The ITO, Ward-1,, Nadiad v. Bherumal M.Shah, Nadiad

ITA 530/AHD/2008 | 2004-2005
Pronouncement Date: 14-05-2010 | Result: Allowed

Appeal Details

RSA Number 53020514 RSA 2008
Assessee PAN AHNPS0648G
Bench Ahmedabad
Appeal Number ITA 530/AHD/2008
Duration Of Justice 2 year(s) 3 month(s)
Appellant The ITO, Ward-1,, Nadiad
Respondent Bherumal M.Shah, Nadiad
Appeal Type Income Tax Appeal
Pronouncement Date 14-05-2010
Appeal Filed By Department
Order Result Allowed
Bench Allotted B
Tribunal Order Date 14-05-2010
Date Of Final Hearing 13-05-2010
Next Hearing Date 13-05-2010
Assessment Year 2004-2005
Appeal Filed On 13-02-2008
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH 'B' [BEFORE SHRI T K SHARMA JM & SHRI A N PAHUJA AM] ITA NO.530/AHD/2008 (ASSESSMENT YEAR:-2004-05) THE INCOME-TAX OFFICER WARD-1 NADIAD V/S SHRI BHERUMAL M SHAH PROP. OF LAXMI METALS K1/3 GIDC ESTATE NADIAD [PAN:AHNPS0648G] [APPELLANT] [RESPONDENT] REVENUE BY :- SMT. NEETA SHAH DR ASSESSEE BY:- SHRI PAMIL H SHAH AR O R D E R A N PAHUJA: THIS APPEAL FILED BY THE REVENUE AGAINST AN ORDER DATED 15-11-2007 OF THE LD. CIT(APPEALS)-IV BARODA RAISES THE FOLLOWING GROUNDS:- (1) ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS.7 64 272/ - BEING EXCESS STOCK FOUND DURING THE SURVEY OBSERVING THAT IT WOULD AMO UNT TO TAXING THE SAME AMOUNT TWICE WHEREAS FACTUALLY THE ASSESSEE HA S NULLIFIED THE EFFECT OF THE ADDITIONAL INCOME BY DEBITING PURCHAS ES AND NOT INCREASING THE CLOSING STOCK BY THE SAID AMOUNT OF ADDITIONAL INCOME IN THE TRADING ACCOUNT. (2) IT IS THEREFORE PRAYED THAT THE ORDER OF THE CIT(A) BE SET ASIDE AND THAT OF THE AO BE RESTORED. (3) THE APPELLANT CRAVES LEAVE TO ADD TO AMEND OR ALTER THE ABOVE GROUND AS MAY BE DEEMED NECESSARY. 2 FACTS IN BRIEF AS PER RELEVANT ORDERS ARE THAT A SURVEY U/S 133A OF THE INCOME-TAX ACT 1961 [HEREINAFTER REFER RED TO AS THE ACT] WAS CONDUCTED IN THE BUSINESS PREMISES OF TH E ASSESSEE ON 19.12.2003. DURING THE COURSE OF SURVEY PHYSICAL STOCK OF ALUMINIUM & STEEL UTENSILS COOKERS ELECTRICAL GOO DS ETC WAS TAKEN VIS--VIS STOCK AS PER BOOKS OF ACCOUNTS. AS A RES ULT EXCESS STOCK OF RS.7.64.272/- WAS DETECTED BY THE SURVEY TEAM. T HE ASSESSEE VIDE HIS LETTER DATED.24.3.2004 ALSO ADMITTED THE SAID DIFFERENCE. DURING THE COURSE OF SURVEY SHRI BHERULAL M. SHAH PROPRIETOR OF ITA NO.530/AHD/2008 2 M/S. LAXMI METALS IN HIS STATEMENT DISCLOSED THE S AID EXCESS STOCK AS HIS UNACCOUNTED INCOME