R.J. Pallod and Sons, Satara V. Deputy Commissioner of Income-tax,

ITA 348/PUN/2014

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 7120 (ITAT-PUNE)
• Duration Of Justice: 2 year(s) 11 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-02-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 20-07-2016
• Assessment Year: 2005-2006
• Appeal Filed On: 25-02-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: P L KUREEL
• Keywords: Gross profit estimation; Unexplained cash credit; Unexplained investment
• Section: 43B; 133A; 68; 69

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, PUN E , ! ' # , $% &' #' , ' # '( BEFORE SHRI ANIL CHATURVEDI, AM AND SHRI VIKAS AWAS THY, JM '%. / ITA NO. 348/PUN/2014 * +* / ASSESSMENT YEAR : 2005-06 R.J. PALLOD AND SONS, 63, DR. SABANE ROAD, MAHABALESHWAR, DISTT.-SATARA PAN : AABFR8676A ....... / APPELLANT / V/S. DY. COMMISSIONER OF INCOME TAX, SATARA CIRCLE, SATARA / RESPONDENT ASSESSEE BY : SHRI NIKHIL PATHAK & SHRI SUHAS P. BORA REVENUE BY : SHRI P.L. KUREEL / DATE OF HEARING : 24-01-2017 / DATE OF PRONOUNCEMENT : 22-02-2017 , / ORDER PER VIKAS AWASTHY, JM : THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDE R OF COMMISSIONER OF INCOME TAX (APPEALS)-III, PUNE DATED 18-1 2-2013 FOR THE ASSESSMENT YEAR 2005-06. 2 ITA NO. 348/PUN/2014, A.Y. 2005-06 2. THE BRIEF FACTS OF THE CASE AS EMANATING FROM RECORDS ARE: THE ASSESSEE IS A PARTNERSHIP FIRM ENGAGED IN THE BUSINESS O F RETAIL TRADING OF CLOTH. A SURVEY U/S. 133A WAS CONDUCTED ON THE BUSIN ESS PREMISES OF THE ASSESSEE ON 16-02-2005. DURING THE COURSE OF SURV EY ASSESSEE DECLARED INCOME OF ` 5,00,000/-. THE ASSESSEE FILED ITS RETURN OF INCOME FOR THE ASSESSMENT YEAR 2005-06 ON 30-10-2005 DECLARIN G TOTAL INCOME OF ` 5,66,571/-. DURING THE COURSE OF SCRUTINY ASSESSMENT TH E ASSESSING OFFICER MADE ADDITION IN THE INCOME RETURNED BY THE ASSESSEE ON ACCOU NT OF : I. SHORT DISCLOSURE OF INCOME ` 4,245/-. II. GROSS PROFIT ESTIMATION AT 25% ` 1,97,872/-. III. UNACCOUNTED SALES ` 15,96,859/-. IV. UNACCOUNTED PURCHASES ` 42,94,820/-. V. UNEXPLAINED CASH CREDIT U/S. 68 OF THE ACT ` 6,25,762/-. VI. DISALLOWANCE OF SALARY AND ADMINISTRATION EXPENSES ` 50,000/-. VII. PAYMENT OF SALES TAX DISALLOWED U/S. 43B ` 16,531/-. AGGRIEVED BY THE ASSESSMENT ORDER DATED 26-10-2007, T HE ASSESSEE FILED AN APPEAL BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS). THE COMMISSIONER OF INCOME TAX (APPEALS) VIDE IMP UGNED ORDER PARTLY ACCEPTED THE APPEAL OF THE ASSESSEE BY D ELETING ADDITION WITH RESPECT TO SHORT DISCLOSURE OF INCOME ` 4,245/- AND PARTLY GRANTED RELIEF ON ACCOUNT OF GROSS PROFIT ADDITION. AGAINST THE FINDIN GS OF COMMISSIONER OF INCOME TAX (APPEALS), NOW, THE ASSESSEE IS IN SECOND APPEAL BEFORE THE TRIBUNAL. 