TaxTMI 
TaxTMI 
2012 (11) TMI 223
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....mpleted u/s 143(3) of the Income-tax Act, 1961. 2. The brief facts of the case are that the assessee is a partnership firm, which is in the business of export of silk fabrics. For the relevant assessment year, the assessee filed its return of income on 31.10.2006 declaring a total income of Rs.53,90,091/-. The return was processed u/s 143(1). There was a survey on the assessee on 4.10.2005, during which physical inventory of the stock available with the assessee was taken and inventoriesd in 8 sheets and it was found that there was discrepancy in the stock and also deficiency of cash as compared to the books of accounts of the assessee. These issues were put to the assessee's managing partner Shri Ravi Kiran and in response to the same, ....
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.... the stock is valued by the Department not on surmises but is done systematically in the premises of the assessee with the assistance of its staff and managing partner and that all the totaling errors have been corrected before arriving at the stock of Rs.2,01,79,021/-. He also rejected the claim of duplication of stock in pages 5 and 8 of the inventory on the ground that before taking the inventory, the stock is arranged in identifiable fashion and, therefore, there cannot be any duplication and also since the totaling in both the pages vary it cannot be a case of duplication. He further observed that the assessee had been given due opportunity of going through that inventory and after few corrections, the Managing Partner had accepted the....
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....rice and quality of the stock. She submitted that the department has taken the round figures of the quantity of the stock and has also assumed prices without actually verifying the quality of the material and the price charged to the assessee. Thus according to her, the differences have arisen in the valuation of the stock by the assessee and by the survey party. She drew our attention to the statement of the managing director, Shri Ravi Kiran at the time of survey, wherein he has clarified that the stock valued in the inventory sheet could only be of Rs.1,82,67,047/- and not Rs.2,01,58,059/-. She also drew our attention to page 5 and 8 of the inventory of stock, which is filed in the paper book to demonstrate that the items mentioned in bo....
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....k found at the time of survey and the closing stock as recorded in the books of accounts of the assessee as on 4.10.2005. The case of the Revenue is that the assessee has not been able to reconcile and explain the discrepancy in the stock. The assessee has stated that the discrepancy is on account of the arbitrary inventoriesing of the stock by the Revenue and also by the duplication of the same stock at pages 5 and 8. The Revenue has rebutted this argument sating that the inventory of stock has been done with the assistance of the staff of the assessee and the managing partner has not contradicted or objected to the valuation of the stock except stating that the same would be around value of Rs.1,82,67,047/-. We find that the Managing part....