SUNDER LAL SONI, Jaipur V. ITO, BEHROR

ITA 258/JPR/2011

• Counselvise Citation: 25823114 RSA 2011
• Duration Of Justice: 5 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-09-2011
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Assessment Year: 2003-2004
• Appeal Filed On: 28-03-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: D K MEENA
• Keywords: Business income; Loose papers; Opportunity of being heard
• Section: 143(3); 133A; 144

Judgement Text

1 ITA 258-11 IN THE INCOME TAX APPELLATE TRIBUNAL JAIPUR BENCH A JAIPUR BEFORE SHRI R.K. GUPTA AND SHRI N.L. KALRA ITA NO. 258/JP/2011 ASSTT. YEAR : 2003-04. SHRI SUNDER LAL SONI, VS. THE INCOME-TAX OFFICER , PROP. SONI TRUNK & STEEL FURNITURE HOUSE, WARD BEH ROR. OLD BUS STAND ROAD, BEHROR. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI SATISH GUPTA RESPONDENT BY : SHRI D.K. MEENA DATE OF HEARING : 08.9.2011 DATE OF PRONOUNCEMENT : 16.9.2011 ORDER DATE OF ORDER : 16/09/2011. PER R.K. GUPTA, J.M. THIS IS AN APPEAL BY ASSESSEE AGAINST THE ORDER OF LD. CIT (A) RELATING TO ASSESSMENT YEAR 2003-04. 2. GROUND NO. 1 IS AGAINST NOT ALLOWING OPPORTUNITY BEFORE PASSING THE ORDER UNDER SECTION 144 WAS NOT PRESSED. THEREFORE, THE SAME IS DISMISSED AS NOT PRESSED. 3. GROUND NO. 2 IS AGAINST CONFIRMING ADDITION OF R S. 3390/- UNDER SECTION 69A. 4. BRIEF FACTS OF THE CASE ARE THAT IN THIS CASE A SURVEY UNDER SECTION 133A WAS CONDUCTED ON 6.5.2002 ON THE PREMISES OF THE ASSESS EE. DURING THE COURSE OF SURVEY, CASH OF RS. 3390/- AND STOCK OF RS. 3,01,690/- WAS FOUND . FURTHER CASH OF RS. 6400/- AND STOCK OF RS. 1,91,930/- WAS FOUND IN CASE OF SHRI SHYAM T RUNCK HOUSE, BEHROR, PROP. SMT. 2 GUDDI DEVI WIFE OF THE ASSESSEE. NO REGULAR BOOKS OF ACCOUNT INCLUDING CASH BOOK WAS FOUND DURING THE COURSE OF SURVEY. DURING THE COURS E OF SURVEY THE STATEMENT OF THE ASSESSEE WAS RECORDED AND THE ASSESSEE HAD NOT OFFE RED EXPLANATION IN REGARD TO THE CASH FOUND AND IN REGARD TO THE STOCK INVENTORY FOUND IN THE ASSESSEES PROPRIETORSHIP CONCERN AND IN THE CONCERN OF THE WIFE OF THE ASSESSEE. IT WAS ADMITTED BY THE ASSESSEE THAT THE CASH AND STOCK FOUND WILL BE DISCLOSED IN THE RETUR N OF INCOME TO BE FILED AFTER THE END OF THE YEAR. THE AO MADE ADDITION OF RS. 3,390/- ON AC COUNT OF CASH FOUND DURING THE COURSE OF SURVEY ON THE BASIS OF STATEMENT RECORDED WHILE PASSING ORDER UNDER SECTION 144 AS NONE APPEARED IN RESPONSE TO NOTICE ISSUED BY AO . THE LD. CIT (A) ALSO DISMISSED THE GROUND THAT NO PROPER OPPORTUNITY WAS GIVEN BY THE AO BY OBSERVING THAT VARIOUS NOTICES WERE ISSUED AND SERVED ON THE ASSESSEE. HOWEVER, F OR THE REASONS KNOWN TO THE ASSESSEE NONE APPEARED BEFORE AO. THEREFORE, THE GROUND RAIS ED WAS DISMISSED. 