3. IN APPEAL THE ASSESSEE HAS RAISED 7 GROUNDS. THE LD. AR OF THE ASSESSEE STATED AT THE BAR THAT HE IS NOT PRESSING GR OUND NOS. 1 AND 5. 3 ITA NO. 348/PUN/2014, A.Y. 2005-06 THE GROUND NO. 7 IS GENERAL IN NATURE, HENCE, REQUIRES NO ADJUDICATION. THE REMAINING GROUNDS RAISED IN APPEAL BEFORE TRIBUNAL BY THE ASSESSEE ARE AS UNDER : 2. THE LEARNED CIT(APPEALS) HAS ERRED IN LAW AND ON FACTS IN CONFIRMING ACTION OF THE AO OF MAKING THE ADDITION ON ACCOUNT OF GP @ 25% ON THE ACCOUNTED SALES AND UNACCOUNTED SALES BY NOT CONSIDERING THE FOLLOWING IMPORTANT FACTS: A. THAT NO ADDITION CAN BE MADE BY APPLYING HIGHER GROSS PROFIT PERCENTAGE WHEN THE GP WAS MORE THAN THE IMMEDIATELY PRECEDING YEAR. B. THAT NO DISCREPANCIES WERE FOUND IN THE BOOKS OF ACCOUNTS, VOUCHERS, BILLS OR IN THE STOCK REGISTER MAINTAINED BY THE APPELLANT. C. THAT RATE OF 25% CANNOT BE APPLIED WITHOUT ASSIG NING ANY VALID REASONS. 3. THE LEARNED CIT(APPEAL) HAS ERRED IN LAW AND ON FACTS IN CONFIRMING THE ACTION OF AO OF ADDITION ON ACCOUNT OF UNACCOUN TED PURCHASES AMOUNTING TO RS.4294820/- ON THE GROUND THAT THESE ARE MADE ON ACCOUNT OF UNACCOUNTED INVESTMENT IN PURCHASES U/S 69. 4. THE LEARNED CIT(APPEALS) HAS ERRED IN CONFIRMING THE ADDITION OF RS.625762/- ON ACCOUNT OF SUNDRY CREDIT BALANCES ON THE GROUND THAT APPELLANT'S FAILURE TO ADDUCE EVIDENCES DISREG ARDING THE FACTS THAT THE APPELLANT HAS SUBMITTED THE REQUIRED DETAI LS. 6. WITHOUT PREJUDICE TO ABOVE GROUNDS, THE LEARNED CIT(APPEALS) HAS ERRED IN NOT ALLOWING SETOFF OF CONFIRMED ADDITION AGAINST DISCLOSURE OF STOCK FOUND DURING THE COURSE OF SURVEY ON THE G ROUND THAT THE AO HAS GIVEN BENEFIT OF SET OFF OF EXCESS STOCK AGA INST UNEXPLAINED PURCHASES. 