TaxTMI 
TaxTMI 
2017 (10) TMI 1142
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....llegal. 3. For that the Ld. CIT (Appeals) should not have confirmed the AO's erroneous addition of Rs. 5,11,114/- to the total income treating and correcting the same as to have been made U/s.69 of the I.T. Act, 1961 by the Ld. A.O. 4. F or that without prejudice to the above and not accept in g provisions of section 69 cannot be invoked in respect of unexplained stock-in-trade. 5. For that the observation of the Ld. CIT (Appeals) that the receipt of the "appellant's Goods returned worth Rs. 337,228/- which formed part of the stock was not reliable" is not justified, the appellant having produced necessary bills and other evidences of goods returned before the Ld. A.O and copies of the same before the Ld. CIT(Appeals) and that no step was taken for verification of the genuineness of the same. 6. For that on the facts and circumstances, the addition of Rs. 5,11,114/- to the total income is not tenable and is liable to be deleted. 7. That the appellant craves leave to reserve to himself the right to add, alter or amend the grounds of appeal at or before the time of hearing. 2. The only effective issue raised by the assessee in all the grounds of appeal is tha....
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....ari Para, Nabadwip Bill No. Nil dated 06/10/04 Rs.52,288/- 14/10/2004 4 Hadu Shaikh Madhya Har Lane, P.S. Bagnan Bill No. Nil dated 06/10/2004 Rs.84,000/- 14/10/2004 5 Ram Ujjal Bhattacharya 11/A, B.P. Lane, Kolkata3 C.Memo No. Nil dated 30/09/04 Rs.77,500/- 14/10/2004 4.1. However, the assessing officer disregarded the contention of the assessee by observing that the story with regard to the goods returned is an afterthought. Moreover the details of goods returned have been furnished after a gap of 37 months. Accordingly, the assessing officer disbelieved the claim of the assessee for the purchases return and accordingly a sum of Rs. 5,11,114/-, was added to the total income of the assessee as unexplained investment, under section 68 of the Act. 5. Aggrieved, the assessee preferred an appeal before the ld. CIT(A). The assessee before the ld. CIT (A) made the submissions as detailed under:- "1. The gross profit was taken by the revenue at the rate of 13% to determine the closing stock as per books of account as on the date of survey. The revenue has taken a wrong rate of gross profit. The actual rate of GP comes at the rate of 13.73% or say 14% of the total turnove....
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.... ignore the amount relating to goods returned of Rs. 3,37,288/-, and has also adduced the valuation of closing stock on the date of survey amounting to R.48,67,936/-, on the basis of an ad hoc margin of mark up assumed arbitrarily. The assessing officer was supplied with all the details of the parties to whom the goods were returned. The assessing officer was empowered under the provisions of law for making the necessary enquiry before disregarding the contention of the assessee. There is no provision under the law to make new submissions at the time of assessment. The assessee has made the submission before the completion of assessment which was supposed to be accepted by the assessing officer. 5.1 The assessee also submitted that the provisions of section 68 of the, are not applicable to the instant case as there is no cash credit entry found in the books of account. However, the ld. CIT(A) disregarded the contention of the assessing officer by observing as under: - " As regards the mention of section 68 by the A.O. while making the impugned addition I agree with the A.R. that the said addition does not fall within the ambit of section 68. The A.O. has made the addition of....
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....e computing the value of the assessee's stock on the date of survey and the A.R.'s claim of applying the gross profit rate of 14% is found to be incorrect on the facts of the case. As regards the A.R.'s reliance upon the assessee's claim of receipt of goods worth Rs. 3,37,288/-, it is observed from the assessment order that such claim was raised before the A.O. for the first time on 28/11/2007, that is more than 37 months from the date of survey and that too nearly at the fag-end of the time when the assessment proceedings were getting barred by limitation. I agree with the contention of the A.R. that there is nothing in law to prevent the production of evidence even at a later date during the assessment proceedings but the evidence shall be cogent and reliable. The A.O. has recorded in the assessment order that the assessee had produced only photocopies of cash memos/bills regarding such goods but no transport bills/receipts were submitted to support its claim that those goods had been returned to the concerned parties, after the date of survey. He has also noted that the partner of the assessee-firm did not raise the claim of having received goods worth Rs. 3,37,288/- even ....
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....rmined by the Revenue @ of 13% is incorrect. The actual rate of profit is approximately 14% of the turnover. Accordingly, the difference of closing stock will reduce by Rs. 1 lakh/-. The goods were returned after the date of survey worth of Rs. 3,37,288/-, which has not been considered by the AO. In spite of this fact, all the necessary details with regard to the parties were available before the AO. On the other hand, the ld. DR submitted that post survey, various statements were recorded by the Revenue but in none of the case, the assessee has mentioned about the goods returned subsequent to the date of survey. The actual amount of GP is 12.81%, therefore, the argument of the ld. AR that the actual GP rate is 14% is not based on any material. The ld. DR vehemently supported the orders of the authorities below. 7. We have heard the rival contentions of both the parties and perused the material available on record. The issue in the instant case revolves with regard to the determination of closing stock as on the date of survey. The revenue has determined the closing stock which is higher than the value declared by the assessee in its books of accounts by Rs. 511,114/-, therefore, ....