TaxTMI 
TaxTMI 
2018 (3) TMI 72
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.... erred in confirming the action of the invocation of section 145(3) of the I.T. Act, arbitrarily. Assessee prayed that rejection of books of account by AO being without pointing out any specific defects in books and closely based on alleged so called surrender made by Shri Gaurav Jain, Director of assessee via statements recorded during survey proceedings u/s 133A, which stood retracted, thus have no evidentiary value. Assessee prayed that rejection of books by AO be held bad in law. 1.1 That the ld. CIT(A) has further erred in confirming the addition to the extent of Rs. 19,35,591/- out of addition of Rs. 51,72,923/- made by AO alleging the same as excess stock by ignoring the explanation furnished by assessee substantiating the differe....
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....9/- was also made by AO on basis of separate statement as per reply to Question No. 35. In appellate proceedings, the ld.AR argued that there are various defects in trading / P&L account prepared at the time of survey proceedings. Major defect pointed out by A/R are:- Value of stock ascertained by the I.T. Officials during the course of survey Rs. 5,78,921/- Add:- Difference in opening stock (Rs. 69,67,131- Rs. 26,39,452) Rs. 23,27,679/- Add: Purchases considered by short amount by survey team Rs. 81,08,657 - Rs. 79,62,913) Rs. 1,46,044/- Add: Gross Profit difference due to lower g.p. rate taken by the Survey Team (22.64% - 18.79%) Rs. 9,09,635/- Add: Invoice value of goods (stock) which were physically received I....
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....addition is confirmed." 2.2 During the course of hearing, the ld. DR supported the order of the AO. 2.3 On the other hand, the ld.AR of the assessee submitted that the ld. CIT(A) has erred in confirming the action of the AO in invoking the provisions of section 145(3) of the Act and also erred in confirming the addition of Rs. 19,35,591/- out of addition of Rs. 51,72,923/- made by the AO. 2.4 We have heard the rival contentions and perused the materials available on record. Brief facts of the case are that assessee is a private limited company engaged in manufacturing of handmade paper products and handicrafts items. A survey u/s 133A of the Act was carried out at the premises of the assessee company and other associate business co....
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....y said that the stock of Rs. 1,71,897/- was also mixed up while the director of the assessee Shri Gaurav Jain surrendered separately as per answer of question no. 35 of the statements. Considering the facts of the case, the assessee does not maintain the books of accounts and other relevant documents properly and the same are hereby rejected by invoking the provisions of section 145(3) of the IncomeTax Act, 1961 . Therefore, the excess stock of Rs. 50,.01,026/- and Rs. 1,71,897/-surrendered during the course of survey proceedings u/s 133A of the Income Tax Act, 1961.'' In first appeal, the ld. CIT(A) has partly allowed the relief of Rs. 32,37,314/-. The AO has invoked the provisions of section 145(3) of the I.T. Act, 1961 and made the ad....