4. SHRI NIKHIL PATHAK AND SHRI SUHAS P. BORA APPEARING ON BEHALF OF THE ASSESSEE SUBMITTED THAT A SURVEY ACTION WAS CONDU CTED ON THE BUSINESS PREMISES OF THE ASSESSEE ON 16-02-2005. DURING THE COURSE OF SURVEY DIARIES WERE FOUND INDICATING UNACCOUNTED SALES. TH E ASSESSING 4 ITA NO. 348/PUN/2014, A.Y. 2005-06 OFFICER HAS MADE ESTIMATED ADDITION ON ACCOUNT OF GROSS PR OFIT @ 25% IN AN ARBITRARY AND UNJUSTIFIED MANNER. THE ASSESSEE WAS M AINTAINING BOOKS OF ACCOUNT. AS PER THE PROFIT AND LOSS ACCOUNT ST ATEMENT FILED BY THE ASSESSEE THE ASSESSEE HAS EARNED GROSS PROFIT @ 1 9%. IN THE IMMEDIATELY PRECEDING ASSESSMENT YEARS I.E. ASSESSMENT YE ARS 2003-04 AND 2004-05 THE GROSS PROFIT OF THE ASSESSEE WAS 18% A ND 19%, RESPECTIVELY. THE ASSESSING OFFICER IN THE EARLIER ASSESSME NT YEARS HAD ACCEPTED THE SAME. THUS, THERE WAS NO REASON FOR THE ASSESSING OFFICER TO ESTIMATE GROSS PROFIT @ 25% IN THE ASSESSMENT YEAR U NDER APPEAL. THE LD. AR SUBMITTED THAT THE ASSESSEE IS NOT DISPUTING U NACCOUNTED SALES FOUND DURING THE COURSE OF SURVEY. THE ONLY DISPUT E IS WITH RESPECT TO THE RATE OF GROSS PROFIT MARGIN ADOPTED BY T HE ASSESSING OFFICER. THE ASSESSING OFFICER OUGHT TO HAVE APPLIED 19% GR OSS PROFIT ON UNACCOUNTED SALES. THE ASSESSING OFFICER HAS ERRED IN EST IMATING GROSS PROFIT @ 25% ON ACCOUNTED AND UNACCOUNTED SALES AND TH E COMMISSIONER OF INCOME TAX (APPEALS) HAS FURTHER ERRED IN C ONFIRMING THE SAME. THE LD. AR SUBMITTED THAT THE CO-ORDINATE B ENCH OF THE TRIBUNAL IN THE CASE OF SISTER CONCERN OF THE ASSESSEE PA LLOD CREATIONS VS. ADDL. COMMISSIONER OF INCOME TAX IN ITA NO. 349/PN/2014 DECIDED ON 16-10-2015 HAS UPHELD THE GROSS PROFIT MARGIN @ 14.90%. 4.1 IN RESPECT OF GROUND NO. 3 RELATING TO UNACCOUNTED P URCHASES, THE LD. AR SUBMITTED THAT THE AUTHORITIES BELOW HAVE ERRED IN MAKING ADDITION OF ` 42,94,820/- ON ACCOUNT OF UNACCOUNTED INVESTMENT IN PURCHASES. THE LD. AR SUBMITTED THAT THE ADDITION HAS BEEN MADE ON THE BASIS OF REGISTER IB-8 FOUND DURING SURVEY. THE SAID REGISTER IS FROM 01-04-2004 TO 16-02-2005 I.E. UP TO THE DATE OF SURVEY. THE REGISTER CONTAINS THE DETAILS OF PURCHASES AND SALES. THE TOTAL U NACCOUNTED SALES WORKED OUT BY THE ASSESSING OFFICER AS PER THE SAID REGISTER IS 5 ITA NO. 348/PUN/2014, A.Y. 2005-06 ` 63,87,434/- AND ESTIMATED GROSS PROFIT @ 25% ON THE SAID UNACCOUNTED SALES IS ` 15,96,859/-. AFTER REDUCING GROSS PROFIT ` 15,96,859/- AND UNACCOUNTED STOCK DISCLOSED ` 4,95,755/- DURING SURVEY, THE ASSESSING OFFICER COMPUTED UNACCOUNTED PURCHASES AT ` 42,94,820/-. THE ADDITION HAS BEEN MADE ON THE PREMISE THAT THE ASSESSEE HAS IN VESTED FUNDS FROM UNDISCLOSED SOURCES IN MAKING PURCHASES. THE AUTHOR ITIES BELOW WHILE MAKING ADDITION HAS LOST SIGHT OF THE FACT THAT THE ASSESSEE