JALAN COMPANY PVT. LTD.,,KOLKATA vs. ACIT, CENTRAL CIRCLE 3(2), KOLKATA, KOLKATA

Per Rajesh Kumar, AM:

These are appeals preferred by the assessee against the orders of the Commissioner of Income-tax (Appeals), Kolkata- 21(hereinafter referred to as the “Ld. CIT(A)”]even dated 20.07.2026 for the AYs 2018-19 to 2022-23 and 2024-25. We shall first decide ITA No. 2797/Kol/2026 A.Y 2022-23.

ITA Nos. 2797/KOL/2026 2. The ground raised by the assessee are as under:

“1. That the Ld. A.O. erred in invoking section 145(3) of the 1. Act IT Act, 1961 and assessing income u/s 144 of the IT Act, 1961 when the books of accounts, documents, bills and vouchers pertaining to purchases and sales

ITA Nos. 2793 to 2798/KOL/2026 Jalan Company Pvt. Ltd; 2022-23 were duly produced and verified and were in harmony and in tune with the recording books of accounts and audited accounts. 2. That the Ld. A.O even after giving a finding about a detailed submission by the appellant in regards to the various type of purchases and sales and there being no contrary material to controvert the submission of the appellant, the Ld. A.O erred in having rejected the books of accounts and estimated the profit in Silver at the rate of 0.68% and in gold at the rate of 0.30 per cent thereby making an addition of ₹25,40,105/- in the gross profit margin. 3. That the order of the Ld. A.O and the Ld. CIT(A) confirming the rejection of books of accounts and estimation of gross profit being arbitrary is bad in law and should have been quashed. 4. That the action of the Ld. A.O. and the Ld. CIT(A) in having whimsically and without substantiating the allegation made erred in having rejected the books result u/s 145(3) r.w.s. 144 of the IT Act, 1961. 5. That the order of the Ld. A.O as well as the Ld. CIT(A) should accordingly be quashed and the appellant be given such necessary relief as required.” 3. The facts in brief are that the assessee filed their return of income on 7th November, 2022, which was processed under section 143(1) on 2nd March, 2023. The assessee is engaged in the business of trading of silver and gold bullion and follows mercantile system of accounting. A search was conducted under section 132(1) of the Act on the assessee on 4th October, 2023. The case of the assessee was subsequently reopened under section 147 of the Act by issuing notice under section 148 of the Act, on 21st June,2024, which was duly served upon the assessee. Thereafter, the assessee complied with the said notices by filing the return of income declaring the same income as declared in the original return of income. The notices under section 143(2) and 142(1) of the Act, along with questionnaire were issued and duly served upon the

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ITA Nos. 2793 to 2798/KOL/2026 Jalan Company Pvt. Ltd; 2022-23 assessee. The assessee complied with the said questionnaire by filing all the details, evidences and submissions before the Ld. AO as called for. The Ld. AO noted that assessee had deposited cash to the tune of ₹ 581.15 crores in different bank accounts during the period commencing from F.Ys. 2017-18 to 2022-23 and also, extracted the details thereof in Para 6 of the assessment order. Thereafter, Shri Saket Jalan in his statement has admitted that they sold silver to the retail customers involving the value of below 50,000/- in each transaction. It is also noted by the AO in the statement recorded during search under section 132(4) of the Act, that the assessee has made cash transactions below 50,000/- and the names of the parties to whom the metal/bullion were sold were not mentioned in the invoices. Thus, the AO concluded that the assessee has used this mode to bring back its unaccounted cash into the banking channel, thereby hiding in the real purchasers of bullions who might be converting the unaccounted money into bullion. The learned AO noted that during the year, the assessee showed purchases of ₹ 1208,49,05,274/- and total sales were shown at ₹ 1213,78,15,396 and thus, declared gross profit of 0.43% and net profit of 0.20% as evident from the audited accounts and tax audit report. The learned AO noted that the assessee had taken bogus entries of purchase of bullion from Shri Ajay Kumar Garg ,M/s Suvidhi Gold Pvt. Ltd and Shri Shivalay Vyapaar Pvt. Ltd. amounting to ₹ 66,72,99,526 and asked to explain the same. Accordingly, the assessee submitted the copies of invoices , details of bullion purchased, bank Page 3 of 17