INVESTED IN STOCK AND AGR EED TO PAY TAX THEREON. HOWEVER IN THE TRADING ACCOUNT ENCLOSED W ITH THE RETURN FILED FOR A.Y.2004-05 THE ASSESSEE THOUGH CREDITED RS.7 55 817/- (IN PLACE OF CORRECT FIGURE OF RS.7 64 272/-) ON CR EDIT SIDE OF P&L ACCOUNT THE SAME WAS ALSO DEBITED TO THE TRADING A CCOUNT UNDER THE HEAD 'STOCK ACCOUNT 19.12.03. THE AO OBSERVED THAT ONLY THE ENTRIES OF OPENING STOCK AND PURCHASE SHOULD REFLEC T ON THE DEBIT SIDE OF TRADING ACCOUNT. SINCE THE DISCLOSED AMOUNT AT THE TIME OF SURVEY BASED ON UNACCOUNTED MONEY INVESTED IN STOCK (I.E. EXCESS STOCK) DID NOT REPRESENT THE PURCHASE THE SAID AM OUNT COULD NOT BE DEBITED TO THE TRADING ACCOUNT. BY WRONGLY DEBITING THE UNACCOUNTED INCOME TO THE TRADING ACCOUNT NO EFFECT OF DISCLOS URE MADE AT THE TIME OF SURVEY OPERATION WAS GIVEN. IN OTHER WORDS THE DISCLOSURE MADE AT THE TIME OF SURVEY WAS NULLIFIED BY MAKING SUCH FALSE ENTRY TO THE TRADING ACCOUNT AS IF IT REPRESENTED PURCHAS E THOUGH THERE WAS NO ACTUAL PURCHASE ON 19.12.2003 THE AO OBSERV ED. TO A QUERY VIDE LETTER DATED 2.2.2006 THE ASSESSEE VIDE LETTE R FILED ON 27TH DECEMBER 2006 SUBMITTED THAT:- IN PURCHASE ACCOUNT WE HAVE DEBITED RS.7 55 817/- WHICH IS RELATING TO EXCESS STOCK FOUND ON 19-12-03. YOU MAY TREAT THIS AMOUNT AS DEEMED INCOME U/S 69B OF THE I.T. ACT 1961. THE SAME IS A LREADY CREDITED TO P&L ACCOUNT AS STOCK DECLARED ON 19-12-03 AND THE SAM E IS ALREADY INCLUDED IN COMPUTATION STATEMENT AS INCOME FROM BUSINESS OR PROFESSION INSTEAD OF INCOME FROM OTHER SOURCES WHICH PLEASE NOTE. THOUGH NO PURCHASE OF GOODS OF RS.7.55 817/- WAS MA DE THE SAME IS DEBITED TO PURCHASE ACCOUNT AS THERE WAS EXCESS STO CK ON 19.12.03 AND THE SAME IS CONSIDERED TO BE INCOME DEEMED TO BE IN VESTED IN STOCK U/S.69B OF THE I .T. ACT 1961. PLEASE NOTE THAT THE DIFFERENCE AMOUNT OF STOCK OF RS.8 49 272/- IS REDUCED BY RS.93.555/- I. E. AMOUNT OF PURCHASE DISCLOSED IN POINT NO.8 OF STATEMENT ON DATE AS ON 19.12.03' HOWEVER THE AO DID NOT ACCEPT THE CONTENTIONS OF T HE ASSESSEE ON THE GROUND THAT THE PURCHASE OF GOODS (FROM UNDISC LOSED INCOME) FOR 'TRADING PURPOSE' CANNOT BE SAID TO BE FOR THE PURPOSE OF 'INVESTMENT' AND THE ASSESSEE NULLIFIED THE DISCLOS URE MADE ON ITA NO.530/AHD/2008 3 ACCOUNT OF PURCHASE OF GOODS OUTSIDE BOOKS OF ACCOU NTS. ACOORDINGLY THE AO DISALLOWED THE AMOUNT OF RS.7 5 5 817/-DEBITED TO TRADING ACCOUNT AND ADDED AN AMOUNT OF RS.7 64 2 72 AS WORKED OUT BY THE ASSESSEE IN HIS LETTER DATED 24.3.2004. 