WAS HAVING SUFFICIENT FUNDS FOR MAKING PURCHASES FROM UNDISCLOSED SALES. THE AUTHORITIES BELOW HAVE FAILED TO GRANT BENEFIT OF SET OFF OF THE FUNDS GENERATED BY THE ASSESSEE FROM UNACCOUNTED SALES FOR M AKING UNACCOUNTED PURCHASES. THE LD. AR FURTHER SUBMITTED TH AT IN THE FIRST INSTANCE THE REGISTERS FOUND DURING SURVEY DISCLOSED SALES AND PURCHASE TILL 16-02-2005. THE ASSESSING OFFICER HAS TAKEN A CUTOFF DATE AS 31-07-2004 WITHOUT ANY BASIS. SECONDLY, THE ASSESSING O FFICER HAS FAILED TO TAKE INTO CONSIDERATION REALIZATION OF CASH FROM DEB TORS, THE FACT WHICH IS QUIET EVIDENT FROM THE SAID REGISTERS. THE DAILY C ASH BALANCE WAS NOTED IN THE SEIZED REGISTERS WHICH WAS ALWAYS POSIT IVE, THUS THE ASSESSEE HAD SUFFICIENT CASH BALANCE FOR MAKING PURCHASES . THE ASSESSEE HAS BEEN MAKING DAILY CASH SALES AND CASH PUR CHASES. THIS FACT HAS NOT BEEN DISPUTED BY ASSESSING OFFICER. 4.2 IN RESPECT OF ADDITION ON ACCOUNT OF UNEXPLAINED CASH CREDIT ` 6,25,762/- THE LD. AR SUBMITTED THAT THE ADDITION HAS BEEN MADE ON THE GROUND THAT THE ASSESSEE HAS NOT BEEN ABLE TO PR OVE THE IDENTITY OF SUNDRY CREDITORS. THE ASSESSEE HAS GIVEN THE DETAILS OF CREDITORS TO THE ASSESSING OFFICER. ONE PARTY M/S. SHREE SHYAM HOSIERY HA S REPLIED TO THE NOTICE ISSUED BY THE ASSESSING OFFICER AND FURNISHED LED GER COPY OF THE ASSESSEES ACCOUNT. THE LETTERS TO THE REMAINING T WO CREDITORS WERE RECEIVED BACK UN-SERVED WITH REMARKS NOT KNOWN. IT IS IN RESPECT OF 6 ITA NO. 348/PUN/2014, A.Y. 2005-06 THE CREDITORS WHO HAVE NOT RESPONDED TO THE LETTER TH AT THE ASSESSING OFFICER HAS MADE ADDITION. THE LD. AR SUBMITTED THAT SINCE T HE ADDITION MADE ON ESTIMATION IN RESPECT OF UNDISCLOSED SALE HAS BEE N ACCEPTED BY THE ASSESSEE, THE BENEFIT OF SUNDRY CREDITORS SHOULD BE A LLOWED TO THE ASSESSEE BY GIVING THE SET OFF AGAINST UNACCOUNTED PURCHASES. 4.3 THE LD. AR FURTHER SUBMITTED THAT BENEFIT OF TELESCOPING ON GROSS ADDITION AGAINST THE EXCESS STOCK DECLARED AT THE TIME O F SURVEY SHOULD HAVE BEEN GIVEN BY THE ASSESSING OFFICER. EXCESS STOCK T O THE TUNE OF ` 4,95,755/- WAS FOUND DURING SURVEY. THE ASSESSING OFFICER M ADE ADDITION OF GROSS PROFIT ` 15,96,859/- ON UNDISCLOSED SALES. THE ASSESSING OFFICER HAS MADE DOUBLE ADDITION BY ADDING EXCES S STOCK, AS WELL AS GROSS PROFIT. 