TMI Blog2005 (1) TMI 94X X X X Extracts X X X X X X X X Extracts X X X X ..... g the same as stock sold outside the regular books of account, especially when the assessee could not reconcile the difference in the value of stock at the time of surveyor during assessment?" The respondent is a partnership firm. It is engaged in the business of sale and purchase of gold and silver ornaments. On September 14, 1996, a survey was conducted at its business premises under section 133A of the Income-tax Act, 1961 (for short, "the Act") and some difference was found in the stock. In the course of the survey, the statement of Shri Suresh Bansal, one of the partners of the respondent, was recorded. He stated that the difference in the stock was due to the fact that the ornaments were given to the karigars for washing. The respon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , the goods are brought back. Since on the day of the survey no sales had to take place, the same were not requisitioned from home. The survey party did not record a single item showing sale of material outside the books. The sales tax authorities also accepted the declared sales. The books were accepted by the Assessing Officer and so was the closing stock position as no purchases put the Assessing Officer and so was the closing stock position as no purchases outside the books were found which could inflate the stock at the end. Under these circumstances there was no justification for making any addition for profit on suppressed sales as there were no such sales." The Income-tax Appellate Tribunal, Delhi Bench "SMC-I", Delhi (for short, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Division Bench which had heard the appeal filed by the Revenue. After noticing the provisions of section 260A of the Act, section 100 of the Code of Civil Procedure and the judgment of the Supreme Court in Panchugopal Barua v. Umesh Chandra Goswami [1997] 4 SCC 713; Ram Prasad Rajak v. Nand Kumar and Bros.[1998] 6 SCC 748 ; Kondiba Dagadu Kadam v. Savitribai Sopan Gujar [1999] 3 SCC 722; Hari Singh v. Kanhaiya Lal [1999] 7 SCC 288 and Santhosh Hazari v. Purushottam Tiwari [2001] 251 ITR 84 (SC), the court culled out the following principles: "(a) An appeal under section 260A of the Act cannot be entertained unless a substantial question of law arises for consideration by the High Court. (b) To be substantial, a question of law must be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on the ground that no discrepancy had been found in the books of account and there was no evidence of sale having been made outside the books of account and that the discrepancy in the statement made in the course of survey and the assessment proceedings was inconsequential. The Commissioner of Income-tax (Appeals) also took cognizance of the fact that the respondent had not kept record for handing over the ornaments to the karigars only because the same had been kept at home for safe custody as is usual practice in the trade. He also noted that on the day of survey, no sale had to take place and, therefore, the goods were not requisitioned from the house. The Tribunal agreed with the Commissioner of Income-tax (Appeals) and held that ther ..... X X X X Extracts X X X X X X X X Extracts X X X X
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