P.V.S. METAL MART,ERODE V. DCIT, CENTRAL CIRCLE-2, COIMBATORE

ITA 1343/CHNY/2025

AI Insights

The case involves PVS Metal Mart, a trading business of metal vessels, which faced scrutiny after a survey revealed a significant discrepancy between the physical inventory and the book stock. The AO added Rs.10,83,000 as unexplained investment under section 69 of the Income Tax Act, which was taxed under section 115BBE. The CIT(A) partly sustained this addition, leading to the current appeal. The ITAT's decision to remand the case back to the AO indicates a need for further verification of the assessee's claims regarding the excess stock.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 711427 (ITAT-CHENNAI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-07-2025
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Assessment Year: 2019-2020
• Laws Referred To: Income Tax Act
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: GAUTHAMI MANIVASAGAM
• Assessee Lawyers: N.C. RAVIKRISHNAN
• Keywords: Set aside; Unexplained investment
• Section: 142(1); 69

Judgement Text

"आयकर अपीलीय अिधकरण, ‘बी’ ᭠यायपीठ, चे᳖ई। IN THE INCOME TAX APPELLATE TRIBUNAL ‘B’ BENCH: CHENNAI ŵी मनु क ुमार िगįर, Ɋाियक सद˟ एवं ŵी जगदीश, लेखा सद˟ क े समƗ BEFORE SHRI MANU KUMAR GIRI, JUDICIAL MEMBER AND SHRI JAGADISH, ACCOUNTANT MEMBER आयकर अपील सं./ITA No.1343/Chny/2025 िनधाᭅरण वषᭅ/Assessment Year: 2019-20 PVS Metal Mart, 434, Sathya Complex, Om Sakthi Koil Street, Nambiyur, Gobichettipalayam, Erode-638 458. v. The DCIT, Central Circle-2, Coimbatore. [PAN: AAMFP 7148 N] (अपीलाथᱮ/Appellant) (ᮧ᭜यथᱮ/Respondent) अपीलाथᱮ कᳱ ओर से/ Appellant by : Mr.N.C. Ravikrishnan, Advocate ᮧ᭜यथᱮ कᳱ ओर से /Respondent by : Mr. Gauthami Manivasagam, JCIT सुनवाईकᳱतारीख/Date of Hearing : 15.07.2025 घोषणाकᳱतारीख /Date of Pronouncement : 21.07.2025 आदेश / O R D E R PER MANU KUMAR GIRI, JM: This is an appeal preferred by the assessee against the order of the Learned Commissioner of Income Tax (Appeals), (hereinafter in short ‘the Ld.CIT(A)’), Chennai-20, dated 26.03.2025 for the Assessment Year (hereinafter in short ‘AY’) 2019-20. 2. The brief facts of the case are that the assessee is engaged in the trading business of metal vessels and related goods. A survey was Printed from counselvise.com ITA No.1343/Chny/2025 (AY 2019-20) PVS Metal Mart :: 2 :: conducted in the business premises of the appellant on 24.01.2019. The appellant filed return of income for the AY 2019-20 on 31.10.2019, declaring total income of Rs.15,34,270/-. The case was selected for scrutiny and notice u/s 143(2) dated 29.09.2020 was issued to the appellant. Further, notice u/s 142(1) of the Act was issued on 03.03.2021. During the course of survey, it was found that the physical inventory of stock found at the appellant's business premises was Rs.67,63,656/- whereas the book stock as per tally account was only Rs.13,19,857/-. Thereafter, allowing the GST component and gross profit, the difference of the stock was arrived at Rs.40,83,176/-. The AO had observed that the appellant had admitted the stock difference of Rs.30,00,000/- is accounted in the books and offered to tax. However, it was also found that balance of Rs.10,83,000/-was not recorded in the books of accounts and no source for purchase of the stock was provided. On the basis of the above, the AO had made addition of Rs. 10,83,000/- as unexplained investment u/s 69 of the Act and taxed as per the provisions of section 115BBE of the Act. On further appeal to ld. CIT(A), sustained an addition of Rs.6,65,437/- being excess stock not offered and partly allowed the appeal. Now assessee is in further appeal before us. Printed from counselvise.com ITA No.1343/Chny/2025 (AY 2019-20) PVS Metal Mart :: 3 :: 3. Before us, the ld. counsel for the assessee filed paper book containing pages 1 to 26 to explain the addition on account of excess stock which has been partly sustained by the ld. CIT(A). He submitted that a sum of Rs.15,00,000/- had been offered in the hands of the Firm. The ld. DR on the other hand submitted that paper book containing pages 1 to 26 is subject to verification by the AO. Therefore, in the light of the above rival submissions, we partially set aside the impugned order limited to the sustained addition of Rs.6,65,437/- being excess stock not offered, to the file of AO to verify the explanation of the assessee in the light of the Paper book filed before us. If the explanation found true, then the AO is directed to delete the addition as partly sustained by the ld.CIT(A). 4. In result, appeal of the assessee is allowed for statistical purpose. Order pronounced on the 21st day of July, 2025, in Chennai. Sd/- (जगदीश) (JAGADISH) लेखा सद᭭य/ACCOUNTANT MEMBER Sd/- (मनु क ुमार िगįर) (MANU KUMAR GIRI) ᭠याियक सद᭭य/JUDICIAL MEMBER चे᳖ई/Chennai, ᳰदनांक/Dated: 21st July, 2025. TLN, Sr.PS 1. अपीलाथŎ/Appellant 2. ŮȑथŎ/Respondent 3. आयकरआयुƅ/CIT, Chennai / Madurai / Salem / Coimbatore. 4. िवभागीयŮितिनिध/DR 5. गाडŊफाईल/GF Printed from counselvise.com ITA No.1343/Chny/2025 (AY 2019-20) PVS Metal Mart :: 4 :: Printed from counselvise.com "