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2023 (4) TMI 489 - TELANGANA HIGH COURTUndisclosed investment in stock and property - HELD THAT:- As according to CIT(A), assessee had shown higher value for the closing stock than the value arrived at by the AO meaning thereby, that assessee had admitted more income in the return of income filed by him by admitting more closing stock. That being the position, CIT(A) was of the opinion that addition made by the assessing officer was not justified and accordingly, the same was deleted. When the matter reached the Tribunal, a view was taken by the Tribunal that the only conclusion possible was that assessee had suppressed sales which was utilized for making investment towards purchase of goods reflected in the closing stock as on 31.03.1996. We are afraid, there was no material on record to support such a conclusion reached by the Tribunal. As pointed out by the CIT(A), when the assessee himself had disclosed higher stock, question of taking a view that assessee had suppressed sales for making investment towards purchase of goods which is reflected in the higher stock figures does not appear to be reasonable. As we have noted above, the quantum of closing stock was reflected in the books of account of the assessee. When such closing stock is reflected in the books of account, assessing officer was not justified in holding that assessee had made investments, which are not recorded in the books of account. There is no material on record to justify such a finding. The closing stock disclosed by the assessee cannot be said to be investment of the assessee in the form of closing stock not reflected in the books of account. Therefore, such addition made by the assessing officer and affirmed by the Tribunal cannot be sustained. Investment in house property- Before the CIT(A), assessing officer did not produce any valuation report. As a matter of fact, CIT(A) had observed that assessing officer could very well had obtained a report from the departmental valuation cell to arrive at the correct figure of investment in house property. Before the Tribunal, the departmental representative filed extracts from the valuation report. From a reading of the order of the Tribunal, it is not discernible as to how such extracts could have been filed before the Tribunal that too without furnishing copy to the assessee. In our view, placing reliance on the extracts from the valuation report was not at all justified by the Tribunal. CIT(A) had clearly mentioned that assessee had obtained loan from the Bank to the tune of Rs.3.5 lakhs. In addition, Tribunal itself gave credit for a sum of Rs.3 lakhs on account of VDIS. That apart, Tribunal also gave credit for disclosing income of Rs.84,962.00. If the three figures are added i.e., Rs.3.5 lakhs+Rs.3 lakhs+Rs.84,962.00, the total figure is much higher than the alleged unexplained investment figure of Rs.6,50,734.00. That being the position, we set aside the aforesaid finding of the Tribunal as well. Substantial questions are answered in favour of the appellant/assessee.
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