5. ON THE OTHER HAND SHRI P.L. KUREEL REPRESENTING THE D EPARTMENT VEHEMENTLY SUPPORTED THE FINDINGS OF COMMISSIONER OF INCO ME TAX (APPEALS) IN CONFIRMING THE ADDITIONS. THE LD. DR SUBMITTED THA T THE COMMISSIONER OF INCOME TAX (APPEALS) IN PARA 7.12 AND 7.13 FOR THE ORDER HAS GIVEN DETAILS AS TO HOW THE GROSS PROFIT ESTIMA TED BY ASSESSING OFFICER @ 25% IS REASONABLE. THE LD. DR FURTHER SUBMITTED T HAT FOR MAKING PURCHASES THE ASSESSEE MUST HAVE MADE CERTAIN INVESTMENTS. THE ASSESSEE HAS NOT BEEN ABLE TO GIVE DETAILS OF SOURCE FOR MAKING INVESTMENTS. THEREFORE, ADDITION HAS BEEN MADE U/S. 69 O N ACCOUNT OF INVESTMENT MADE IN PURCHASES. THE LD. DR VEHEMENTLY DEFE NDED THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS) AND PRAYED FO R DISMISSING THE APPEAL OF THE ASSESSEE. 6. WE HAVE HEARD THE SUBMISSIONS MADE BY THE REPRESEN TATIVES OF RIVAL SIDES AND HAVE PERUSED THE ORDERS OF THE AUTHORITIE S BELOW. THE 7 ITA NO. 348/PUN/2014, A.Y. 2005-06 ASSESSEE IN APPEAL HAS ASSAILED THE ADDITIONS MADE ON ACC OUNT OF ESTIMATING GROSS PROFIT @ 25%, UNACCOUNTED PURCHASES ` 42,94,820/- AND SUNDRY CREDITORS ` 6,25,762/-. 7. THE LD. AR OF THE ASSESSEE HAS STATED AT THE BAR T HAT HE IS NOT PRESSING GROUND NOS. 1 AND 5 OF THE APPEAL. ACCORDINGLY, THE GROUND NOS. 1 AND 5 RAISED IN THE APPEAL BY THE ASSESSEE ARE D ISMISSED AS NOT PRESSED. 8. IN GROUND NO. 2 THE ASSESSEE HAS ASSAILED THE ADDITIO N ON ACCOUNT OF GROSS PROFIT ESTIMATION @ 25%. THE ASSESSEE HAS DECLAR ED GROSS PROFIT @ 19% APPROXIMATELY. DURING THE COURSE OF SURVEY UNAC COUNTED SALES WERE ADMITTED BY THE ASSESSEE. THE ASSESSING OFFICER APP LIED GROSS PROFIT @ 25% ON ACCOUNTED AS WELL AS UNACCOUNTED SALES. IN FIRST APP EAL, THE COMMISSIONER OF INCOME TAX (APPEALS) IN PARA 7.12 AND 7 .13 HAS DISCUSSED THIS ISSUE IN DETAIL. AFTER CLOSE ANALYSIS OF THE T RADING ACCOUNT FOR THE PERIOD 01-04-2004 TO 15-02-2005, THE COMMISSIONER OF INCOME TAX (APPEALS) HELD THAT THE RATE OF GROSS PROFIT C OMES TO 28%. THE LD. AR OF THE ASSESSEE HAS MADE ELABORATE SUBMISSI ONS ON THIS ISSUE, HOWEVER, THE LD. AR HAS FAILED TO CONTROVERT THE FINDIN GS OF COMMISSIONER OF INCOME TAX (APPEALS) AND HIS ANALYSIS OF TRA DING ACCOUNT. WE DO NOT FIND ANY ERROR IN THE FINDINGS OF COMMIS SIONER OF INCOME TAX (APPEALS) IN UPHOLDING THE GROSS PROFIT MARGIN @ 25%. THE LD. AR HAS ALSO REFERRED TO ORDER OF CO-ORDINATE BEN CH OF THE TRIBUNAL IN THE CASE OF SISTER CONCERN OF THE ASSESSEE PA LLOD CREATIONS VS. ADDL. COMMISSIONER OF INCOME TAX (SUPRA). IN THE CASE O F ASSESSEES