TaxTMI 
TaxTMI 
2014 (5) TMI 428
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....d stock register. 2. On the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in deleting the disallowances of purchase of Rs.14,12,050/- without appreciating the fact that the discrepancy in valuation of stock was worked out on verification of records, bills etc. at the time of survey. That, the production of the so called bills subsequent to survey was nothing but an afterthought," 2. The assessee is a retailer and running departmental store. The return of income was filed on 31.12.2008 declaring total income at Rs.51,06,270/-. A survey action u/s. 133A of the Act was conducted on 28.03.2008, therefore , the return of income was taken up for scrutiny as per CBDT guidelines. Statutory notices were issued and served....
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....and there because of the volume of the goods traded by the assessee. It was explained that the calculation mistakes have the impact on inflating the valuation of stock by Rs.31,30,192/- It was also pointed out that the AO has wrongly assumed that similar mistakes might have also taken place while calculating the sales figures, which would neutralize the effect of the mistakes. The assessee again filed reconciliation statement before the CIT(A), which was placed before the AO for his report. The AO vide his report dated 21.12.2011 confirmed the casting errors noted in the inventory and recomputed the value of inventory accepting that casting errors have resulted in arriving at the value of the physical stock in excess of Rs.18,32,039/- in pl....
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....961/-. The CIT(A) finally concluded that the additions sustained by him comes to Rs.23,26,514/- which comprises of - a) disallowance towards casting errors Rs.12,98,153/- b) addition towards value of closing stock by providing for direct cost Rs.9,14,400/- c) disallowance of purchases Rs.1,13,961/- The CIT(A) observed that the assessee has offered additional income of Rs.25 lacs which has not been considered by the AO. The CIT(A) was of the firm belief that benefit of telescoping needs to be given to the assessee and he accordingly deleted the addition of Rs.23,26,514/- sustained by him on various grounds. Aggrieved by this the revenue is before us. 3. The DR supported the findings of the AO. The counsel for the assessee reiterated wha....