2015 (12) TMI 30

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..... n confirming the impugned penalty. 2. The relevant material facts are as follows. During the course of assessment proceedings, the Assessing Officer made, inter alia, the following additions:- (i) Difference in stock as per bank statement vis-a-vis books of the assessee 8,85,620/- (ii) Depreciation on Bangalore display unit 53,348/- (iii) Write off of advances 32,23,000/- 3. It was in this backdrop that the Assessing Officer required the assessee to show cause as to why penalty under section 271(1)(c) not be imposed by treating the above income as concealed income and the income for which inaccurate particulars are filed in respect of which no explanation has been given by the assessee. It was submitted by the assessee that the p .....

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..... tatement vis-a-vis books of accounts and in respect of write off of debts, learned CIT(A) observed as follows:- "As regard penalty on difference between book stock and bank stock, it was specifically asked to the counsel of the appellant whether the difference is on account of value or quantity. Appellant's counsel could not explain the difference on account of higher valuation of stock given to the bank. There are several decisions in which it is held that if the quantity disclosed to the bank is more, it amounts to unexplained stock and addition on account of the same is justified. Since appellant was not able to explain the difference in stock with proper explanation, the addition is deemed to be concealed income as per explanation 1 t .....

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..... officer of this addition also. In the final result appeal is dismissed." 5. The assessee is aggrieved and is in further appeal before us. 6. We have heard the rival contentions, perused the material on record and duly considered facts of the case in the light of the applicable legal position. 7. We find that so far as addition in respect of difference in value of stock in stock statement vis-a-vis accounts of the assessee is concerned, it proceeds on the basis that difference between these two figures represents concealed income. That view is not entirely free from doubt as it is a ground reality that bank statements at times reflect inflated value of stocks so as to avail higher credit limits. There is nothing more than bank statement .....

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