9911796707
TMI Blog2025 (2) TMI 1029X X X X Extracts X X X X X X X X Extracts X X X X ..... On the facts and circumstances of the case, the order passed by the Ld. Commissioner of Income Tax (Appeals) (CIT(A)] is bad both in the eye of law and on facts. 2(i) On the facts and circumstances of the case, the Ld. CIT(A) has erred both on facts and in law in confirming the action of AO who made addition amounting to Rs. 43,88,755/- on account of difference of stock valuation given to bank for credit facility. (ii) That the Ld. CIT(A) has erred both on facts and in law in rejecting the explanation and evidences brought on record by the assessee 3(i) On the facts and circumstances of the case, the learned CIT(A) has erred both on facts and in law in confirming the 10% adhoc disallowance on account of i. Telephone expenses. ii. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... goods sold during this period, the AO worked out the existence of excess stock of Rs. 43,88,755/- being the difference between stock position as on date of survey as computed by AO and the value of stock physically found. 3.2 During the course of survey, the stock of the physically verified which was valued at Rs. 60,87,362/-. The Ld. AR submitted that the stock statement submitted to the bank should not be taken as sacrosanct, as normally the stock value provided to the bank shows inflated prices of stocks in order to avail larger bank limits. The assessee has maintained regular books of account, including stocks register, and therefore, the stock valuation as per the books of account need to be considered as against the stock valuation g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ther hand, the Ld. Sr. DR supported the order of the lower authorities and submitted that during the course of the survey, the stock physically verified was valued at Rs. 60,87,362/-, as against which the stocks statement submitted to the bank contained the corresponding value as on 31.01.2015 at Rs. 1,47,96,000/- and corresponding value of stock value as per books of account was Rs. 1,08,29,830/-. He further submitted that the AO, while computing the stock as on the date of survey, has been fair enough in allowing the adjustments with regard to the purchases as well as the cost of goods sold during the period from 01.02.2015 to 17.03.2015 and assessee has not been able to controvert such findings of AO. Therefore, the addition made by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ra) also held that no addition could be made on account of difference between the stocks as per the books and the stocks statements submitted to the bank. Therefore, we are of the view that, for computing the stocks position as per the books of accounts as on the date of survey, the AO should have taken into consideration the stocks as per the books of accounts as on 31.01.2015, as against the stocks as per the statement submitted before the bank. 6. Now, coming to the amount of addition, if the value of the stock as per the books of account as on 31.01.2015 is replaced, and further adjustments for purchases and the cost of goods sold during the period from 01.02.2015 and 17.03.2015 are made, the stock as on 17.03.2015 would be of Rs. 6509 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and presumption, has observed that the possibility of utilising of these expenses for personal purposes cannot be denied. The Ld. CIT(A) concurred with the findings of the AO without going into the merits. After going through the orders of the lower authorities, we find that no single instant of personal use were pointed out by the AO and only on whims and fancies, the disallowance were made. Looking to these facts, we are of the view that no disallowance can be made in the present case of the assessee, more particularly, when there was a survey carried out in the case of the assessee, and revenue has failed to bring any evidence of personal use gathered as a result of survey. As the result, ground of assessee's appeal is allowed. 9. In t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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