ITO, Nashik V. SMT Shilpa Prashant Mundada, Nashik

ITA 1463/PUN/2012

• Counselvise Citation: 146324514 RSA 2012
• Duration Of Justice: 3 year(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-07-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 16-10-2014
• Assessment Year: 2009-2010
• Appeal Filed On: 04-07-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Unexplained investment; Business income; Retraction
• Section: 143(3); 133A; 131

Judgement Text

] ]] ] IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A, PUNE , . . !, # $ BEFORE MS. SUSHMA CHOWLA, JM AND SHRI R.K. PANDA, AM ITA NO.1463/PN/2012 ASSESSMENT YEAR : 2009-10 THE INCOME TAX OFFICER, WARD 1(4), NASHIK. . APPELLANT VS. SMT. SHILPA PRASHANT MUNDADA, PROP. MUNDADA ELECTRONICS, SATPUR SOCIETY, SHOPPING CENTRE, NEAR SHIVAJI MARKET, SATPUR, NASHIK. PAN : ALFPM2134H . RESPONDENT / DEPARTMENT BY : SHRI ACHAL SHARMA / APPELLANT BY : SHRI PRAMOD SHINGTE / DATE OF HEARING : 24.06.2015 / DATE OF PRONOUNCEMENT: 08.07.2015 % / ORDER PER SUSHMA CHOWLA, JM : THIS APPEAL FILED BY THE REVENUE IS AGAINST THE ORD ER OF CIT(A)-I, NASHIK DATED 27.04.2012 RELATING TO ASSESSMENT YEAR 2009-1 0 AGAINST ORDER PASSED UNDER SECTION 143(3) OF THE INCOME TAX ACT, 1961. 2. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL :- 1. IN THE FACTS AND CIRCUMSTANCES OF THE CASE & IN LAW, WHETHER THE HON'BLE CIT(A) WAS JUSTIFIED IN DELETING THE ADDITION OF RS .18,01,670/- MADE BY THE A.O. IN ASSESSMENT PROCEEDINGS ON ACCOUNT OF EXCESS STOC K ADMITTED AND DECLARED AS ADDITIONAL INCOME DURING THE COURSE OF SURVEY U/ S 133A(1) WHICH WAS FOUND UNACCOUNTED IN THE BOOKS OF ACCOUNTS AT THE TIME OF SURVEY AS WELL AS ASSESSMENT PROCEEDINGS ? 2. IN THE FACTS AND CIRCUMSTANCES OF THE CASE & IN LAW, WHETHER THE HON'BLE CIT(A) WAS JUSTIFIED IN DELETING THE ADDITI ON OF RS.1,41,000/- MADE BY THE A.O. IN ASSESSMENT PROCEEDINGS ON ACCOUNT OF UN EXPLAINED ADVANCES TOWARDS ROW HOUSE NO.14 AT CHINCHALE ? 2 ITA NO.1463/PN/2012 3. THE APPELLANT CRAVES LEAVE TO ADD, ALTER, MODIFY , AMEND ANY GROUND/S OF APPEAL AT ANY STAGE OF THE APPELLATE PROCEEDINGS ? 3. THE ISSUE IN GROUND OF APPEAL NO.1 RAISED BY THE REVENUE IS AGAINST THE DELETION OF ADDITION OF RS.18,01,670/- MADE ON ACCO UNT OF DECLARATION OF EXCESS STOCK AS ADDITIONAL INCOME DURING THE COURSE OF SUR VEY. 4. BRIEFLY, IN THE FACTS OF THE PRESENT CASE, THE A SSESSEE WAS RUNNING AN ELECTRONIC SHOP OF TELEVISION, REFRIGERATOR, WASHIN G MACHINE AND OTHER ELECTRONIC GOODS IN SATPUR, NASHIK. A SURVEY UNDER SECTION 13 3A OF THE ACT WAS CONDUCTED AT THE PREMISES OF THE ASSESSEE ON 12.08.2008. DURING THE COURSE OF SURVEY, STOCK TO THE EXTENT OF RS.22,00,490/- WAS FOUND AS PER TENTA TIVE TRADING