BABUSONA MANDAL ,BARDHAMAN vs. DCIT,CIR-1, BARDHAMAN, BURDWAN

This is an appeal preferred by the assessee against the order of Learned Commissioner of Income-tax (Appeals)-NFAC, Delhi [hereinafter referred to Ld. ‘CIT(A)’] dated 14.07.2023 for the Assessment Year (in short ‘AY’) 2015-16.

The assessee has raised the following ground of appeal: “1. That on the facts and in the circumstances of the case the action of the Ld. CIT(A) to confirm the addition made by the AO of Rs. 14,66,622/- on account of unexplained investments u/s 69B of the I.T.A. No.: 749/KOL/2023 Assessment Year: 2015-16 Babusona Mondal. Act is contrary to the material evidences of record and the addition is arbitrary, excessive and illegal.

The facts in brief are that the assessee is engaged in the business of liquor trading and during the year filed the return of income on 29.09.2015 declaring total income of Rs. 17,34,910/-. The case of the assessee was selected for scrutiny under CASS and statutory notices were duly issued and served upon the assessee. The AO during the course of assessment proceedings observed from the sale bills and sale ledger that sales were not properly accounted for. In para ‘3.2’ the AO noted that some sales were accounted for on earlier dates whereas the earlier dates were accounted for on the subsequent dates however there was no instance of non-recording of sales by the assessee. Thereafter the AO has calculated the supressed value in the stocks by taking a I.T.A. No.: 749/KOL/2023 Assessment Year: 2015-16 Babusona Mondal. few items at Rs. 29,33,243/- on the basis of information furnished by the assessee and estimated the suppression in the value of stock at 50% of the total supressed value of stocks at Rs. 14,66,622/- and added the same to the income of the assessee. In the appellate proceedings Ld. CIT(A) simply affirmed the order of the AO on the same reasoning.

After hearing the rival contentions and perusing the material on record, we find that the assessee is dealing in liquor which is an excisable item and passes through various checks and scrutinies by the Excise Department. We note that the assessee has maintained stock register recording therein opening stocks, purchases, sales and closing stocks including item-wise identification of each brand. Similarly, the assessee has maintained the excise register also. Both these were produced before us and were test checked by us. We observe from the assessment order that the AO while taking a few items out of the total items calculated the suppression in the value of stock at Rs. 29,33,243/- and calculated the understatement of closing stock at 50% of the suppressed stock value without any basis and without any reasoning. In our opinion, the addition made by the AO is purely based upon conjectures and surmises as the AO has failed to taken note of the evidences filed by the assessee before the AO in the form of purchase bills, stock register etc. and also the fact that the wastage and breakage sustained by the assessee in the ordinary course of business. Under these circumstances, we are inclined to set aside the order of Ld. CIT(A) and direct the AO to