Itxa/1308/2016 Of Pr.commissioner Of Income Tax-7 v. M/S.lagu Bandhu Motiwale Pvt Ltd

IN THE HIGH COURT OF JUDICATURE AT BOMBAYORDINARY ORIGINAL CIVIL JURISDICTION INCOME TAX APPEAL NO.1308 OF 2016 The Pr. Commissioner of Income Tax-7v/s. M/s. Lagu Bandhu Motiwale Pvt. Ltd. .. Appellant .. Respondent Mr. Suresh Kumar for the appellant Mr. Mihir Naniwadekar for the respondent CORAM : AKIL KURESHI & M.S. SANKLECHA, J.J. P.C. DATED : 30[th] JANUARY, 2019 1.The Revenue is in appeal against the judgment of the Income TaxAppellate Tribunal ("the Tribunal" for short). The following questionsare presented for our consideration :- (i)Whether on the facts and in the circumstances of the caseand in law, the Tribunal was justified in holding that thesurrender of unaccounted income was based on estimation andconsequent retraction of the assessee without appreciating thatdiscrepancies arrived during the course of survey was on theactual physical verification and not on mere estimation ? (ii)Whether on the facts and in the circumstances of the caseand in law, the Tribunal was right in holding that the statementgiven during the course of survey has no evidentiary value onaccount of undervaluation of closing stock without appreciatingthe director own admission of unaccounted excess stock ? 2.The respondent assessee is a private limited company. The issuerelates to Assessment Year 2008-09. The Assessing Officer madecertain additions in the taxable income of the assessee on the basis ofdiscrepancies in the physical stock as compared to the registermaintained by the assessee which was detected during the survey.The Commissioner of Income Tax (Appeals) [CIT(A)] and the Tribunalhowever, deleted the additions concurrently holding that the assesseehad reconciled the differences and extended the possible inconsistency.The Tribunal by the impugned judgment observed that during thesurvey action, no difference in quantity was noticed and the admissionmade by the assessee was based only on account of method ofcalculation. The assessee had also tried to reconcile this differencepointing out that the calculation on the date of survey was based onapproximation and not based on scientific calculation basis. TheTribunal noted that at the time of survey the assessee may not be in aposition to give full explanation and if post survey explanation isoffered which furnished necessary reconciliation, the same would beacceptable. The Tribunal approved the view of the CIT(A) on suchreconciliation. It was also recorded that the statement of therepresentative of the assessee recorded in survey would not haveevidential value so as to make the additions purely on such statement. 3.The issue thus based on appreciation of material on record, theCIT(A) and the Tribunal concurrently held that there was sufficientreconciliation offered by the assessee through acceptable explanation.No question of law arises. 4.The tax appeal is dismissed. (M.S. SANKLECHA, J.) (AKIL KURESHI, J.)