TMI Blog2023 (6) TMI 47X X X X Extracts X X X X X X X X Extracts X X X X ..... 15th October, 2007 we find that there is absolutely no reference to the remand report. Whether the assessee could be taxed based upon the inflated stock shown in the stock statement submitted to the bank? - This issue is no longer res integra and has been decided in the Commissioner of Income Tax vs. N. [ 1998 (9) TMI 27 - MADRAS HIGH COURT] as held that the assessee s income is to be assessed by the income tax officer on the basis of the material which was required to be considered for the purpose of assessment and ordinarily not on the basis of the statement which the assessee may have given to a third party unless there is material to corroborate that statement of the assessee given to a third party, even if it be a bank. Mere f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Tax Act, 1961 (the Act for brevity) is directed against the order dated 11th September, 2009 passed by the Income Tax Appellate Tribunal, A Bench, Kolkata (the Tribunal) in M.A. No.173/Kol/2008 for the assessment year 2004-05. The appeal was admitted on 11th February, 2010 on the following substantial questions of law: (i) Whether on the facts and in the circumstances of the case, the order of the Learned Tribunal was erroneous in so far as it was perverse having been passed without considering the ground that the remand report furnished by the respondent before the C.I.T. (Appeals), was ignored by the CIT (Appeals)? (ii) Whether on the facts and circumstances of the case the order of the Learned Tribunal was erroneous in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y of the inspection report of the bank should be forwarded. (iii) A copy of the stock statement filed by the appellant with the bank during the F.Y. 03-04 should also be forwarded. The Assessing Officer in his remand report dated 20th March, 2007 clarified the issues in the following terms: As directed I am to report as under for your kind perusal 1. (i) Sri Ghosh, during the course of hearing stated that the assessee maintained stock register during the relevant period and stock shown in the account was as per stock register and stock summary enclosed with the audit report reflects closing stock as on 31.3.2004. (ii) During the course of assessment proceedings the bank was asked to furnish details in respect of CC ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... imit, submission of stock statement before the bank is a routine affair and the same should not be taken seriously. It was further stated that the stock declared to the bank purely on estimate basis and the bank relied upon the stock statement, granted cash credit facility and never physically verified whether physical stock tallies with the stock statement. The CIT(A) did not take into consideration this aspect of the matter. The legal issue is as to whether the assessee could be taxed based upon the inflated stock shown in the stock statement submitted to the bank. This issue is no longer res integra and has been decided in the Commissioner of Income Tax vs. N. Swami reported in (2000) 241 ITR 363 (Mad.). In the said decision it was held ..... X X X X Extracts X X X X X X X X Extracts X X X X
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