Stock shortage alone cannot justify turnover addition in a second-sale business without evidence of suppressed purchases or sales.

In a second-sale liquor business, mere stock shortages in Indian-made foreign liquor and arrack did not justify an addition to turnover where the goods were purchased locally from Government depots and registered dealers and tax had already been borne at the first point. The authorities treated the shortages as nominal, and the surrounding circumstances, including compounding of offences and the absence of any material suggesting suppressed purchases, did not support an inference of suppressed sales. On the facts, no addition to turnover was warranted.

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Issues: Whether addition to turnover was warranted on account of shortages in stock of Indian-made foreign liquor and arrack detected during inspection.

Analysis: The assessee was treated as a second seller purchasing goods locally from Government depots and registered dealers, on which tax had already suffered at the first point. The authorities below found that the shortages detected were nominal and that the surrounding circumstances, including compounding of offences and the absence of indications of purchase suppression, did not justify an inference of suppressed sales. The question turned substantially on appreciation of facts and the commercial context of the business.

Conclusion: No addition to turnover was called for on the basis of the stock shortages.

Final Conclusion: The revision failed because the concurrent factual findings disallowed any addition for the detected shortages, leaving no ground for interference.

Ratio Decidendi: In a second-sale business, mere stock shortage, without material indicating purchase suppression or suppressed turnover, does not by itself justify an addition to turnover.

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