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2018 (2) TMI 1598 - HC - Income TaxRejection of books of accounts - difference in stock statement - Held that:- There was no dispute that the addition had been made only on the ground of inflated statements furnished to the bank authorities for the purpose of availing larger credit facilities and was of the opinion that no addition can be made only on such basis. Tribunal further observed that it was an acceptable position in the commercial world that whenever cash credit facilities are availed by a businessman from the banks, to safeguard his cash credit limit, inflated stock statements are supplied to the banks for the purpose of fulfilling the margin requirements of the bank. Tribunal was of the view that no addition should be made on such count and dismissed the appeal filed by the revenue and allowed the cross objection filed by the assessee. Difference in stock statement was as regards the value of the stock and not the quantity thereof. Insofar as the value of the stock is concerned, as noted by the Tribunal, the value shown in the books of account was at cost or market price, whichever is lower and the value adopted for the stock statement supplied to the bank was at market price. Inflated statements came to be furnished to the bank authorities for the purpose of availing larger credit facilities, wherein the value of the stock was inflated. In the absence of any difference in stock in the statements furnished by the bank and in the books of account, the Tribunal was justified in holding that no addition could be made based upon the statement supplied to the bank.
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