2016 (7) TMI 729

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....sue arises for consideration is with regard to estimation of profit on the deficit stock. According to the Ld. counsel, there was a survey in the premises of the assessee on 13.03.2009. The Assessing Officer claims that physical inventory of stock was taken and it was estimated at Rs. 98,61,818/-. According to the Ld. counsel, the stock, namely, the papers were spread over several acres of land. Therefore, it is not possible for the Assessing Officer to take physical inventory of the stock. Therefore, the first contention of the Ld.counsel is that the physical inventory taken by the Assessing Officer is not correct. The Assessing Officer has taken sample stock and estimated the same at Rs. 98,61,818/-. The exact stock was not taken by the A....

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....eficit stock at Rs. 55,75,603/-, ought to have taken the profit on the deficit stock of Rs. 55,75,603/-. According to the Ld. counsel, the addition, at the best, can be made on the profit of the deficit stock of Rs. 55,75,603/- and not the entire deficit stock of Rs. 55,75,703/-. 4. On the contrary, Shri M.S.V.M. Prasad, the Ld. Departmental Representative, submitted that admittedly there was survey operation in the premises of the assessee on 13.03.2009. Physical inventory was taken and the Assessing Officer computed the deficit stock at Rs. 2,70,85,031/-. The physical stock of inventory was taken in consultation with the employees of the assessee. The accuracy of the physical stock was also certified by the assessee's employees. Theref....

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....possible for the Revenue to take the physical stock of the assessee since it was spread over several acres of land. The fact remains that the Revenue took the physical inventory and the employees of the assessee have also certified the accuracy of the inventory taken by the Revenue authorities. The Managing Director of the assessee-company has not disputed the inventory taken by the Revenue. Therefore, it is too late for the assessee to contend before this Tribunal that the inventory was not taken properly. 6. Now coming to the actual stock found by the Assessing Officer, the closing stock as per the books was Rs. 3,69,46,849/-. The sales as per the sales tax return was Rs. 17,18,04,430/-. The Assessing Officer added 20% as gross profit ....