9911796707
TMI Blog2019 (5) TMI 1153X X X X Extracts X X X X X X X X Extracts X X X X ..... ember, 2018, dismissing the appeal filed by the appellant for the assessment year 2007-08 is infirm in law and contrary to facts and circumstances of the case. 2) The learned lower authorities erred in making an addition of Rs. 4,83,426/- as unexplained investment u/s. 69 of the Income Tax Act, 1961. 3) The learned lower authorities ought to have found that the valuation of 'Work-in-Progress' estimated at the time of inspection for VAT registration purposes was purely on estimate basis. In the absence of any deficiency in opening stock, sales and purchases as per day to day books of accounts maintained found during the course of assessment, there is no justification for making the above addition of Rs. 4,83,426/- merely relying on VAT i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rk in Progress' of Rs. 7 lakhs. From the books of accounts and vouchers, he purchase up to the date of inspection was only for Rs. 1,28,258/- which included opening stock of Rs. 150,000/- taken over from the propreitory concern and Rs. 128,258/- purchases upto the date of inspection. In addition, as per books, the work-in-progress was Rs. 22,400/- as taken over from the proprietory concern. The Assessing Officer calculated the difference between the stock as per books of accounts and the stock as per inspection report of the commercial Tax Department which worked out difference of Rs. 6,10,892/-. After giving deduction of expenses incurred up to the date of inspection for Rs. 1,27,466/- the difference of Rs. 4,83,426/- was assessed as unexp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... een the books and the valuation report indicated suppression of investment done in the purchases up to that date and is therefore, liable to be assessed as unexplained investment under section 69 of the Income Tax Act. The CIT(A) observed that the assessee's reliance on the judgment of the Supreme Court in the case of Smt. P.K. Noorjahan's (237 ITR 570) was also misplaced because the decision was purely based on the facts of that case and income ratio laid down the principle that the word "May" used under section 69 of the Income Tax Act gives discretion to the Income Tax Officer to treat the source of investment as income of the assessee even if the explanation offered by the assessee is not found satisfactory and such discretion has to be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... estimate basis, by the Commercial Tax Officer, the Assessing Officer in the impugned order came to the conclusion that the difference between the inspection figures and what the assessee accounted in the Book of Accounts, indicated suppression of investment in purchase and stock upto that date. It was submitted that the Assessing Officer invoked Section 69 and estimated the investment u/s 69 amounting to Rs. 4,83,426/- without any basis whatsoever and made addition u/s 69. 5.1 It was submitted that Section 69 can apply to unexplained investment and reads -" Where in the Financial Year immediately preceding the assessment year, the assessee has made investments which are not recorded in the Books of Accounts, if any, maintained by him for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... evealed in the Books of Accounts. As such, it was submitted that on the facts of the case, the addition to the income of Rs. 4,83,426/- on that basis by invoking provisions of Section 69 of Act was liable to be set aside. 5.3 The Ld. AR submitted that the First Appellate Authority had merely reproduced the Assessment Order and the submissions made by the assessee and without appreciating the facts as revealed from the Books of Accounts. According to the CIT(A), he merely relied on the observations of the Commercial Tax Officer which are mere perceptions and not facts found or supported by evidence. The observations made by the Commercial Tax Officer at the time of the inspection are only spontaneous and not based on records. Hence, it was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the investment in assets declared in the Balance Sheet. So also the Profit & Loss Account and Balance Sheet disclosing the profit of Rs. 65,860/- was accepted in toto without any modification. In the above circumstances, it was prayed that the addition of Rs. 4,83,426/- as the undisclosed investment may be vacated and the appeal may be allowed. 6. The Ld. DR relied on the order of the lower authorities. 7. We have heard the rival submissions and perused the record. Admittedly, in this case, the assessee's assessment was completed u/s. 143(3) of the Act. The assessee's authorized representative, Shri C. Suresh Kumar, FCA attended the hearing and produced the documents and other details before the Assessing Officer. The Assessing Officer h ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
