Additions on the basis of incriminating material obtained during survey is justified

DCIT Vs Neeraj Agrawal (ITAT Allahabad)

ITAT Allahabad held that additions made based on the incriminating material (being excess stock) found during survey conducted u/s 133A of the Income Tax Act is justifiable.

Facts- The assessee is engaged in the trading business of Trading & Manufacturing Silver Jewellery and trading gold jewellery under the name and style of Raj Shree Jewellers, and assessee also runs Cinema Hall in the name and style of Rajshree Palace, Mirzapur. The assessee e-filed return of income on 15th September 2012 declaring a total income of Rs. 30,31,050/- from aforesaid businesses, under the heads business income and income from other sources.

In this case, the survey u/s. 133A was conducted at the business premises of the assessee at Sudiya, Varanasi and Basnahi Bazar, Mirzapur, simultaneously. During the course of assessment proceedings, the assessee submitted details before AO and produced books of accounts as maintained by it which were subjected to test checks by the AO. It was observed by the AO that during the course of survey proceedings conducted by Revenue on 24.02.2012, the assessee’s books of accounts were not found to be complete as of the date of the survey i.e. 24.02.2012.

The AO observed that the assessee did not keep a stock register for silver bullion and gold jewellery. Further, AO made an addition under section 69B of the Income Tax Act, 1961. Penalty proceedings u/s 271(1)(c) are being initiated separately for concealment of income. The AO found that the assessee has not kept proper and adequate records to substantiate the quantity of the stock at any given date and time, and it was observed by the AO that the arguments were extended by the assessee.

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