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TMI Blog2023 (4) TMI 489X X X X Extracts X X X X X X X X Extracts X X X X ..... and in the circumstances of the case, Tribunal was justified in setting aside the order of the Commissioner of Income Tax (Appeals) and sustaining the addition of Rs.6,90,876.00 made by the assessing officer on account of undisclosed investment in stock ? (ii) Whether on the facts and in the circumstances of the case, Tribunal was justified in setting aside the order of the Commissioner of Income Tax (Appeals) and sustaining the addition of Rs.2,56,772.00 made by the assessing officer on account of unaccounted investment in property ? 4. Appellant is an assessee under the Act having the status of an individual carrying on the business of sale of electronic goods. For the assessment year 1996-97, assessee filed return of income on 17.03.1997 admitting income of Rs.2,43,320.00. Assessing officer, in the course of the assessment proceedings, noticed that as per the statement filed by the assessee along with the return of income, the closing stock was quantified at Rs.26,25,634.00 whereas assessing officer worked out the closing stock as on 31.03.1996 at Rs.19,34,758.00. It was found that assessee had admitted excess stock of Rs.6,90,876.00. Explanation given by the assessee was f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... A). 9. Per contra, Ms. Sapna Reddy, learned counsel for the respondent has taken the Court to the orders passed by the revenue authority and submits that there is no error or infirmity in the findings rendered by the Tribunal. She has also taken the Court to Section 69 of the Act and submits that the said provision has been duly applied by the Tribunal. Therefore, the appeal should be dismissed. 10. We have heard learned counsel for the parties and perused the materials on record. 11. Insofar the first issue i.e., investment in stock is concerned, the finding of CIT(A) reads as follows: The first ground in this appeal is towards difference in stock. During the course of assessment proceedings, the AO found that the closing stock admitted by the appellant was Rs.26,25,634.00. In this regard, the assessee was asked to produce the closing stock inventories and the stock books. The assessee denied having maintained any stock registers. Further, the AO observed that when compared with the stock admitted and the stock found at the time of survey and worked out the stock as per these inventories, the assessee has admitted excess stock of Rs.6,90,876.00. As per the AO, since the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... closing stock as on 31.03.1996. 14. 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. 15. Section 69 of the Act deals with unexplained investments. It says that where in the financial year immediately preceding the assessment year, the assessee has made investments which are not recorded in the books of account, if any, maintained by him for any source of income, and the assessee offers no explanation about the nature and source of the investments or the explanation offered by him is not, in the opinion of the assessing officer, satisfactory, the value of the investments may be deemed to be the income of the assessee in such financial year. 16. 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 t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0 but, the appellant produced proof for the sources to an extent of Rs.8 lakhs in the way of borrowing a sum of Rs.3.5 lakhs from SBH, Adilabad, declaration of Rs.3 lakhs made under VDIS and admission of additional income of Rs.1,50,000/-. Further, if the AO got any doubts, he should have referred matter to the Valuation Cell and got estimated the cost of construction by the Valuation Cell. In view of the above, I am satisfied that the appellant proved sources to an extent of Rs.8 lakhs. Therefore, I am unable to sustain the action of the assessing officer in making the addition in this regard. Hence, I am of the view that this addition also needs to be deleted. The AO is accordingly directed to delete the above addition. 18. Thus, according to CIT(A), assessing officer found certain papers in the course of survey amounting to Rs.6,50,734.00, which according to the assessing officer were unexplained investment in the construction of the house by the assessee. CIT(A) noted that assessee had borrowed a sum of Rs.3.5 lakhs from State Bank of Hyderabad, Adilabad branch for the purpose of construction of the building. Further, assessee had also declared an amount of Rs.3 lakhs unde ..... X X X X Extracts X X X X X X X X Extracts X X X X
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