1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION INCOME TAX APPEAL NO. 62 OF 2007 Shantilal Manakchand Lalwani. ..... ... ..... Appellant. Versus Asstt. Commissioner of Income Tax. .... ..... Respondent. Mr. N. R. Bubna for the Appellant. None for the Respondent. CORAM : BILAL NAZKI and A. A. KUMBHAKONI, JJ. DATED : 22ND JULY, 2008. P.C.: Although 8 questions have been framed in the memo of appeal, after arguing for a while, it was conceded by the learned Counsel for the appellant that none of these questions is a question of law but wanted this court to allow him to amend the memo to frame additional question, “As to whether the order passed by the Income Tax Appellate Tribunal was perverse”. Therefore, we have heard the learned Counsel for the appellant on that question as well. 2. Basically, the matter which was considered by the Assessing Officer, the appellate authority and the Tribunal was a factual question. The assessee was running a proprietory business in electrical items. Search and seizure 2 was conducted on 6th January, 1990. In the course of search proceedings, statement of the appellant was recorded under the provisions of Section 132 (4) of the Income Tax Act. An additional income of Rs.15 lakhs was surrendered by the appellant for taxation. The broad details were also furnished. 3. The dispute is with regard to the addition of Rs.2,31,871/- which was an addition on account of suppression of sale. During physical verification of inventory of the stock at the time of search, it was valued at Rs.8,07,633/-. On that date the stock as per book of accounts was Rs.10,39,504/-. This was explained in his statement by the appellant himself and relying on this statement the assessment was made. 4. This assessment was, however, set aside by the appellate authority for extraneous reasons. The Tribunal restored the findings and on the basis of the evidence which was before the Assessing Officer and came to the conclusion which in no way can be termed to be perverse. The Tribunal while considering the rival contentions held as under: "6.1 Coming to the revenue's appeal No. 390/PN/97, the issue to be decided is whether the Ld. CIT(A) was right in deleting the amount of Rs.2,31,871/- made by the A.O. On account of suppressed sales. The facts of the case on this issue have been set out in the 3 assessment order as well as the order of CIT (A). The assessee's case is that the impugned addition was made on insufficient facts and in any case, no addition could be made of an amount exceeding the gross profit on the shortage of stock found. The case of the A.O. is that in the absence of quantitative details, it cannot be said whether corresponding purchases were accounted or not in the books of account. It is also found in the course of assessment proceedings that in respect of 23 items, the value put in the inventory was lower than the actual cost price. We have considered the facts of the case and the arguments of both the parties. It may be stated that the aforesaid amount was part and parcel of over all amount of Rs.15 lakh confessed by the assessee under the provisions of Sec. 132(4). On considering the facts, we find that the Departments case is better placed than the case of B. D. Dal (supra) because in that case confession was made in the course survey. That was also a case where shortage of stock was found. In spite of this, it was held in that the assessee could not be allowed to retract from the statement unless it was proved by him that the statement was given under coercion, threat, etc. In that case, goods were not even weighed and shortages were estimated. In the instant case, all 4 the goods have been inventorised and shortages have been found. We have also seen that decision of Hon' ble Pune Bench in the case of Hotel Kiran that the statement u/s 132(4) stands on a different footing than a statement given under other provisions of I.T. Act or under other Acts as legislature has enacted that this statement can be used in the course of assessment. Thus, while the facts are identical to the case of B.D. Dal (supra), the ratio of cases of B. D. Dal and Hotel Kiran are applicable. The facts do not correspond with the facts of the case of Nageenbhai Dayabai Patel of Jaguste Tandale (supra). Keeping in view the devisions in the cases of Hotel Kiran and B. D. Dal, we are of the view that the Ld. CIT(A) was not right in directing the A.O. To delete the addition of Rs.2,31,871/- and add only gross profit of Rs.10,752/- in its place. Accordingly, the addition of Rs.2,31,871/- made by the A. O. is sustained.” 5. For the aforesaid reasons, we do not find any merit in the appeal, which is, accordingly, dismissed. Sd/- (BILAL NAZKI, J.) Sd/- (A. A. KUMBHAKONI, J.)