TaxTMI 
TaxTMI 
2018 (12) TMI 1206
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....ck without appreciating that the assessee has not furnished any documentary evidence to substantiate its claim or point out the defects in - stock taking process of the survey team." 3. "On the facts and circumstances of the case and, in law, the Ld.CIT(A) has erred in deleting the addition of Rs. 10,07,03,903/- on account of deficit in stock without appreciating that the assessee nor the Ld.CIT(A) has given any explanation about the method of valuation or inventory as mentioned in 3CD Report i.e, cost or net realizable value whichever is lower under the FIFO to substantiate their claim of correct valuation of stock." 4. "On the facts and circumstances of the case and in law, the Ld.CIT(A) has erred in deleting the addition of Rs. 10,07,03,903/- on account of deficit in stock without appreciating that the difference of the stock of Rs. 10,61,71,434/- arrived at was on the basis of computerized sheet of MRP. Moreover, neither the assessee nor the Ld.CIT(A) has challenged the veracity of the computer sheet." 5. "The appellant prays that the order of Ld.CIT(A) on the above grounds be set aside and that of the Assessing Officer be restored." 6. "The appellant craves leave to am....
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....et of MRP and the difference has been worked out between the value mentioned in the said sheet and value of physical manually prepared by the Survey team by adopting the MRP for valuation. It has also expressly pointed out by the appellant that there is big difference between MRP and cost price and the inventory is required to be valued at cost price. The appellant has also admitted that there has been difference between physical stock found at the time of Survey and actual stock as per books of accounts. The exercise of verification of stock suffer various defects which is ignored by the DDIT (Inv.) and AO. The method adopted by the DDIT (Inv.) and AO for valuation of inventory of stock was also not reliable. Inventories were prepared by Survey team with the help of sale employee. There was no material to suggest that employee concerned were properly authorised to certify the value of stock found during the Survey. During the course of Survey inventory were prepared itemwise by the DIT (Inv.). However, the DDIT and AO has not given any finding on the item, which appears in the computer sheet but not found during the course of the Survey. The DDIT (Inv.) and the AO should have comp....
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....of physical inventory taken by the Survey team works out to Rs. 9,01,35,304/- and cost price of computerized sheet as maintained by the appellant, comes to Rs. 13,71,90,491/-. However, still there is a difference of Rs. 4,70,55,187/- (Rs.13,71,90,491 - Rs. 9,01,35,304) being deficit in the stock between stock as per appellant's noting in computerized sheet as well stock as per physical inventory taken by the Survey team. During the course of assessment proceedings as well as during the Survey action, appellant has tried to explain the difference to the extent of Rs. 4.18 crores. Shri Tejas A Shah, Partner of the appellant firm stated that the difference between the physical stock inventory and stock as per books of accounts is due to various articles given on approval to various parties like Shopper's shop, Promart, Waman HariPethe. he stock given to the above parties account for about to Rs. 3.22 crores which includes the stock of appellant's shops at R. City Ghatkopar and Borivli worth around Rs. 50 lakhs . Apart from that appellant has given articles of Rs. 96 lacs for framing. It has been stated by the appellant that complete name and addresses of invoices of all th....
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....d we had also deliberated on the judicial pronouncements referred by lower authorities in their respective orders as well as cited by learned AR and DR during the course of hearing before us in the context of factual matrix of the case. We have also carefully gone through the statement recorded during course of survey, the questions asked by survey party and the replies given by the partner of assessee firm. 9. From the record we found that a survey action u/s. 133A of the Income Tax Act, 1961 was carried out at five business premises of the assessee on 14/15.10.2010 by the DDIT (Inv.), Unit-lll(3). During the course of survey proceedings physical stock was taken and compared with assessee's notings in the computerized sheets. For this purpose statement of Shri Tejas A. Shah, partner of the firm was recorded u/s. 131 of the Income Tax Act, 1961. During the course of survey proceedings, the stock found in all the five premises were physically checked. The physical stock was also found at Rs, 20,33,73,897/- (MRP) whereas as per notings on computer sheet it was at Rs. 30,95,45,331/- (MRP), thus there was deficit of stock of Rs. 10,61,71,434/-. Accordingly an addition of Rs. 10,61,71,....