ITA Nos. 2793 to 2798/KOL/2026 Jalan Company Pvt. Ltd; 2022-23 statements, stock register, other relevant documents to establish the veracity of claim of the assessee. As such the assessee is noted to have explained that it had not taken any accommodation entries from the aforesaid parties, rather gold and silver were purchased from them in the ordinary course of business. The learned AO was not satisfied with the explanation of the assessee and he , on the basis of materials /documents seized during the course of search, noted that the mode of delivery of precious gold bars and silver/ bullion was not mentioned in the invoices and accordingly came to the conclusion that the assessee had made bogus purchases without taking actual delivery of goods. Thereafter , a show- cause notice was issued which was complied with by the assessee. The Ld. AO mentioned in the show-cause notice that the GP rate of the assessee is higher, but made a general allegation that net profit of the assessee was very low as compared to other prominent peers in the domain/sector, which showed net profit of 1 to 2%, whereas assessee's net profit is very low. Even the assessee asked the AO to provide accounts of these prominent players so that the assessee could examine their accounts and give its specific comment on the allegation made by the AO. The learned AO also extracted /made a chart of three parties namely Shri Ajay Kumar Garg ,M/s Suvidhi Gold Pvt. Ltd and Shri Shivalay Vyapaar Pvt. Ltd. who returned a gross profit at the rate of 0.30(Gold Bar), 0.30(Gold Bar) and 0.68(Fine Silver).It was submitted before the AO that purchases were made through banking channels which delivered physically , sometimes through Page 4 of 17

ITA Nos. 2793 to 2798/KOL/2026 Jalan Company Pvt. Ltd; 2022-23 courier and sometimes through hand delivery. The assessee submitted that the purchases made from Shri Ajay Kumar Garg, M/s Suvidhi Gold Pvt. Ltd & Shri Shivaalay Vyapaar Pvt. Ltd. were by hand delivery, which according to the AO could not be verified. The learned AO thereafter rejected the books of accounts under section 145(3) of the Act. The learned AO thereafter noted that there are two types of bogus purchases, one is that where no purchases were actually made, but bills were only procured to inflate the expenses and reduce the profit and another where the bogus purchases were made from one party and bullion was procured from the other. It is also noted that the AO , in order to verify the transactions independently, also issued notices under section 133(6) of the Act which were fully complied with by the said supplier with all evidences as called for by the AO. The AO noted the assessee had made purchases for which corresponding sales were there though the purchases made may be mode from the grey market. Thereafter, the AO estimated the GP on the aggregate of bullion, gold, and silver sales of ₹66,72,99,526/-(Gold Bar ₹ 52,56,66.356/- plus Fine Silver ₹14,16,33,170/-) from three entities, namely Shri Ajay Kumar Garg, M/s Suvidhi Gold Pvt. Ltd & Shri Shivaalay Vyapaar Private Limited which is extracted below for the sake of ready reference:-

Name of the Party Item Taxable Value (Rs.) G.P. Percentage Ajay Kr. Garg Gold Bar 33,66,22,181 0.30 (Om Commodity (0.995) trading company) Shivalay Vyapar Pvt. God Bar (0.995) 18,90,44,175 0.30 Page 5 of 17

ITA Nos. 2793 to 2798/KOL/2026 Jalan Company Pvt. Ltd; 2022-23 Ltd. Suvidhi Gold Pvt. Ltd. Fine Silver (0.999) 14,16,33,170 .68 4. The learned AO accordingly appled the GP as mentioned above in the table Gold Bar @ .30% and Fine Silver at .68% and computed the suppressed profit at the rate of 25,40,105/- and added to the income of the assessee in the assessment framed under section 147 read with section 144 of the Act vide order dated 27.08.2025.