3 ON APPEAL THE LD. CIT(A)DELETED THE ADDITION WIT H THE FOLLOWING OBSERVATIONS:- 4. IN APPEAL THE AUTHORIZED REPRESENTATIVE SUBMIT TED THAT ON THE DATE OF THE SURVEY HE HAD DEBITED THE TRADING ACCOUNT WI TH THE SUM OF RS.7 55 817/- SINCE THE SURVEY WAS IN THE MIDDLE OF THE ACCOUNTING PERIOD. TO BRING THE STOCK INTO THE BOOKS OF ACCOUNTS THE TRADING ACCOUNT WAS DEBITED AND ADDITIONAL STOCK WAS INCLUDED IN THE CL OSING STOCK. HE ALSO SUBMITTED THAT A FURTHER CREDIT WAS MADE TO THE PRO FIT & LOSS ACCOUNT OF THE SAME AMOUNT. THE APPELLANT HAD MADE THE FOLLOWING E NTRIES. TRADING ACCOUNT: PURCHASE ACCOUNT (DR.) RS.7 55 817 CLOSING STOCK ( CR.) RS. 7 55 817 PROFIT & LOSS A/C. (CR.) RS.7 55 817 THEREFORE THE NET RESULT IS: (A) INCOME EARNED BY HIM BY SALES MADE OUTSIDE THE BOOKS OF ACCOUNTS HAVE BEEN CREDITED TO THE P. & L. ACCOUNT. (B) THE STOCK PURCHASED OUTSIDE THE BOOKS OF ACCOUN TS FROM SUCH INCOME HAS BEEN BROUGHT INTO THE BOOKS. (C) THE APPELLANT ALSO SUBMITTED THAT THIS AMOUNT I S ALREADY INCLUDED IN THE COMPUTATION STATEMENT AS INCOME FROM BUSINESS O R PROFESSION. SINCE THE APPELLANT HAS SUO MOTO ACCOUNTED FOR THE SURRENDERED INCOME IN HIS BOOKS OF ACCOUNTS THE ASSESSING OFFICER'S ADDI TION OF RS.7 55 817/- AMOUNTS TO THE SAME INCOME BEING TAXED TWICE. THE A SSESSING OFFICER HAS BROUGHT TO TAX THE ABOVE AMOUNT U/S.69B OF THE INCO ME TAX ACT. I DO NOT AGREE WITH THE ASSESSING OFFICER'S CONCLUSION. THE BASIC FACT IS THAT SURVEY WAS CONDUCTED ON THE BUSINESS PREMISES OF THE APPEL LANT. DURING THE COURSE OF SURVEY PROCEEDINGS STOCK OF MERCHANDISE WAS FOUND IN WHICH THE APPELLANT HAD BEEN DEALING WITH REGULARLY FOR M ANY YEARS. THE BOOKS OF ACCOUNTS WHEREIN THE DETAILS OF SUCH STOCK WAS DEA LT WITH WERE CONSIDERED BY THE SURVEY PARTY. THE DIFFERENCE IN Q UANTITY BETWEEN THE STOCK ENTERED IN THE BOOKS OF ACCOUNTS AND THE STOC K FOUND AT THE BUSINESS PREMISES OF THE APPELLANT WAS CONSIDERED TO BE ADDI TIONAL STOCK. THE SURVEY PARTY DID NOT DISTINGUISH BETWEEN THE EXCESS STOCK SAID TO HAVE BEEN INVESTED FROM UNDISCLOSED SOURCES AND THE STOC K ENTERED IN THE BOOKS OF ACCOUNTS. THIS WAS SO BECAUSE THE ENTIRE S TOCK WAS FROM A ITA NO.530/AHD/2008 4 COMMON POOL FOUND ON THE BUSINESS PREMISES OF THE A PPELLANT. THEREFORE A DIRECT NEXUS BETWEEN THE BUSINESS ACTIVITY OF THE APPELLANT AND THE EXCESS STOCK FOUND DURING THE COURSE OF SURVEY WAS ESTABLISHED. FURTHER NO EVIDENCE HAS BEEN