ACCOUNT PREPARED ON THE DATE OF SURVEY. THE STOCK WAS WORKED OUT TO RS.3,98,820/- AND HENCE EXCESS STOCK OF RS.18,01,670/- WAS CALCULATED. THE ASSESSEE ACCEPTED THE SAID DIFFERENCE IN STOCK AND DECLARED ADDITIONAL INCOME OF RS.18,01,670/- ON ACCOUNT OF EXCESS STOCK. FURTHER, THE ASSESSEE MADE DISCLOSUR E OF INCOME ON ACCOUNT OF UNDISCLOSED SERVICE CHARGES OF RS.6,10,000/- AND RE NOVATION EXPENSES OF RS.4,00,000/-. HOWEVER, IN THE RETURN OF INCOME FI LED ON 31.03.2010 THE TOTAL INCOME WAS DECLARED AT RS.3,31,350/-. DURING THE C OURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE WAS SHOW-CAUSED AS TO WHY THE INCOME DECLARED IN SURVEY ON ACCOUNT OF EXCESS STOCK OF RS.18,01,670/- AND RENOVATION EXPENSES OF RS.4,00,000/- WERE NOT DECLARED. THE HEARING OF TH E CASE WAS ADJOURNED AND SINCE THE ASSESSEE HAS FAILED TO APPEAR BEFORE THE ASSESS ING OFFICER SUMMONS UNDER SECTION 131 OF THE ACT WERE ISSUED ON 19.12.2011 AN D THE ASSESSEE WAS ASKED TO PRODUCE THE BOOKS OF ACCOUNT, BANK PASS BOOK AND AT TEND THE OFFICE FOR RECORDING THE STATEMENT. THE SUMMONS WERE SERVED UPON THE AS SESSEE ON 20.12.2011. HOWEVER, THE ASSESSEE DID NOT APPEAR ON 21.12.2011. THE AR PRODUCED THE BOOKS OF ACCOUNT, PURCHASE BILLS, SALE BILLS, VOUCHERS WH ICH ARE ADMITTEDLY TEST CHECKED BY THE ASSESSING OFFICER. FROM THE PERUSAL OF THE BOO KS OF ACCOUNT, HE NOTES THAT THE ASSESSEE HAD NOT SHOWN THE UNDISCLOSED INCOME DECLA RED ON ACCOUNT OF EXCESS 3 ITA NO.1463/PN/2012 STOCK OF RS.18,01,670/- AND RENOVATION EXPENSES OF RS.4,00,000/-. IN VIEW THEREOF, THE SAME WERE ADDED TO THE TOTAL INCOME OF THE ASSE SSEE. 5. ANOTHER ADDITION MADE IN THE HANDS OF THE ASSESS EE WAS ON ACCOUNT OF CASH CONSIDERATION OF RS.1,41,000/- PAID BY THE ASSESSEE AGAINST ROW HOUSE NO.14 AT CHINCHALE. 6. BEFORE THE CIT(A), THE CONTENTION OF THE ASSESSE E WAS THAT DURING THE COURSE OF SURVEY ON 12.08.2008, A TENTATIVE TRADING ACCOUN T FOR THE FINANCIAL YEAR 2007-08 WAS PREPARED AND ALSO A TENTATIVE TRADING ACCOUNT F OR THE PERIOD FROM 01.04.2008 TO 12.08.2008 WAS PREPARED. IT WAS POINTED OUT BY THE LD. AR BEFORE THE CIT(A) THAT AT THE TIME OF STOCK TAKING, THE BILLS AND CHALLANS CUM INVOICES IN RESPECT OF THE STOCK WERE NOT TAKEN INTO ACCOUNT AND IN SUPPORT TH EREOF THE ASSESSEE FURNISHED COMPLETE BILLS, TAX INVOICES AND CHALLANS TO SUBSTA NTIATE THAT AT THE TIME OF SURVEY THE ENTIRE STOCK WAS FULLY ACCOUNTED. IT WAS FURTH ER POINTED OUT BY THE ASSESSEE THAT THE ARTICLES IN WHICH THE ASSESSEE TRADES WERE ELECTRONIC ITEMS SUCH AS REFRIGERATOR, TELEVISION, DVD, WASHING MACHINE, OVE NS, ETC. WHICH WERE COVERED BY VAT TAX AND SUBJECTED TO OTHER TAXES AND LEVIES BY THE GOVERNMENT. AS PER THE ASSESSEE, THE STOCK FOUND FROM IN HIS SHOP