The assessee's reconciliation explained total purchases, ...

Unexplained stock differences cannot be taxed without evidence.

Case Laws     Income Tax

August 20, 2024

The assessee's reconciliation explained total purchases, including capital goods and purchase returns, tallying with recorded purchases. The Tribunal correctly held that the Assessing Officer lacked relevant workings of the stock difference determined during the search by the Investigation Wing. The Assessing Officer erroneously made additions towards the stock-in-trade difference u/s 69C of the Act as unexplained expenditure, purely based on surmises and suspicion without supporting evidence. Even the Assessing Officer did not have the benefit of relevant workings of the stock difference arrived at during the search. The Assessing Officer was directed to delete the additions made towards the stock-in-trade difference u/s 69C. The decision favored the assessee.

View Source