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Showing contexts for: impounding of document in Modern Agencies, Jhansi vs Acit Circle-6, Jhansi on 9 October, 2018Matching Fragments
4. Considering the above facts brought before me and also the arguments taken by the Ld. AR during the hearing of appeal on 18.09.2014, you are required to submit following details/explanation: -
(i) Please examine the contention raised by the Ld. AR about the double addition of Rs. 39, 13,263/-.
(ii) Please examine whether, purchase and sale bill up to the date of survey are available in the impounded document or not.
(iii) If the purchase bills are found available in the impounded document, it should be explained why these purchase bills were not considered for working of value of stock found during survey. The entire impounded documents should be produced before me for necessary examination on the date of next hearing.
In reply to my above queries, the AO has confirmed that most of the purchase & sale bills are available in the impounded documents but instead of verifying the valuation of stock made by the assessee on cost price at Rs. 83, 65,725/- from the purchase bills found available in impounded documents, the AO has simply reported in a routine manner stating that during the course of survey proceeding, the stock was prepared in the presence of partner of the firm and the stock value was determined on the basis of product price and also mentioned that during the survey proceeding, no books of account was found and hence, stock value was determined on the basis of product price. The AO has neither verified the correctness of valuation of stock furnished by the assessee (appellant) claiming to have been done at cost price amounting to Rs. 83, 65,725/- nor he has made any attempt to furnish correct valuation of stock at cost price with reference to purchase bills found in the impounded documents and he has simply forwarded the impounded documents to my office which was called for with the purpose of verifying the correctness of valuation of stock by referring to purchase bills claimed to be available in the impounded documents.
ITA No. 408 and 409/AGR/2015 ITA No. 437 and 438/AGR/2015 Assessment Year: 2010-11 The AO has not followed my direction in furnishing of correct valuation of stock at cost price with reference to purchase bills available in impounded document and he has not even followed my another direction in which, he was required to work out the book value of stock on the date of survey after drawing a provisional Profit & Loss Account on the basis of purchase & sale bills. The assessee has made such provisional Profit & Loss Account taking into account the sales & purchase bills available for the period 01.04.2009 to 18.09.2009 (date of survey) and on the basis of such provisional Profit & Loss Account, the book value of closing stock has been worked out at Rs. 44, 23,559/- The Ld. AR has argued that for determining the excess value of stock on the date of survey, book value of stock worked out on the date of survey should be deducted from the total value (at cost price) of stock found on the date of survey instead of deducting opening value of stock of Rs. 22, 72,457/- as done by the AO. In view of above objection of the Ld. AR, the AO has been asked in my letter dated 23.09.2014 to find out from the impounded documents, whether purchase & sale bills are available or not and if they are available, a provisional Profit & Loss Account of the assessee should be drawn as done by the assessee on the basis of these purchase & sale bills and then, he should give his comments as to what could be the correct value of closing stock as worked out on the date of survey on the basis of impounded documents and whether, in order to work out the excessive value of stock for making addition in the income of the assessee, the same value should be deducted instead of Rs. 22, 72,457/- from the value of stock determined at cost price on the date of survey. In response to my above query, the AO in his report dated 07.11.2014 has just referred to working of valuation of stock on basis of Gross Profit percentage and deducting there from opening value of stock to arrive at the excess value of stock. Instead of determining the book value of stock on the date of survey by making a provisional Profit & Loss Account on the basis of purchase & sale bills available in the impounded documents, the AO has again reported in a routine manner that on the date of survey, Sh. Mukesh Agarwal was asked the value of stock present in his books of accounts and he submitted in his statement that stock present in his books was worth Rs. 30 lacs but it is seen that in absence of the books of accounts, the assessee could not substantiate this figure. Therefore, as submitted by the AO, the book value of stock stated to be at Rs. 30 lacs could not be accepted and hence, he justified taking the opening stock of the stock at Rs. 22, 72,457/- as stock of the assessee as per his books of accounts. Such report of the AO is beyond my comprehension. How it can be possible that the stock on 18.09.2009 would remain the same what was available as on 01.04.2009. It can be possible only when no trading activity would have taken place during the period 01.04.2009 to 18.09.2009 but looking to the trading result as available in the case record, I have found that the assessee (appellant) has been regularly doing trading activities during the same period and the assessee (appellant) had already drawn a ITA No. 408 and 409/AGR/2015 ITA No. 437 and 438/AGR/2015 Assessment Year: 2010-11 provisional Profit & Loss Account showing the book value of stock on the date of survey at Rs. 44, 23, 559/- which the AO was asked to verify. However, no comment has been offered by the AO on the correctness of book value of stock on the date of survey determined on the basis provisional Profit & Loss Account and he has mentioned about the value of stock told by the partner on the date of survey as being of Rs. 30 lacs, which was rejected by the AO in absence of books of accounts as reported by him in the remand report. In fact, the AO was never asked by me to verify correctness of book value of stock of Rs. 30 lacs told on the date of survey by the partner but he was asked to examine correctness of book value of stock determined on the date of survey at Rs. 44, 23,559/- on the basis of provisional Profit & Loss Account prepared by the assessee (appellant), which the AO has failed to examine and to offer comment on its correctness.
29. The ld. CIT(A) has affirmed the AO's confirmation that most of the purchase and sale bills are available in the impounded documents.He had noted that instead of verifying the valuation of stock made by the assessee on cost price at Rs. 83, 65,725/- from the purchase bills found available in impounded documents, the AO send a remand report in routine manner and that the AO has neither verified the correctness of valuation of stock furnished by the assessee which is claimed to have been done at cost price amounting to Rs. 83, 65,725/- nor he has made any attempt to furnish correct valuation of stock at cost price with reference to purchase bills found in the impounded documents rather he has simply forwarded the impounded documents to the CIT(A)'s office which were called for with the purpose of verifying the correctness of valuation of stock by referring to purchase bills claimed to be available in the impounded documents.