1996 (5) TMI 11

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....ng the order of the Commissioner of Income-tax (Appeals) who deleted the addition of Rs. 29,735 made by the Assessing Officer under section 69B of the Income-tax Act, 1961 ?" The brief facts giving rise to this reference are thus : The assessee is a dealer in mill machinery. On May 31, 1978, there was a search and seizure operation in the premises of the assessee in the course of which inventory of available trading stock as on that day was prepared. Undisputedly, the value of stock on that day was Rs. 5,79,139, as per the inventory so prepared. The difference, if any, between the stock as per the books and the stock as per the inventory was certainly liable to be held as undisclosed stock and investment therein was liable to be added to....

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....ales. The Assessing Officer after taking a sample of several items found that the average G. P. rate for both the periods was 17.78 per cent. He found that on application of this G. P. rate to the sales of the first period, the stock on the date of search as per books was Rs. 29,735 less than the stock as per inventory. Therefore, he made an addition of Rs. 29,735 under section 69B of the Act. On appeal, the Commissioner of Income-tax (Appeals) held that section 69B of the Income-tax Act is not applicable in the present case as there was no undisclosed investment in the stock. It was also held by the Commissioner of Income-tax (Appeals) that the method of working out the stock by the Assessing Officer was on the basis of different rate of G....