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2017 (8) TMI 72 - AT - Income TaxAddition on account of difference in stock - Held that:- The assessee is said to be maintaining books of accounts on day to day basis and the purchase and sales were properly vouched. Section 34 of the Indian Evidence Act provides books of accounts, regularly kept in the course of business are relevant wherever they refer to a matter into which the court has to inquire. Thus, entries made in the books of accounts maintained in the ordinary course of business would be relevant evidence and, thus, they would, to some extent, carry with them a presumption of truth. The books of accounts of the assessee had been duly audited as per the requirement of section 44 AB of the Income Tax Act, 1961. The assessing officer has not pointed out any defect in the books of accounts but has simply substituted the value of stock as per books of accounts with the information supplied by the bank although the book results were held to be correct. Moreover, in the instant appeals it is a case of hypothecation and not of pledge and as such the stock is not with the bank. The Tribunal has also, on numerous occasions, held that addition on this account was not justified where the books of accounts or the accounting system had been found to be genuine duly supported by vouchers etc. Thus, addition on account of difference in stock can be made only on the basis of adequate material and not arbitrarily. Admittedly, there was a difference between the value of stock declared to the bank and the stock as per books of accounts but there is no dispute that the assessee had been maintaining proper books of accounts on the day to day basis and the sales and purchases were duly supported with vouchers and there was no finding as to suppression of any purchase or sales - Decided in favour of assessee.
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