TMI Blog2010 (8) TMI 1156X X X X Extracts X X X X X X X X Extracts X X X X ..... respondent-assessee for the same assessment year, they are being disposed of by a common order. It is pertinent to mention that while ITA No. 103/2009 is the quantum appeal, ITA No. 544/2009 is the penalty appeal. 2. Briefly stated the relevant facts are that the respondent-assessee is a partnership firm engaged in the business of manufacture and export of readymade garments. On 11th March, 2004, a survey operation under Section 133A was conducted at the business premises of the respondent-assessee and excess stock worth ₹ 68,69,090/- was found on physical verification which was accepted by the respondentassessee. For the Assessment Year under consideration, the respondentassessee filed a return of income tax of ₹ 55,75,930/- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on of the impugned order is reproduced hereinbelow:- 11. We have considered the rival submissions. We find that the stock inventory runs into 59 different items. While at the time of survey stock inventory was prepared by the survey official, the statement of one of the partners was also recorded during the course of survey operation conducted on 11.3.2004. The work in progress specifically includes 5 items like blouse, dress, skirt, baby doll, blouse sets totaling into 8000 pieces and valuing at ₹ 20 lacs. The inventory was taken by the survey officials only in the business premises of the assessee. Therefore, it will be incorrect to hold that the work in progress which was admitted in quantity of 8000 pieces and valuing at ͅ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... issions. The value of closing stock found on the date of survey as per inventory prepared by survey official was ₹ 95,08,460/-. The learned CIT(A) has noted at page 8 of his order the trading account drawn on the date of survey. As per the said trading account, the purchases were to the extent of ₹ 1,72,09,384/- and packing expenses were of ₹ 4,86,636/-. In the audited trading account as on 31.3.2004 the purchases are mentioned at ₹ 1,77,24,339/- but no separate packing expenses are claimed. Thus the contention of the learned counsel for the assessee is found to be correct. The additional purchase after the date of survey is only of ₹ 28,319/- but the stock declared by the assessee is more by 61- as compared to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unt with the G.P. as per trading account prepared on the date of survey. However, the crucial thing that he has missed is on the date of survey, though the assessee has incurred certain expenses, the same were not recorded due to nonreceipt of such bills. The value of such bills was of ₹ 25 lac. Therefore, if such expenses are reduced from the gross profit as per trading account prepared on the date of survey, the same will be as declared by the assessee for the entire year. Except the reduction in the rate of G.P., no. case is made out in rejection of books of account. In our opinion, the same is not in accordance with law. Under section 145(3) the Assessing Officer may make a best judgment assessment by rejecting the book results ..... X X X X Extracts X X X X X X X X Extracts X X X X
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