AND THE GODOWN WERE FULLY ACCOUNTED FOR AND IN THE ABSENCE OF ANY MATERIAL FOUND DURING THE COURSE OF SURVEY OR ASSESSMENT PROCEEDINGS TO SUGGEST THAT THE ASSESSEE HAD MADE ANY INVESTMENT IN THE STOCK OUTSIDE THE BOOKS OF ACCOUNT, THERE WAS N O MERIT IN ANY ADDITION. THE CIT(A) AFTER CONSIDERING THE EXPLANATION OF THE ASS ESSEE AND ALSO THE RELEVANT DETAILS REGARDING THE STOCK-IN-HAND ALONG WITH BILL S, CONCERNED LEDGERS AND INVENTORY MAINTAINED IN THE BOOKS OF ACCOUNT, WAS O F THE VIEW THAT THE STOCK DECLARED ON THE DATE OF SURVEY WAS PURCHASED OUT OF EXPLAINED SOURCES. THE CIT(A) FURTHER HELD THAT THERE IS MERIT IN THE CONT ENTION THAT THE ENTIRE STOCK COULD NOT BE OFFERED AS INCOME OF THE ASSESSEE FOR THE AS SESSMENT YEAR IN QUESTION BUT ONLY TO THE EXTENT THE ESTIMATED PROFITS EMBEDDED I N THE SALES. THE CIT(A) FURTHER OBSERVED THAT THE ASSESSING OFFICER HAVING IN PAST ACCEPTED THE GROSS PROFITS 4 ITA NO.1463/PN/2012 DECLARED BY THE ASSESSEE IN THE RETURN OF INCOME, N O ADDITION WAS JUSTIFIED AS THERE WAS NO UNEXPLAINED INVESTMENT IN THE STOCK. FURTHE R, NO EVIDENCE OF SALES OUTSIDE THE BOOKS OF ACCOUNT WAS FOUND BY THE ASSESSING OFF ICER AND THE IMPUGNED ADDITION OF RS.18,01,670/- WAS DELETED AND IT WAS A LSO OBSERVED BY THE CIT(A) THAT THE SAID ADDITION COULD NOT BE SUSTAINED MERELY ON THE BASIS OF THE STATEMENT MADE ON BEHALF OF THE ASSESSEE DURING THE COURSE OF SURV EY. 7. IN RESPECT OF THE SECOND ADDITION OF RS.1,41,000 /-, THE CIT(A) HELD THAT THERE IS NO MERIT IN THE SAID ADDITION AS THE SAID INVEST MENT IS DULY REFLECTED IN THE BALANCE SHEET OF THE ASSESSEE AND THUS DELETED THE SAME. 8. THE REVENUE IS IN APPEAL AGAINST THE ORDER OF CI T(A). THE LD. DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE STRONGLY OPPOSED THE ORDER OF THE CIT(A). IT WAS POINTED OUT BY THE LD. DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE THAT DURING THE COURSE OF SURVEY UNDER SECTION 133A OF THE ACT COND UCTED ON THE PREMISES OF THE ASSESSEE ON 12.08.2008, INCOMPLETE BOOKS OF ACCOUNT WERE FOUND FROM THE POSSESSION OF THE ASSESSEE AND HENCE THERE WAS A SU RRENDER OF RS.18,01,670/- ON ACCOUNT OF EXCESS STOCK FOUND. HOWEVER, THE ASSESS EE HAD NOT DECLARED THE SAID ADDITIONAL INCOME IN ITS RETURN OF INCOME. OUR ATT ENTION WAS DRAWN TO THE STATEMENT RECORDED DURING THE COURSE OF SURVEY, WITH SPECIAL REFERENCE TO QUESTION NO.6 IN WHICH THE ASSESSEE ADMITTED THE EXCESS STOCK OF RS. 18,01,670/-. THE LD. DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE ALSO RE FERRED TO QUERY NO.4 OF THE STATEMENT WHEREIN THE ASSESSEE ADMITTED THAT AS ON THE DATE OF SURVEY HE WAS MAINTAINING ROUGH CASH BOOKS AND CREDIT/SALES AND C ASH SALE DETAILS. IT WAS FURTHER ADMITTED BY THE HUSBAND OF THE ASSESSEE THAT AT THE END OF THE YEAR HE WOULD CHECK THE RECORD TO CA WHO WAS ENTERED THE TRANSACT ION IN THE COMPUTER AND FINALIZED THE BOOKS OF ACCOUNT. HE CATEGORICALLY A DMITTED THAT THE BOOKS OF ACCOUNT OF M/S MUNDADA ELECTRONICS I.E. PROPRIETORY CONCERN OF THE ASSESSEE WERE NOT COMPLETE ON THE DATE OF SURVEY. 