4.1. REGARDING CASH FOUND, IT WAS SUBMITTED THAT TH E ASSESSEE IS AN ILLITERATE PERSON AND WAS NOT AWARE OF THE PROVISIONS OF LAW AND BONAFIDE THE ASSESSEE HAS ADMITTED TO MAKE THE ADDITION OF LTHE AMOUNT OF CASH FOUND DURING TH E COURSE OF SURVEY AND OF THE STOCKS FOUND IN THE PREMISES OF THE ASSESSEE AS WELL AS ST OCKS RELATING TO THE WIFE OF THE ASSESSEE. DETAILED STATEMENTS WERE FILED BEFORE LD. CIT (A). THE ASSESSMENT ORDER FOR IMMEDIATELY PRECEDING YEAR I.E. ASSESSMENT YEAR 2002-03 WAS ALS O FILED ALONG WITH THE BALANCE SHEET ETC. OF EARLIER AS WELL AS RECONCILIATION OF THE YE AR UNDER CONSIDERATION. IT WAS SUBMITTED THAT NO ADDITION CAN BE MADE ON THE BASIS OF STATEM ENT RECORDED DURING THE COURSE OF SURVEY. RELIANCE WAS PLACED ON THE DECISION IN THE CASE OF PULLANGODE RUBBER PRODUCT CO. LTD., 91 ITR 18 (SC) AND IN CASE OF CHRISTIAN M ICA (I) LTD., 109 ITR 324 (CAL) WHEREIN IT IS HELD THAT NO ADDITION CAN BE MADE ON THE BASIS OF STOCK, IF THERE IS NO 3 CORROBORATIVE EVIDENCE FOUND DURING THE COURSE OF S URVEY. THE DETAILS WERE FILED BEFORE HIM FOR REMAND REPORT. IN REMAND REPORT IT WAS SUB MITTED THAT AMPLE OPPORTUNITY WAS GIVEN TO THE ASSESSEE. HOWEVER, THEY WERE NOT AVAIL ED. IT WAS FURTHER ADDED THAT CERTAIN LOOSE PAPERS WERE FOUND DURING THE COURSE OF SURVEY AND BY TAKING A OVER ALL VIEW THE ADDITIONS WERE MADE. THE ASSESSEE WAS ALLOWED OPPO RTUNITY TO FILE REPLY IN RESPONSE TO REMAND REPORT SENT BY AO. IT WAS SUBMITTED THAT COP Y OF BALANCE SHEET FOR ASSESSMENT YEAR 2002-03 WAS FOUND. THERE WAS STOCK OF RS. 8 L ACS OR ODD WHICH WAS ACCEPTED BY THE AO. NO BENEFIT OF OPENING STOCK HAS BEEN GIVEN AND IF THE BENEFIT OF STOCK IS GIVEN THEN NO ADDITION CAN BE MADE ON ACCOUNT OF STOCK AND AS WELL AS ON ACCOUNT OF CASH AS THERE WAS OPENING CASH BALANCE OF RS. 3000/- OR ODD. IT WAS FURTHER SUBMITTED THAT THERE WAS A SALE OF RS. 3 LACS OR ODD UPTO THE DATE OF SURVEY. THEREFORE, CASH FOUND DURING THE COURSE OF SURVEY OUT OF SALE PROCEEDS AND OUT OF OPENING B ALANCE. HOWEVER, LD. CIT (A) WAS ALSO NOT SATISFIED WITH THE EXPLANATION OF THE ASSE SSEE. HE OBSERVED THAT THE AO HAS ALREADY GIVEN AMPLE OPPORTUNITY TO THE ASSESSEE BUT NO EXPLANATION WAS FILED. 