TaxTMI 
TaxTMI 
2006 (10) TMI 254
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....l the assessee has disputed assessment of a sum of Rs. 25 lakhs on the ground that it was an additional income declared by the assessee himself during the survey proceedings under section 133A of the Act conducted on 30-3-1999. 3. Facts of the case leading to this dispute briefly are that there was a survey under section 133A at the premises of the assessee on 30-3-1999. During the course of survey an inventory of stock as found was physically taken. Based on that inventory relying upon the fact that in the case of the assessee average rate of gross profit was 7.26 per cent the survey authorities concluded that there was under-statement of closing stock. Confronted by this question the assessee offered an additional income of Rs. 25 lakh....
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....he higher G.P. than my regular business turns out normally. You have showed me the basis of computation of the G.P. as being random sales and purchase bills. True, that in respect of certain commodities which forms a good part of the commodities sold by me during the year vis-a-vis the business of the firm, yet I state that at the end of the year the G.P. may not work out as much list as done today by you. However, I would like to put on end to this controversy and to avoid litigation. I would like to make a disclosure of Rs. 25,00,000 as additional income which hopefully shall take care of stock discrepancy as well as the above stated cash discrepancies in the event of my not being able to explain away such discrepancies to demonstrate my ....
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....hat the assessee could not blow hot and cold. The offer of additional income was made by the assessee when he was confronted with the conclusions drawn on the basis of an elaborate enquiry made by the survey party. As the assessee had no proper answer to the case made out by survey party at that point of time he made a disclosure of Rs. 25 lakhs. On these circumstances the assessee was not entitled to resile from that offer after a long gap of time. Retraction of statement on the part of the assessee was not bona fide and was merely an afterthought. The learned CIT, DR especially relied upon the observation of the learned CIT(A) in para 2.2 of the impugned order. 7. We have carefully considered the rival submissions. On perusal of the re....
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....me the burden cast upon an assessee who chooses to retract his earlier statement is very heavy. As far as the case before us is concerned during the course of assessment proceedings the assessee has completely explained entire business transactions leading up to the date of survey. The assessee has given during the course of assessment proceedings the details of his trading activity which are placed at pages 40 to 63 of the paper book. From those particulars we find that the assessee has demonstrated that the rate of gross profit varied from item to item and transaction to transaction and by no means any particular rate of gross profit can be correctly applied so as to work out the value of closing stock at any given date. What is more impo....