TaxTMI 
TaxTMI 
2026 (4) TMI 1632
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....the Act') dated 07.03.2013 by the Assessing Officer, JCIT, Range-19, New Delhi (hereinafter referred to as 'ld. AO'). 2. The only issue to be decided in this appeal is as to whether the Learned CITA was justified in confirming the addition made on account of inventory in the facts and circumstances of the instant case. The interconnected issue involved therein is as to whether the Learned CITA was justified in upholding the action of the Learned AO in rejecting the books of accounts and book results of the Assessee under section 145(3) of the Act in the facts and circumstances of the instant case. 3. We have heard the rival submissions and perused the materials available on record. The return of income for the assessment year 2010-11 ....
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....29,200 5. The main grievance of the revenue was that the total additional income surrendered by the Assessee was Rs 5,18,43,842 whereas the return of income was filed declaring total income of Rs 4,36,31,310. The additional income offered by the Assessee towards excess stock of Rs 1,75,98,542 was incorporated by the Assessee in the profit and loss account under the head "Sales and Other Income" and after considering the same, the Assessee earned gross profit of Rs 8,42,95,900 which was worked out to 10.79%. The Learned AO observed that excess income offered on account of excess stock to be taxed only as income from other sources and hence the same cannot be considered as business income of the Assessee and consequently, the same should n....
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....ng survey in excess over the stock as per books of accounts as on 21-01-2010 and not the value of particular item of stock. The Learned AO justified the additional amount on account of difference of Rs. 108,51,505 by taking sample of 10 invoices of purchase and sales made by the Assessee and arrived at the corresponding gross profit percentage thereon, wherein he found that the gross profit earned thereon were much more than 8.53% in all the cases. Further, the Learned AO noted that the Assessee had made majority of the purchases from sister concern i.e. M/s Swiss Devices (I) which was claiming deduction under section 80IC of the Act showing exorbitant GP of 32.08% and net profit of 28.81% which means that expenses debited to its profit and....
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....he said sister concern. To prove this fact, the Learned AR drew our attention to page 389 of the paper book volume II which contain the assessment order framed in the hands of the sister concern under Section 143(3) of the Act dated 12-3-2013. We find that no adverse inference was drawn by the revenue in the hands of the sister concern while granting deduction under section 80IC of the Act and the alleged excessive sales made by them to Assessee was not disturbed or even whispered. Hence the reasoning of the Learned AO on this aspect fails. 8. Further, yet another reason adopted by the Learned AO to reject the book results and books of accounts of the Assessee was that the quantitative details were not furnished by the Assessee during th....