4.2. NOW EXPLANATION WAS FILED WITHOUT ANY SUPPORTI NG EVIDENCE. THE LD. CIT (A) ALSO OBSERVED THAT THE ASSESSEE HAS NOT RETRACTED FROM T HE STATEMENT GIVEN DURING THE COURSE OF SURVEY. IT WAS FURTHER OBSERVED BY LD. CIT (A) THA T ASSESSEE HIMSELF HAS AGREED TO MAKE THE ADDITION OF CASH FOUND DURING THE COURSE OF SUR VEY AT THE PREMISES OF THE ASSESSEE AS WELL AS AT THE PREMISES OF THE ASSESSEES WIFE. AC CORDINGLY LD. CIT (A) CONFIRMED THE ACTION OF THE AO MAKING ADDITION OF RS. 3390/- AS W ELL AS ADDITION OF RS. 3,01,690/- ON ACCOUNT OF STOCK FOUND FROM THE PREMISES OF THE ASS ESSEE AS WELL AS STOCK FOUND IN THE PREMISES OF THE ASSESSEES WIFE. THE CONTENTION RA ISED BEFORE LOWER AUTHORITIES WERE REITERATED HERE BEFORE THE TRIBUNAL BY LD. A/R, COP Y OF WRITTEN SUBMISSION WAS ALSO FILED. 4 5. ON THE OTHER HAND, LD. D/R STRONGLY PLACED RELIA NCE ON THE ORDERS OF THE AO AND LD. CIT (A). 6. AFTER CONSIDERING THE SUBMISSIONS AND PERUSING T HE MATERIAL ON RECORD, WE FIND THAT ASSESSEE DESERVES TO SUCCEED IN RESPECT TO ADD ITION OF RS. 3390/-. THE BALANCE SHEET OF EARLIER YEAR IS PLACED ON RECORD AND AS PER BALA NCE SHEET OF EARLIER YEAR THERE IS AN OPENING CASH BALANCE OF RS.3000/- OR ODD. IT WAS FU RTHER NOTED THAT THE ASSESSEE HAD MADE SALES UPTO THE DATE OF SURVEY AMOUNTING TO RS. 3 LA CS OR ODD. THEREFORE, THE AMOUNT OF CASH FOUND DURING THE COURSE OF SURVEY WAS OUT OF O PENING CASH BALANCE AND OUT OF SALE PROCEEDS OF THE ASSESSEE. THE AO AND LD. CIT (A) H AD MADE ADDITION ON THE BASIS THAT DURING THE COURSE OF SURVEY THE ASSESSEE HIMSELF HA D ADMITTED THAT CASH FOUND DURING THE COURSE OF SURVEY MAY BE ADDED TO THE INCOME OF THE ASSESSEE. WE ARE OF THE VIEW THAT THE STATEMENT MADE DURING THE COURSE OF SURVEY CANNOT B E RECORDED ON OATH AS PER PROVISIONS OF SECTION 133A(6). IT MANDATES THAT IF A PERSON R EFUSES OR EVADES TO GIVE REPLY TO THE INCOME-TAX AUTHORITY, THEN THEY SHALL HAVE ALL THE POWERS UNDER SECTION 131(1) FOR ENFORCING COMPLIANCE WITH THE REQUIREMENTS. THE ASS ESSEE HAS CO-OPERATED DURING THE COURSE OF SURVEY. THE HONBLE HIGH COURT IN THE CA SE OF PAUL MATHEWS & SONS, 263 ITR 101 (KERALA) HAS HELD THAT THE STATEMENT RECORDED U NDER SECTION 133A HAS NO EVIDENTIARY VALUE AS STATEMENT RECORDED UNDER SECTION 133A CANN OT BE TAKEN INTO CONSIDERATION WITHOUT ANY CORROBORATIVE EVIDENCE. THE CASH OF RS. 3390/- IS DULY EXPLAINED AS THERE WAS AN OPENING CASH BALANCE AS ON 1.4.2002 AND THERE WA S ALSO AMPLE SALES UPTO THE DATE OF SURVEY. THE BOARD HAS ALSO ISSUED INSTRUCTION THAT NO ADDITION SHOULD BE MADE ON THE BASIS OF STATEMENT RECORDED DURING THE COURSE OF SU RVEY WHERE NO CORROBORATIVE EVIDENCE ARE FOUND. THEREFORE, IN VIEW OF ALL THESE FACTS AN D CIRCUMSTANCES, WE HOLD THAT ADDITION 5 MADE BY AO WHICH IS CONFIRMED BY LD. CIT (A) WAS NO T JUSTIFIED. ACCORDINGLY, THE SAME IS DELETED. 