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inventory. It is found that as result of search evidence found to the effect that tag price is double of MRP. The contents of such document cannot be ignored and infect the same have to be taken as correct in view of the provision of Sec. 132(4A). Therefore it would be only reasonable and fair if the value of available stock on the date of search is worked out with reference to MRP which is half of the tag price. Moreover reasonable evidence was placed before the AO to the effect that which goods found mentioned in inventoryA-1 to A-9 belongs to the appellant and the AO has not otherwise has commented on such details. Accordingly in my view computation of excess stock to the extent of Rs.27,67,452/- appears to be incorrect. Since there appears to be logic in the working of excess stock by the appellant, the same shall be taken for computation of excess stock. The value of stock as owned by the appellant as per chart enclosed at the rate of MRP which is half of the tag price at Rs.11,52,081/- Less: G.P. at the average rate of 8.49% Rs. 97,801/-

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no specific defect was found. Hence the ld. AO did not mention any specific item of defect in this regard. In some sales vouchers, the quality of cloth/sari were not mentioned. It is because some of the vouchers were issued by the salesman. Details were mentioned in most of the vouchers. The defects pointed out by the Assessing Officer as discussed above are not sufficient to reject the books of accounts of all the preceding years more particularly in view of the reply and justification given by the assessee with respect to each objection of the Assessing Officer. The rate slips attached to the clothes were just double the maximum MRP and the salesman were directed to effect the sales at rates not more than MRP. Written notice to this effect was seized by the department during search. The sales vouchers found during search shows that the sales were effected much below the maximum MRP after bargaining which is a normal common occurrence in this line of business. Some petty expenses were not supported by vouchers though they were incurred. These are the expenses of

8. Ground N. 2- The AO discussed this issue in para 10 at page 17 of the assessment order. The AO found that the value of stock on physical verification was worked out at Rs.40,48,893/-. The AO noted that almost on all the items, tag price affixed. The tag price

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was mentioned on each item of the goods found which carried code A-10. The AO found that as per departmental view, A denotes MRP whereas the assessee claimed that A2 represents MRP. The AO had worked out the value of stock on the basis of that double of MRP at Rs.40,48,890/- after reducing gross profit at the rate of 20%.The AO had worked out the value of stock on the date of search at Rs.32,39,112/-. Since the stock as per the books of accounts on the date of search was Rs.16,93,393/-, therefore, excess stock was worked out at Rs.15,45,719/-. It was submitted before the ld.CIT(A) that the AO arbitrarily worked out the value of stock. It was submitted that the search party valued the stock of the assessee on the basis of code price i.e. tag price. The AO had ignored the fact that the code price appearing on the sarees was double of the MRP. This fact was explained by Shri Ajitkumar Jain during the search proceedings. Thus, the AO had worked out the value of stock wrongly at the double of MRP. In fact, the value of stock should be valued on the basis of MRP and in case the same is computed accordingly, there will be no difference in the value of stock. It was, therefore, submitted that 50% value was enhanced by the AO and the gp rate was also wrongly taken. IT was submitted that the correct value of stock was 17,06,203/- and the difference was very nominal at Rs.12,810/- in comparison to the books of accounts of the assessee. The ld. CIT (A) considering explanation of the assessee accepted the explanation because value of stock was taken on the basis of tag price which was double the MRP. The ld.CIT(A) supported his finding on the basis of documents found during the course of search which was instruction to the employees which clearly indicated that the code price is double of MRP. The ld. CIT(A) accordingly sustained the addition to Rs.13,000/- and deleted the addition of Rs.15,32,719/- 9 The ld.DR relied upon order of the AO. On the other hand, the ld. Counsel for the assessee reiterated the submissions made before the authorities below and submitted that a paper containing instruction was seized during search to explain that the tags mentioned double the MRP and the employees could sell the same

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document was found during the course of search which states that the tag price is double the MRP which cannot be ignored and the contents of such documents have to be read as such and taken as correct in view of section 132(4A) of the Act. Thus, keeping into account this document, the learned Commissioner of Income Tax (Appeals) has recomputed the value of stock as found during the course of search by applying MRP as per inventory A-1 to A9. After applying MRP the value of physical stock found during the course of search was worked out at Rs.18,57,117/- and thereafter reducing the gross profit rate of 7.6% from the value of stock as worked out at MRP, the learned Commissioner of Income Tax (Appeals) worked out the MRP of stock at Rs. 17,15,976/- (i.e. Rs.18,57,817 (-) 1,41,141). The value of stock as per books of accounts as worked out by the Assessing Officer at Rs.16,92,252/- after reducing the same from the value of stock found at the time of search at Rs. 17,15,976/-, the learned Commissioner of Income Tax (Appeals) worked out the excess stock at Rs. 23,724/-. Thus, as against the addition of