TaxTMI 
TaxTMI 
2022 (12) TMI 1116
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.... 2. In its appeal, the Revenue has raised the following grounds:- "1. On the fact and circumstances of the case the Ld. CIT(A) erred in holding that the books of account of the assessee were not required to be rejected on the ground that the same were not complete without appreciating the fact that there was a specific mistake in the books of account in the shape of excess of Rs. 1,88,77,595/- duly admitted by the assessee which itself establish that books of account of the assessee were not complete. 2. On the fact and circumstances of the case the Ld. CIT(A) erred in deleting the addition on the ground that the addition on account of GP tantamount to double addition due to determination of WIP on account of sale value....
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....urvey proceedings, the statement of Mr. Manoj T Bijlani, one of the partners of the assessee, was recorded under section 131 of the Act. The aforesaid partner of the assessee admitted to the difference of Rs. 3,15,32,000, in the work in progress (WIP) as unaccounted investment in stock of WIP of cranes. It was also admitted that the difference arising on the valuation of raw materials of Rs. 1,88,77,595, on the physical inventory of the stock during the survey, is unaccounted investment in stock of raw materials. The assessee also considered Rs. 3,59,68,280, as stock which was not yet been entered in the profit and loss account at the time of survey and declared a net profit of Rs 10,13,72,648 (i.e. Rs. 11,20,72,648 - Rs. 1,00,00,000). Acco....
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....hat profit was already added to the WIP and therefore further profit cannot be added. 7. We have considered the rival submissions and perused the material available on record. The AO recomputed the gross profit and net profit of the assessee, for the year under consideration, after reducing the amount disclosed during the survey as under: Particulars Amount (in Rs.) Sales 47,97,42,348 Gross profit including disclosure 13,13,61,862 Less: disclosure 5,04,09,595 Gross profit of regular income 8,09,52,267 G.P.% of regular income 16.86% 8. The AO on the basis of the difference of gross profit @4.37% as compared to earlier year (i.e. 21.23% for AY 2012-13 - 16.86% for AY 2013-14) made the addition of Rs. ....
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....MSM - Job 756A 41,00,000 75% 30,80,000 ARS - Job 801 19,00,000 70% 13,30,000 Hitech - Job 734B 51,67,500 75% 38,79,500 Hitech - Job 734D 41,34,000 75% 31,00,500 Western Ind. - Job 792A 67,00,000 75% 50,25,000 Dubai Manufacturing Co. - Job 806A 44,10,000 50% 22,10,000 Apex Industries - Job 808 31,27,000 50% 15,63,500 Sub-Total 5,03,00,000 B. Work in Progress _ Mahape Bhimeshwari - Job 722C 41,00,000 80% 32,80,000 MSM - Job 756F 28,00,000 70% 19,60,000 A"IA - Job 800 22,00,0....
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....income. The other component in the aforesaid amount of Rs. 5,04,09,595, is unaccounted investment in raw materials accepted by the assessee amounting to Rs. 1,88,77,595. In view of the aforesaid facts, the learned CIT(A) allowed the appeal filed by the assessee by observing as under: "6. Decision: I have gone through the submissions made by the AR of the appellant as well as the assessment order passed by the AO carefully. In the course of survey and subsequent assessment proceeding, valuation of closing stock was different to arrive at a disclosure of income. However, the recognized method of valuation is cost or market rate whichever is lower. The Supreme Court in the case Sanjeev Woolen Mills v. C.I.T. 279 ITR 434 (SC) ....
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....g the declaration and estimating the gross profit was unwarranted. Even rejection of book results u/s 145(3) is also uncalled for. Besides, the Delhi High Court in the case of CIT v. Bindals Appearels (2011) 332 ITR 410 (Delhi) held that "Non maintenance of Day to Day Stock Register is not a reason to reject books". The case is rather identical to the facts of the assessee's case. However, in the case of the assessee, Purchase Register, Sales Registers and Stock Registers were impounded by the A.O. The A.O.'s statement that these registers are not maintained appears to be wrong. The Sales tax / VAT Assessment order is produced int eh paper book at Page 145 to 148 for the above period. The Dy. Commissioner of Sales Tax who carried o....