TMI Blog1996 (5) TMI 11X X X X Extracts X X X X X X X X Extracts X X X X ..... me-tax reference under section 256(1) of the Income-tax Act, 1961, at the instance of the Revenue and the following question of law has been referred by the Tribunal for answer of this court : "Whether, on the facts and in the circumstances of the case, the Tribunal was justified in law in confirming the order of the Commissioner of Income-tax (Appeals) who deleted the addition of Rs. 29,735 mad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was no satisfactory explanation of the assessee for this excess stock. The Assessing Officer during the course of assessment prepared two trading accounts, i.e., one from the 1st day of the accounting year to May 31, 1978, and the other from June 1, 1978, to the last date of the accounting year. While preparing the first trading account, the closing stock was taken at Rs. 5,79,139. The stock as on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Officer found that the method of valuing the closing stock adopted by the assessee was to value it as a balancing figure applying the G. P. rate on sales. The Assessing Officer after taking a sample of several items found that the average G. P. rate for both the periods was 17.78 per cent. He found that on application of this G. P. rate to the sales of the first period, the stock on the date of se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bunal found that section 69B of the Income-tax Act, is not applicable in the present case. As, according to the Tribunal, section 69B can only be invoked, if it is found that the assessee had made investment or the assessee is found to be the owner of any bullion, jewellery or other valuable article and it is found that the amount expended on making such investments or in acquiring such bullion, j ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for two varying periods and then worked out the amount of Rs. 29,735 as excess ; that is not correct. The appellate authority has found that the average rate of 17.78 per cent. was satisfactory ; therefore, two varying periods of the gross profit rate adopted by the Income-tax Officer was not correct. As per the finding of the Tribunal, there is no room or scope for making any presumption about e ..... X X X X Extracts X X X X X X X X Extracts X X X X
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