Disputed accounting figures require fresh verification before additions can stand when supporting records and opportunity to explain are not properly examined.

Additions based on alleged closing stock discrepancy and turnover mismatch cannot be sustained where the figures are disputed and the assessee produces supporting records requiring factual verification. The closing stock addition was restored because the revised audit material, quantitative details, GST returns and stock register were not adequately examined. The profit addition based on the difference between STR turnover and book turnover was also set aside because the underlying data, bank statements and related records needed proper confrontation and verification. Both matters were remanded for fresh assessment after giving adequate opportunity and observing natural justice.

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Issues: (i) Whether the addition made on account of alleged discrepancy in closing stock, based on Form 3CD, could be sustained without verifying the assessee's supporting records and revised audit material; (ii) Whether the addition made by estimating profit on the basis of the difference between STR turnover and book turnover could be sustained without giving the assessee adequate opportunity and verification of the underlying data.

Issue (i): Whether the addition made on account of alleged discrepancy in closing stock, based on Form 3CD, could be sustained without verifying the assessee's supporting records and revised audit material.

Analysis: The stock addition rested on the figures reflected in the tax audit report, but the assessee claimed that the report contained a clerical error and placed reliance on quantitative details, GST returns, stock register and other materials to show the correct stock position. The record indicated that the discrepancy required factual verification. Since the revised audit report and supporting materials were not examined at the assessment stage in a manner sufficient to resolve the controversy, the matter called for fresh verification by the Assessing Officer.

Conclusion: The addition on account of stock discrepancy was not finally sustained and was restored to the Assessing Officer for fresh adjudication.

Issue (ii): Whether the addition made by estimating profit on the basis of the difference between STR turnover and book turnover could be sustained without giving the assessee adequate opportunity and verification of the underlying data.

Analysis: The profit addition was founded on a difference between turnover reflected in the STR data and the turnover shown in the books and GST records. The assessee asserted that the relevant bank statements and related data required examination and that the STR material had not been adequately confronted. As the claim depended on verification of figures and supporting documents, the matter was considered fit for reconsideration by the Assessing Officer after granting proper opportunity.

Conclusion: The addition based on the turnover difference was also set aside for fresh assessment.

Final Conclusion: Both impugned additions were restored for reconsideration, and the assessee obtained only a partial relief in the form of remand for fresh assessment.

Ratio Decidendi: Where an addition is founded on disputed accounting figures and the assessee produces material requiring factual verification, the assessment should be restored for fresh examination after giving adequate opportunity and following natural justice.

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