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Thus there is minor difference occurred in the book stock and physical taken at the time of survey , which was actually not exist in actually..."

In addition thereto, it is common knowledge that:

1. No two weighing scales give exactly the same weight. In fact, the same weighing scale may differ slightly even for the same goods;

2. The difference of 0.426% is so minor that it can easily be overlooked as because of human error;

3. The AO himself, in the assessment order says that the value of the excess stock is an approximation. Attention is drawn to para 3 ,first page of the assessment order where it has been stated that:

Shree Prithvi Iron Mills Private Ltd. vs. ACIT "In the light of judgment in CIT vs Reliance Petro products Pvt Ltd., the Supreme Court reinforced the principle that merely because an addition is made does not result in automatic levy of penalty for concealment of income. There must be clear evidence of intent to conceal, which was not established in my case." To sum up, it is clear from the analysis of the facts of the case and judgements cited above, that the alleged difference between the weight as per books of account and as per physical stock-taking was so minute that it should not have been taken cognizance of by the assessing officer. This difference could have been because of human error, or error in the weighing process, or natural difference in different weighing scales.

Shree Prithvi Iron Mills Private Ltd. vs. ACIT

9. We have heard the rival contentions and perused the material placed on record. We note that there are three grounds of appeal but ground no. 1 and 3 being general does not require any findings. Thus, effective ground no. 2 which the assessee challenges relate to the levy of penalty of Rs. 1,17,670/- u/s 271(1)(c) of Income Tax Act on account of undisclosed investment under section 69 of the IT. Act. The brief facts of the dispute are that there was a survey u/s 133A of the Act at the factory premises of the assessee at B-190A, Road No. 9F, VKI Area, Jaipur on 09.10.2014. In that proceeding stock was physical taken and the survey team found discrepancy in the valuation of stock during the course of survey proceedings of 8.399 MT excess stock which was valued at Rs. 3,62,661/- (approximate) at the time of stock taken physically as compared to stock as per books of account. In response the assessee submitted that there is minor difference occurred in the book stock and physical taken at the time of survey , which was actually not exist in actually. In addition thereto, it is common knowledge that no two weighing scales give exactly the same weight. In fact, the same weighing scale may differ slightly even for the same goods. The difference of 0.426% is so minor that it can easily be overlooked as because of human error. The AO himself, in the assessment order says that the value of the excess stock is an approximation.