IN INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH; AMRITSAR (CAMP AT JALANDHAR) BEFORE SH. A.D.JAIN, JUDICIAL MEMBER AND SH. T.S. KAPOOR, ACCOUNTANT MEMBER I.T.A No. 185 (Asr)/2016 Assessment Year: 2009-10 Lalit Cloth House Vs. ITO, III(4) Bazar Sheikhan Jalandhar. Jalandhar. PAN: AAAFL2876M (Appellant) (Respondent) Appellant by: Sh. P.K.Anand, CA. Respondent by: Sh. Bhawani Shankar (DR) Date of hearing: 28.06.2016 Date of pronouncement: 15.09.2016 ORDER PER T. S. KAPOOR (AM): This is appeal filed by assessee against order of learned CIT(A), Jalandhar dated 28.01.2016 for Asst. Year: 2009-10. 2. only grievance raised by assessee in this appeal is action of learned CIT(A), by which he has upheld addition made by Assessing Officer on account of alleged difference between value of stock arrived at by survey team and that of value calculated by assessee on basis of Trading Account as on date of survey by applying G.P. rate of previous year. 3. At outset, learned AR submitted that survey u/s 133A was carried out on 4.9.2008 and list of stocks held on date of 2 ITA No.185 (Asr)/2016 Asst. Year: 2009-10 survey was prepared. It was valued at prices mentioned on Slips attached to related Garments and on which three rates were mentioned. survey team applied highest rate and arrived at valuation of stock at Rs.7060020/-. assessee was asked to calculate value of stock by preparing trading account from 01.04.2008 to date of survey by adopting G.P. rate of 18.46% which was declared in preceding year. learned AR submitted that value of stock as per trading account came out to be Rs.67,96,273/- and therefore, Assessing Officer made addition of Rs.2,59,420/- holding that such stock were excess stocks held by assessee. learned AR submitted that Hon ble Punjab & Haryana High Court in case of CIT vs. Bhalla Bros. reported 10 TLR 45 has held that assumption of uniform gross profit rate in case of all sales in each and every month was arbitrary and discrepancies in stock worked on such assumption is not acceptable. It was submitted that this decision has been followed by Chandigarh Bench of ITAT in case of Saqi Brothers Vs. ITO reported as 54 TTJ 306. learned AR further submitted that Assessing Officer was also apprised of fact that G.P rate declared by assessee was favorably compared with its competitors. learned AR also relied upon decision of Kolkata High Court in case of Laxmi Business Cement Co. Pvt. Ltd. vs. CIT reported at 56 DTR 0108, for proposition that if assessee furnishes details of concerns in same line of business, facts of those must be considered by Assessing Officer before 3 ITA No.185 (Asr)/2016 Asst. Year: 2009-10 estimating gross profit rate in any case. It was further submitted that survey team did not find any discrepancies in cash holding or any other incriminating document during survey and also did not find any defect in accounts maintained by assessee during assessment proceedings. It was submited that books of accounts were not rejected and therefore, in accordance with Hon ble Punjab & Haryana High Court decision in case of CIT vs. K.S. Bhatia reported at 269 ITR 577 no addiion was warranted. 4. learned DR, on other hand, heavily placed his reliance on order of authorities below. 5. We have heard rival parties and have gone through material placed on record. We find that assessee is in business of Cloth and Garments and its qualities are numerous and it is also fact that prices mentioned on Slips attached on such cloths does not necessarily realize same value as during bargaining business man has to give some discount, therefore, valuation by survey team at highest prices was not justified. Moreover, Assessing Officer has not made out case that assessee had not been valuing its stock at sale prices as normally stocks are valued at cost prices or market prices whichever is less. Therefore, valuation of inventory at time of survey at sale prices is not at all justified. assessee vide its letter dated 22.11.2011 placed at (PB 6 to 10) had submitted that gross profit 4 ITA No.185 (Asr)/2016 Asst. Year: 2009-10 ratio earned by it for last five years as is apparent from (PB-9) and has also filed gross profit earned by assessee in same trade by its competitors and had requested Assessing Officer to consider gross profits of these firms also but Assessing Officer did not consider submissions and neither rebutted any of submissions made by assessee. Therefore, addition made by Assessing Officer and further upheld by learned CIT(A) is not justified specifically in view of fact that they did not find any discrepancy in books of account nor books of account were rejected. In view of above, grievance of assessee is justified and we delete addition. 6. In view of above, appeal filed by assessee is allowed. Order pronounced in open Court on 15.09.2016. Sd/- Sd/- (A.D. JAIN) (T. S. KAPOOR) JUDICIAL MEMBER ACCOUNTANT MEMBER Dated:15.09.2016. /PK/Ps. Copy of order forwarded to: (1) Assessee: (2) (3) CIT(A), (4) CIT, (5) SR DR, I.T.A.T., True copy By Order Lalit Cloth House v. ITO, III(4) Jalandhar