“5. Observations, Findings and Decisions 5.1 I have carefully considered the order of the Ld. Assessing Officer (hereinafter referred to as 'the Ld. AO') passed u/s 147 r.w.s. 144 of the I.T. Act, 1961 dated 27.08.2025 as well as grounds of appeal, statement of facts and written submission filed by the appellant during the course of appellate proceedings. 5.2.0 In essence, all the substantial grounds taken by the appellant relates to the action of the Ld. AO in adding Rs.25,40,105/- in the guise of G.P. at 0.30 and 0.68 percent on the alleged possible inflated purchase of Rs. 66,72,99,526/- without actual delivery of goods in spite of the fact that in support of the purchases passed through proper banking channel and Page 6 of 17

ITA Nos. 2793 to 2798/KOL/2026 Jalan Company Pvt. Ltd; 2022-23 audited accounts, proof of physical delivery of goods through courier and sometimes through hand was filed before the Ld. AO. 5.2.1 The assessment order reveals that the impugned addition has been made primarily on the basis of the findings recorded during the search and post-search investigation, the financial profile of the supplier congems, the unusually high turnover coupled with negligible profits disclosed by such entities, alleged deficiencies in the transportation documents, and the suspicion that the suppliers were engaged in providing accommodation entries. The Ld. AO also observed that though the appellant had effected corresponding sales and the payments for purchases had been made through banking channels, the purchases appeared to have been routed through the aforesaid concerns and, therefore, estimated the profit element embedded in such purchases by applying the gross profit rates disclosed by the appellant. 5.2.2 During the appellate proceedings, the appellant has submitted that the purchases were genuine and were duly supported by purchase invoices, books of account, audited financial statements, stock records, banking transactions and documentary evidence relating to the movement of goods, including courier receipts wherever applicable. It has further been contended that in cases where deliveries were made by hand, the same was in accordance with the prevailing trade practice and that the appellant, being the purchaser, was not required to maintain the particulars of the employees or representatives of the supplier who physically delivered the goods. The appellant has also contended that no incriminating material establishing purchases from the grey market was found during the course of search.. that no enquiry under section 142(2) of the Income-tax Act, 1961 was conducted to verify the evidences furnished by it, and that no adverse material allegedly collected by the Ld. AO was confronted to the appellant as contemplated under section 142(3) of the Act before drawing adverse conclusions. 5.2.3 On a careful consideration of the entire material on record, I find that the Ld. AO has entertained serious doubts regarding the genuineness of the supplier concerns and the movement of goods. However, it is equally evident that the appellant has consistently claimed that all purchases were duly supported by documentary evidence and that such evidences, including courier receipts, invoices, books of account and proof of payment through banking channels, were furnished during the assessment proceedings. The assessment order does not clearly indicate whether each of these documents was independently examined and verified before rejecting the appellant's explanation. 5.2.4 It is also pertinent to note that the Ld. AO himself has accepted that the appellant's sales have been duly verified through notices issued under section 133(6) of the Act and has categorically observed that corresponding Page 7 of 17

