TaxTMI 
TaxTMI 
2018 (1) TMI 1107
X X X X Extracts X X X X
X X X X Extracts X X X X
....d in the circumstances of the appellant's case, the CIT(Appeals) has erred in sustaining the addition of Rs. 8,04,163/-applying gross profit @ 22.82% on difference in stock found as on the date of search and stock as per books of accounts as unaccounted income in the case of appellant when no such addition is called for. The appellant craves leave to add to, alter, amend and/or withdraw any ground or grounds of appeal either before or during the course of hearing of the appeal. 3. The Revenue has raised following grounds in its appeal vide ITA No. 3088Ahd/2013: (1) On the facts and in the circumstances of the case, the Ld. CIT(A) has erred in law and on facts in restricting the addition of Rs. 60,91,883/- to Rs. 35,23,941/-, which was made on account of unaccounted investment. (2) On the facts and in the circumstances of the case, the Ld. CIT(A) has erred in law and on facts in restricting the addition of Rs. 15,83,890/- to Rs. 8,04,163/-, which was made on account of G.P. rate. 4. The brief facts of the case are as under: A search action U/s.132 of the I.T. Act, 1961 was carried out in the Baroda Bushing & Insulators group of cases including the case....
X X X X Extracts X X X X
X X X X Extracts X X X X
....he Department in December 2009 i.e. post-search enquiry. The appellant has submitted following reconciliation statement to Assessing Officer: Particulars Raw Materials Finished /semi- finished goods Total Stock taken by Income Tax Department as per panchnama dated 10-09-2009 A 64,70,234 69,60,953 1,34,31,187 Stock as per books of account as on 10-09-2009 B 76,81,780 69,60,953 1,46,42,733 Less: Either not taken by the survey / search party or counting error during stock taking C 10,72,639 0 10,72,639 Adjusted stock (B-C) D 66,09,141 69,60,953 1,35,70,094 Difference in stock (A-D) E 1,38,907 0 1,38,907 Apart from above no discrepancy has been pointed out by the assessing officer in the books of accounts maintained by the Appellant when assessing officer has not pointed out a single deviation in the books of accounts, wherein entries of such purchases have been duly recorded, it is not justified in considering the stock as unexplained when the same is supported by books of accounts. ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....Products (Guj) ltd vs Dy.CIT I.T.A. No.133/Rjt/2006, where it had been held that if there is substantial error in stock taking or some items have been missed at the time of making inventory and the same is reconciled by the assesses subsequently by way of enough evidence and proper supporting then the addition on account of difference in stock is not called for." 4.2 But ld. AO was not convinced with the reply/submission made by the assessee hence, he made addition of Rs. 60,91,883/- after rejecting the book, same considered as unaccounted ex-stock and of Rs. 15,83,890/- as gross profit earned on sale of unaccounted stock. 5. Against the said order assessee preferred first statutory appeal before the ld.CIT(A), who partly allowed the appeal of the assessee. 6. Aggrieved by the order of the ld. CIT(A), appellant filed this appeal before us. 7. So far as ground no.1 is concerned. Ld. AO had made the addition of gross profit of Rs. 15,83,890/- applying the rate of 26% on unaccounted stock of Rs. 60,91,883/-. Therefore, the CIT(A) had taken the rate at 22.82% after considering the detailed working provided by the appellant. We have gone through the order and relevant record....
X X X X Extracts X X X X
X X X X Extracts X X X X
....he period 1/4/2009 to 31/8/2009 were also submitted to the CIT(A) for his perusal. But both the authorities did not consider the reconciliation submitted by the appellant and authorities relied statement of the appellant u/s.142 of the Act though the appellant reflected for his statement after one month and thereafter also filed an affidavit to that effect but lower authorities failed to consider his contention. After hearing both the parties, we set aside this issue to the file of the AO to examine the reconciliation statement filed before the lower authorities and will decide the matter as per law. In the result, this ground of appeal is allowed. 11. So far as ground no. 2 in sustaining the addition of Rs. 8,04,163/- applying gross profit @ 22.82% on difference in stock found as on the date of search is concerned. Assessee submitted a comparative chart at page no.12 of Paper Book, the same is reproduced here as under: Production Sales GP 20% Stock of SF 01/04/2009 7893131.00 20% Net S.F. April'09 30/04/09 7715408.00 12424401.00 ....