Contemporaneous survey admission can sustain excess stock addition even without actual weighment when un-retracted by the assessee's director.

Where a responsible person of the assessee is present during a survey, admits the stock quantity, signs the survey record, and does not retract that statement, the revenue authorities may rely on that contemporaneous admission to determine excess stock even without actual weighment. The High Court treated the director's statement and the signed survey note as sufficient material to sustain the addition, and held that the contrary decision cited was distinguishable because it did not involve such direct disclosure by the person in charge. The challenge to the stock-based tax addition was therefore rejected and the tax liability upheld.

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Issues: Whether tax liability could be sustained on the basis of excess stock found during survey, supported by the director's statement and survey note, notwithstanding the absence of actual weighment of the goods.

Analysis: The revision challenged the assessment on the ground that the stock difference was only estimated and not physically weighed. The material on record showed that the director of the assessee-company was present during the survey, disclosed the weight of the stock, signed the survey note, and never retracted that statement. The Court found the cited contrary decision distinguishable on its facts because, unlike the present case, there was direct contemporaneous disclosure by the person in charge of the business. In these circumstances, the authorities were justified in relying on the survey material and the director's statement to conclude that stock was in excess of the books.

Conclusion: The challenge to the addition based on excess stock was rejected, and the finding of tax liability was upheld.

Ratio Decidendi: Where a responsible person of the assessee, present at the time of survey, admits the quantity of stock and signs the survey record without retraction, the authorities may rely on that contemporaneous admission to determine excess stock even in the absence of actual weighment.

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