TMI Blog2016 (12) TMI 681X X X X Extracts X X X X X X X X Extracts X X X X ..... 000/- Accordingly addition towards GP estimation on unaccounted sales will work out to ₹ 1,61,920/- being 15.72% of the shortage figure of ₹ 10,30,028/-. Unexplained expenditure u/s 69C for payment of labourand two expenditure directly made by the partners out of their cash withdrawals - Held that:- We observe that ld. Assessing Officer has made a general remark for making addition and has not given any cognizance to the fact that there was a shortage in cash of ₹ 250781/- which could have taken care of the unexplained expenditure as submitted by the assessee. Further we also agree to the contentions of assessee that once estimation of GP has been made on the unaccounted sales it covers unexplained expenditure also to this extent. We are, therefore, of the view that ld. Assessing Officer erred in making addition - ITA No.804/Ahd/2014 - - - Dated:- 8-12-2016 - Shri Rajpal Yadav, JM Shri Manish Borad, AM. For The Appellant by Shri Rasesh Shah, AR For The Respondent by Shri Prasoon Kabra, Sr.DR ORDER PER Manish Borad, Accountant Member . This appeal by assessee for Asst. Year 2008-09 is directed against the order of ld. CIT(A)-II, Sura ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e made during the course of survey by disputing the difference in stock estimated by survey party by submitting that the actual physical stock as per the excise records as on the date of survey stood at ₹ 11567906/- only. Whereas the closing stock shown in the computer generated sheet at ₹ 1,65,06,231/- was merely a rough figure put in by the Accountant and therefore, shortage in stock was only to the extent of ₹ 1030028/-. However, ld. Assessing Officer was not convinced and assessed the income after making addition by estimating GP @ 15.72% (as against 10.83% shown by the assessee in its audited accounts) on unaccounted sales of ₹ 60,00,000/- which was calculated at ₹ 943200/-. 5. Ld. Assessing Officer also made an addition of ₹ 2,75,407/- with regard to unaccounted expenditure related to payment of labour at ₹ 96,800/- and payments for expenses by partners out of their cash withdrawals at ₹ 1,78,607/- ignoring the submissions made by assessee that (1) the unexplained expenditure of ₹ 2,75,407/- is taken care of by shortage of cash of ₹ 2,50,781/- found at the time of survey by the revenue authorities and (2) also onc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The closing stock at the time of survey as per books was taken from P L account as generated by the appellant S accounting system and the appellant admitted the stock value in the statement on oath. 6.6 It needs to be clarified here that computerized accounting systems and packages have replaced manual books of accounts now and any report generated from such packages/ systems is to be treated as report as per books of accounts. The appellant accepted the value of stock as per books on the basis of that report. If he had denied it, quantity wise list from system could have been generated at that time only. Retraction after 1 !/2 months is apparently an after thought after making adjustments in the system. The reliance on excise record is also misplaced as the excise records would never show unaccounted sales or excess/shortage of stock. 6.7 To summarize, the appellant's book results are not reliable in view of the above discrepancies noticed during the course of survey and later, during assessment proceedings including fall in GP , fall in yield, unaccounted sales, unaccounted expenditure , shortage of stock and shortage of cash. These facts make it a fit case for rej ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ry value and, therefore, there was no fault on the part of assessee to retract its statement which was based on documentary evidence. 8.2 As regards impugned addition of ₹ 275407/- ld. AR submitted that this impugned addition was in relation to unexplained expenditure of ₹ 96,800/- paid to labourers and payments of ₹ 178607/- directly made by the partners out of their cash withdrawals. Ld. Assessing Officer has not appreciated the fact that there was a cash short of ₹ 250781/- which could possibly take care of unexplained expenditure of ₹ 275407/- and further submitted that once addition has been made by way of applying GP rate on the impugned shortage of stock then no addition is called for separately towards unexplained expenditure. 8.3 Ld. AR also assailed the order of ld. CIT(A) by submitting that ld. CIT(A) was not correct in confirming addition of ₹ 8,50,000/- by estimating GP @ 19,03% of the immediately preceding year and thereby confirming the addition of ₹ 8,50,000/-. 9. Ld. DR on the other hand submitted that at the time of survey on 12.2.2008 unaccounted income of ₹ 60,00,000/- was admitted by Managing partner of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ement of excisable goods. In the Tax Audit Report also quantitative records have been shown separately for raw material, work in progress and finished goods. We further observe that all necessary quantitative details were filed before the assessing authority during the course of assessment proceedings including excise records and no defect has been pointed out except for minor difference in the yield. Ld. Assessing Officer has also not been able to point out any mistake in the excise record which could not be avoided and certainly carry a far better evidentiary value in comparison to the computer generated sheet of the accounting system in which figures of closing stock can be manually putin to increase or decrease the profits. Certainly the excise record and quantitative records are having an edge over the computer generated print out. 13. We are therefore, of the view in the given facts and circumstances of the case that where Revenue has been unable to point out any major fault in the quantitative record maintained by the assessee which were duly produced during the course of assessment proceedings, we agree with the contentions of assessee that the shortage of stock is only ..... X X X X Extracts X X X X X X X X Extracts X X X X
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