of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Board that no attempt should be made to obtain confession as to the undisclosed income and the addition should be made only on the basis of material gathered during the course of search and survey. Going by the verdict of the two Hon'ble High Courts and the position reaffirmed by the Central Board of Direct Taxes through its Circular, it becomes abundantly clear that no addition can be made or sustained simply on the basis of statement recorded at the time of Survey search. In order to make an addition on the basis of surrender during search or survey, it is sine qua non that there should be some other material to co-relate the undisclosed income with such statement. Adverting to the facts of the instant case we find that only to th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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