SISTER CONCERN THE CO-ORDINATE BENCH OF THE TRIBUNAL HAS UPHELD THE GROSS PROFIT MARGIN @ 14.90% DETERMINED BY ASSESSING OFFICER AS AGAINST 8 ITA NO. 348/PUN/2014, A.Y. 2005-06 @ 13.03% CLAIMED BY THE ASSESSEE. IN THE PRESENT CASE AGAIN THE ASSESSEE HAS NOT BEEN ABLE TO CONTROVERT THE FINDINGS O F AUTHORITIES BELOW WITH RESPECT TO GROSS PROFIT RATE ARRIVED AT BY THE ASSESSING OFFICER. WE FIND NO MERIT IN THE SUBMISSION OF LD. AR, ACCORDINGLY, GROU ND NO. 2 RAISED IN THE APPEAL BY THE ASSESSEE IS DISMISSED. 9. IN GROUND NO. 3 THE ASSESSEE HAS ASSAILED THE ADDITIO N ON ACCOUNT OF PURCHASES ` 42,94,820/-. THE CONTENTION OF THE ASSESSEE IS THAT THE AUTHORITIES BELOW HAVE FAILED TO TAKE INTO CONSIDERATION THE FUNDS AVAILABLE WITH THE ASSESSEE FROM UNACCOUNTED SALES. THE L D. AR OF THE ASSESSEE HAS DRAWN OUR ATTENTION TO THE DAY BOOK MAIN TAINED BY THE ASSESSEE TO SHOW THAT THERE WERE CASH PURCHASE AND CASH SALES, THE ASSESSEE WAS HAVING SUFFICIENT CASH BALANCE FOR MAKING INVES TMENT IN PURCHASES. WE FIND SOME MERIT IN THE SUBMISSIONS OF THE LD. AR OF ASSESSEE ON THIS ISSUE. HOWEVER, FOR PROPER VERIFICATION OF THE FACTS, WE DEEM IT APPROPRIATE TO REMIT THIS ISSUE BACK TO THE FILE OF ASSESSING OFFICER. HERE WE WOULD LIKE TO OBSERVE THAT THE ASSESSING OFFICER DURING REMAND PROCEEDINGS HAS CONSIDERED CASH SALES FROM 01-04 -2004 TO 31-07-2004. SURVEY ACTION WAS CARRIED OUT ON 16-02-20 05. THE LD. DR ALSO COULD NOT EXPLAIN THE SANCTITY OF CUTOFF DATE AS 31- 07-2004. THE ASSESSING OFFICER IS DIRECTED TO CONSIDER CASH SALES AND CA SH PURCHASES FOR THE ENTIRE PERIOD I.E. UP TO THE DATE OF SURVEY. THE ASSESSING OFFICER AFTER EXAMINING THE DAY BOOK WHEREIN THE ASSESSEE HAS R ECORDED CASH PURCHASE AND CASH SALES AND OTHER RELEVANT MATERIAL SHA LL DECIDE THIS ISSUE DE-NOVO. ACCORDINGLY, GROUND NO. 3 RAISED IN THE AP PEAL BY ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSE. 10. IN GROUND NO. 4 THE ASSESSEE HAS ASSAILED THE ADDIT ION OF ` 6,25,762/- ON ACCOUNT OF SUNDRY CREDITORS. IN RESPECT O F SUNDRY 9 ITA NO. 348/PUN/2014, A.Y. 2005-06 CREDITORS THE LD. AR OF THE ASSESSEE SUBMITTED THAT AGAIN ST GROSS PROFIT ADDITION, THE BENEFIT OF TELESCOPING SHOULD BE GIVEN TO THE ASSESSEE FOR SUNDRY CREDITORS. DURING THE COURSE OF ASSESSMENT PROC EEDINGS, AS WELL AS FIRST APPELLATE PROCEEDINGS THE ASSESSEE HAS NOT BEE N ABLE TO SHOW GENUINENESS OF CREDITORS. DURING REMAND PROCEEDINGS