BROUGHT ON RECORD WHICH INDICA TES THAT THE APPELLANT HAS ANY OTHER SOURCE OF INCOME WHICH HAS BEEN UTILI ZED BY HIM FOR ACQUIRING THE EXCESS STOCK FOUND DURING THE COURSE OF SURVEY. THE RELIANCE OF THE ASSESSING OFFICER ON THE DECISION OF THE GUJ ARAT HIGH COURT IN THE CASE OF FAKIR MOHAMMAD HAJI HASSAN IS NOT CORRECT S INCE THE FACTS OF THE CASE ARE CLEARLY DISTINGUISHABLE FROM THE FACTS OF THE CASE OF FAKIR MOHAMMAD HAJI HASSAN. IN THE SAID JUDGMENT THE HON 'BLE HIGH COURT HAD COMMENTED THAT IT IS NOT THE CASE OF THE APPELLANT THAT HE IS IN THE BUSINESS OF SMUGGLING. IN THE PRESENT CASE IT IS THE CASE O F THE APPELLANT THAT HE IS IN THE BUSINESS OF TRADING IN TOBACCO AND EXCESS ST OCK OF TOBACCO HAS BEEN FOUND AT THE BUSINESS PREMISES OF THE APPELLAN T. IN VIEW OF THE ABOVE I HOLD THAT THE ASSESSING OFFICER WAS NOT JU STIFIED IN INVOKING THE PROVISIONS OF SECTION 69B IN THE CASE OF THE APPELL ANT. THEREFORE THE AMOUNT DECLARED AS INVESTMENT MADE IN STOCK SHOULD BE BROUGHT TO TAX AS THE BUSINESS INCOME OF THE APPELLANT AND NOT AS DEE MED INCOME U/S 69B OF THE INCOME-TAX ACT. 4. THE ASSESSEE IS NOW IN APPEAL BEFORE US AGAINST THE AFORESAID FINDINGS OF THE LD. CIT(A).THE LD. DR SUPPORTED THE ORDER OF THE AO WHILE THE LD. AR ON BEHALF OF THE ASSESSEE SUPPORTE D THE FINDINGS OF THE LD. CIT(A) WHILE RELYING UPON A DECISION DATED 18.7.2008 OF THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF KR ISHNA TEXTILES VS. CIT . TO A QUERY BY THE BENCH THE LD. AR DID NOT D EMONSTRATE AS TO HOW THE FACTS IN THE CASE UNDER CONSIDERATION WERE PARI MATERIA TO THE FACTS IN THE CITED DECISION NOR COULD EXPLAIN T HE SOURCE OF INVESTMENT IN THE EXCESS STOCK FOUND DURING THE COU RSE OF SURVEY. THE LD. AR FURTHER CONTENDED THAT THE ASSESSEE HAD ALREADY CREDITED THE AMOUNT TO THE PROFIT AND LOSS ACCOUNT BESIDES DEBITING AND CREDITING STOCK IN THE TRADING ACCOUNT. THEREFO RE NO FURTHER ADDITION COULD BE MADE. HOWEVER THE LD. DR DISPUTE D THIS SUBMISSION OF THE LD. AR CONTENDING THAT THE AMOUNT HAD NOT BEEN TAXED TWICE AND THE ASSESSEE HAD NOT INCREASED THE CLOSING STOCK IN THE TRADING ACCOUNT WHILE DEBITING THE EXCESS STOCK AS ON 19.12.2003. ITA NO.530/AHD/2008 5 5 WE HAVE HEARD BOTH THE PARTIES AND GONE THROUGH T HE FACTS OF THE CASE AS ALSO THE DECISION RELIED UPON. WE FIND THAT THE REVENUE IN THEIR GROUND OF APPEAL HAVE DENIED THAT THE AMOU NT HAD BEEN TAXED TWICE SINCE THE ASSESSEE DID NOT INCREASE THE CLOSING