7. NEXT ISSUE RELATES TO ADDITION OF RS. 3,01,690/- ON ACCOUNT OF STOCK DIFFERENCE. 8. THE FACTS IN THIS REGARD, WE HAVE ALREADY DISCUS SED WHILE DISPOSING THE ISSUE IN RESPECT TO ADDITION OF RS. 3390/- ON ACCOUNT OF CAS H FOUND DURING THE COURSE OF SURVEY. WE HAVE HELD THAT NO ADDITION CAN BE MADE ONLY ON T HE BASIS OF STATEMENT RECORDED DURING THE COURSE OF SURVEY PROCEEDINGS. THERE SHO ULD BE SOME CORROBORATIVE EVIDENCE FOR DRAWING ADVERSE INFERENCE. IN THE PRESENT CASE , THERE IS NO CORROBORATIVE EVIDENCE AGAINST ASSESSEE AND THE EVIDENCES WHICH ARE AVAILA BLE ARE IN FAVOUR OF THE ASSESSEE. THE AO HAS NOT TAKEN INTO CONSIDERATION THE STOCK OF RS . 8,19,344/- WHICH WAS CLOSING STOCK AS ON 31.3.2002. ASSESSMENT FOR ASSESSMENT YEAR 200 2-03 HAS BEEN COMPLETED UNDER SECTION 143(3) VIDE ORDER DATED 18.3.2005, COPY OF THE SAME IS PLACED IN THE PAPER BOOK AT PAGES 1 TO 5. AT PAGE 4 OF THE ASSESSMENT ORDER FOR ASSESSMENT YEAR 2002-03 THE AO HIMSELF ADMITTED THAT THERE IS A CLOSING STOCK OF R S. 8,19,344/- AS ON 31.3.2002. THIS CLOSING STOCK BECAME OPENING STOCK OF THE YEAR UNDE R CONSIDERATION AND IF THIS OPENING STOCK IS TAKEN INTO CONSIDERATION, THEN THERE IS NO SHORT FALL OF STOCK. THE SALES UPTO THE DATE OF SURVEY IS OF RS. 3,94,260/- ONLY. THE OPEN ING STOCK IF OF RS. 8,19,344/- WHICH IS MUCH MORE THAN THE SALES MADE BY ASSESSEE. THE STO CK FOUND DURING THE COURSE OF SURVEY WAS ONLY OF RS. 3,01,690/-. IF THE STOCK FOUND DUR ING THE COURSE OF SURVEY AND SALES ARE TAKEN INTO CONSIDERATION, THEN TOTAL OF BOTH ARE LE SS THAN THE STOCK WHICH WAS AVAILABLE SHOULD HAVE BEEN ACCEPTED BY THE AO DURING THE REMA ND PROCEEDINGS OR THE LD. CIT (A) SHOULD HAVE TAKEN INTO CONSIDERATION THE EXPLANATIO N. HOWEVER, BOTH THE AUTHORITIES HAVE FAILED TO CONSIDER THE OPENING STOCK AVAILABLE WITH THE ASSESSEE FOR THE REASON THAT DURING 6 THE COURSE OF SURVEY ASSESSEE HIMSELF HAS ADMITTED TO MAKE THE ADDITION OF STOCK FOUND DURING THE COURSE OF SURVEY. WE HAVE STATED THAT M ERELY ON THE BASIS OF STATEMENT DURING THE COURSE OF SURVEY, ADDITION CANNOT BE MADE IF TH ERE IS NO CORROBORATIVE EVIDENCE FOUND. THE CORROBORATIVE EVIDENCE IS IN FAVOUR OF THE ASSE SSEE. IN VIEW OF THESE FACTS AND CIRCUMSTANCES, WE DELETE THE ADDITION OF RS. 3,01,6 90/- MADE ON ACCOUNT OF STOCK FOUND DURING THE COURSE OF SURVEY. 9. GROUND NO. 4 IS AGAINST MAKING THE ADDITION ON T HE BASIS OF STATEMENT WHICH WE HAVE ALREADY DISPOSED OFF WHILE DECIDING GROUND NOS . 