ITAT Deletes ₹1.2 Crore Addition, Cites Lack of Evidence in Jewellery Stock Discrepancy Case

The Income Tax Appellate Tribunal (ITAT) has deleted a substantial addition of Rs 12 crore made by the Assessing Officer in a case involving an alleged discrepancy in a jeweller's stock. The tax department had made the addition based on its valuation of the jewellery stock found during a search operation. However, the ITAT found that the department's valuation was not supported by sufficient evidence and that the method used to determine the discrepancy was flawed. The tribunal noted the absence of concrete proof to justify the high-value addition. It concluded that an addition of this magnitude cannot be sustained on the basis of assumptions or weak evidence. By deleting the addition, the ITAT has reinforced the principle that the onus is on the revenue department to provide clear and convincing evidence before making any additions to a taxpayer's income.