TMI Blog2013 (11) TMI 1665X X X X Extracts X X X X X X X X Extracts X X X X ..... was in fact in possession of higher quantity of stock. Before us, the Revenue has not brought any material on record to controvert the findings of CIT(A). In view of the aforesaid facts, we find no reason to interfere with the order of CIT(A). - Decided against revenue. - I.T. A. No. 745/AHD/2013 - - - Dated:- 22-11-2013 - SHRI MUKUL Kr. SHRAWAT, J.M. SHRI ANIL CHATURVEDI, A.M. Appellant by: Shri P.L. Kureel, Sr. D.R. Respondent by: Shri Rajesh Shah ORDER PER SHRI ANIL CHATURVEDI, A.M. 1. This appeal is filed by the Revenue against the order of CIT(A)-II, Ahmedabad dated 16.11.2012 for A.Y. 2006-07. 2. The facts as culled out from the material on record are as under. 3. Assessee is a firm engaged in the business of trading and exporting of art silk fabrics. It filed its return of income for AY 2004-05 on 31.12.2004 showing total loss of ₹ 16,760/-. The case was selected for scrutiny and thereafter the assessment was framed u/s 143(3) vide order dated 23.11.2006 and the total income was determined at ₹ 57,85,560/-. Aggrieved by the order of AO Assessee carried the matter before CIT(A). CIT(A) vide order dated 16.11.2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as under: 4. I have carefully considered the Assessment Order and submission filed by the appellant. The Assessing Officer has observed that appellant has shown grey stock of ₹ 52,50,000/- of 2,50,000 meters in stock statement submitted to the Bank for the period June 2003 to September 2003 whereas no such stock was shown in books of Account. It was further observed by Assessing Officer that Assessee has purchased grey to the extent of 13,837 metres in the month of October 2003 showed grey stock of 2,63,837.75 meters (2,50,000 + 13837 metre purchased during the month). As appellant has not shown 2,50,000 meters of grey in Books of Account but shown in the stock statement submitted to the Bank, same was considered as unexplained investment in the hands of appellant and addition of ₹ 52,50,000 was made. Further, Assessing Officer has observed that as this stock of grey is not reflected in the closing stock or sales made by appellant, further addition of ₹ 5,25,000/- being 10% profit on this unaccounted sale was estimated. Thus, Assessing Officer has made addition of ₹ 57,75,000/- for unaccounted transactions of purchase and sale of grey. On the ot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s against ₹ 91.76 lacs shown in Books of Account and even similar is the case for August 2003 to November 2003. The appellant has shown higher book stock in all the months in comparison with stock statements submitted to the Bank. While making impugned addition, Assessing Officer has compared only grey stock without making any comparison of processed stock which cannot be accepted as AO cannot adopt or consider the issue which are in favour of it without ignoring the other part which is in favour of Assessee. Even otherwise, on overall comparison of stock submitted to Bank appellant has shown higher book stock hence addition made by Assessing Officer making partial comparison of grey cloth is not justified. Even the appellant has shown the processed stock in the Books of Account for ₹ 91.76 lacs in the month of June and July 2003, ₹ 97.74 lacs in August 2003 and ₹ 91.76 lacs in September and October 2003 but has shown substantially lower stock in stock statement submitted to the Bank which suggests that stock statement submitted to Bank is incorrect, as no prudent businessman would submit lower stock to Bank as it will ultimately affect credit limit of loan. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mere comparison of the stock declared to the bank and the one shown in the books of account, addition could not be made of the difference between the two Further Hon. Rajasthan High Court in case of CIT vs. Relaxo Footware 123 Taxman 322 has held as under: Section 143 of the Income-tax Act, 1961 -Assessment - Addition to income - Assessment year 1992-93 - Tribunal on examination of books of account found that true position of stock was rightly reflected in books of account of assessee and stock statement submitted to bank was deliberately inflated only to get higher limit of credit from bank - Tribunal, therefore, deleted addition made to income on basis of stock statement submitted to bank - Whether finding of Tribunal was a finding of fact and required no interference - Held, yes In view of this fact, it appears that appellant has mechanically reported wrong figures of grey cloth and processed stock which was certainly less than stock as per books of account. Even Assessing Officer has not pointed any corroborative evidence of unaccounted purchase and sale either of grey cloth or processed stock. Stock of grey in running business constantly cannot remain ..... X X X X Extracts X X X X X X X X Extracts X X X X
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