2008 (6) TMI 137

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....r detailed inquiry calling for various details and evidence on the basis of discrepancies found during the course of search operation the assessing officer recorded as under: "Since the assessee has already taken into account all the expense relating to purchase, mfg. and sales, as such whole of the amount of Rs.3,26,69,000/- is considered to be its sales of carbon black made outside its regular books of accounts. Further, during search operation as per physical verification of stock inventory prepared it was found that excess stock of finished goods (carbon black) was found to the extent of 136.234 M.T. which is valued at Rs.21,36,131.00. This excess stock of carbon black. Is considered to be part of suppression of yield of carbon black.....

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....law. In support of the submissions made reliance has been placed on the following two decisions of this Court: Mohamed Nasim Abdul Razak Mistry v. Wealth Tax Officer - (1995) 216 ITR 104(Guj); and Swastik Engineering and Manufacturing Co. Pvt. Ltd. v. Income Tax Officer (1991) 189 ITR 667(Guj). 5. On behalf of the respondent authority Mr. M.R. Bhatt, learned Senior Standing Counsel submitted that as could be seen from the reasons recorded, during course of search and seizure proceedings under section 132 of the Act the value of excess stock of carbon-black amounting to Rs.21,36,131/- was found but the assessee had neither shown the sale of such stock of finished goods nor was the value of the same shown as part of closing stock as on 31....

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....tock of carbon black found was part of the low yield determined. No separate addition on account of excess stock found of carbon black was made. A perusal of the case records reveals that the assessee has neither shown the sale of this stock of finished goods during the period from 17.03.1988 nor it has shown the value of the same as part of the closing stock as on 31.03.1988. In view of the above, I have reason to believe that the income of Rs. 21,36,131/- has escaped assessment. In my opinion, this is a fit case for reassessment under section 147 of the Income Tax Act, 1961. Therefore, notice under section 148 is being issued for making reassessment under section 147 of the Income Tax Act, 1961 in this case". 7. On going through the af....