The Assessing Officer (AO) made an addition to the stock based ...

AO added stock based on search & statements from GM/Director. Discrepancies due to search activities. AO misinterpreted finished goods accounting. ITAT allowed assessee's appeal.

Case Laws     Income Tax

August 13, 2024

The Assessing Officer (AO) made an addition to the stock based on a search, relying on statements from the General Manager and Director. The stock update process was detailed, explaining delays in updating due to ongoing search activities. Discrepancies arose as the search team described stock differently from the actual materials. Statements confirmed stock maintenance at the Head Office, not the plant level. The AO solely relied on statements for the addition, misinterpreting the accounting of finished goods. No evidence of unaccounted sales was found, leading to the allowance of the assessee's appeal by the Appellate Tribunal (ITAT).

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