TMI Blog2011 (6) TMI 773X X X X Extracts X X X X X X X X Extracts X X X X ..... peal are reproduced as follows :- 1. Whether the ld. AO has erred in law and facts in making an addition of ₹ 61,64,507/- on account of undisclosed stock under section 69-B of the Income-tax Act, 1961; 2. Whether the ld. AO has erred in law and facts of the case by ignoring the statements recorded during the survey and also ignoring the following : a) The value of Third Party Stock from the stock found at the time of survey; b) Over-valuation of stock of Gold (18Ct. 22Ct. categories respectively) made by the valuer on ad-hoc and unscientific basis; c) The cost price of the stock declared in the books and valuing the same at the rate prevailing at the time of survey. 3. The facts of the case stated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee in respect of third party stock amounting to ₹ 23,08,033/-. However, as regards the valuation of the stock both the unaccounted stock as well as the stock as per books of accounts was taken as per market value. The ld. CIT (Appeals) observed that the valuation of the stock was made at the time of survey in the presence of the assessee. The valuation was not disputed by the assessee at the time of survey. There was also no dispute that the valuation done at the time of survey was based on the relevant gold / diamond rates. The contention of the assessee that the value of the stock found as per trading account was of lower value. This contention of the assessee was rejected on the ground that the assessee failed to reconcil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ror in the valuation had been pointed out. He accordingly upheld the addition on account of valuation of the closing stock. 5. Before us the ld. AR of the assessee submitted that the assessee had offered in the return of income excess stock found at the time of survey. The gold rate of the excess stock was taken at the rate of ₹ 790/- per gm. The approved valuer had taken the valuation of diamonds at Rates of ₹ 9,171.38 per ct. as against this, the assessee had taken the rate of ₹ 9,200/- per ct. Therefore, the assessee was fair in valuing the excess stock and had surrendered the value of excess stock found in the return of income at market rates. He further submitted that the approved valuer had valued the stock as per ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee had valued the stock as per books of accounts at cost price. It is also a settled law that no profit can be earned unless goods are sold though there may be difference in the purchase price and the market price on a particular date. Therefore, the value of the closing stock as per books of accounts for the purpose of computation of income cannot be valued at the market rate when the purchase rate of such stock is lower than the market rate. At the time of survey, excess stock was found, which has been valued at the market rate and the assessee had admitted the sale in the return of income. Therefore, in our considered opinion, the value of the closing stock appearing in the books of accounts cannot be valued at the market rate, as on t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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