Loading judgment…
Facts
During a survey, stock worth Rs.59,56,469/- was found, and stock in transit was valued at Rs.60,05,348/-. The assessee stated the stock in transit at Rs.43,00,000/-. The AO made an addition of 8% of the stock deficit as undisclosed profits. Separately, cash of Rs.1,68,940/- was found during the survey.
Held
The Tribunal noted that the stock in transit, when considered at Rs.60,05,348/-, showed no difference between the disclosed and found stock. Regarding the cash found, it was clarified as being from cash sales, supported by cash books and auditor's certificate. Therefore, no addition was warranted.
Key Issues
Whether the addition made by the AO on account of stock deficit and cash found during survey is sustainable.
Sections Cited
Section
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, RANCHI BENCH, RANCHI
Before: SHRI GEORGE MATHAN, JM & SHRI RATNESH NANDAN SAHAY, AM
O R D E R Per Bench : This is an appeal filed by the assessee against the order passed by the ld.CIT(A), Patna-3, dated 27.03.2025 for the assessment year 2018- 2019.
It was submitted by the Ld. AR that the assessee is a shopkeeper dealing in retail sale of automobile batteries and helmets. It was the submission that in the course of survey stock to the extent of Rs.59,56,469/- was found. Stock in transit was of Rs.60,05,348/-. It was the submission that the AO records that the stock in transit has been stated by the assessee at Rs.43,00,000/-. It was the submission that there was no stock statement and there was no such statement by the assessee that the stock in transit was of Rs.43,00,000/-. The Ld. AR drew our attention to pages 9 to 12 of the paper book which were the details of the stock in transit to an extent of Rs.60,05,348.72/-. It was the submission that if this amount of Rs.60,05,348.72/- is taken into consideration there will be no difference and the addition of Rs.17,05,348 will no more remain. It was the submission that the AO is estimated 8% of the said stock deficit as the undisclosed profits of the assessee. It was the submission that as the stock in transit is Rs.60,05,348/- which is also supported by the affidavits of the suppliers and the subsequent delivery notes is considered then the difference be not there the estimated income was also liable to be deleted.
In reply the Ld. Sr DR submitted that there was no books found in the course of survey. When it was put to the Ld.SR DR that if there was no books how was this amount of Rs.59,56,469/- taken and how 43,00,000/- was adopted. The Ld Sr Dr submitted that stock register was available.
We have considered the rival submissions. The evidences produces clearly shows that stock in transit was to an extent of Rs.16,05,348/-. Once this stock in transit is taken at Rs.60,05,348/-, there is no difference between the stock has disclosed by the assessee and has found in the course of survey. Consequently, the addition of 8% as made by the AO would no more survive on account of the fact that there is no difference in the stock found in the course of survey. In these circumstances the addition has made by the AO at 8% of the alleged undisclosed sales stands deleted.
The second issue is in regard to cash found in the course of at Rs.1,68,940/- . It was submissions that cash is of the cash sales for which the sales register, sales bills and the cash book has also been submitted. It was submissions that even the auditor of the assessee has given a