STOCK BY THE SAID AMOUNT OF ADDITIONAL INCOME IN THE TRADING ACCOUNT WHILE THE LD. AR INVITED OUR ATTENTION TO THEIR WRITTEN SUBMI SSIONS QUOTED IN THE IMPUGNED ORDER OF THE LD. CIT(A) AND CONTENDED THA T EXCESS STOCK HAD ALREADY BEEN INCLUDED IN THE CLOSING STOCK. THE RE IS NO MATERIAL BEFORE US TO VERIFY AS TO WHETHER OR NOT EXCESS STO CK HAS BEEN INCLUDED IN THE CLOSING STOCK SHOWN IN THE TRADING ACCOUNT. REGARDING THE ADDITION OF RS. 7 64 272 ON ACCOUNT O F EXCESS STOCK FOUND DURING THE COURSE OF SURVEY WE FIND THAT THE ASSESSEE DID NOT OFFER ANY EXPLANATION REGARDING SOURCE OF INVESTMEN T IN THE SAID EXCESS STOCK EITHER DURING THE COURSE OF SURVEY OR EVEN DURING THE COURSE OF ASSESSMENT PROCEEDINGS. RATHER THE ASSES SEE IN UNEQUIVOCAL TERMS ADMITTED THE EXCESS STOCK AND O FFERED THE SAID AMOUNT TO TAX. NOT ONLY DURING THE COURSE OF SURVEY AND IN LETTER DATED 24.3.2004 THE ASSESSEE IN HIS WRITTEN SUBMIS SION DATED 27.12.2006 AS EXTRACTED IN THE ASSESSMENT ORDER AN D QUOTED ABOVE ADMITTED THAT THEY HAVE CONSIDERED THE AMOUNT INVE STED IN THE EXCESS STOCK AS THEIR DEEMED INCOME U/S 69B OF THE ACT. THIS HAS BEEN STATED SO NOT ONCE BUT TWICE IN THE SAID SUBMI SSIONS. IN THE FACE OF THESE SUBMISSIONS OF THE ASSESSEE WE ARE O F THE OPINION THAT THE LD. CIT(A) WAS NOT JUSTIFIED IN HOLDING TH AT PROVISIONS OF SEC. 69B COULD NOT BE INVOKED ESPECIALLY WHEN THE AMOUNT HAD BEEN ADDED BY THE ASSESSEE HIMSELF IN TERMS OF PROVISION S OF SEC. 69B OF THE ACT. HOWEVER ACCORDING TO THE AO IN THE RETUR N THE ASSESSEE THROUGH CREDITED THE AMOUNT TO THE P&L ACCOUNT BU T DEBITED THE STOCK ACCOUNT WITHOUT EVEN DISCLOSING THE SOURCE O F INVESTMENT IN THE SAID EXCESS STOCK. AS ALREADY POINTED OUT ABOVE THERE IS NO MATERIAL BEFORE US TO VERIFY THAT THE ASSESSEE ALSO INCREASED THE CLOSING STOCK SHOWN IN THE TRADING ACCOUNT. AS A RE SULT THE AO ITA NO.530/AHD/2008 6 DISALLOWED THE AMOUNT RELATING TO EXCESS STOCK DEBI TED IN THE TRADING ACCOUNT. THERE IS NOTHING TO SUGGEST THAT EVEN BEFO RE THE LD. CIT(A) THE ASSESSEE EXPLAINED THE NATURE AND THE SOURCE OF I NVESTMENT IN THE EXCESS STOCK FOUND AT THE TIME OF THE SURVEY. HOWEVER THE LD. CIT(A) DELETED THE ADDITION ON THE GROUND THAT THE AMOUNT HAS BEEN TAXED TWICE. BE FORE US THE LD. AR ON BEHALF OF THE ASSESSEE DID NOT PLACE ANY MATERIAL REGARDIN G SOURCE OF INVESTMENT IN THE EXCESS STOCK OR EVEN IN RESPECT OF AMOUNT CREDITED TO TRADING ACCOUNT. THE LD. AR CLAIMED BEFORE US