TaxTMI 
TaxTMI 
2018 (8) TMI 1200
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....me of the assessee. The assessee is a partnership firm engaged in the business of retail trading in textiles and garments. For the AY 2013-14, the assessee filed a return of income on 29.9.2013 declaring a total income of Rs. 9,11,310. 3. There was a survey carried out u/s. 133A of the Income-Tax Act, 1961 ["the Act"] in the business premises of the assessee on 12.02.2013. According to the revenue, at the time of survey statement of Shri A.D. Shivaprakash, M.D. of the assessee was recorded and in his statement, he had agreed to declare income of Rs. 40 lakhs in the hands of the firm for AY 2013-14. In the return of income filed by the assessee for AY 2013-14, there was no declaration of income of Rs. 40 lakhs. The AO called upon the asse....
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....on date of survey was Rs. 1.16 crores do you agree? Ans: Some of the expenditures have not been debited and there are certain errors in closing stock entered in tally package the net profit for the period from April till the date of survey is around 40 lakhs. This will be offered as the income for the current financial year." 4. The AO, however, rejected the plea of assessee and made an addition of Rs. 40 lakhs for the following reasons:- " The contention put forth by the AR was considered. Considering the facts and circumstances of the case, it is apparently clear that the contention of the AR is only an afterthought and hence, the same is rejected for the reason that the managing partner himself had admitted Rs. 40 la....
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....n date of survey was Rs. 1.16 crores do you agree? Ans: Some of the expenditures have not been debited and there are certain errors in closing stock entered in tally package the net profit for the period from April till the date of survey is around 40 lakhs. This will be offered as the income for the current financial year." It is also seen from the statement dated 28/02/2013, Sri A D Shivaprakash himself had agreed to declared Rs. 1.40 crores as addl. Income which is inclusive of Rs. 40 lakhs. In view of the above, it is crystal clear that there is a failure on the part of the assessee to declare the income of Rs. 40 lakhs, as admitted at the time of survey in the return of income filed. In the circumstances, the sum of R....
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....as per the books of account. While arriving at the value of inventory, the cost price has to be determined and due deduction given towards direct expenses. In other words, if the stock found at the time of survey carries a tag of sale price, then to arrive at the purchase price of the assessee, gross profit margin as declared in the relevant assessment year and direct expenses have to be reduced. Only then the value of inventory at the time of survey can be ascertained. Thereafter, the value of inventory has to be compared with the value of inventory as recorded by the assessee in the books of account. If the inventory is more than the value as recorded in the books of account, then addition u/s. 69 as unexplained investment in stock has to....