Law:

Section:

Section 69 of the Income-tax Act, 1961 - Unexplained investments - Assessment year 1990-91 - During search conducted at residence of assessee's partner, authorities found some loose slips and on basis of transactions mentioned therein made addition in assessee's income - Assessee, however, contended that he had surrendered amount against excess value of stock found during search and as such, no addition was warranted on that account - Tribunal sustained said addition - Whether Tribunal was required to verify fact as to whether assessee had surrendered any amount against excess stock found during search - Held, yes - Whether if assessee had surrendered amount against excess stock found at time of search, then no addition was warranted on that account - Held, yes FACTS The assessee, deriving income from whole sale business of iron and hardware, declared his income for the assessment year. A search was conducted at the residence of one of the partners of the assessee wherein some loose slips were found. The Assessing Officer made addition in the assessee's income on account of transactions mentioned in the said loose slips. On appeal, the said addition was deleted by the Commissioner (Appeals). On appeal by the revenue, the Tribunal sustained the said addition on the ground that there was no addition on account of excess stock found at the time of search. On appeal : HELD The Tribunal should verify the fact as to whether the assessee had surrendered any amount on account of excess stock found during the search. If the assessee had surrendered any amount against the excess stock, then the very addition was not justified. Therefore, the Tribunal was required to verify the fact whether the assessee had surrendered any amount against the excess stock found during the search. [Para 6] The Tribunal was also directed to verify the fact whether the amount had been surrendered against excess stock found. Further, whether the value of excess stock found exceeded the amount surrendered. If value of excess stock exceeded the amount surrendered, it would be open to the Tribunal to add the balance excess amount found on the basis of loose slips. If the excess stock did not…

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