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2005 (8) TMI 686 - JAMMU AND KASHMIR HIGH COURTCash credit - Addition on account of closing stock position in the books of account - Whether the assessee had sufficiently proved that the declaration made to the bank was for the purpose of availing higher cash credit facility and it did not reflect correct position regarding the closing stock - HELD THAT:- We find that in the stock position shown to the Bank the assessee had not disclosed quantity and weight of the stock but had only given particulars of the goods and their value. Whereas the Assessing Authority as well as the Tribunal laboured under the impression that the quantity and weight of the goods declared to the Bank differed with that shown by the assessee in the trading account. It is thus clear that addition has been made neither on the ground that the assessee had more stock on 31-3-1990 nor on the ground that the assessee had any concealed income which had been invested by it in the closing stock but simply on the ground that the closing stock declared in the trading account after physical verification and value thereof differed with the stock position given to the Bank. While making the addition, the Assessing Authority as well as the Tribunal ignored the important fact that the goods/stock shown in the trading account on 31-3-1990 were as per verification and valued at cost whereas in the declaration made to the Bank the stock was not valued at cost but was on rough estimate. As a matter of fact, no statement of stock as on 31-3-1990 was filed before the Bank. It was only for the period ending up to 15-2-1990. The assessing authority and the Tribunal thus have completely mis-read the document (declaration) furnished by the assessee to the Bank and, therefore, the order of the assessing authority as well as of the Tribunal are not sustainable in law. Thus, the appeal is allowed and the order dated 14-12-1999 passed by the Income-tax Appellate Tribunal is set aside and that of the Commissioner Income-tax (Appeals), Jammu dated 19-5-1993, is restored.
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