Case Law Details
ACIT Vs National Cable Industries (ITAT Delhi)
A survey u/s 133A of the Act was carried out in the business premises of the assessee on 03.02.2010 wherein it was concluded that assessee has undisclosed/ excess stock amounting to Rs. 50,02,024/-(l,70,02,024- 1,20,00,000). The assessee estimated closing stock at Rs. 1,20,00,000/- in trading account prepared during course of survey, whereas the same has been taken at Rs. 1,70,02,024/- by survey team.
The Ld. AR pointed out that in CIT(A)’s order it was affirmed that no physical discrepancy was found/ detected by the survey team and excess value of stock was merely because of difference in valuation of closing stock. Survey team took the valuation applying MRP- GP% whereas as per assessee, since as per normal trade practice sales are generally made after giving discounts @ 30% to 60%, stock was valued at MRP-Discounts-GP%. This discrepancy in valuation method was duly elucidated before the Assessing Officer vide submission dated 25.02.2013. The statement showing valuation of closing stock at actual sale price supported by relevant invoices to prove assessee’s claim of overvaluation of stock by the survey team. An affidavit by the partner of the assessee firm stating the above facts was also submitted before the CIT(A).
The Ld. AR further submitted that nevertheless, the assessee after immense pressure from survey officers, in order to buy peace of mind surrendered the excess valued stock by Rs. 50,02,024/- as additional income for the impugned assessment year at the time of survey after expressing his reservations on the method of valuation method used by the department. However, during the course of assessment proceedings the Assessing Officer adopted different approach and made additions on the basis of production of wires by taking electricity and diesel as inputs to produce the wire as mentioned hereinabove.
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