TaxTMI 
TaxTMI 
TaxTMI 
1984 (2) TMI 139
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....d sale and purchases in respect of Termeric and Betal Nut for other period beginning from 20th Sept., 1983 to 14th Dec., 1983 B.S. According to the assessee the closing stock for these three items at the end of the accounting period was 6 bags, 5 bags and 3 bags respectively. Calculating the closing stock as per purchases and sales, the ITO found that there was suppression of sales by the assessee in respect of these items. The relevant figures given by the ITO in his assessment order are as follows: Item of trading goods Closing stock as per purchase and sale Mati Dana 13 bags 48 Kg. Termeric 21 bags 40 Kg. Betal Nut 30 bags 55 Kg. Closing stock as per assessee Suppression of sale 6 bags. 7 bags 48 Kg. 5 bags. 16 bags 40 Kg.....
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....o pressed the appeal on merits. It was contended before us that accounts of the assessee could not have been rejected merely because it did not maintain stock register in respect of miscellaneous goods. In this connection it was also urged that all the sales and purchases were duly vouched. It was further submitted that in respect of miscellaneous goods it is impossible and impracticable to maintain the stock register. It was also argued on behalf of the assessee that the basis adopted by the ITO for holding that there was suppression of sale is wholly untenable and on that basis the addition made by him is clearly unsustainable. In this connection it was argued that in order to find out it there was any shortage in respect of the three ite....
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....ng two items. By adopting this method the ITO found that there was discrepancy between the closing stock as disclosed by the assessee and the closing stock as per purchases and sales of the aforesaid three miscellaneous goods. We agree with the contention put forth on behalf of the assessee that in order of ascertain shortage, if any, in the closing stock of the aforesaid items, the ITO ought to have examined all purchases and sales made during the entire accounting period. So the basis on which the ITO came to the conclusion that there was suppression of sales in respect of the aforesaid three miscellaneous goods and as a result of which addition was made in the trading account is wholly unreasonable and for this reason the addition cannot....