TMI Blog2019 (5) TMI 1392X X X X Extracts X X X X X X X X Extracts X X X X ..... - HELD THAT:- Contention raised by the Assessee has essentially emanated from a misconception that the Additions made u/s 69B/69C have to be reduced to some extent by giving leverage to the Assessee to claim some deductions from these Additions as well. If the contention of the learned counsel for the Assessee was to be accepted viz., by allowing the purchases corresponding to the alleged excess stock, the Assessee will have to now record verifiable purchases in his Books of Accounts and for that he will have valid purchase Invoices from genuine and existing Sellers which is not possible. When the excess stocks were found during the Survey, there is no question of allowing the Assessee to record any additional purchases because such purchases had already been recorded in the books of accounts of the Assessee. Therefore, the excess stock, per se, has to be naturally brought to tax as 'undisclosed income' by itself and there is no question of any corresponding deduction from that in such cases. Tribunal as well as the Authorities below were justified in bringing to tax the Undisclosed Income u/s 69B/69C and such findings of fact do not give rise to any substantial quest ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iate book entries made by way of entry in stock register along with corresponding income offered in the form of sales made to give effect to the admission made during the course of survey by the Appellant? iii) Whether the Appellate Tribunal was justified in law in sustaining the addition of stock and its purported findings were arrived at by ignoring the relevant materials placed on record and were arbitrary, unreasonable and perverse? 2. All the three Authorities below have given the finding of facts against the Assessee and on the admission of the Assessee during the statements recorded under Section 131 of the Act during the course of Survey under Section 133A of the Act, the Authorities below have found that the said excess stock was liable to be added as undisclosed income of the Assessee under Section 69C of the Act. The relevant findings of the Tribunal are quoted below for ready reference:- There is a clear admission by the assessee that the difference in stock as on date of survey was added in its stock register but no corresponding entry was passed in the books of accounts. Stock cannot come in from vacuum. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat he was unable to give the details for the above mentioned excess stock of ₹ 2,50,31,815/- and requested that the above mentioned amount may be treated as the unaccounted income of the M/s.S.V.S.Mills for the F.Y.2013-14. In addition to the above, he also declared an amount of ₹ 20,95,821/- on account of excess cash. Thus there was a total disclosure of ₹ 2,71,27,635/-. 4. However, on examination of the ITR and final accounts submitted by the AR of the assessee during the course of scrutiny assessment proceedings, it was noticed that there is no reference to this amount. Hence, the AR of the assessee was requested vide order sheet entry dated 12/08/2016, inter alia, to furnish the clarification as to how the amount declared as income during the course of survey under Section 133A of the Income Tax Act, 1961 conducted on 21/11/2013 is reflected in the computation of income and the case was adjourned to 18/8/2016. However, there was no reply from the assessee on the said date. Subsequently, the AR of the assessee vide his letter dated 07/11/2016 stated that In this regard we would like t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n of this stock in the value of the closing stock, the assessee has recognized income offered by it or not. The AO without looking into the reply of the assessee extracted (supra) separately made addition. Therefore, in the given facts and circumstances, we deem it appropriate to remit this issue to the file of the AO to consider the above reply of the assessee. It is to be ascertained that excess stock found at the time of survey valued at ₹ 58,02,095/- should suffer tax. If the assessee has already included this amount in the value of closing stock, then separate addition would result double addition. We further make it clear that the AO would verify the fact about the enhancement of closing stock by a sum of ₹ 58,02,095/- There should not be any corresponding expenditure debited by the assessee. In other words, the assessee will not be entitled for corresponding expenses because this must have already been debited in the regular course of business. It if it found that the assessee included a sum of ₹ 58,02,095/- in the value of the closing stock and not debited any corresponding expenditure, then there should not be further addition, because t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ure. Nonetheless, we are of the clear opinion that mentioning of wrong section would not upset the Additions made by the Assessing Authorities below in the present case. All these 5 provisions enumerated above have been enacted with a view to bring to tax the unexplained debit balances in the Balance Sheet of the Assessee either in the form of Unexplained Investments, Expenses or Stocks, etc., or unexplained Assets, Money, Bullion, Jewellery, etc., and therefore, such unexplained investments and expenses intended to be brought to tax as Undisclosed Income, these provisions are not only clearly worded but also indicated to plug the loopholes and check the menace of black money. Likewise, unexplained credits in the Balance Sheet are also brought to tax under Section 68 of the Act. 9. In the light of the above, the contention raised by the learned counsel for the Assessee has essentially emanated from a misconception that the Additions made under Section 69B/69C have to be reduced to some extent by giving leverage to the Assessee to claim some deductions from these Additions as well. If the contention of the learned counsel for the Assessee was to be accepted viz., by a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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