TaxTMI 
TaxTMI 
2015 (7) TMI 522
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....osed Purchase". As purchase is always related to the subsequent sales. Therefore, the concealment involves only the net profit, if there is any such "Undisclosed Purchase". 4. For that as per the report on dated 24/03/2010 the addition of Rs. 3,85,01,830/- is not to be accepted as in the 'survey report' the calculation of undisclosed purchase is erroneous. The Ld. A. O. never mentioned the unit during the calculation of paddy, rice & rice bran. Further the Ld. Appellate Authority in the appeal order did not clarify the units of the items. 5. For that the copy of the deposition dated on 24/03/2010 is itself erroneous as because the marked documents as "SRM-5,6&7" are not in existence as per the assessee. During the assessment proceedings the Ld. A.O. failed to supply the copy of the said documents. So the entire survey is bad in law as there are erroneous observations and non-supply of documents on the part of the Ld. A. O. 6. For that the assessee in the letter dated 11/12/2012 filed his objection for excess valuation of the stock as on 24/03/2010. 7. For that during the appeal preceding the A/R of the assessee produced the total area of the stock room with the ....
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....Less: Sale during the year 22545.17 Less: Sale during 25.03.2010 to 31.03.2010 140.00 Closing Stock as on 31.03.2010 3174.85 Closing Stock as on 31.03.2010 3756.00 Excess Stock of Rice = (3756.00 - 3174.00) = 581.15 Quintal Determination of Closing Stock of Rice Bran (in Quintal) As per Audited Account As per Survey Findings Opening Stock as on 01.04.2009 45.00 Stock on the date of survey 24.03.2010 146.00 Add: Production during the year 1780.01 Add: Purchase during 25.03.2010 to 31.03.2010 10.00 Total 1825.01 Total 156.00 Less: Sale during the year 1714.53 Less: Sale during 25.03.2010 to 31.03.2010 NIL Closing Stock as on 31.03.2010 110.48 Closing Stock as on 31.03.2010 156.00 Undisclosed Purchase of Bran = (156.00 - 110.48) = 45.52 Quintal The AO required the assessee to explain the discrepancy in respect to undisclosed purchase, excess stock of rice and undisclosed stock of bran. The assessee for the first time denied the excess stock of rice, undisclosed purchases and ....
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....ks noted, by the assessee firm itself, in the Form Registers (Register-IV) and in Paddy stock register SRM-5, as evident from survey statement (question no.8) However, for assessment purpose the stock considered are as per physical stock found for different items in the premises of the assessee on the day of survey." No reasons are adduced as to why FCI inspector has to prevail over the physical verification made by Assessing Officer The manner and effort put in such certification by FCI is a fact not established by assessee. It is not proved that FCI inspector did take stock and no in mechanical manner where inspectors visit godown after another for periodic checking. Further the stock taken by Assessing Officer is legal and in accordance with provisions of Section 133A by a team. On the other hand the FCI inspector has merely signed a document prepared by assessee and there is no entry of having verified stock and found correct. Also on 24.03.2010, the day of survey, there was no entry of verification by an FCI Inspector. 22. In the final hearing the emphasis laid by appellant is that the evidence issued by Assessing Officer in farming assessment is on basis of confessio....
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....ount to retraction and for this he relies on line 2 of CBDT instruction. Line 2 highlights the background of issue of instruction and not that filing of return of income in variation with statement tantamount to retraction. In fact the instruction is intended to discourage disclose of additional income not based on evidences. In the instant case there is no disclosure of additional income. Only permissible acts highlighted I preceding paragraph has been conducted by Assessing Officer. Hence the contents of F.No.286/2/2003-IT(Inv) is not applicable in the context of the case. It is added here that the Assessing Office who (A) had conducted survey, (B) recorded statement of 06.11.012 and completed assessment and (C) who had given report on 20.08.2014 are different and no bias can be attributed I their findings. 26. Another objection taken by Authorised Representative is that the Assessing Officer partly used figures in his books of accounts in determining unaccounted stock. The stock was taken on 24.03.2010. The Assessing Officer considered transactions in the period between date of survey and 31.03.2010 to make a comparison with the disclosed stock as on 31.03.2010. Comparison ca....
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....e Oriental Bank of Commerce and is to justify the stock balance reported in Balance Sheet. This evidence comes in par with the nature of evidence with regard to FCI inspection relied on by appellant and a decision on the same is already made. As matter of fairness evidence on FCI was admitted and adjudicated. The statement given Oriental Bank of Commerce was in possession of assessee even during assessment proceedings, not produced. As no justification exists to be covered under rule 46A the evidence is ordinarily inadmissible. However the same is found to be a self-declaration and again no there is o entry of any independent verification. Therefore, even if admitted, the same does not help appellant in any manner. 31. In summary the facts are:- a. Stock Inventory taken during survey is not faulty as alleged. b. There is material in possession of assessee viz document marked SRM-5, found during survey, but not produced when notice under section 131 was issued, establishing existence of unaccounted stock. c. Condition for a valid retraction not satisfied. d. All legal and factual arguments are found to be inapplicable/validly rebutted by Assessing Officer and also in ....
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....rchases. The sales made are accepted as it is. Once the sales are accepted, the entire undisclosed purchases cannot be added for computing the income of the assessee except by applying a profit rate i.e. gross profit as declared by assessee in regular books of account or the gross profit declared by other concerns in the similar trade. In view of the above facts and circumstances and particularly when the books of accounts were not produced by the assessee before the AO, the book results cannot be accepted and the same are to be rejected. In any case, the computation method of the AO for determining undisclosed purchases is taken through mathematical exercise. We find that the assessee maintaining the stock and production registers as per the guidelines of FCI, which are Form No.I to IV. The registers are regularly checked by FCI for the reasons that 40% of the production would have been sold to FCI as per Government order. The AO should have verified the closing stock in view of stock register maintained for the purposes of FCI. Even otherwise, this stock inventory of the magnitude of 43,447.20 quintals is impossible to be weighed and determine the closing stock within the time-li....