5 ITA NO.1463/PN/2012 9. OUR ATTENTION WAS DRAWN TO THE ORDER OF THE CIT( A) AND IT WAS POINTED OUT BY THE LD. DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE THAT IN THE ABSENCE OF ANY DETAILS WHAT VERIFICATION COULD BE CARRIED OUT BY T HE CIT(A), WAS NOT CLEAR. HIS NEXT CONTENTION WAS THAT ADMISSION WAS THE BEST EVIDENCE AGAINST THE ASSESSEE, THOUGH NOT CONCLUSIVE BUT THE SAME WAS DECISIVE. THE LD. DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE POINTED OUT THAT THE ASSESSEE HAD E FFECTIVELY RETRACTED FROM ITS STATEMENT, BUT THERE WAS NO RETRACTION AFTER SURVEY , ASSESSMENT OR APPEAL, HENCE THE SAME COULD NOT BE ACCEPTED. FURTHER, IT WAS PO INTED OUT BY THE LD. DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE THAT TH ERE WAS NO WHISPER OF ANY FRESH MATERIAL OR EVIDENCE WHICH RESULTED IN THE AD MISSION OF ADDITIONAL INCOME BY THE ASSESSEE. HE FURTHER RELIED ON THE RATIO LAID DOWN IN THE FOLLOWING DECISIONS :- (I) NARAYAN BHAGWANTRAO GOSAVIBALAJIWALE VS. GOPAL VINAYAK GOSVAI AND OTHERS, 1960 AIR 100 (SC); (II) PARAM ANAND BUILDERS PVT. LTD. VS. ITO, 59 IT D 29 (MUM.); AND, (III) MANHARLAL KASTURCHAND CHOKSHI VS. ACIT, 61 I TD 55 (AHD). 10. THE LD. AUTHORIZED REPRESENTATIVE FOR THE ASSES SEE POINTED OUT THAT ADMITTEDLY ON THE DATE OF SURVEY THE BOOKS OF ACCOU NT WERE INCOMPLETE AND EVEN THE BOOKS OF ACCOUNT FOR THE PRECEDING YEAR WERE NO T FINALIZED AS THE DATE FOR FILING THE RETURN OF INCOME WAS STILL DUE. THE LD. AUTHOR IZED REPRESENTATIVE FOR THE ASSESSEE FURTHER REFERRED TO THE TENTATIVE TRADING ACCOUNT ON THE DATE OF SURVEY, COPY OF WHICH IS PLACED AT PAGE 8 OF THE PAPER BOOK , WHEREIN THE OPENING STOCK WAS TAKEN AT RS.4,12,850/- AS AGAINST THE OPENING S TOCK OF RS.14,54,835/- DECLARED BY THE ASSESSEE FOR THE YEAR UNDER CONSIDERATION IN HIS TRADING ACCOUNT PLACED AT PAGE 80 OF THE PAPER BOOK. THE LD. AUTHORIZED REPR ESENTATIVE FOR THE ASSESSEE REFERRED TO THE INVENTORY OF STOCK FOUND AT THE GOD OWN, COPY OF WHICH IS PLACED IN THE PAPER BOOK, TOTALING TO RS.13,92,250/-. HE FUR THER REFERRED TO STOCK SUMMARY, COPY OF WHICH IS PLACED AT PAGES 21 TO 24 OF THE PA PER BOOK AND ALSO THE DETAILS OF ITEM-WISE STOCK WHICH IS PLACED AT PAGE 25 ONWARDS OF THE PAPER BOOK IN WHICH HE POINTED OUT THAT MANY OF THE ITEMS WHICH WERE FOUND DURING THE COURSE OF SURVEY 6 ITA NO.1463/PN/2012 WERE IN-FACT THE STOCK BROUGHT FORWARD FROM THE