TaxTMI 
TaxTMI 
2022 (11) TMI 1080
X X X X Extracts X X X X
X X X X Extracts X X X X
...., for Assessment Year 2014-15. 2. The assessee has raised the following grounds of appeal:- "1. That on the facts and in the circumstances of the case, the Ld.CIT(A) erred in passing the order appealed against sustaining and confirming the additions made in the assessment order on account of 'undisclosed cash and stock amounted to Rs. 1,00,35,509/- without considering the facts of the case in proper perspective. 2. That on the facts and in the circumstances of the case, the Ld.CIT(A) erred in sustaining the addition of Rs.4,00,000/- on account of payment of Interest on Demand VAT 3. That on the facts and in the circumstances of the case, the Ld.CIT(A) erred in sustaining the additions of Rs.1,00,35,509/- under the head 'und....
X X X X Extracts X X X X
X X X X Extracts X X X X
....tement maintained at the sales office. 4. That on the facts and circumstances of the case, the learned CIT(A) erred in sustaining the addition of alleged undisclosed stock and cash of Rs. 1,00,35,509/- without appreciating the fact that the difference in stock statement as obtained from godown and from sales office was due to certain quantity of stock of biri which was not stacked in the godown, pending verification by the team of internal stock verifiers. 5. That on the facts and circumstances of the case, even otherwise also, the difference in the stock as recorded by the survey party and as appearing in the godown as per the regular books of accounts being less, the entire difference can't be assessed and only GP@ 17. 20% amoun....
X X X X Extracts X X X X
X X X X Extracts X X X X
....as per the stock register there were 2203 bags but in the godown only 1289 bags were found and the difference of 914 bags which were lying outside were not considered in the physical stock and the value of the same was considered as undisclosed cash/stock. However, the ld. CIT(A) was not satisfied with these submissions and held that the assessee had paid the penalty and has not challenged the action of the survey team under the VAT Laws and the issue cannot be decided merely on the basis of written submissions and since no documents or evidence have been produced to establish that the impugned stock was part of the regular books, there is no basis to interfere with the findings of the assessing officer. 6. Aggrieved, the assessee is in ap....
X X X X Extracts X X X X
X X X X Extracts X X X X
....y team asked the assessee to pay VAT demand at Rs. 1,00,35,509/- of Rs. 20 lakhs and VAT penalty of Rs. 4 lakhs. The assessee paid the said sum under pressure and fear. Further the ld. Counsel for the assessee, submitted that actually there was no shortage of stock. Even after requesting the survey team they did not entertain the claim that certain stock was lying outside for necessary checking and verification. Reference was also made to the invoice nos. 100, 101, 102 & 158, which were dt. 9/11/2013, 11/11/2013 & 12/11/2013 respectively; through which 914 bags were received and which remained to be considered by the survey team. Thus, it was submitted that no addition was called for in respect of the undisclosed stock at Rs. 1,00,35,509/-.....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ent of NCT of Delhi. As per the stock register maintained at the sales office, there were 2203 bags in the stock. As per the physical stock statement prepared by the survey team 1289 bags were found. A shortage of 914 bags was detected and unaccounted stock was valued at Rs. 1,00,35,509/-was determined and the assessee paid the penalty/tax on the said sum. The ld. Assessing Officer, has confirmed this addition in the scrutiny proceedings and the same was confirmed by the ld. CIT(A) also. 12. In the first fold of contention, it is submitted by the ld. Counsel for the assessee that there was no difference in the stock and the alleged 914 bags were actually received during the period 09/11/2013 to 12/11/2013. They were duly entered in the sto....
X X X X Extracts X X X X
X X X X Extracts X X X X
....l ground no. 5, it is stated that only the gross profit element on such undisclosed sales should have been subjected to tax. We find force in this contention of the ld. Counsel for the assessee and considering the judicial precedents wherein it has been held that in case of undisclosed/unaccounted sales, addition could be made only in respect of the profit element. We find that the Hon'ble Bombay High Court in the case of CIT vs. Hariram Bhambani (supra) considering similar case, where survey was conducted u/s 133A of the Act and unaccounted sales were found and thereafter accepted in the statement recorded, the Hon'ble Court held as follows:- "We are unable to appreciate how Section 69C of the Act which speaks of unexplained expenditure ....