Unexplained deposits and stock differences cannot sustain additions when documentary evidence and confirmations remain unrebutted.

Additions for fixed deposits found during survey could not be sustained where the assessee produced deposit-holder names, PAN details, confirmations, bank particulars and renewal evidence, and the concerned persons confirmed ownership in remand proceedings; the Revenue brought no material to show undisclosed income or investment. Additions for stock discrepancies and shortages also failed where the assessee gave contemporaneous explanations, purchaser confirmations and a reconciliation working, and the explanation was not rebutted. On these facts, the deletions were upheld because credible documentary evidence and uncontroverted explanations displaced any suspicion.

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Issues: Whether the additions made on account of fixed deposits found during survey and on account of stock discrepancies and shortages were sustainable in the facts and circumstances of the case.

Analysis: The fixed deposits were found in the assessee's possession during survey, but the assessee furnished the names of the deposit holders, PAN details, confirmations, bank particulars and evidence of renewal. The persons concerned also confirmed ownership in remand proceedings, and no material was brought by the Revenue to show that the deposits represented the assessee's own undisclosed income or investment. Similarly, in relation to the stock discrepancy, the assessee produced contemporaneous explanations, correspondence and confirmations from the concerned purchasers, and the explanation of partial lifting and pending delivery of tobacco was not rebutted in remand. For the shortage and excess in dust, kandi and pashari stock, the assessee filed a reconciliation working, which was accepted by the first appellate authority and remained uncontroverted.

Conclusion: The additions were rightly deleted and the Revenue failed to dislodge the assessee's explanation.

Ratio Decidendi: Where the assessee produces credible documentary evidence and confirmations explaining survey discoveries or stock differences, and the Revenue fails to bring contrary material, additions for unexplained deposits or stock cannot be sustained merely on suspicion.

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