PRE CEDING YEAR. IN RESPECT OF THE BALANCE STOCK WHICH WAS PURCHASED DURING THE YEAR U NDER CONSIDERATION, THE LD. AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE MENTIONE D THAT THE BOOKS OF ACCOUNT WERE PRODUCED BEFORE THE ASSESSING OFFICER DURING T HE COURSE OF ASSESSMENT PROCEEDINGS AND NO DEFECT HAS BEEN POINTED OUT BY T HE ASSESSING OFFICER IN THE SAID BOOKS OF ACCOUNT. AS PER HIM, THE ITEMS WHICH WERE FOUND DURING THE COURSE OF SURVEY AND WHICH WERE INITIALLY DECLARED AS EXCE SS STOCK IN THE HANDS OF THE ASSESSEE, WAS IN ACTUAL FACT RECONCILED WITH THE ST OCK OF THE ASSESSEE AND THE OPENING STOCK AND HENCE THERE WAS NO MERIT IN ANY A DDITION. 11. THE LD. DEPARTMENTAL REPRESENTATIVE FOR THE REV ENUE IN REJOINDER POINTED OUT THAT THE BILLS ON THE BASIS OF WHICH THE RECONC ILIATION IS BEING MADE BY THE ASSESSEE WERE NOT FOUND DURING THE COURSE OF SURVEY AND IN THE ABSENCE OF ANY BOOKS OF ACCOUNT BEING MAINTAINED, THERE WAS NO MER IT IN THE PLEA OF THE ASSESSEE. IT WAS VEHEMENTLY STRESSED BY THE LD. DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE THAT IN THE ABSENCE OF ANY BILLS FOUND DURI NG THE COURSE OF SURVEY, THERE WAS NO AUTHENTICITY IN THE STATEMENT OF THE ASSESSE E. HE FURTHER STATED THAT EVEN THOUGH THE BILLS WERE PRODUCED BEFORE THE ASSESSING OFFICER BUT THE SAME WERE PRODUCED AT FAG END AND THERE WAS NO TIME FOR INVES TIGATION. HE FURTHER STRESSED THAT IN THE ABSENCE OF ANY RETRACTION AND NO DURESS DONE BY THE REVENUE, THERE WAS NO MERIT IN THE PLEA OF THE ASSESSEE. RELIANCE WAS PLACED ON THE RATIO LAID DOWN BY THE HONBLE ALLAHABAD HIGH COURT IN DR. S.C . GUPTA VS. CIT REPORTED IN 248 ITR 782 (ALL.) 12. WE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. ADMITTEDLY, DURING THE COURSE OF SURVEY CARRIED ON AT THE PREMISES OF THE ASSESSEE, STOCK WAS COUNTED AND ITS VALUATION WAS COMPLETED. FURTHER, TENTATIV E TRADING ACCOUNT WAS PREPARED, ON THE DATE OF SURVEY, COPY OF WHICH IS PLACED AT P AGE 8 OF THE PAPER BOOK. THE PERUSAL OF THE SAID TENTATIVE TRADING ACCOUNT AS ON 12.08.2008 AND ALSO THE TENTATIVE TRADING ACCOUNT PREPARED FOR THE FINANCIA L YEAR 2007-08 REFLECTS THE CLOSING 7 ITA NO.1463/PN/2012 STOCK AS ON 31.03.2007 AT RS.4,12,850/- WHICH WAS C ARRIED FORWARD TO THE SUCCEEDING YEAR AND THE CLOSING STOCK WAS WORKED OU T. HOWEVER, THE PERUSAL OF THE TRADING FOR THE YEAR UNDER CONSIDERATION, WHICH WAS FILED ALONG WITH THE RETURN OF INCOME, COPY OF WHICH IS PLACED AT PAGE 80 OF THE P APER BOOK, REFLECTS THAT THE OPENING STOCK OF THE GOODS WAS RS.14,54,835/-, WHIC H WAS CLOSING STOCK AS ON 31.03.2007. THE SAID CLOSING STOCK AS ON 31.03.200 7 HAS BEEN ACCEPTED BY THE REVENUE/DEPARTMENT IN THE HANDS OF THE ASSESSEE, AS THE