2006 (1) TMI 168

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....902/B/2003 This is assessee's appeal for the asst. yr. 2001-02. 2. Assessment was framed under s. 143(3) r/w s. 144A of the Act. A survey was conducted in the business premises of the assessee. The assessee offered excess value of stock of Rs. 3 lakhs and excess cash of Rs. 2,01,000. It was noticed by the AO that the firm has claimed remuneration to the partners on the additional income of R....

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....her, we find that the additional income was not assessed by the AO under any other head of income. In similar circumstances, the Tribunal, Bangalore Bench, held in the case of Premium Distributors in ITA No. 863/B/2003 that the income which was disclosed at the time of survey should be treated as business income and the remuneration paid to the partners on the said income is to be allowed. 4....

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....g stock was valued at Rs. 397, the CIT was of the view that the value of stock as calculated at the time of survey at Rs. 314 per gram was not correct. For this reason, proceedings under s. 263 were initiated and notice to show cause was issued. The assessee explained that at the time of survey, jewelleries which were valued (did) not belong to the assessee alone but belonged to other customers....

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....see in reply (sic-response) to the notice under s. 263 finds place. It was submitted on the basis of those documents that the inventory prepared by the survey team at the time of survey and rate of Rs. 314 per gram was computed by them only. Therefore, it cannot be said that the assessee had offered some lower value. On the other hand, learned Departmental Representative supported the order under ....