TaxTMI 
TaxTMI 
2016 (10) TMI 965
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.... at 10.41%. 3. The learned Commissioner of Income-tax (appeals) erred in confirming the action of the Assessing Officer in holding that there was difference in the closing stock. 4. The learned Commissioner of Income-tax (appeals) erred in holding that the discounts allowed would be 30% on an average and that the discounts of 30% only should be deducted from the tagged price as arrived at by the Assessing Officer. 5. The learned Commissioner of Income-tax (appeals) ought to have accepted that no addition need be made on account of difference in the stocks as the Assessing Officer did not correct value the cost of the stocks as on the date of survey and that there was no difference in the stocks available as on the date of survey". ....
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....addition of Rs. 2,00,092/-. With reference to excess stock brought to tax, Ld. CIT(A) gave certain factual findings vide para 5.7 of the order and determined the reduction of price to an extent of 30% and accordingly allowed the contention partly. His findings in para 5.10 are as under: "During the course of appellate proceedings, the appellant took the plea that, there is a huge gap between the tag prices and the actual sale price, which would be almost equal to 55% which was due to the discounts allowed to the customers. The appellant furnished the list/details of sales, under each category/items of trade such as sarees, chiffon sarees, fancy sarees etc., indicating the further details such as purchase date, purchase price, sale date, ....
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.... 170 5.88% 4442/22.3.05 142.86 170 220 22.72% 4482/28.3.05 450 550 570 3.50% 4471/26.3.05 280 330 390 15.38% 4470/26.3.05 150 170 180 5.55% 4465/26.3.05 300 370 480 22.91% 4646/29.4.05 320 375 460 18.47% 4783/9.5.05 175 215 240 10.41% 31042/5.4.05 290 350 395 11.40% C. Fancy Sarees: Ref. No. Purchase price Rs. Sale price Rs. Tage price Rs. % of difference between tag price and sale price 5275/6.6.05 450 600 700 14.28% 5346/16.6.05 350 400 500 20.00% 5520/29.7.05 400 450 530 15.09% 4/4.5.06 300 360 570....
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..../variation between the low tag price and sale price at 30% on an average. Accordingly, the appellant deserved to deduct the 30% variation on stocks quantified on account of discount allowed on tag prices. Thus, the discount @30% needed to be deducted from the value of the stock as arrived at Rs. 68,88,419/- on the basis of low tag price, and the assessing officer is directed to recomputed the net unexplained closing stock for treating the same as unexplained investment. Accordingly, this ground of appeal is treated as partly allowed." 4. Ld. Counsel, referring to the details filed before the AO and CIT(A) reconciling the stock found to the purchase price and sale price, submitted that there is a general boost-up in the prices as mentione....
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....nt, Ld. Counsel submitted that profit offered by assessee is reasonable and should not have estimated the income at 10.41%. 5. Ld. DR however, showed the inventory, as placed in the assessment record (copy was not filed on the record of ITAT] to inform that there are many items in which there is only one tag price and there is no higher or lower tag price. Only in certain silk sarees, the higher tag price and lower tag prices were available and inventory was made of lower tag price. It was submitted that on an average, the reduction of price is coming to about 25%. Therefore, Ld. CIT(A) is very reasonable in granting 30% reduction. It was further submitted that Revenue also preferred an appeal but the same was dismissed on the tax effect....