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2021 (7) TMI 505 - AT - Income TaxDifference in stock - Additions u/s 69B - difference between the statement given by the assessee wherein he has given estimation of the stock and the stock as valued by the valuer at the time of survey - Addition on the basis of statement during the course of survey - HELD THAT:- Admittedly, there is no difference in the quantitative tally or any discrepancy in purchase and sales or any excess quantity of jewellery was found so as to draw any adverse inference. Albeit the addition is based on the statement given by the assessee in respect of stock value at the time of survey and even in the statement there is no reference of excess quantity. CIT (A) analysis is de hors the basic fact that there was no difference in the quantitative tally nor the books of account have been rejected or the sale and purchase has been disputed. Once the opening stock, purchase and direct cost on the debit side is not in dispute; and on credit side sales have been accepted and there is no difference in the quantitative tally in the closing stock, then no addition can be made in the trading account. Here the addition is not based on undervaluation of closing stock but undisclosed investment in closing stock. Simply because there is a difference in the valuation made by the valuer and the value stated by the assessee during the survey in his statement as an approximate estimate of the stock available with him, addition cannot be made as undisclosed investment. Had it been case where there is excess quantity of stock found not recorded in the books or not explained, then perhaps addition on account of undisclosed investment could have been made.No reason to sustain the addition; therefore, the same is directed to be deleted. - Decided in favour of assessee. Disallowance of interest on the advance - HELD THAT:- Assessee had interest free unsecured loan from friends and relatives and this fact has also been noted by the Ld. CIT(A). Simply because the assessee has secured loan from Standard Chartered Bank that does not mean that same interest bearing fund have been given for interest free loan to other party. If assessee has interest free funds which far exceed the advance given, then there cannot be any presumption that such advance has been given only out of such interest bearing funds. Once the assessee has substantial interest free fund, then no addition/disallowance can be made on this score. Accordingly, this ground is allowed.
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