LD. DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE HAS FAILED TO BRING ANY EVIDENCE BEFORE US TO ESTABLISH THAT THE SAID CLOSING STOCK WAS NOT ACCEP TED IN THE HANDS OF THE ASSESSEE. FURTHER, THE ASSESSEE HAD ALSO FURNISHED COMPLETE S TOCK TALLY OF ITS GOODS. THOUGH THE ASSESSEE IS DEALING IN VARIOUS CONSUMER DURABLE , BUT THE ASSESSEE HAS FURNISHED ON RECORD COMPLETE STOCK TALLY ITEM-WISE AND BRAND-WISE. THE ASSESSEE ALSO TRIED TO RECONCILE THE STOCK FOUND FROM HER PO SSESSION ON THE DATE OF SURVEY WITH THE SAID STOCK TALLY AND WE FIND THAT MANY OF THE ITEMS FOUND DURING THE COURSE OF SURVEY ARE ON ACCOUNT OF OPENING STOCK AND BALAN CE ITEMS WERE PURCHASED BY THE ASSESSEE DURING THE YEAR UNDER CONSIDERATION. 13. THE ISSUE ARISING BEFORE US IS IN RELATION TO T HE ADMISSION OF EXCESS STOCK DURING THE COURSE OF SURVEY, WHICH WAS NOT ACTED UP ON WHILE FILING THE RETURN OF INCOME I.E. NO ADDITIONAL INCOME WAS OFFERED BY THE ASSESSEE ON ACCOUNT OF HIS ADMISSION. ADMITTEDLY, THE HUSBAND OF THE ASSESSEE IN THE STATEMENT RECORDED ON 12.08.2008 ADMITTED THAT NO REGULAR BOOKS OF ACCOUN T WERE PREPARED TILL THE DATE OF SURVEY AND ONLY RECORD OF SALES WERE BEING MAINTAIN ED. HOWEVER, THE ITEMS PURCHASED BY THE ASSESSEE WERE IN THE NATURE OF ELE CTRONICS GOODS I.E. TELEVISION, REFRIGERATOR, WASHING MACHINE, ETC. OF VARIOUS BRAN DS. THE PURCHASE OF SAID ITEMS IS SUBJECT TO VARIOUS STATE LEVIES INCLUDING VAT AN D OTHER TAXES. THE CASE OF THE ASSESSEE BEFORE US IS THAT THE BILLS IN RESPECT OF THE SAID PURCHASES WERE AVAILABLE WITH THE ASSESSEE, BUT THE SAME WERE NOT ENTERED IN THE BOOKS OF ACCOUNT AND CONSEQUENTLY THERE WAS THE DIFFERENCE IN THE STOCK AS PER THE BOOKS OF ACCOUNT AND THE ACTUAL STOCK FOUND DURING THE COURSE OF SURVEY. THE TOTAL SALES MADE BY THE 8 ITA NO.1463/PN/2012 ASSESSEE FOR THE YEAR UNDER CONSIDERATION ARE RS.31 ,95,089/-. IN THE ENTIRETY OF THE ABOVE-SAID FACTS AND CIRCUMSTANCES AND BECAUSE OF S MALLNESS OF TURNOVER, WHERE THE ASSESSEE HAS FURNISHED A RECONCILIATION STATEME NT TO ESTABLISH ITS CLAIM THAT THE STOCK FOUND FROM HER POSSESSION ON THE DATE OF SURV EY, WAS ACCOUNTED FOR BY WAY OF BILLS AND IN THE ABSENCE OF ENTRIES IN THE BOOKS OF ACCOUNT, MERELY BECAUSE THE ASSESSEE HAD DECLARED ADDITIONAL INCOME DURING THE COURSE OF SURVEY, DOES NOT MERIT ANY ADDITION IN THE HANDS OF THE ASSESSEE. W HERE THE ASSESSEE HAS FURNISHED EVIDENCE VIS--VIS POSSESSION OF VARIOUS ITEMS OF STOCK IN HER HANDS ON THE DATE OF SURVEY AND ALSO BECAUSE OF THE DIFFEREN CE IN THE FIGURES OF OPENING STOCK AS PER THE TENTATIVE TRADING ACCOUNT FOR THE FINANCIAL YEAR 2007-08 I.E. THE CLOSING STOCK AS ON 31.03.2008 AND AS PER THE FINAL TRADING ACCOUNT PREPARED FOR THE FINANCIAL YEAR 2007-08, WE