ITA Nos. 2793 to 2798/KOL/2026 Jalan Company Pvt. Ltd; 2022-23 purchases must necessarily have been made, though according to him such purchases could have been sourced from the grey market. However, except for drawing inferences from the financial affairs of the supplier concerns, their profit margins and certain discrepancies regarding the mode of delivery, no conclusive evidence has been brought on record to establish that the goods were in fact procured from undisclosed sources or that the documentary evidences produced by the appellant were false or fabricated. Likewise, if any adverse material collected during the course of search or post-search investigation has been relied upon against the appellant, the assessment order does not clearly demonstrate that such material was specifically confronted to the appellant and an effective opportunity was afforded to rebut the same. 5.2.5 The principles of natural justice require that any material proposed to be relied upon against an assessee must be confronted to it and adequate opportunity should be afforded to explain or rebut the same. Further, where the appellant claims to have produced documentary evidence in support of the purchases, including evidence relating to transportation and delivery of goods, the same deserves proper verification before any adverse inference is drawn. In the absence of such verification, the estimation of profit on the alleged bogus purchases cannot attain finality. 5.2.6 Considering the totality of the facts and circumstances of the case, I am of the considered opinion that the issue requires a comprehensive factual examination by the Ld. Assessing Officer. Accordingly, the impugned addition of Rs.25,40,105/- is restored to the file of the Ld. Assessing Officer with a direction to examine afresh the appellant's claim regarding the genuineness of the purchases after verifying the purchase invoices, books of account, stock records, bank statements, courier receipts, transportation documents and all other evidences furnished by the appellant. The Ld. AO shall also make such independent enquiries from the supplier concerns, transporters, courier agencies or any other concerned parties as may be considered necessary for verifying the actual movement and delivery of the goods. 5.2.7 The Ld. AO shall further furnish to the appellant copies of all adverse material, statements or information proposed to be relied upon, provide adequate opportunity to rebut the same in accordance with section 142(3) of the Income-tax Act, 1961, and thereafter pass a fresh, reasoned and speaking order strictly in accordance with law after granting sufficient opportunity of being heard. 5.2.8 It is clarified that no opinion is expressed on the merits of the addition and all contentions of both the parties are kept open. The Ld. Assessing Officer shall decide the issue independently on the basis of the evidence available on record and such further evidence as may be brought on record during the fresh proceedings. Page 8 of 17

ITA Nos. 2793 to 2798/KOL/2026 Jalan Company Pvt. Ltd; 2022-23 6. In the final result, appeal filed by the appellant is treated as set aside.” 6. The learned DR, on the other hand, submitted that the case of the assessee has been restored to the file of the AO by the learned CIT(A) for verification and adjudication, and the CIT(A) has not expressed any opinion on the documents/details submitted by the assessee, which were controverted by the learned AR by submitting that the CIT(A) has discussed each and every aspect of the issue in the appellate order and recorded a observation that the AO has not brought any material on record and contemporaneously recording a finding that the assessee proved the purchases the sales by furnishing all the evidences. The Ld. CIT (A) also noted that the notices issued u/s 133(6) of the Act were issued by the AO and the said transactions with three parties were verified. The AR vehemently argued that despite the fact the Ld. CIT (A) recording categorical findings to the effect that the AO hopelessly failed to bring any material on records to disbelieve the contentions, submissions of the assessee and assessee proving the purchases and sales with all evidences before the Assessing Officer, the ld. CIT(A) restored the issue to the file of the Ld. AO which is wrong and should be set aside by allowing the assessee’s appeal.

ITA Nos. 2793 to 2798/KOL/2026 Jalan Company Pvt. Ltd; 2022-23 accommodation entries to inflate its purchases and reduce the profits. The books of accounts were rejected and the profit was estimated on the basis of the profits of the peers. Therefore, now the first issue before us whether the rejection of books of account under section 145(3) of the Act is valid or not and whether the estimation of income of the assessee's income at Rs. 134 of the Act when the books of accounts, documents, bills, and vouchers pertaining to purchases and sales were duly produced and verified by the AO, is correct

