TaxTMI 
TaxTMI 
1999 (5) TMI 66
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....was also noticed that complete sales are also not shown in the books of accounts. On the basis of entries recorded in documents seized at Annexure E-6, E-7 and E-8 unaccounted purchases made by the assessee for various years were determined. All these workings are shown in the assessment order for asst. yr. 1988-89 which is part of the record before the Tribunal. It was admitted by the assessee that the determined figure of purchases are outside his regular books of accounts. It was also admitted that sales are also made outside books of accounts but it was prayed that sales may be estimated on the g.p. rate declared by him. In his regular books of account as no details of sales were available with the assessee. It was also requested that a....
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.... were also found which was determined by the Department. The total unrecorded stock which was excess by Rs. 1,74,893. Further, a credit-sale of Rs. 50,191 was also found which was not recorded in the books of account. Thus a stock of Rs. 2,25,084 was found to be in excess. Yearwise, excess stock was determined which was as under: Rs. 1983-84 10,000 1984-85 9,188 1985-86 30,267 1986-87 9,238 1987-88 31,270 1988-89 33,581 1989-90 21,692 &....
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.... is in appeal here before us. 5. The lengthy arguments were put-forth by both the parties. They are considered carefully. The material on record is also perused. Various case laws relied upon by the learned counsel are also considered. The case laws which were relied upon by the learned counsel are CIT vs. V.M.R.P. Firm, Muar (1965) 56 ITR 67 (SC), CIT vs. Bharat Gen. Reinsurance Co. Ltd. (1971) 81 ITR 303 (Del), R.B. Jessa Ram Fateh Chand vs. CIT (1971) 81 ITR 409 (All), J.K. Synthetics Ltd. vs. O.S. Bajpai, ITO & Anr. 1975 CTR (All) 265 : (1976) 105 ITR 864 (All), Addl. CIT vs. P. Nammalvar Naidu & Sons (1979) 8 CTR (Mad) 72 : (1979) 116 ITR 863 (Mad), Pioneer Spring & Steel Concern (P) Ltd. vs. CIT (1979) 10 CTR (Cal) 322 : (1983) 135....
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....sidered then only addition can be made i.e. Rs. 21,692 which was determined on the basis of incriminating documents found during the course of search. There is no any other material or there is no any other investment which was found by the Department which is not recorded in the books of account. Therefore, in the interest of natural justice the profit which is only earned and determined should be added in the income of the assessee. It is correct that the confession cannot be foundation of assessment and nor creates any estoppel. This was held by apex Court in Pooran Mal's case. It is a well settled law that the cognizance should not be taken on the statement made by a person at the time of search if that statement is rebuttable or assess....
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....73 CTR (SC) 253 : (1973) 91 ITR 18 (SC). Likewise, we have also considered other case laws as relied upon by the learned counsel. The ratio of these decisions are also similar as we have discussed above. After considering all these materials, we are of the view that the determination which was determined by the Department on yearwise should be adopted. However, in this determination we find some discrepancies. As per trading account for the period from 1st April, 1988, to 27th May, 1988, the excess stock is of Rs. 1,75,032. This is as per trading account filed by assessee, and a copy of the same is placed at p. 8 of the paper-book. There is one more discrepancy. After that period, a sale of Rs. 50,191 was found not recorded in the books of ....
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....es. Therefore, the peak investment in the purchase and gross profit earned on sales is equivalent to stock and debtors. The book stock of assessee after including certain purchases for which bills were received but not journalised amount of Rs. 6,21,490 whereas physical stock was of s. 8,36,725 including certain disputed items and disputed valuations. Looking to the above and other papers seized in course of search, the assessee surrendered a sum of Rs. 2,50,000 on estimation basis to be included in the total income. Now the assessee has prepared the datewise statement of unaccounted purchases and sales. According to this statement, stock remaining out of unaccounted stock and sales amounts to Rs. 1,73,560. This stock when totalled with sto....