2 & 3. WE HAVE ALREADY HELD THAT NO ADDITION CAN BE MADE SOLELY ON THE BASIS OF STAT EMENT RECORDED DURING THE COURSE OF SURVEY. THERE SHOULD BE SOME CORROBORATIVE EVIDENCE . THEREFORE, THIS GROUND IS DECIDED IN FAVOUR OF THE ASSESSEE. 10. NEXT ISSUE RAISED IN GROUND NO. 5 IS AGAINST MA KING ADDITION OF RS. 3 LACS IN CONSTRUCTION OF HOUSE ON THE BASIS OF ADMISSION MAD E DURING THE COURSE OF SURVEY. 11. IT WAS NOTICED BY THE AO THAT ASSESSEE HAS CONS TRUCTED A HOUSE. THE ASSESSEE WAS REQUIRED TO EXPLAIN THE INVESTMENT IN THE HOUSE. IN THE STATEMENT IT WAS STATED THAT THE HOUSE WAS CONSTRUCTED IN EARLIER TWO YEARS. THE ASS ESSEE HAS MADE TOTAL INVESTMENT STATED TO BE OF RS. 3.50 LACS IN THE HOUSE. IT WAS SUBMITT ED THAT RS. 50,000/- HAS BEEN SPENT OUT OF HIS OWN SAVINGS AND RS. 3 LACS IS STILL TO BE PA ID TO THE VARIOUS PARTIES FROM WHOM THE RAW MATERIAL FOR HOUSE CONSTRUCTION HAS BEEN PURCHA SED. AS NO EXPLANATION WAS FILED DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE AS SESSMENT WAS MADE UNDER SECTION 144 AND THE ADDITION OF RS. 3 LACS WAS MADE BY THE AO A ND CONFIRMED BY THE LD. CIT (A). THE LIST OF PERSONS TO WHOM THE PAYMENT WAS TO BE M ADE WAS ALSO FILED. HOWEVER, THE LD. 7 CIT (A) WAS ALSO NOT SATISFIED WITH THE EXPLANATION AND ON THE BASIS OF STATEMENT, THE ADDITION OF RS. 3 LACS MADE BY AO WAS CONFIRMED. 12. AFTER CONSIDERING THE SUBMISSIONS AND PERUSING THE MATERIAL ON RECORD, WE ARE OF THE VIEW THAT THIS MATTER SHOULD GO BACK TO THE FIL E OF AO TO DECIDE AFRESH AFTER AFFORDING REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESS EE. IN THE STATEMENT IT WAS CLEARLY ADMITTED THAT THE PAYMENT OF RS. 3 LACS IS PENDING AS THE ASSESSEE HAS NOT MADE PAYMENT TO VARIOUS PERSONS TILL DATE. THEREFORE, IT CANNOT BE SAID THAT ASSESSEE HAS ADMITTED THAT PAYMENT OF RS. 3 LACS HAS ALREADY BEEN MADE. THE AS SESSEE HAS FILED DETAILS OF VARIOUS PERSONS TO WHIM THE PAYMENT WAS TO BE MADE. HOWEVE R, IT IS NOT CLEAR THAT WHEN THE ASSESSEE HAS MADE PAYMENT TO THESE PARTIES AND FROM WHICH SOURCE THE PAYMENT HAS BEEN MADE. 12.1. NOW CONFIRMATION OF THE PARTIES WERE FILED BE FORE THE LD. CIT (A). THEREFORE, IN OUR VIEW THIS MATTER SHOULD GO BACK TO THE FILE OF AO TO DECIDE AFRESH. ASSESSEE IS FREE TO FILE THE DETAILS IN RESPECT OF PAYMENT OF RS. 3 LAC S WITH EVIDENCE. WE ORDER ACCORDINGLY. 