ITA Nos. 2793 to 2798/KOL/2026 Jalan Company Pvt. Ltd; 2022-23 paper book. We note that in the invoices issued by the said suppliers, all the details are mentioned qua the purchases made, namely, name and address of the supplier, GSTIN number, invoice number, date of invoice, description of goods, quantity, and purchase GST on the said purchases. We have also examined the stock register maintained by the assessee, in which all the details of the goods purchased and sold were duly entered. The copy of the stock register of gold is available at page number 316 to 441.We have also seen the GST return filed by the assessee in GSTR-2B which contained the details of sales by the suppliers to the assessee company, and further note that purchases made from these parties were duly shown in the said return. Moreover, the confirmations of purchases from these parties are also furnished before the authorities below, which are available from page numbers 449 to 450 and 457. We have also observed from the records placed before us that the suppliers have duly disclosed the sales made to the assessee. Therefore, considering the facts and evidences available on records , we are of the considered opinion that the assessee has discharged its onus by filing all the details and evidences as stated here in above, and also proved that the purchases were made through banking channels in the ordinary course of business. On the contrary , the Assessing Officer (AO) has not pointed out any single defect with respect to the transaction of purchases or in the books of accounts maintained by the assessee. We even note that the assessee has even produced affidavits from the suppliers who had duly recognized the sales in their books of Page 11 of 17

ITA Nos. 2793 to 2798/KOL/2026 Jalan Company Pvt. Ltd; 2022-23 accounts and hence confirmed the transactions. Therefore, the action of the AO rejecting the books of accounts is without any cogent reasons and is not in accordance with the provisions of section 145(3) of the Act. Similarly, the action of ld. CIT(A) in setting aside the issue to the file of the learned AO for taking cognizance of all the facts despite CIT(A) recording a categorical finding that the AO has not been able to prove anything to be incorrect is also not tenable as the AO as well as the CIT(A) had examined all the evidences in depth. Therefore, when the assessee has produced all the evidences in the form of purchase invoices, proofs of payments through banking channels and accepting the corresponding sales , AO doing enquiries by issuing notices issued under Section 133(6) of the Act to the suppliers which were duly replied, and the purchases by the assessee were duly confirmed. The ld. CIT(A) recorded in the appellate order that the AO has verified the said transactions with three parties by issuing enquiry letters u/s 133(6) and also by doing enquiry u/s 142(2) of the Act in para 5.2.4 of the appellate order. In that scenario, the rejection of books of accounts under Section 145(3) is wrong and so is the consequent estimation of income under Section 144 of the Act without. In our opinion the books of accounts were rejected by the AO without pointing any defects in the evidences furnished and in books of accounts which were also audited with no adverse inference drawn against the assessee. Therefore, considering the facts of the case , we are inclined to hold that books were

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ITA Nos. 2793 to 2798/KOL/2026 Jalan Company Pvt. Ltd; 2022-23 wrongly rejected without any cogent reasons and cannot be sustained.

“The entire purchase and sales had been duly recorded in the regular books of account of all parties; the transactions were routed through regular banking channels; the purchase and sales were duly supported by quantitative details; copies of bank statements showing sales and purchases were placed before the Assessing Officer, and no incriminating documents concerning sales and purchases were found in the course of search and seizure actions. [Para 15.1] ■ Tribunal also found that in respect of assessment years 2012- 13, 2013-14 and 2014-15, sale and purchase transactions were verified and assessment orders were framed under section 143(3). The books of account were duly audited, both, under the Companies Act, 2013 and the Income-tax Act; no defects concerning books were found either by the Assessing Officer or the Commissioner (Appeals). Thus, according to it, no incriminating evidence was found. [Para 15.1] ■ Insofar as the abated assessment years were concerned i.e., assessment years 2015-16, 2016-17 and 2017-18, it was, apparent that the assessee had purchased goods, which were in value less than the sum for which they were sold. Therefore, as held by the Assessing Officer, in the deviation report, if the purported bogus purchases were to be disallowed then necessarily the sales shown in the assessee's regular books of account would also have to be excluded which would result in the assessee's income falling below the returned/declared income. [Para 15.1] ■ Furthermore, the Assessing Officer had not placed on record any material to justify the disallowance of 25 per cent of the purchases on the ground that they were bogus without carrying out any inquiry or investigation. In particular, the Tribunal also flagged the issue that the Page 13 of 17

