Survey stock discrepancy and PMSGKY disclosure prevented treatment of excess silver stock as unexplained money.

Excess silver stock found during survey in the course of jewellery was held to be covered by the assessee's disclosure under the Pradhan Mantri Garib Kalyan Yojana, read with the surrender letter, scheme provisions and clarificatory circulars. On that basis, the stock discrepancy could not be arbitrarily treated as unexplained money, and invocation of section 69A was found unsustainable on the facts. The addition was therefore deleted in favour of the assessee.

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Issues: Whether the addition of the value of excess silver stock found during survey could be sustained as unexplained money under section 69A, and whether the assessee's disclosure under the Pradhan Mantri Garib Kalyan Yojana covered the discrepancy.

Analysis: The assessee dealt in gold and silver jewellery, and the excess silver stock arose in the course of the regular business. The survey material, the surrender letter, the scheme provisions, and the clarificatory circulars were read together. On that basis, the disclosure made under the scheme was treated as covering the discrepancies noticed during survey, and the stock difference could not be arbitrarily characterised as unexplained money. The invocation of section 69A was therefore found unsustainable on the facts.

Conclusion: The addition was deleted and the issue was decided in favour of the assessee.

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