TMI Blog2017 (3) TMI 1298X X X X Extracts X X X X X X X X Extracts X X X X ..... 2011-12. which shall be in addition to the regular book profit. The above additional income of ₹ 45,67,900/- was quantified by the assessee on the basis of adopting the rate at ₹ 1700/gms at the time of survey operation. Based on the established scheme of valuation of stock, the AO was of the view that the value of gold should have been adopted at the then prevailing market value in Bangalore on the date of survey i.e., on 14.6.2011 which was around ₹ 2105/gm as against the valuation adopted/agreed upon by the partner of the assessee firm at ₹ 1700/gm at the time of survey (supra). Accordingly, the AO had valued the excess stock found at the time of survey at ₹ 2105/gm which worked out to Rs,56,55,999/- [268 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essment u/s 14 of the Act being without jurisdiction requires to be quashed; (2) that without prejudice, the addition made/sustained by the authorities below on account of excess stock found in the year under appeal (after setting off income offered by the assessee in the asst. year 2011-12) being contrary to available facts and law requires to be deleted. 3. Briefly stated, the facts of the issue are as follows: The assessee, a partnership firm and a retail trader in jewellery, had furnished its return of income for the assessment year under dispute, admitting a total income of ₹ 13,77,910/- which was initially processed u/s 143(1) of the Act. Survey operation u/s 133A of the Act was undertaken in the business premise ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted income of the assessee to the financial year during which survey took place. Accordingly, the value of excess stock at ₹ 2105/gram for 266.9354 gram was worked out and, thus a sum of ₹ 56,55,999/- [266.9354 x ₹ 2105] was added to the income returned for the AY 2012-13 on account of excess stock found during the survey. While concluding the assessment, the AO had set off the income admitted on account of survey for the AY 2011-12 by the asssessee as adopted at ₹ 1700/gram and the difference of ₹ 24,66,120/- [Rs.13,77,910+56,55,999 = 70,33,909 ₹ 45,67,790] was brought under tax net. 4. Aggrieved, the assessee firm took up the issue before the CIT (A) for consideration. After due consideration of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . A wrong application of law cannot be held as permissible view and that can always be changed for appreciation of law. Reopening valid, Som Dutt Builders (P) Ltd v. DCIT (ITAT, Kol) 98 ITD 78. In view of the above discussed judicial pronouncements, the ground taken on the reopening of the assessment is hereby dismissed. 8. As the third ground is related to the second ground which has already been adjudicated in the above paras, no separate adjudication is needed. The third ground is raised without prejudice to the above two grounds, on the additions made on account of valuation of the excess stock by adopting the rate at ₹ 1700/- instead of the rate prevailing as on date of the Survey. After careful consideration of the submiss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in law and the CIT (A), instead of quashing the assessment order, had erred in confirming the same. In conclusion, it was urged that the addition made/sustained by the authorities below on account of excess stock found in the year under appeal [after setting off income offered by the assessee firm in the year 2011-12] being contrary to available facts and law requires to be deleted. 5.1. On the other hand, the learned DR present submitted that the stand taken by the assessing officer as well as the CIT (A) were commensurate to the effect that the excess stock found during the course of survey had to be valued by adopting the prevailing market value on the date of survey. As such, it was submitted that the AO was within his domain to arr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s against the valuation adopted/agreed upon by the partner of the assessee firm at ₹ 1700/gm at the time of survey (supra). Accordingly, the AO had valued the excess stock found at the time of survey at ₹ 2105/gm which worked out to Rs,56,55,999/- [2686.9354 x ₹ 2105] and the same was brought to tax as additional income of the assessee for the AY 2012.13. However, while concluding the assessment, the AO took care and also fair in giving a deduction of ₹ 45,67,790/- [being the income declared by the assessee for the AY 2011-12 in adopting the value of excess stock of 2686.9354 gms only at the rate of ₹ 1700/gm]. This very fact has not been refuted by the assessee either. Thus, we are of the view that the stand t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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