THAT THE AMOUNT OF RS. 7 64 272/ - IS HIS BUSINESS INCOME . IN THIS CONNECTION THE HONBLE JURISDICTIONAL HIG H COURT IN FAKIR MOHAMMED HAJI HASSAN V. CIT 247 ITR 290 OBSERVED THAT THE SCHEME OF SECTIONS 69 69A 69B AND 69C WOULD SHOW THAT IN CASES WHERE THE NATURE A ND SOURCE OF INVESTMENTS MADE BY THE ASSESSEE OR THE NATURE AND SOURCE OF AC QUISITION OF MONEY BULLION ETC. OWNED BY THE ASSESSEE OR THE SOURCE OF EXPENDI TURE INCURRED BY THE ASSESSEE ARE NOT EXPLAINED AT ALL OR NOT SATISFACTO RILY EXPLAINED THEN THE VALUE OF SUCH INVESTMENTS AND MONEY OR VALUE OF ARTICLES NO T RECORDED IN THE BOOKS OF ACCOUNT OR THE UNEXPLAINED EXPENDITURE MAY BE DEEME D TO BE THE INCOME OF THE ASSESSEE. IT FOLLOWS THAT THE MOMENT A SATISFACTORY EXPLANATION IS GIVEN ABOUT SUCH NATURE AND SOURCE BY THE ASSESSEE THEN THE SO URCE WOULD STAND DISCLOSED AND WILL THEREFORE BE KNOWN AND THE INCOME WOULD BE TREATED UNDER THE APPROPRIATE HEAD OF INCOME FOR ASSESSMENT AS PER TH E PROVISIONS OF THE ACT. HOWEVER WHEN THESE PROVISIONS APPLY BECAUSE NO SOU RCE IS DISCLOSED AT ALL ON THE BASIS OF WHICH THE INCOME CAN BE CLASSIFIED UND ER ONE OF THE HEADS OF INCOME UNDER SECTION 14 IT WOULD NOT BE POSSIBLE TO CLASS IFY SUCH DEEMED INCOME UNDER ANY OF THESE HEADS INCLUDING INCOME FROM OTHER SOU RCES WHICH HAVE TO BE SOURCES KNOWN OR EXPLAINED. WHEN THE INCOME CANNOT BE SO CLASSIFIED UNDER ANY ONE OF THE HEADS OF INCOME UNDER SECTION 14 IT FOL LOWS THAT THE QUESTION OF GIVING ANY DEDUCTIONS UNDER THE PROVISIONS WHICH CORRESPON D TO SUCH HEADS OF INCOME WILL NOT ARISE. IF IT IS POSSIBLE TO PEG THE INCOME UNDER ANY ONE OF THESE HEADS BY VIRTUE OF A SATISFACTORY EXPLANATION BEING GIVEN T HEN THESE PROVISIONS OF SECTIONS 69 69A 69B AND 69C WILL NOT APPLY IN WHICH EVENT THE PROVISIONS REGARDING DEDUCTIONS ETC. APPLICABLE TO THE RELEVANT HEAD OF INCOME UNDER WHICH SUCH INCOME FALLS WILL AUTOMATICALLY BE ATTRACTED. IN TH E FACTS OF THE INSTANT CASE SINCE ITA NO.530/AHD/2008 7 THE ASSESSEE DID NOT EXPLAIN THE SOURCE OF INVESTM ENT IN THE EXCESS STOCK FOUND DURING THE COURSE OF SURVEY THE AO DISALLOWED THE CLAIM OF DEBIT TO THE TRADING ACCOUNT AND HAS BROUGHT TO TAX THE AMOUNT U/S 69B O F THE ACT AS ACCEPTED BY THE ASSESSEE IN HIS SUBMISSIONS BEFORE THE AO. THE SCOPE OF A CHARGING SECTION CANNOT BE ENLARGED BY IMPORTING FURTHER FICTION BY DEEMING THE SUM RECEIVED AS INCOME FROM BUSINESS. IF THE WORDS OF A STATUTE ARE PRECISE AND UNAMBIGUOUS