TaxTMI 
TaxTMI 
2019 (12) TMI 350
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....TA is not justified in confirming the addition of Rs. 6,27,496/- made by the Assessing Officer on estimate on account of alleged excess stock. There was no excess stock. The stock inventorized / taken are not correct inspite of objection having been raised during the course of survey. It was not possible for taking such huge stock with limited manpower. The entire sales and purchases are verifiable and nothing contrary has been detected. No goods are sold on the price quoted by the assessee in as much as the assessee is a retailer. No rebate out of stock inventorised have been considered / allowed on account of damaged, discolor and outdated materials which the assessee is entitled at least 20-25 percent out of stock inventorised in as much....
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....allowed on account of damages, discolour and outdated materials which the assessee is entitled at least 20-25% rebate on the valuation of stock done during the survey. Ld. AR also pointed out that no goods have been sold on the price quoted by the assessee and the survey team has taken maximum retail price(MRP) printed on the items without considering a fact that on such kind of items MRP is printed on higher side and cost price/purchase price is generally 20-30% less than the MRP printed thereon. Ld. AR submitted that same prayer has been made before the lower authorities but was not accepted without any justified reasoning, therefore, in the interest of justice, reduction of 30% in the total valuation adopted by the survey team on the bas....
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....d the stock of assessee by taking MRP without considering some relevant factors viz., (i) sales price includes GP approximately 8 to 10%; (ii) the stock inventorised includes old and absolute stock also and rebate onaccount of damaged, discolour and outdated materials should be allowed and (iii) MRP printed on the items cannot be taken as basis for valuation of stock because MRP is generally 20 to 25% higher than the actual purchase price charged by the manufacturer/wholesaler. In view of the above, I am of the considered view that the assessee has not disputed quantum of material/stock inventorised by the survey team. However, I am of the view that the valuation of stock should have been done by considering the said three factums as noted ....
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....er observed that the assessee has made the said expenditure out of books and added the same to the total income of the assessee. From the above observations of the both the authorities below, I do not find any good reason to interfere in the findings recorded by the CIT(A) and I uphold the same and dismiss the ground No.3 of the assessee. 9. With regard to ground No.4, ld. AR submitted that this issue is covered in favour of the assessee on the decision of Hon'ble Jharkhand High Court in case of Ajay Prakash Verma in ITA No.38 of 2010 reported in 2013(1) TMI 140, wherein the hon'ble High Court has held that interest u/s.234B can be levied only on the returned income and not on the assessed income. 10. Contra, ld. DR relied on the or....