LETT ERS WERE ISSUED TO THE CREDITORS ON THE ADDRESSES FURNISHED BY A SSESSEE TO VERIFY GENUINENESS. ONLY ONE CREDITOR RESPONDED TO THE LETTER WHEREAS OTHER CREDITORS DID NOT RESPOND. THERE WAS DIFFERENCE IN THE O PENING BALANCE AS PER THE CREDITOR WHO RESPONDED AND IN THE BOOKS O F THE ASSESSEE. THE ASSESSEE COULD NOT RECONCILE THE SAME. NO PLAUSIBLE REASO N HAS BEEN GIVEN BY THE ASSESSEE FOR DIFFERENCE IN THE BOOKS OF CREDI TOR AND NO DOCUMENT HAS BEEN BROUGHT ON RECORD BY THE ASSESSEE EXCEPT FURNISHING OF ADDRESSES TO SHOW THE GENUINENESS OF THE CREDITORS. THE BENEFIT OF TELESCOPING COULD HAVE BEEN GRANTED TO THE ASSESSEE IF T HE GENUINENESS OF CREDITORS WOULD HAVE BEEN ESTABLISHED. THEREFORE, WE UP HOLD THE FINDINGS OF COMMISSIONER OF INCOME TAX (APPEALS) ON THIS ISSUE . ACCORDINGLY, GROUND NO. 4 RAISED IN THE APPEAL BY THE ASS ESSEE IS DISMISSED. 11. IN GROUND NO. 6 THE ASSESSEE HAS PRAYED FOR GRANT ING THE BENEFIT OF TELESCOPING ON ACCOUNT OF EXCESS STOCK AGAINST UNDISCLOSE D SALES. THE CONTENTION OF THE ASSESSEE IS THAT IF THE BENEFIT OF TELESCO PING IS NOT GIVEN IT WILL RESULT IN DOUBLE ADDITION. DURING THE COURSE OF SURVEY EXCESS STOCK OF ` 4,95,755/- WAS DECLARED BY THE ASSESSEE AND GROSS PROFIT ADDITION ON ACCOUNT OF UNDISCLOSED SALES OF ` 15,96,859/- HAS BEEN MADE DURING ASSESSMENT PROCEEDINGS. THE AMOUNT GENERATED FR OM UNDISCLOSED SALES IS AVAILABLE WITH THE ASSESSEE TO EXPLAIN T HE EXCESS STOCK. WE FIND MERIT IN THE CONTENTION OF THE LD. AR OF ASSE SSEE SEEKING BENEFIT OF TELESCOPING. THE ASSESSING OFFICER IS DIRECTED TO G RANT THE 10 ITA NO. 348/PUN/2014, A.Y. 2005-06 BENEFIT OF TELESCOPING IN RESPECT OF EXCESS STOCK DECLARED DURING SURVEY AGAINST UNDISCLOSED SALES. ACCORDINGLY, WE ACCEPT THE CON TENTIONS OF THE ASSESSEE IN RESPECT OF GROUND NO. 6. 12. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED IN THE AFORESAID TERMS. ORDER PRONOUNCED ON WEDNESDAY, THE 22 ND DAY OF FEBRUARY, 2017. SD/- SD/- ( / ANIL CHATURVEDI) ( ! / VIKAS AWASTHY) ' ! / ACCOUNTANT MEMBER # ! / JUDICIAL MEMBER ' / PUNE; $% / DATED : 22 ND FEBRUARY, 2017 RK , - ./& 0&+ / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT. 2. / THE RESPONDENT. 3. & & ' () / THE CIT(A)-III, PUNE 4. & & ' / THE CIT-III, PUNE 5. *+ ,- , & ,- , . ./ , ' / DR, ITAT, B BENCH, PUNE. 6. +01 23 / GUARD FILE. // // TRUE COPY// &'4 / BY ORDER, 5 %6 / ASSISTANT REGISTRAR, & ,- , ' / ITAT, PUNE