ITA Nos. 2793 to 2798/KOL/2026 Jalan Company Pvt. Ltd; 2022-23 purported shortage of stock was based on a reference made qua that aspect in the appraisal report of Investigation Wing which, as noted above, did not find mention in the remand report, as during the search it was found that the stock worth the aforementioned value was lying at the assessee's warehouse, something which was completely ignored. This position, was fortified by the fact that no addition in respect of any excess or shortage of stock had been made in the assessment orders of any of the years. In effect, according to the Tribunal, the stock found in the books reconciled with the stock which was found physically. [Para 15.3] ■ It appears, that the Commissioner (Appeals) did not call for the books of account i.e., to examine the same. Furthermore, the Tribunal records that the Assessing Officer, in the remand report, did not advert to the fact that the books of account were either incorrect or incomplete. According to the Tribunal, the books of account could not have been rejected till such time the revenue found "patent, latent and glaring defects in the books of account". The revenue, according to the Tribunal, made no such attempt and simply relied upon the statement of the managing director, which was retracted and in any event, did not relate to the booking of 'bogus expenditure'. Therefore, insofar as the Tribunal was concerned, the rejection of books of account by the Commissioner (Appeals) did not meet the legal standards. [Para 15.6] ■ Thus, in effect, the Tribunal held that the books of account were rejected without crystalizing the defect in the books of account, which could have been done only after examining the same. Furthermore, according to the Tribunal, even if it is assumed that the books of account could be rejected, the profit had to be estimated based on proper material. As noted above, the Tribunal recorded the inconsistent approach adopted by the Commissioner (Appeals) in applying the gross profit ratio concerning non- related parties to purported bogus transactions i.e., those involving related parties, resulting in unsustainable conclusions. [Para 15.7] ■ Accordingly, the observations made by the Tribunal are pure findings of fact, which cannot be interdicted by the Court in appeal. The inconsistency in the approach adopted by the Assessing Officer, while preparing the deviation report and framing the assessment order with regard to purported bogus purchases is an aspect, which cannot be ignored and has been correctly highlighted by the Tribunal. [Para 15.8] ■ If the revenue chooses to disallow bogus purchases, it would necessarily have to ignore the corresponding sales recorded against the very same parties. As pointed out by the Tribunal, the Commissioner (Appeals) could have rejected the books of account only, after it had examined and come to the conclusion that he was not satisfied as regards their correctness or completeness. The finding of fact returned by the Tribunal is that books of account were not examined by the Commissioner (Appeals). If that be so, Page 14 of 17

ITA Nos. 2793 to 2798/KOL/2026 Jalan Company Pvt. Ltd; 2022-23 then, section 145(3) could not have been triggered by the Commissioner (Appeals), based on the mere statement of the managing director of the assessee. Besides this, as noted by the Tribunal, the Commissioner (Appeals) had attempted to quantify the profit by resorting to a methodology, which was incomprehensible. [Para 15.9]” 10. We are also supported by the decision of Hon'ble’ High Court Karnataka High Court in case of Karnataka State Forest Industries Corporation Vs. CIT (1993) 201 ITR 674 (Karnataka), wherein the court has held as under:-

“section 145 of the Income-tax Act, 1961 - Method of accounting - Valuation of closing stock - Assessment year 1979-80 - Whether ITO's power under proviso to section 145 to choose the basis and manner of computation of income, is an arbitrary power to assess the income - Held, no - Whether he must exercise his discretion and judgment judicially - Held, yes - Whether he can base the computation solely on the basis of statutory auditor's report to the directors of the assessee-company - Held, no Section 254 of the Income-tax Act, 1961 - Appellate Tribunal - Powers of - Assessment year 1979-80 - Whether power of Tribunal under section 254 can be exercised only in relation to grounds arising in appeal - Held, yes - Whether it can go beyond scope of appeal and decide a question which does not form a subject matter of appeal - Held, no For the assessment year 1979-80, the assessee-company, engaged in the business of developing and manufacturing forest products for sale, changed the method of accounting in relation to the valuation of closing stock for a bona fide reason and claimed that the closing stock figures should be one as determined by him for the purpose of income-tax assessment. The ITO rejected the claim on the ground that the statutory auditors of the assessee had not agreed to the change in the method of accounting. On second appeal, the Tribunal took a different stand, leaving out the aforesaid findings and upheld the additions on the ground that because of the change in the method of accounting of the valuation of closing stock in a particular year, different valuation would be shown for the same stock which was held as the opening stock and remained as closing stock; and, admittedly, thus, a sum equal to that difference would either be taxed twice or would escape taxation altogether. Thus, the Tribunal proceeded on a new ground not taken by the lower authorities or urged by the department before the Tribunal and concluded the issue against the assessee. When the assessing authority does not accept the assessee's method of accounting for the assessment year, then he can exercise power under section 145 to make such computation in such method as he determined for Page 15 of 17

