TaxTMI 
TaxTMI 
2007 (9) TMI 317
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....footwears in the name of M/s Vinod Foot Wear. A survey under s. 133A of the IT Act, 1961 (hereinafter referred to as 'the Act' for short) was carried out on 15th Oct., 2003 in this case. During the course of survey, the assessee surrendered the following amounts against item Nos. 1 to 4, as under: 1. Excess/unexplained cash Rs. 5,70,545 2. Excess/unexplained stock Rs. 3,10,004 3. Unexplained investment in building construction Rs. 4,00,000 4. Unexplained debtors Rs. 2,20,000 &nb....
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....e was an excess stock of Rs. 3,10,004. The assessee had surrendered this amount at the time of survey. However, in the computation of total income the assessee has worked out the excess stock as under: Inventory valued at the time of survey Rs. 27,37,157 Less: difference in valuation of stock Rs. 2,97,714 ------------- Rs. 24,39,443 Stock as per trading account as on date of survey Rs. 24,27,153 Difference (excess stock ....
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.... ---------- Rs. 75,789 ---------- These were the discounts received by the assessee, but the assessee has not accounted for the same in its books of accounts on the plea that no such payments were received. In view of the above the learned AO held that the book result cannot be accepted. He further stated that the GP rate of the immediately preceding assessment year also cannot be taken as a basis as the same was not subjected to any verification. The AO has further noted that it was evident from the purchase bills that the rate stated to the survey team has been reduced drastically. This means that the profit element to the assessee is not 11.8 per cent shown in the trading account. He has also noted that the assessee had received discounts against purchases, meaning thereby that the assessee has inflated the pur....
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.... found to be maintained in a single computer which is owned by this assessee. This was established by a copy of ledger accounts of M/s Siddhi Plastics and M/s Vinod Food Wear, furnished before the AO. A certificate from Bank of Baroda, Paloda, District Banswara, certifying that M/s Siddhi Plastics is maintaining current account with bank and its official address has been given as Sadar Bazar, VPO Paloda, District Banswara. Therefore from evidences which include copy of cash book of M/s Siddhi Plastics, registration certificate issued by the Sales-tax Department showing the address of the factory at village Paloda, a certificate from Bank of Baroda, the fact of maintenance of account by the same accountant namely Shri Prakash and proof of salary payment to him by both the concerns go to establish the plea taken by the assessee. As far as surrender made during survey is concerned the assessee has a legal right to disprove the same, which he has done successfully in this case. Consequently, we confirm the impugned deletion and dismiss ground No. (2) of Revenue's appeal. 10. The facts of ground No. (3) are that the AO has noted that during the course of survey, a small diary was fou....
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....nvestment on the part of the assessee. The assessee also filed a confirmation from Shri Suraj Mal to whom he advanced money for building construction. Shri Suraj Mal, the contractor stated that he had received Rs. 3,98,045 from the assessee towards different works and he had given a sum of Rs. 2,20,000 to the above persons. But, the AO did not believe the above claim of the assessee and added this amount in his total income. On the contrary, the learned CIT(A) deleted this addition. 11. After hearing both sides and after carefully going through the available material on record, we are not inclined to accept this amount of Revenue's appeal. The simple reason for our above conclusion is that the AO has rejected the contention of the assessee with regard to advance having been made to the contractor by mentioning that this is not usually done and that a copy of agreement between the contractor and the assessee had not been filed. The above grounds taken by the AO for rejecting of the claim of the assessee are not valid ones. There is no abnormality in the act of the assessee in making advances to the contractor for the construction work. When all the payments are recorded in the bo....