2007 (2) TMI 168

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....ises of its partners. The Assessee firm is engaged in the business of sale and purchase of timber/plywood. Consequent to the search, a notice under Section 158BC of the Act dated 28^th April, 1992 was issued by the Assessing Officer requiring the Assessee to file its return of income for the block period 1^st April, 1987 to 7^th August, 1997. In response thereto, the Assessee filed its return showing undisclosed income of Rs. 4,74,119/-. During the course of assessment proceedings, it was noticed that for the above mentioned period the Assessee had shown purchases of Rs.11,77,666/- and sale of Rs.20,45,039/-. The value of closing stock as on 7^th August, 1997 was shown at Rs.4,10,600/-. The Assessing Officer, however, noted that on the date....

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....orked out by the Assessee only as a balancing figure. However, Assessing Officer found force in the plea of the Assessee that certain errors had crept in the inventory prepared by the search party. 4. The Assessee being aggrieved with the order of Assessing Officer filed an appeal before Commissioner Income Tax (A) who decided the matter in favour of the Assessee. Thereafter, Revenue filed an appeal before the Tribunal and the Tribunal set aside the order of the Assessing Officer and restored the addition of Rs.3,11,267/- made by the Assessing Officer. On the second ground the appeal filed by the Revenue (assessee?) was dismissed. 5. The present appeal has been filed challenging the decision of the Tribunal restoring the addition of R....

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....h the Assessing Officer in his order. The relevant portion of the order of the Assessing Officer read as under:- "It is an admitted position that the Assessee has not been maintaining any stock register and that for any of the financial years and that the closing stock has been worked out only as a balancing figure by the Assessee in this very reply dated 23^rd August, 1999." 8. It was only in the return of income filed in response to notice under Section 158BC on 12^th July, 1999, the Assessee adopted the stock as on 7^th August, 1997 at Rs.4,10,600/-. The inventory in this case was prepared on 7^th August, 1997 whereas, Assessee waited to file its return of income on 12^th July, 1999, wherein the stock was differently depicted. Ther....