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2022 (8) TMI 221 - Income Tax
Undisclosed stock - discrepancies in the stock between the value of stock shown in the Profit & Loss Account and the value of stock shown in the ACEM Software - excess stock was found and the same was offered as additional income by revising the return of income - HELD THAT:- Assessee firm had discharged primary onus lying upon it by explaining the difference between the stock as per Profit & Loss Account and stock as per stock register maintained through computer software ‘ACME Software’. On receipt of the explanation, AO had not done anything to verify the veracity of the explanation of the respondent-assessee firm. He simply proceeded with by making addition by observing that the explanation of the respondent-assessee firm cannot be believed for the reason that stock received from the customers in respect of the gold, diamond, silver jewelleries either under gold deposits scheme or gold received for making ornaments were not accounted in the books of accounts of the respondent-assessee firm.
This reasoning of AO has no legs to stand in view of the well-settled position of law that the presence and absence of entries in the books of accounts do not determine the true nature of the transaction. Reference in this regard can be made to the decision of Kedarnath Jute Mfg. Co. Ltd. [1971 (8) TMI 10 - SUPREME COURT] - Further, it is not even the case of the Assessing Officer that the respondent-assessee firm had failed to discharge the primary onus lying upon it i.e. filing full details of the customers from whom gold was received under gold deposits scheme or for the purpose of making the ornaments. Without making any further enquiries,AO cannot make any addition based on the conjectures and assumptions as well as without bringing any conclusive evidence on record.
Reference can be made on the decision in the case of Dhakeswari Cotton Mills Ltd. [1954 (10) TMI 12 - SUPREME COURT]. In these circumstances, we are of the considered opinion that the order of the ld. CIT(A) is fair and reasonable and based on the appreciation of material facts of the case. - Decided against revenue.