13. GROUND NO. 6 IS AGAINST ESTIMATING TURNOVER OF AT RS. 22 LACS ON THE BASIS OF SO CALLED STATEMENT AND APPLYING 10% NET PROFIT RATE. 14. UPTO THE DATE OF SURVEY, THE TURNOVER OF THE AS SESSEE WAS RS. 3.94 LACS. IT WAS AGREED THAT FOR WHOLE OF THE YEAR THE SALE MAY TOUC H RS. 22 LACS OR ODD. SINCE NO MATERIAL WAS AVAILABLE DURING THE ASSESSMENT PROCEEDINGS, TH EREFORE, AO ESTIMATED TURNOVER OF RS. 22 LACS OR ODD AND BY APPLYING NET PROFIT RATE OF 1 0%, AN ADDITION OF RS. 2,20,000/- WAS MADE. THE LD. CIT (A) REDUCED THE TURNOVER TO RS. 1 5 LACS AND BY APPLYING NET PROFIT OF 10% ESTIMATED THE ADDITION AT RS. 1.50 LACS. 8 15. AFTER CONSIDERING THE SUBMISSIONS AND PERUSING THE MATERIAL ON RECORD, WE FIND THAT ASSESSEE DESERVES TO SUCCEED IN THIS GROUND IN PART. OF COURSE THERE WAS NO MATERIAL TO ESTIMATE THE TURNOVER AT RS. 22 LACS OR ODD EXCE PT ADMITTED BY THE ASSESSEE DURING THE COURSE OF SURVEY THAT THE TURNOVER MAY REACH RS. 22 CRORES OR ODD. THE SURVEY WAS CONDUCTED ON 1 ST OF THE YEAR I.E. IN THE MONTH OF MAY, 2002. THE AC COUNTS OF THE YEAR UNDER CONSIDERATION CLOSED ON 31.3.2003. THEREFORE, THERE WAS NO MATERIAL TO HOLD THAT ASSESSEE HAS REACHED THE TURNOVER TO RS. 22 LACS OR ODD. THE TOTAL SALES SHOWN BY ASSESSEE DURING THE YEAR UNDER CONSIDERATION IS ONL Y OF RS. 6 LACS OR ODD ON WHICH PROFIT OF RS. 43,000/- OR ODD HAS BEEN SHOWN BY THE ASSESS EE. IT IS NOTICED THAT FOR EARLIER YEAR ALSO THE TURNOVER OF THE ASSESSEE WAS ESTIMATED. M ATTER REACHED UPTO THE STAGE OF TRIBUNAL AND THE TRIBUNAL HAS ESTIMATED THE PROFIT AT RS. 75,000/- ON TOTAL TURNOVER SHOWN BY ASSESSEE AT RS. 5,03,299/-. SINCE NO BOOKS OF A CCOUNT WERE FOUND DURING THE COURSE OF SURVEY NEITHER THEY WERE PRODUCED BEFORE THE AO OR THE LD. CIT (A), THEREFORE, SOME ESTIMATE HAS TO BE MADE. KEEPING IN MIND THE PAST H ISTORY OF THE CASE WHERE TRIBUNAL HAS SUSTAINED AN ADDITION OF RS. 75,000/- ON THE TURNOV ER SHOWN BY ASSESSEE, WE ARE OF THE VIEW THAT IN THE YEAR UNDER CONSIDERATION IF THE PR OFIT OF THE ASSESSEE IS TAKEN AT RS. 80,000/- THEN IT WILL MEET THE ENDS OF JUSTICE. WE ORDER ACCORDINGLY. THEREFORE, THIS GROUND OF THE ASSESSEE IS ALLOWED IN PART. 16. REMAINING GROUND IS AGAINST CONFIRMING THE ADDI TION OF RS. 1,98,330/- ON SUBSTANTIVE BASIS ON ACCOUNT OF STOCK FOUND IN THE HANDS OF THE WIFE OF THE ASSESSEE. 17. THE ADDITION WAS MADE ON THE BASIS OF SURRENDER MADE DURING THE COURSE OF SURVEY. STOCK OF RS. 1,91,930/- WAS FOUND ALONG WI TH CASH OF RS. 6,400/-. IN THIS WAY TOTAL ADDITION OF RS. 1,98,330/- WAS MADE BY THE AO ON SUBSTANTIVE BASIS IN THE HANDS OF 9 THE ASSESSEE AND ON PROTECTIVE BASIS IN THE HANDS O F THE WIFE OF THE ASSESSEE. IN CASE OF WIFE, THE MATTER REACHED TO THE STAGE OF TRIBUNAL W HO HAVE HELD THAT NO ADDITION CAN BE