TMI Blog2011 (7) TMI 1167X X X X Extracts X X X X X X X X Extracts X X X X ..... the appeals by this common order. ITA No.2210/Ahd/2008 (Revenue s appeal): 2. In this appeal, following grounds are raised: 1. The ld.CIT(A) has erred in law and on facts of the case in deleting the addition made on account of excess stock of ₹ 19,65,223/- and direct to accept the excess stock declared by the assessee. 2. The ld.CIT(A) erred in law and on facts of the case to ignore that the explanation offered by the assessee was not satisfactory/acceptable to the AO. The addition was made on the basis of statement given by Shri Bharatbhai Narandas Chudasma who has admitted the income of ₹ 35 lakhs on account of value of excess stock. 3. At the time of hearing before us, it is stated by the learned DR ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ke was done by the survey party, which resulted in incorrect calculation of excess stock. That after the date of survey, but before the filing of the return, the assessee worked out the correct excess stock and whatever was correct excess stock, was duly included in the stock as well as the income of the assessee. That during the assessment proceedings, the assessee furnished complete working of the excess stock and the AO has not pointed out any discrepancy in such working. Therefore, the CIT(A) rightly deleted the addition made by the AO. 6. We have carefully considered the arguments of both the sides and perused the material placed before us. We find that the CIT(A) deleted the addition made by the AO with the following findings: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is not proved to be unreliable. The Assessing Officer has not given any adverse comments on reconciliation given before him by the Appellant. They cannot be ignored only because admission was made by the purchaser at the time of survey. I also find that the appellant's books of account are audited by the Chartered Accountant and that no defects or discrepancies are pointed by the auditor, nor the AO has pointed out any discrepancy in the books of account of the appellant including stock particulars. It has been held in various judicial pronouncements including Hon ble ITAT Ahmedabad in the case of Ashok Manilal Thakkar (supra) that in the absence of any material to prove that the income disclosed by the assessee in his statement under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... indly be deleted. 8. At the time of hearing before us, it is stated by the learned counsel that for the computing the remuneration to the partners, the AO has reduced the excess stock declared in the trading account from the profit of the business. He has stated that the excess stock was declared in the trading account and then the resultant net profit was declared as business income. In the computation of the income, the AO accepted the same as business income, however, while working out the remuneration to partners he reduced the same from the profit of the business. He has stated that when the business income shown by the assessee is accepted, and there is no assessment under the head Income from Other Sources , adopting of differe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r. Rs.4,53,836 Rs.24,19,059 Assessed Total Income Rs.33,41,129 i.e. Rs.33,41,130 From the above, it is evident that the AO accepted the income of ₹ 9,22,070/- declared by the assessee as per the statement of income furnished by the assessee. Meaning thereby, the business income of ₹ 9,22,070/- disclosed by the assessee was accepted as it is. In the same income, the AO made further addition. Thus, the entire income was assessed as business income and no income was assessed under the head Income from Other Sources . The AO cannot adopt different yardstick for determining allowability of r ..... X X X X Extracts X X X X X X X X Extracts X X X X
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