IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH “SMC”, LUCKNOW BEFORE SHRI ANADEE NATH MISSHRA, ACCOUNTANT MEMBER (Assessment Year: 2019-20)

Vivek Dixit v. ACIT Central Circle-2 C-46, Kalyanpur, Kanpur-Uttar Central Circle, Laxmi Pradesh-208024. Niwas, 10/453, Tilak Nagar, Kanpur-208002.

PAN:AMSPD4880H (Appellant) (Respondent)

Appellant by: None Respondent by: Shri Amit Kumar, CIT(DR)

O R D E R

1. The present appeal has been filed by the assessee against the order passed by the Ld. Commissioner of Income Tax (Appeals)-4, Kanpur dated 23.02.2024 for the assessment year

2019-20. The grounds of appeal of the assessee are as under: -

“1. That the Ld. CIT(A) has erred in confirming the addition of Rs. 2,60,135/ - made by the Assessing Officer on account of difference in the value of stock appearing in the balance sheet as on 07.01.2019 and stock as per physical verification during the course of Search and Seizure.

2. That on the facts and circumstances of the case and in law, the Ld. CIT(A) has failed to appreciate the detailed explanations submitted during the course of first appeal proceedings and assessment proceeding u/s 143(3) of the Act.

3. That the appellant reserve the right to add to, alter or modify the above grounds before or during the hearing before the Hon'ble Tribunal so as to enable the Hon’ble Tribunal to decide on the grounds raised by the appellant as per Law.

4. Any other relief which Hon’ble Tribunal may deem fit in the case.”

2. In this case, assessment order dated 05.07.2021 was passed by the Assessing Officer under section 143(3) of the Income Tax Act, 1961 (“Act”, for short) whereby the assessee’s total income was determined at Rs.37,89,155/- (Rounded off to Rs.37,89,160/-) as against the returned income of Rs.15,29,020/-. In the aforesaid assessment order an amount of Rs.20,00,000/- was added u/s 69A of the Act. A further addition of an amount of Rs.2,60,135/- was made by the Assessing Officer towards estimated gross profit on shortage of stock found during the physical verification on 17.01.2019. The team of Income Tax Department, on physical verification, valued the stock found on 17.01.2019 at Rs.14,84,000/- whereas, as per the balance-sheet as on 17.01.2019, the team of Income Tax Department found the stock at Rs.46,21,944/-. The Assessing Officer worked out the difference of the aforesaid amounts of Rs.46,21,944/- and Rs.14,84,000/- at Rs.31,37,944/-. The Assessing Officer further estimated the gross profit on the aforesaid amount of Rs.31,37,944/- at Rs.2,60,135/- and added this amount to the income of the assessee. The assessee filed appeal in the office of the Ld. CIT(A). Vide the impugned appellate order dated 23.02.2024 of the Ld. CIT(A), the aforesaid addition of Rs.20,00,000/- was deleted; but the addition of the aforesaid amount of Rs.2,60,135/- was sustained. The relevant portion of the impugned order of the Ld. CIT(A) is reproduced as under: -

“A search operation u/s 132 of IT Act was conducted on 17.01.2019 on Dr. M.C. Sharma, S.P.M. Hospital & Trauma Centre Group of cases and the premises of the appellant were covered in the same. The case was centralized to the O/o DCIT Central Circle-II, Kanpur vide order u/s 127 of IT Act dt. 27.08.2019 passed by the PCIT, Aligarh. The appellant filed return of income on 23.10. 2019 declaring total income of Rs. 15,29,020/-. Notice u/s 143(2) of IT Act was issued on 16.09. 2020 and duly served upon the appellant. Later on, notices u/s 142(1) of the Act alongwith questionnaire were also issued and A.O. completed the assessment by making addition of Rs. 20,00,000/- u/s 69A of IT Act on account ‘of unexplained loans received from Sh. Raman Dixit, Sh. Abhishek Dixit, Sh. Harsh ‘Dixit and Smt. Renu Dixit (Rs. 5,00,000/- from each, thus totaling to. Rs.20,00,000/-) and addition: of Rs. 2 60, 136/being estimated GP @8. 29% on the: unaccounted shortage of stock, physically not found during search proceeding conducted on Ms. Sagar Medical Store, proprietorship concern