Case Law Details
Madhur Jain Vs ITO (ITAT Delhi)
In this case the valuation was done based on the statement of assessee’s son who is no way connected with assessee’s business except his occasional visits. Therefore, the statement of Sh. Rajat Jain has no evidentiary value.
Facts-
The assessee Late Sh. Rakesh Kumar Jain was an individual carrying on his business activity in trading of utensils, flat steel putta and manufacturing of utensils. The assessee filed ROI for AY 2014-15 on 29.11.2014 declaring income of Rs.4,07,660/-. Assessee also declared stock of Rs.88,16,413/- in his audited financials as on 31.03.2014. The case was selected for scrutiny and in the course of assessment proceedings the assessee Rakesh Kumar Jain died and assessment order was passed in the name of Sh. Madhur Jain the son of the assessee as legal heir. The assessment was completed u/s 143(3) on 29.12.2016 determining the income of the assessee at Rs.27,05,510/-. AO added Rs.22,72,050/- as difference in valuation of stock and Rs.25,800/- was disallowed on account of labour charges paid by the assessee for making furniture for his godown.
AO valued the stock at a price of Rs.230/- and the basis for adopting this rate of Rs.230/-was the statement taken from the son (Rajat Jain) of the assessee in the course of survey proceedings. The assessee submits that the assessee has valued the stock at Rs.190/- and whereas the AO valued the stock at Rs.230/-. Hence, the total stock value was determined at Rs.1,12,22,070.00.
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