TaxTMI 
TaxTMI 
2016 (5) TMI 622
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....ained regular Books of Account, including the Stock Book, under Mercantile System of Accounting, which were audited u/s 44AB of the Act. We find that before proceeding to deal with the grounds taken in the appeal for Asst Year 2007-08, it would be useful to refer to some facts in the succeeding Financial Year 2007-08 ( relevant to assessment year 2008-09 ), as the same have close bearing to the issues involved in the instant appeal. In the succeeding Financial Year 2007-08, Survey u/s.133-A of the I. T. Act was carried out on 18-03-2008 at the assessee's shop at Salt Lake. In course of the said Survey, some Exercise Books and Computer Printouts were impounded and inventorised as twelve items marked with Identification Nos. BBD-1 to BBD-12 respectively. Such impounded books and records inter alia included one Bound Register marked as BBD- 2 which became the central point of controversy in the assessment for the assessment year 2007-08 which is now under appeal. In the course of the said survey u/s.133-A on 18-03-2008, the statement of Sri Kanak Dutt, Partner, was recorded, purportedly on oath, and in course of the said statement, Sri Kanak Dutt voluntarily disclosed undisclosed ....
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....s of the aforesaid Exhibits. In regard to the alleged Gold Ornaments Stock Book, marked as BBD - 2, it was inter alia explained that the said Book was started for keeping control over the stock displayed in the show-case at the assessee's show-room at Salt Lake. The idea for maintaining the said Book was mooted for exercising better control over the goods displayed in the show-case, as the same used to be under control of the salesmen during business hours. This Book was thus designed to serve as a memoranda record for internal control purposes only. On the final date of hearing on 14-12-2009, the Authorised Representative of the assessee appeared and furnished some details of revenue expenses as called for by the Learned AO. At this hearing, the Authorised Representative filed a letter dated 08-12-2009, inter alia, reiterating that as no question had been put by the Survey Party to Sri Kanak Dutt, Partner, about the contents of any of the Exhibits, including BBD-2, there was no occasion for the assessee to comment on the Book BBD-2 in course of recording his statement u/s.133- A of the Act. The Learned AO not satisfied with the replies and explanations of the assessee, soug....
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....s been stated hereinbefore, the Learned AO made extensive examination of the impounded books and records, including the Book BBD-2. On such examination , the Learned AO inter alia alleged that all the entries in the said Book, excluding those on pages 89, 90 & 99, related to the Financial Year 2006-07. For driving home this allegation, he has noted the contents of the said Book BBD-2 on pages 2, 3, 4 & 5 of the impugned assessment order. The assessee proceeds to deal with the said notings in the following lines. The Book BBD-2, with written pages from 1 to 119, has four columns, namely, "Entry Date" , " Item code" , " Weight" and "Date of Delivery". It was argued that the Entry Date column of the Register has been filled up at page nos. 1, 2, 3, 5,39, 42, 43, 44, 55, 77, 78,89,90, 99, 103, 104, 115 & 116 against the respective items i.e. at eighteen places only; and all other places have been left blank. It was argued that inspite of observing as above, he has alleged, in the same breath, that all the entries in the Register excluding those on pages 89, 90 & 99, related to Financial Year 2006-07. It was respectfully submitted that such allegation, contrary to record, was made....
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....tes falling in the Financial Year 2007-08 and 2008-09 as admitted by the Learned AO in the impugned order, and pointed out herein before. The attention of the Learned CITA was also drawn to the entries at Pages 1, 2, 14, 16, 19, 21, 22, 31, 32, 34, 53, 54, 55, 89, 90, 99, of the said Stock Book, where the entries in BBD-2 do not bear any date whatsoever (i.e. dates left blank), it cannot be conclusively inferred by any stretch of imagination that those entries related to the Financial Year 2006-07 alone. Unfortunately the Learned AO drew this unwarranted inference for making an arbitrary addition of Rs. 83,45,740/- to Assessee's total income, allegedly on account of undisclosed stock for the Financial Year 2006-07. 4.3. Version of the Learned AO - The delivery date column shows prospective dates. Some of the items show the delivery dates falling in the Financial Year 2007-08. It was explained that this point has already been dealt hereinabove in the preceding paragraphs. 4.4 Version of the Learned AO - In as much as the assessee accepted the fourteen items, against which dates had been mentioned in the proper column of the register, as undisclosed stock and paid taxes on ....
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....phs hereinbefore. It was further submitted that the circumstances prevailing at all material times were that during the Survey on 18-03-2008, full inventory of stock was prepared by the Survey Party with the help of a Registered Valuer and the excess stock, not recorded in the regular Books of Account, was declared by the assessee as representing his income for the assessment year 2008-09. It was further submitted that on weighing the aforesaid circumstantial evidences in their proper perspective, it would be kindly appreciated that after offering the undisclosed trading stock for taxation for the immediately succeeding assessment year 2008-09 and paying tax on it, there could not have been any further undisclosed stock left with the assessee, which was liable to be taxed for the immediately preceding assessment year 2007-08 under appeal. 4.7 It was argued that as has been stated hereinbefore, the purported sworn statement of the Partner of the assessee firm was recorded at the time of Survey on 18- 03-2008, and the Survey Party made physical inspection of all stock found at the shop premises, which were inventorised and valued by a Registered Valuer of the Department. The as....
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....referring to relevant pages of the assessment order and with reference to the impounded document BBD /2 . 6. We have heard the rival submissions and perused the materials available on record including the impounded document BBD /2 enclosed in the paper book filed by the assessee. It is not in dispute that the said document contained certain dates pertaining to financial year 2006-07 and 2007-08. The assessment year under appeal is Asst Year 2007-08. It is not in dispute that the assessee having stated that the said document is memoranda register had come forward to offer a sum of Rs. 2,12,400/- for the Asst Year 2007-08 based on dates found in the entries pertaining to financial year 2006-07. Apart from this, it is not in dispute that the assessee had already offered a sum of Rs. 1.80 crores for the Asst year 2008-09 towards difference in book stock and physical stock found during the course of survey on 18.3.2008. 6.1. It is not in dispute that the said impounded document did contain various entries which were undated. The Learned AO had reckoned the same as relatable to Asst Year 2007-08 which is disputed by the assessee. We find that the date of survey is 18.3.2008 (Asst Y....
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....Kolkata-700 064 during survey operation U/s. 133A of Income Tax Act 1961 on 18-03-08 and are impounded/not impounded Sl. No. Description Identification mark 1. Green Covered Exercise book BBD-1 2. one binding Register of Gold ornaments Stock Book BBD-2 3. one exercise book BBD-3 4. one black cover exercise book BBD-4 5. one Binding Red cover Exercise book BBD-5 6. one black cover exercise book BBD-6 7. one exercise book BBD-7 8. Bunch of loose sheet BBD-8 9. Bunch of loose Sheet for F/y 2007-08 Computer Print out BBD-9 10. Bunch of Computer Print out for the F/y 2006-07 BBD-10 11. Bunch of Computer print out BBD-11 12. Bunch of Computer Print out BBD-12 6.2. We also find that the survey party had recorded a sworn statement from the partner of the firm Sri Kanak Dutt wherein vide questions 13 and 14 , he had replied as under :- Question:13. During the course of survey operation in your business premise, valuation of stock has been determined as per Departmental approved Valuer as per his Report dated 18.3.2008 containing SL No. 1 ....