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TMI Blog2017 (4) TMI 166X X X X Extracts X X X X X X X X Extracts X X X X ..... ls in the possession of the assessee in view of the arrangement between the assessee, manufacturer and the contractors. There is nothing improbable in this proposition put forth before us and merely because some suspicion occurred to the mind of the Assessing Officer such suspicion cannot prevail over broad probabilities. Source and destination of the payments are verifiable and the ledger book, which are not in the custody and control of either assessee or contractor but in the custody and the maintenance of the manufacturers are available on record for verification. In these circumstances the authorities below should have noticed that all the bills are excisable bills. There is no finding that these bills are fabricated. Suspicion, how ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ative For the Respondent : U. C. Mishra, Departmental Representative ORDER 1. The assessee is the proprietor of M/s. Agrwal Tubewell Company and involved in the business of trading of tubewell equipment motor, water tank, PVC pipes, tiles, sanitary items etc. On March 29, 2010 a survey operation was conducted at the business premises of the assessee. For the assessment year 2010-11, the assessee filed their return of income and assessment was completed by the Assessing Officer making the addition of ₹ 36,96,697 on account of undisclosed stocks. 2. Challenging the same the assessee preferred an appeal before the learned Commissioner of Income-tax (Appeals), Bhagalpur in Appeal No.52/A-1/13-14/2010-11 and the learned Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ontractors who happen to be the clients of the assessee and who are allowed to keep the stock in the godown of the assessee in view of a business arrangement that was made between manufacturer, contractors and the assessee, since the assessee happens to be a guarantor for the payments of the sale consideration by the contractors to the manufacturer. It is submitted by the learned authorised representative that all the details of the contractors are furnished, though not on the date of the survey the bills and vouchers etc. could be produced before the authorities, but subsequently all such material was produced. But the authorities below failed to appreciate the same on suspicion that generally a trader has to purchase the goods either from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... instead of furnishing security to the manufacturer for the sale consideration and to have the credit facility the contractors agree to keep the materials in the possession of the assessee till the dues payable to the manufacturer are cleared by the contractors. By this arrangement the assessee will gain commission which would compensate providing storage facilities to the contractors and enhance the business prospects of the assessee. Further in this process the manufacturer need not run the risk of any of bad debts or non-payments of the sale consideration. There is nothing improbable in this proposition put forth before us and merely because some suspicion occurred to the mind of the Assessing Officer such suspicion cannot prevail over br ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... elow and without giving a finding that the document produced by the assessee or the contractors or the manufacturer are false and fabricated once, in addition made on suspicion cannot be sustained. 7. In respect of sprinklers worth ₹ 3,50,000 by way of pages 87 to 94, the bills issued by the manufacturer the assessee produced the material to show that one Satyam Enterprises is the owner thereof. It is submitted before us that the owner of Satyam Enterprises is the own brothers of the assessee and conducting the business in the same premises of old house in which the assessee is conducting the business as such it is natural that the stock to the business of Satyam Enterprises could also be found in the same premises. There is nothin ..... X X X X Extracts X X X X X X X X Extracts X X X X
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