TaxTMI 
TaxTMI 
2011 (5) TMI 28
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....61 (Kol) of 2004 for the block period April 1, 1990 to January 24, 2001. 2. The facts giving rise to filing of this appeal may be summed up thus: a) The assessee is a public limited liability company within the meaning of the Companies Act, 1956 and is a manufacturer of hosiery goods and has branches at various places in the country. b) On January 24, 2001, officials of the Income-tax Department conducted searches at various places of the office of the assessee and in course of such searches, various books of records were seized. Inventory was prepared of the stock at some of the locations and the portion of the stock was also seized. The assessee of its own provided details of the stock at the locations which was not....
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....losed. However, instead of taking into consideration the average discount of 29.13% for the Financial Year 2000-01 as per the books of account, the Assessing Officer deducted the average discount of 25.53% of the Financial Year 1999-2000 to estimate the cost of the closing stock as on January 24, 2001. By the said process, the Assessing Officer estimated the cost of the stock as on January 24, 2001 at Rs.19,55,93,534/- and the difference between the said figure and the figure of Rs.18,87,00,000/- reflected in the accounts was assessed as undisclosed income on the allegation of suppression of valuation of stock. h) Being aggrieved, the assessee preferred an appeal before the Commissioner of Income-tax (Appeals) and the said authori....
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....ly found is in agreement with the books of account and is valued at cost which is also reflected in the books of account, any undisclosed income within the meaning of Section 158(b) read with Section 158BB of the Income Tax Act, 1961 can be determined on the allegation of undervaluation of stock in the absence of any material and/or finding that the books of account were not correct or did not include and/or reflect any element making up the cost. "ii) Whether and in any event, the Tribunal was justified in law in holding that for estimating the cost of the stock of the financial year, the average of the average discounts of the financial years 1999-2000 and 2000-2001 should be deducted and not the average discount for the financi....
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....ning false entry, in such a case, the Assessing Officer is left with no other alternative but to accept the amount shown in the books of account. In support of such contention, Mr. Khaitan relies upon the following decisions: 1. Commissioner of Income-Tax Vs. Hindustan Zinc Ltd., reported in [2007] 291 ITR 391 (SC); 2. Sargam Cinema Vs. Commissioner of Income-Tax, reported in [2010] 328 ITR 513 (SC); 3. Chainrup Sampatram Vs. Commissioner of Income-Tax, West Bengal, reported in [1953] ITR Vol. XXIV SC 481; 4. Commissioner of Income-Tax Vs. Pratapsingh Amrosingh Rajendra Singh and Deepak Kumar, reported in [1993] Vol. 200 ITR 788; 5. Unit Construction Co. Ltd. Vs. Joint Commissioner of Income....
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....he Trial balance sheet and the Profit and Loss account. tallied and has further noted that the gross profit rate of the appellant was acceptable. It further appears that the Department had not found the entire stock but it was the appellant who volunteered to give the full facts on those stocks not covered by the search operation. The Assessing Officer also found from examining the third parties that the discount rates varied between 18.5% and 33. 81% and it varied from party to party, region to region and even from product to product. But none of any of such instances was found to be incorrect. In such a situation, we find that the Commissioner of Income Tax (Appeals) rightly held that as the stocks were found to be as per the books there ....