MADE IN THE HANDS OF WIFE OF THE ASSESSEE ON PROTEC TIVE BASIS AS THE ADDITION HAS ALREADY BEEN MADE IN THE HANDS OF THE ASSESSEE ON SUBSTANTI VE BASIS. THE LD. CIT (A) HAS ALSO CONFIRMED THE ACTION OF THE AO BY OBSERVING THAT NO REASONABLE EXPLANATION HAS BEEN FILED BEFORE HIM AND THE ASSESSEE HAS ADMITTED TO S URRENDER THE AMOUNT OF STOCK AND CASH IN HIS HANDS, FOUND AT THE PREMISES OF WIFE OF THE ASSESSEE. THE CONTENTION RAISED BEFORE LD. CIT (A) WAS REITERATED BEFORE THE TRIBUNAL. IT WAS EXPLAINED THAT STOCK OF RS. 1,64,000/- OR ODD WAS TRANSFERRED BY THE ASSESSEE T O THE PROPRIETORSHIP CONCERN OF HIS WIFE WHICH WAS STARTED DURING THE YEAR UNDER CONSIDERATI ON. IT WAS SUBMITTED THAT THE STOCK WAS TRANSFERRED OUT OF STOCKS AVAILABLE WITH THE AS SESSEE. DETAILS OF STOCK SHOWING OPENING STOCK HAS ALSO BEEN FILED BY THE ASSESSEE. THERE WAS OPENING STOCK OF RS. 8,19,000/- OR ODD IN THE HANDS OF THE ASSESSEE. ASS ESSEE HAS MADE SALES OF RS. 3.19 LACS OR ODD UPTO THE DATE OF SURVEY AND A STOCK OF RS. 3.01 LACS WAS ALSO FOUND AT THE PREMISES OF THE ASSESSEE. IF THE STOCK TRANSFERRED OF RS. 1.64 LACS PLUS STOCK FOUND DURING THE COURSE OF SURVEY AND THE STOCK CONSUMED IN THE TURNOVER IS TAKEN INTO CONSIDERATION, THEN IT IS NOTICED THAT THERE IS NO EXCESS STOCK REMAINS WITH THE ASSESSEE. THE STOCK TRANSFERRED TO THE PROPRIETORSHIP CONCERN OF THE ASSESSEE WAS OUT OF AVAILABLE STOCK OF THE ASSESSEE. THEREFORE, IN OUR VIEW NO ADDITION SHOULD HAVE BEEN MADE ON ACCOUNT OF TRANSFER OF STOCK OUT OF THE STOCKS AVAILABLE WITH THE ASSESSEE. HOWE VER, THE STOCK OF RS. 1.91 LACS, CASH OF RS. 6400/- WAS FOUND, THEREFORE, THE REMAINING AMOU NT AFTER THE AMOUNT OF STOCK TRANSFERRED FROM THE STOCK OF THE ASSESSEE HAS TO B E ADDED IN THE HANDS OF THE ASSESSEE ON SUBSTANTIVE BASIS. ACCORDINGLY THE STOCK TRANSFERR ED BY THE ASSESSEE TO THE PROPRIETORSHIP 10 CONCERN OF THE ASSESSEE HAS TO BE REDUCED FROM THE AMOUNT OF RS. 1,98,000/- AND THE REMAINING ADDITION HAS TO BE SUSTAINED. THEREFORE, THE REMAINING ADDITION IS UPHELD. THE AO WILL RECALCULATE THE REMAINING ADDITION WHILE PA SSING RECTIFICATORY ORDER. THIS GROUND OF THE ASSESSEE IS ALLOWED IN PART. 18. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWE D IN PART. 19. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 16 .9.2011. SD/- SD/- ( N.L. KALRA ) ( R.K. GUPTA ) ACCOUNTANT MEMBER JUDICIAL MEMBER JAIPUR, D/- COPY FORWARDED TO :- SHRI SUNDER LAL SONI, BEHROR. THE ITO WARD BEHROR. THE CIT (A) THE CIT THE D/R GUARD FILE (ITA NO. 258/JP/2011) BY ORDER, AR ITAT JAIPUR.