2005 (1) TMI 346 - AT - Income Tax

Tribunal modifies tax assessment: Excess stock addition deleted, low withdrawals upheld. Evidence key.

The Tribunal partially allowed the appeal, deleting the addition of Rs. 1,16,427 for excess stock but upholding the addition of Rs. 12,000 for low ... - Issues:- Addition of Rs. 1,45,232 made on account of excess stock and low withdrawals.Analysis:The appeal was directed against the order of the CIT(A) for the assessment year 1997-98. Several grounds were taken, but only the issue of the addition of Rs. 1,45,232 on account of excess stock and low withdrawals was pursued. The Tribunal considered whether to decide on the issue despite it being set aside by the CIT(A). The Tribunal referred to a previous decision where it was held that set-aside issues can be decided on merits to avoid multiple litigations.The case involved a survey under section 133A of the Act, where an addition was made based on a statement recorded during the survey. The assessee contested the addition, claiming the statement was made under coercion. The authorized representative argued that only a portion of the excess stock was unexplained based on the trading account provided. The Department disputed the bills submitted as an afterthought. The Tribunal examined the evidence and submissions, noting the retracted statement of the assessee. It emphasized giving more weight to evidence over a retracted statement. Ultimately, the Tribunal allowed the appeal in part, deleting the addition of Rs. 1,16,427 on account of excess stock and upholding the addition of Rs. 12,000 for low household withdrawals.In conclusion, the Tribunal accepted the submissions of the authorized representative regarding the excess stock addition and decided in favor of the assessee on that issue. However, the addition for low household withdrawals was sustained due to the lack of contradictory evidence. The appeal was partly allowed, with the excess stock addition reduced and the low withdrawals addition upheld.