ITA Nos. 2793 to 2798/KOL/2026 Jalan Company Pvt. Ltd; 2022-23 deducing the correct profits and gains. In the instant case, the ITO did not accept the changed method of accounting of the assessee merely on the basis of the objections taken by the statutory auditor. Not accepting the assessee's changed method of valuation, the TTO had merely taken the figure of the statutory auditor on the assumption that the assessee-corporation, while changing the method of valuation of the closing stock, had not, in the same manner, changed the valuation of the opening stock. The said action of the TTO could not be held to be in exercise of his power under section 145. The ITO not having accepted the assessee's changed method of accounting, had not resorted to the exercise of power under section 145 for computation of income by adopting such other basis as determined by him. The ITO's power under this proviso to choose the basis and manner of computation of income is not an arbitrary power to assess the income, but he must exercise his discretion and judgment judicially. He could not base the computation solely on the basis of the statutory auditor's report to the directors of the assessee- company. The TTO, after discarding the assessee's changed method of accounting, had mechanically added the amount as per the auditor's report to the income returned, without adopting any method or disclosing any valid basis for such addition. The Tribunal had not adverted to the subject-matter of the appeal but proceeded to decide the question whether the TTO had exercised his power under the proviso to section 145(1) or improperly exercised that power. The power of the Tribunal under section 254 can be exercised only in relation to the grounds arising in the appeal. It was apparent from the records that the Tribunal had not decided the actual question involved in the appeal, but had touched upon the power exercisable by the TTO under section 145(1) which was not the subject matter of the appeal. Moreover, the ITO's action in adding back the difference in the closing and opening stock for computation of valuation was not traceable to the exercise of his power under section 145(1). The assessee's stand was, therefore, well founded. Hence, the Tribunal was not right in upholding the impugned addition.” 11. Considering the facts and circumstances of the case in the light of the above decisions, we are inclined to set aside the order of ld. CIT(A) and direct the AO to delete the addition. The appeal of the assessee is allowed.

ITA Nos. 2793 to 2796 & 2798/KOL/2026 12. The issues raised in these appeals are similar to ones as decided by us in ITA No. 2797/KOL/2026 A.Y.2022-23. Accordingly, our decision in the above appeal would, mutatis Page 16 of 17

ITA Nos. 2793 to 2798/KOL/2026 Jalan Company Pvt. Ltd; 2022-23 mutandis, apply to these appeals of assessee as well and consequently the appeals of assessee are allowed.

Order pronounced on 28.10.2026.

Sd/- Sd/- (PRADIP KUMAR CHOUBEY) (RAJESH KUMAR) (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) Kolkata, Dated: 28.10.2026 Sudip Sarkar, Sr.PS Copy of the Order forwarded to: 1. The Appellant 2. The Respondent 3. CIT DR, ITAT, 4. 5. Guard file. BY ORDER, True Copy// Digitally signed by MANISH MANISH KUMAR BHOI KUMAR BHOI Date: 2026.11.02 14:57:13 +05'30' Dy. Registrar Income Tax Appellate Tribunal, Kolkata

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