M/S MANGAT RAM NIRANJAN DASS vs. COMMISSIONER OF IT

ITA-560-2005

-2- appellant had not actually received gold from customers for remaking whereas it was its own gold. Addition in appellant’s stock was made and liability of income tax for the Assessment Year 1994-95 was created. The stock which proved to be undisclosed in the Assessment Year 1994-95 became opening stock of Assessment Year 1995-96. The stock was not allegedly sold during 1994-95 whereas it was shown as closing stock on 31.03.1994. Automatically, undisclosed stock became opening stock as on 01.04.1994. The Tribunal while adjudicating demand of Assessment Year 1995-96 did not consider aforesaid fact and relying upon its order for Assessment Year 1994-95 ordered to make addition. The operative portion of order passed by Tribunal reads as:- “6. Regarding ground No. 2 for a.y. 94-95, the Tribunal accepted the ground of the revenue observing as under:- "3.12 In the instant case of the assessee, we find that neither the assessee nor the goldsmiths from whom the assessee got the ornaments remade have maintained any proper details of the weight of gold ornaments received for remaking and the weight of the new ornaments returned after remaking. Hence, we are of the opinion that on account of the facts and circumstances of the case of the assessee and applying the law of probabilities, the plea of the asessee that it received gold ornaments for remaking from customers and returned the same after remaking and that the gold ornaments found with it belonged to the customers, cannot be believed and consequence upon this finding, this plea of the assessee is rejected and it is held that the AO by treating the gold ornaments, received by the assessee in the guise of customers gold, to be belonging to the assessee was justified in making the impugned addition of rs.1422849 treating these transactions to be ingenuine". DEEPAK BISSYAN 2026.01.14 10:32 I attest to the accuracy and integrity of this document

ITA-560-2005

-3- Respectfully following the said decision of the Tribunal, we reverse the order of the CIT(A) for the year under consideration and restore that of the AO. Therefore, ground No. 1 stands allowed.” 3.

On being confronted that closing stock as on 31.03.1994 became opening stock as on 01.04.1994, learned counsel for the respondent expressed his inability to controvert the said fact. 4.

From the perusal of record, it is evident that all the authorities have not considered the fact that addition of stock made in the Assessment Year 1994-95 needs to be taken care of while framing assessment of Assessment Year 1995-96. The matter needs to be examined in the light of said fact. 5.

In the backdrop, we deem it appropriate to set aside findings of Tribunal with respect to addition of Rs.4,20,082/-. The matter is remanded back to Assessing Officer to re-examine the matter in the light of above findings and pass fresh assessment order qua said addition. 6.

Allowed in above terms. 7.

Pending application(s), if any, stands disposed of.

(JAGMOHAN BANSAL)

JUDGE

(AMARINDER SINGH GREWAL)

JUDGE January 13, 2026 Deepak DPA

Whether Speaking/reasoned Yes/No

Whether Reportable

Yes/No

DEEPAK BISSYAN 2026.01.14 10:32 I attest to the accuracy and integrity of this document