DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE-AGARTALA, AGARTALA vs. M/S. SAYAK ENTERPRISE, AGARTALA

The captioned appeal filed by the Revenue pertaining to assessment year 2015-16, is directed against the order passed by the Commissioner of Income Tax (Appeal), Shillong, in Appeal No. CIT(A)/SHG/10173/2016-17, dated 25.01.2019which in turn arises out of an assessment order passed by the Assessing Officer u/s 153Cr.w. s. 143(3) of the Income Tax Act, 1961 (in short the ‘Act’).

Grounds of appeal raised by the Revenue are as follows:

Brief facts qua the issue are that during the assessment proceedings, the assessing officer scrutinized the assessment records, return of income, seized materials along with bank accounts of the assessee. The assessee was asked to explain that why it has shown, out of books, Rs. 2,87,28,563/- as suppressed value of stock-in-trade? In response, the assessee submitted the following written submissions before the assessing officer:

However, the assessing officer rejected the contention of the assessee and held that since the assessee has not provided any explanation regarding the stock valuation method as was asked for in the questionnaire and the assessee has not provided any ledger copy of the stock inventory to support his claim that there is no difference in the stock value found during search and that of the books of the assessee. Thus, in absence of any documentary proof and supporting books of accounts such as ledgers or bills/vouchers of the inventory as on date of search, the above-mentioned claim of the assessee was not accepted by assessing officer. The assessing officer also held that since suppressed value of stock which was found during search and which was admitted as undisclosed income by Shri Alak Kumar Saha, partner of the assessee firm in his statement u/s 131 of the Act on Page | Page | 2 Page | Page |

Aggrieved by the order of the Assessing Officer, the assessee carried the matter in appeal before the Ld. CIT(A) who has deleted the addition made by the assessing officer. Aggrieved by the order of the Ld. CIT(A), the Revenue is in appeal before us.

We heard both the parties and carefully gone through the submission put forth on behalf of the assessee along with the documents furnished and the case laws relied upon, and perused the fact of the case including the findings of the ld CIT(A) and other materials brought on record. Before us, ld DR for the Revenue has reiterated the stand taken by the assessing officer, which we have already noted in our earlier para and the same is not being repeated for the sake of brevity. On the other hand, ld Counsel for the assessee has defended the order passed by the ld CIT(A). We note that difference in stocks arises mainly because stocks at Udaipur Branch and stocks at Godown were not considered by the survey team and assessing officer. From accounts of assessee, it was observed by the ld CIT(A) that assessee indeed had a branch in Udaipur. In course of survey, no stock from Udaipur Branch was taken. As per audited account, the stock as on 31.03.2015 was 8,51,32,422/- which is four days after survey at assessee’s premises. It was stated that in the period from 27.03.2015 i.e. from the day search was conducted in the group case, till 31.03.2015, there was no fresh purchases. The stock as on 31.03.2015 was much more than stock per books as on 27.03.2015 which was Rs. 7,87,45,291/-. Assessee’s stock per book as on 31.03.2015 was in excess of Rs. 63,87,131/- compared to stock as on 27.03.2015. The contention of the ld Counsel is that in the audited Profit and Loss account, the difference in stock found in course of survey was duly taken care of. In addition to this, ld Counsel also made alternative argument before the Bench that additional income disclosed amounting to Rs. 1,10,00,000/- is sufficient to cover the possible profit out of such sales, therefore the conclusions arrived at by the CIT(A) are correct.

We note that ld CIT(A) deleted the addition observing the following:

We have gone through the above findings of ld CIT(A) and noted that there is no any infirmity in the order passed by the ld CIT(A).That being so, we decline to interfere with the order of Id. CIT(A) in deleting the aforesaid addition. His order

In the result, the appeal of the Revenue is dismissed.