TaxTMI 
TaxTMI 
2012 (9) TMI 34
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.... ITA 4396/M/08 2. By this appeal the Revenue has questioned the correctness of the findings of the CIT [A] who deleted the additions of 14.30 lacs made by the AO ignoring the fact that the assessee himself has surrendered unexplained stock and cash during the survey. 3. Facts giving rise to this grievance show that a survey operation was conducted at the business premises of the assessee on 14/03/2002. The stock found was inventorised by the survey party, the inventory taken at the time of survey is annexed with this order for the sake of convenience of all. The inventory of the stock was quantified and valued as per the annexure. The total stock so inventorised was to the tune of Rs.3985768.00. At the outset, we would like to point....
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....ot in a position to explain but now that the books of accounts are complete the assessee claimed that he had sufficient cash in hand on date of survey to justify the cash found Rs. 30000.00. 6. However both these contentions of the assessee were rejected by the AO who concluded that the assessee himself has surrendered 14.30 lacs and there fore must honour his surrender and added 14.30 lacs to the returned income along with some other additions. 7. The matter was taken before the CIT [A] who after considering the submissions of the assessee held that the AO has made additions on the basis of tentative trading account and not on the audited trading account and as the tentative trading account was not in the possession of the assessee, ....
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....claim of the assessee and considering that the closing stock as on 31.03.2002 is without including the stock surrendered at the time of survey, the gross profit margin is short by 5.2 %. 11. After perusing schedule F of the audit report we find that the assessee has quantified its closing stock as under : 1. HSS Rods 628 kg 13062.50 2. Alloy steel Rods 23374 kgs 3159540.71 3. HSS Scrap 400 kgs 9227.47 4. Alloy steel scrap 77061 kgs 930494.62 5. Tungesten scrap 1630 kgs 421239.64 6. Other scrap 34122 kgs 41707.66 Total 4575272.50 The rates per KG comes as under: 1. 20.80 2. 135.18 3. 23.06 4. 12.07 5. 258.42 6. 1.2....
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....lts cannot be accepted as the valuation of stock shown by the assessee is not based on any sound accounting principle and AO's version cannot be accepted for want of any independent findings, considering the facts in totality and in the interest of justice and fair play, we direct the AO to take net profit rate at 5 % of sales which should come to Rs.1079815.00 and as assessee has shown net profit at Rs.548570, the addition sustained comes to Rs. 531245.45, which will cover all the discrepancies in the valuation of stock and other expenses. 14. We also find that both the AO and the CIT [ A] has discussed issue of debit notes on sales invoices raised after the date of survey at length . We find that this issue is irrelevant to the facts i....