THEY MUST BE ACCEPTED AS DECLARING THE EXPRESS INTE NTION OF THE LEGISLATURE. IT WAS TRITE PROPOSITION IN LAW THAT A LEGAL FICTION HAS TO BE STRICTLY CONSTRUED. AS HAS BEEN OBSERVED BY THE HONBLE SUPREME COURT IN BENGA L IMMUNITY CO. LTD. VS. STATE OF BIHAR (1955) 2 SCR 603 LEGAL FICTION S ARE ONLY FOR A DEFINITE PURPOSE AND THEY ARE LIMITED TO THE PURPOSE FOR WHICH THEY ARE CREATED AND SHOULD NOT BE EXTENDED BEYOND THAT LEGITIMATE FIELD. IN THE PRESE NT CASE THE FICTION IS LIMITED TO THE CASES PROVIDED IN THE SECTION 68 69A.69B& 69C A ND CANNOT BE EXTENDED FURTHER TO HOLD THAT INCOME IS TO BE ASSESSED UNDER THE HEAD PROFITS AND GAINS OF BUSINESS OR PROFESSION. WE HAVE ALREADY POINTED OU T THAT THE LD. AR DID NOT DEMONSTRATE BEFORE US AS TO HOW THE DECISION RELIE D UPON BY HIM IS APPLICABLE TO THE FACTS OF THE CASE UNDER CONSIDERATION ESPECIAL LY WHEN THE ASSESSEE HIMSELF ADMITTED BEFORE THE AO THAT THE AMOUNT HAS TO BE AD DED U/S 69B OF THE ACT 5.1 IN VIEW OF THE FOREGOING SINCE THERE IS NO MA TERIAL BEFORE US TO VERIFY AS TO WHETHER OR NOT THE AMOUNT OF EXCESS ST OCK HAS BEEN CREDITED TO THE TRADING ACCOUNT WHEN THE ASSESSEE D EBITED THE EXCESS STOCK AS ON 19.12.2003 WE CONSIDER IT FAIR AND APPROPRIATE TO VACATE THE FINDINGS OF THE LD. CIT(A) AND RESTO RE THE MATTER TO THE FILE OF THE AO WITH THE DIRECTIONS TO EXAMINE THE R ELEVANT BOOKS OF ACCOUNT IN ORDER TO ASCERTAIN AS TO WHETHER OR NOT EXCESS STOCK WAS CREDITED TO THE TRADING ACCOUNT AND THEREAFTER PAS S APPROPRIATE ORDERS IN ACCORDANCE WITH LAW AFTER ALLOWING SUFFIC IENT OPPORTUNITY TO THE ASSESSEE. IN THE EVENT CLAIM OF THE ASSESSEE TH AT THE AMOUNT IS TAXED TWICE IS FOUND TO BE CORRECT ADDITION OF EXC ESS STOCK MADE BY THE AO SHOULD BE DELETED OTHERWISE THE ADDITION HAS TO BE SUSTAINED WITH THESE DIRECTIONS GROUND NO. 1 IS DISPOSED OF. ITA NO.530/AHD/2008 8 6. GROUND NOS. 2 & 3 BEING GENERAL IN NATURE DO NO T REQUIRE ANY SEPARATE ADJUDICATION AND ARE THEREFORE DISMISSED . 7 IN THE RESULT APPEAL IS ALLOWED AS ABOVE BUT FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT TODAY ON 14-05-2 010 SD/- SD/- (T K SHARMA) JUDICIAL MEMBER (A N PAHUJA) ACCOUNTANT MEMBER DATE : 14-05-2010 COPY OF THE ORDER FORWARDED TO : 1. SHRI BHERUMAL M SHAH PROP. OF LAXMI METALS K/1 3 GIDC ESTATE NADIAD 2. THE ITO WARD-1 NADIAD 3. CIT CONCERNED 4. CIT(A)-IV BARODA 5. THE DR ITAT AHMEDABAD 6. GUARD FILE BY ORDER DEPUTY REGISTRAR ASSISTANT REGISTRAR ITAT AHMEDABAD