TMI Blog2010 (9) TMI 1129X X X X Extracts X X X X X X X X Extracts X X X X ..... is that, the Ld. CIT (A) erred in sustaining addition of ₹ 3,88,405/- on account of excess stock found at the time of search. It is mentioned that the inventory prepared at the time of search was not correct as it was not fully totaled, proper weights of various items were not taken or proper rates were not applied. It is further mentioned that the calculation of stock as per books was wrong because correct Gross Profit Ratio was not applied. It is also mentioned that the averments made in the affidavit of the assessee were not considered judiciously. (ii) Before us, the Ld. Counsel for the assessee submitted brief facts of the case that survey operation U/s 133A was conducted at the head office of the assessee in Barmier, on 12-09 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ferred to Page No.9 of the Paper book, which is a letter dated 13-09-2004 addressed to the Assessing Officer, in which it is inter alia mentioned that the valuation of stock at about ₹ 43,00,000/- made at the time of survey is totally wrong and without any basis, because the inventory prepared in respect of Subhash Chowk is incomplete, value of various items has not been completed and totaled. The same has not also been given to the assessee. Therefore, the question of surrender of excess stock at the time of survey does not arise. Further, he referred to page no.20 of the paper book, being a letter dated 31-01-2006, addressed to the Assessing Officer, in which it is mentioned that the stock inventory taken at the time of survey and t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the time of survey. Thus, this cheque was not given subsequently after considering the whole issue about the stock. (v) We have considered the facts of the case and submissions made before us. The facts are that survey was conducted at the business premises of the assessee situated in Barmier on 12-09-2002 and 13-09-2002. The assessee had been carrying on the business of dealing in spare parts and scrap from these premises. Inventories of stock of spare parts and scrap material were prepared separately. There is no dispute about the items or valuation of spare parts. In respect of inventory of scrap, the Ld. Counsel has referred to various improbable factors to canvass that it could not have been correct. It is submitted that the weig ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Assessing Officer and referred to be the Ld. Counsel as one-sided. Further, the assessee s statement was not recorded. The son s statement is not binding on the assessee in absence of its corroboration by clear evidence of excess stock. The payment of advance tax by itself is only a circumstance requiring corroboration by way of some evidence. We are also of the view that non-interference with the stock clinches the issue in favour of the assessee. Therefore, we are also of the view that the Ld. CIT (A) erred in sustaining the addition on this ground. 3. Ground No.2 is against various additions made to the trading results shown by the assessee in Barmier Branch, Gandhidham Branch and Ajmer Branch of ₹ 94,322/- , ₹ 35,455/- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the fact that the ratio cannot remain static, we are of the view that the estimate furnished by the Ld. Counsel is reasonable. Therefore, Assessing Officer is directed to take this ratio at 9.5%, apply the same to the total sales of about ₹ 1.26 crores of this year and workout the addition to be made to the book results for this year. Thus, this ground is partly allowed. 4. (i) Ground No.3 against part allowance of expenditure out of various expenses, direct and indirect. The Ld. Counsel made the submission that total expenditure of ₹ 73,179/- (Rs.10,454/- + ₹ 62,725/-) was incurred during the whole of the year. Although, he was open to disallowance of nominal expenditure, it was his argument that the expenses are ver ..... X X X X Extracts X X X X X X X X Extracts X X X X
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