FIND NO MERIT IN THE AFO RESAID ADDITION MADE IN THE HANDS OF THE ASSESSEE. WE ARE NOT IN CONFORMITY WITH THE OBSERVATION OF THE CIT(A) THAT THE ENTIRE STOCK COULD NOT BE OFFERED AS INCOME OF THE ASSESSEE FOR THE ASSESSMENT YEAR IN QUESTION BUT ONLY TO THE EXTENT THE ESTIMAT ED PROFITS EMBEDDED IN THE SALE. WHERE THE STOCK FOUND FROM POSSESSION OF THE ASSESS EE FROM A PERSON IS NOT DECLARED AND THE SAID PERSON HAS NOT ESTABLISHED TH E SOURCES FOR THE SAID STOCK FOUND FROM HIS POSSESSION, ADDITION IS MERITED IN T HE HANDS OF THE PERSON FROM WHOSE POSSESSION THE SAID STOCK IS FOUND. HOWEVER, IN THE FACTS OF THE PRESENT CASE, THE ASSESSEE HAS FILED THE NECESSARY EVIDENCE AND HAS ALSO PREPARED THE STOCK RECONCILIATION STATEMENT AND IN THE ABSENCE O F ANY ERROR FOUND IN THE SAID RECONCILIATION STATEMENT, WE FIND NO MERIT IN THE G ROUND OF APPEAL NO.1 RAISED BY THE REVENUE IN THIS REGARD. 14. RELIANCE PLACED UPON THE VARIOUS DECISIONS BY T HE LD. DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE ARE NOT APPLICABLE T O THE PRESENT CASE, WHERE THE ASSESSEE HAS FILED A PLAUSIBLE EXPLANATION VIS--VI S STOCK FOUND FROM HIS POSSESSION ON THE DATE OF SURVEY AND IN THE ABSENCE OF ANY DEFECTS BEING POINTED OUT BY THE REVENUE IN THE SAID EXPLANATION FILED, W E FIND NO MERIT IN THE PLEA OF THE LD. DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE THA T ONCE THE ASSESSEE HAS IN 9 ITA NO.1463/PN/2012 THE STATEMENT DECLARED THE SAID ADDITIONAL INCOME, THE SAME HAS TO BE ADDED IN THE HANDS OF THE ASSESSEE. IN THE FACTS OF THE PRESENT CASE, WHERE THE ASSESSEE HAS FURNISHED PLAUSIBLE EXPLANATION THERE IS NO MERIT I N THE ADDITION IN THE HANDS OF THE ASSESSEE. ACCORDINGLY, WE DISMISS THE GROUND OF AP PEAL NO.1 RAISED BY THE REVENUE IN THIS REGARD. 15. NOW, COMING TO THE ISSUE IN GROUND OF APPEAL NO .2 RAISED BY THE REVENUE AGAINST THE DELETION OF ADDITION OF RS.1,41,000/-, WHERE THE SAID AMOUNT HAS BEEN ROUTED THROUGH THE BOOKS OF ACCOUNT AND IS DULY REF LECTED IN THE BALANCE SHEET OF THE ASSESSEE AND MERELY BECAUSE THE SAID AMOUNT IS PAID IN CASH DOES NOT WARRANT ANY ADDITION IN THE HANDS OF THE ASSESSEE. ACCORDI NGLY WE DISMISS THE GROUND OF APPEAL NO.2 RAISED THE REVENUE IN THIS REGARD. 16. IN THE RESULT, THE APPEAL OF THE REVENUE IS DIS MISSED. ORDER PRONOUNCED ON THIS 08 TH DAY OF JULY, 2015. SD/- SD/- ( R.K. PANDA ) ( SUSHMA CHOWLA ) # / ACCOUNTANT MEMBER / JUDICIAL MEMBER PUNE ; DATED : 08 TH JULY, 2015. % & '()* +*( / COPY OF THE ORDER IS FORWARDED TO : 1) THE ASSESSEE; 2) THE DEPARTMENT; 3) THE CIT(A)-I, NASHIK; 4) THE CIT-I, NASHIK; 5) THE DR A BENCH, I.T.A.T., PUNE; 6) GUARD FILE. %, / BY ORDER , ' # //TRUE COPY// $%& # '( / SR. PRIVATE SECRETARY ) '*, / ITAT, PUNE