TMI Blog2003 (9) TMI 319X X X X Extracts X X X X X X X X Extracts X X X X ..... ounts. The learned CIT(A) confirmed the addition. The assessee has challenged the confirmation of the addition by the learned CIT(A) before us. 3. We have heard the learned authorised representative Shri Shailendra Bardia and the learned Departmental Representative Shri D.R. Zala and perused the material on record. 4. The learned authorised representative has submitted that the assessee declared stock of Rs. 5,71,117 in his books of accounts. In the stock statement, the assessee has shown a stock of Rs. 7,94,730. The stock statement as submitted to the bank has been valued at the market price and that too on a higher side. The learned authorised representative has further submitted that the assessee has shown this stock on higher value ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... financial help from the bank. The Department is not justified in calculating the price shown in the bank statement referred to as the stock statement submitted to the bank for making additions in this regard. In case the Department has doubts about the value of the stock in question, it could have well verified from the market and then could have come to a conclusion that there is a difference between the market price of the stock and the one declared by the assessee. But in this case, the Department has not carried out any such exercise. 6. The realities of life and the reality of a particular business of a particular assessee while computing the income has to be taken care of. It is brought to our notice that for asst. yr. 1990-91 and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... de adjustments of figures without following any common or correct basis. The assessee during the course of appellate proceedings has tried to state that the numbers of items shown in the inventories tally but as discussed above while the number of items get tallied the assessee had shown different rates for different items which show that the method of stock taking of the assessee is not fool-proof. But the most important point on the basis of which the AO had made the addition is that the assessee had filed inventory of stock with the State Bank of Bikaner and Jaipur as on 31st March, 1989, and according to this inventory the stock as on 31st March, 1989, comes to Rs. 7,94,730. After accounting for the percentage of gross profit from this ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the assessee-firm for the year under consideration compared with the g.p. rate of the immediately preceding year and the AO has not recorded any adverse finding in respect of the same. As such considering all the facts and circumstances of the case and the AO was patently wrong in relying on the stock statement furnished by the assessee to the bank while making the addition under s. 69B. It is thus clear that the AO has not made out a befitting case to establish/prove the tax avoidance on the part of the assessee. Therefore, the impugned order on this issue is reversed and the AO is directed to delete the addition made by him on this count." 8. The learned authorised representative has also relied on various other decisions as given u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lot and instead, examined her mother and on the basis of her statement made the addition. 12. The learned authorised representative submitted that although Kumari Bharti Shahlot has filed confirmatory letter, but the learned AO did not consider the same. Rather, the learned AO relied on the statement of the mother of the said Kumari Bharti Shahlot. According to the learned authorised representative, the learned AO has applied wrong procedure. When confirmatory letter was filed by the said Kumari Bharti Shahlot, she should have been called for confirmation by way of relying on her statement but the learned AO chose to take the statement of the mother of Kumari Bharti Shahlot which according to legal principles is not tenable in the eyes of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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