Tribunal allows appeal, deletes additions under section 69B, stresses consistency, lack of evidence, sufficient withdrawals.

The tribunal allowed the appeal of the assessee, deleting both the additions of Rs. 25,66,790/- under section 69B for the difference in stock statements and Rs. 55,000/- for low household withdrawals. The tribunal emphasized the importance of consistency, the lack of corroborative evidence for the stock discrepancy, and the sufficiency of household withdrawals considering the family size and additional agricultural income.

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Issues Involved:
1. Addition of Rs. 25,66,790/- under section 69B of the Income Tax Act due to the difference in stock statements given to the bank.
2. Addition of Rs. 55,000/- on account of low household withdrawals.

Issue-wise Detailed Analysis:

1. Addition of Rs. 25,66,790/- under section 69B of the Income Tax Act:
The assessee challenged the addition of Rs. 25,66,790/- made by the Assessing Officer (AO) under section 69B of the Income Tax Act due to a discrepancy between the stock statement provided to the bank and the stock value as per the balance sheet. The AO noted that the stock declared to the bank on 28.02.2014 was Rs. 2,23,86,350/-, while the balance sheet as on 31.03.2014 showed a stock value of Rs. 1,88,17,001/-. The AO, after considering the Gross Profit (GP) rate, added the difference as unexplained investment in stock.

The assessee argued that the stock statement given to the bank was on an estimated basis to avail higher credit facilities and not based on actual stock. The stock value as per the audited books of accounts matched the stock statement submitted to the bank on 31.03.2014. The assessee's books of accounts were duly audited and accepted by the AO without any specific defects pointed out. The assessee relied on several judicial precedents, including CIT vs. Sidhu Rice & General Mills, CIT vs. Shri Bharat Bhushan Suri (HUF), and CIT vs. N. Swamy, which supported the contention that additions could not be made solely based on stock statements given to banks without corroborative evidence.

The CIT(A) dismissed the assessee's appeal, noting that the bank had verified the stock as per their general practice. However, the tribunal found that the authorities below relied on general banking practices rather than verifying the actual facts of the case. The tribunal observed that the stock statement as on 31.03.2014 matched the audited books of accounts and that the stock statement on 28.02.2014 was indeed on an estimated basis. The tribunal noted that no inquiries were made with the Agriculture Department regarding the stock, and a similar addition for the previous assessment year was deleted by the CIT(A). Following the principle of consistency and the judicial precedents cited, the tribunal deleted the addition of Rs. 25,66,790/-.

2. Addition of Rs. 55,000/- on account of low household withdrawals:
The assessee challenged the addition of Rs. 55,000/- made by the AO on account of low household withdrawals. The AO estimated the household expenses at Rs. 2,40,000/- for the year, while the assessee had withdrawn Rs. 1,85,000/-. The AO added the difference, considering the social status of the assessee.

The assessee argued that the family consisted of himself and his wife, with both sons earning separately and residing elsewhere. The family resided in their own house and had additional income from ancestral agricultural land. The household expenses shown by the assessee, combined with agricultural income, were sufficient for the family size.

The tribunal found that the AO did not provide any evidence to justify the estimated household expenses and did not dispute the assessee's explanation. It was noted that in the previous assessment year, the CIT(A) had deleted a similar addition, and there was a substantial increase in household expenses in the current year compared to the previous year. The tribunal concluded that the addition was made merely on an estimated basis without any basis and deleted the addition of Rs. 55,000/-.

Conclusion:
The tribunal allowed the appeal of the assessee, deleting both the additions of Rs. 25,66,790/- under section 69B for the difference in stock statements and Rs. 55,000/- for low household withdrawals. The tribunal emphasized the importance of consistency, the lack of corroborative evidence for the stock discrepancy, and the sufficiency of household withdrawals considering the family size and additional agricultural income.

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