TaxTMI 
TaxTMI 
2025 (4) TMI 2090
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....A) has erred in law and in facts by deleting the addition made as per provisions of section 69B r.w.s. 115BBE of the I.T. Act on declaration made of Rs. 5,88,00,000/- on account of excess stock found during survey for which assessee failed to offer any satisfactory explanation during the survey as well as assessment proceedings. 2. Whether on the facts and in the circumstances of the case and in law, the Ld. CIT (A) has erred in law and in facts by not appreciating the facts that the assessee has failed to offer the declaration made of Rs. 5,88,00,000/- during the course of survey action in it's return of income for the year under consideration. 3. The appellant craves leave to add, alter, modify, delete and amend any ....
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....ITR as declared during the course of survey on account of excess stock. In this regard, the Assessing Officer has issued a notice u/s 142(1) of the Act on 11.09.2021 and the assessee was requested to explain why the unrecorded/excess stock valued at Rs. 5,88,00,000/- should not be treated as "deemed income" u/s 69B of the IT Act and accordingly taxed u/s 115BBE of the IT Act. In response to the notice, the assessee filed its reply vide letter dated 13.09.2021. The reply of the assessee had been considered by the Assessing Officer but not found to be acceptable. In view of the above facts, the Assessing Officer passed assessment order u/s 143(3) on 18.09.2021 & assessed total income of Rs. 9,11,00,970/- by making addition of Rs. 5,88,00,000/....
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..... 5.2.8 I have perused the submission filed by the appellant during the course of the assessment proceedings and also the submission filed before me during the appellant proceedings. 5.2.9 I find force in the contention of the appellant that the tentative trading account does not include direct expenses and salary and wages. Thus, the trading account based on such fundamental defect would not depict meaningful analysis. The action of AO in making the tentative trading account as a basis of making the addition is not correct. 5.2.10 Further, on perusal of the details submitted during the assessment proceedings, it is observed that the appellant had submitted details regarding direct expenses and employees' bene....
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....by Ld. CIT(A) is unjustified. Ld. DR submitted before us that the Revenue is only challenging the deletion of addition of Rs. 5,88,00,000/- made by the Assessing Officer due to difference in physical stock found on the date of survey and the value of closing stock appearing in the trading account prepared by the assessee on the date of survey & which was also admitted by the director of the assessee company in its statement recorded at the time of the survey. The other relief allowed by the Ld. CIT(A) is not under challenge. Ld. DR further submitted before the Bench that the director of the assessee company himself accepted in his statement recorded at the time of survey that he will disclose extra income of Rs. 5,88,00,000/- in the return ....
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....addition of Rs. 5,88,00,000/-. It was the main contention of the assessee before Ld. CIT(A) that the trading account prepared on the date of survey was a tentative trading account. The director of the assessee company was an engineer and not from the accounting background and due to this reason he forgot to consider the direct manufacturing expenses of Rs. 4.38 crores and also did not consider salary and wages of Rs. 2.83 crores in the tentative trading account which ultimately resulted in wrong value of closing stock. In this regard, we further find that in the questions and answers recorded at the time of survey in question no.14, the survey officer herself talks about the tentative trading account provided by the director of the assessee....
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....rior to date of survey and the Assessing Officer has not objected to these figures which also proves the contention of the assessee. In this regard, the correct trading account upto the date of survey was prepared and produced before the Assessing Officer as well as before Ld. CIT(A). Admittedly the direct manufacturing expenses & salary & wages were not considered by the director while preparing the tentative trading account which affected the value of closing stock to a great extent & when correct trading account was prepared on the basis of books of accounts the mistake was found & accordingly the other amount declared at the time of survey were disclosed in the return of income but the so called difference of Rs 5,88,00,000/- wrongly ad....