TMI Blog2016 (9) TMI 17X X X X Extracts X X X X X X X X Extracts X X X X ..... the purpose of availing of larger credit facilities, no addition can be made if there appears to be a difference between the stock shown in the books of account and the statement furnished to the banking authorities. If, for the purpose of fulfilling the margin requirements of the bank purely on inflated estimate basis, when the stock statement had reflected inflated value of the stock, in wake of otherwise satisfactory explanation, both - for the purpose of value as well as quantity and taking into account the actual non verification of stock, we find no reason to interfere with the order of the Tribunal. We hold that the Tribunal was right in law in deleting the addition made on account of difference in stock statement as furnished befor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tails and their rates and the stock statement was verified by the assessee. The Assessing Officer therefore made an addition of the difference pertaining to the month where the maximum difference was noted; treated the same as unaccounted investment in stock. On appeal before CIT(A) by the assessee, the CIT (Appeals) allowed the appeal filed by the assessee. 3. On appeal before the Tribunal by the revenue, by impugned order, the Tribunal upheld the decision of CIT(A) and confirmed the deletion of addition. Being aggrieved and dissatisfied with the impugned order passed by the Tribunal, the revenue has preferred the present Tax Appeal for consideration of the aforesaid substantial question of law. 4. The issue involved in the present T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee had been subjected to statutory audit under the Companies Act, 1956 and also tax audit under the Income-tax Act. No errors were found at any stage in the report submitted by these auditors and for the past eight years, the assessee had been following continuously/consistently the method of accounting, as provided under section 145 of the Act, valuing the closing stock and inventory, as provided under section 145 A of the Act. The assessee was also subjected to Excise and VAT and the books of account were found genuine and no discrepancies were found even by the Excise Audit report for the period January 2009 to December 2009 which was carried out by the Excise Revenue Audit Team, wherein the Excise Department, after a detailed scr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Tax Appeal No. 198 of 2003 in the case of CIT vs. Sharp Springs Stapples Co. (P) Ltd observed as under: 10. Insofar as question no.2 is concerned, the assessee has proved on record that the group of companies were maintaining stock at a common place. The stock of the other group concerns were given in the Bank statement. This fact was also brought to the notice of the Bank. Similarly, a letter given by the Bank Manager to the Director of the assessee was on record, which is indicative of the fact that the assessee has informed the Bank regarding common stock position at one place of the sister concerns. In this way, the assessee has duly discharged the onus of explaining the excess stock and the CIT(A) was justified in deleting the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wn in the books of account and the statement furnished to the banking authorities. Similar view has been taken by this Court in Tax Appeal No. 1371 of 2006 vide decision rendered on 12.12.2014. 7.1 It is a settled law that only on account of inflated statements furnished to the banking authorities for the purpose of availing of larger credit facilities, no addition can be made if there appears to be a difference between the stock shown in the books of account and the statement furnished to the banking authorities. If, for the purpose of fulfilling the margin requirements of the bank purely on inflated estimate basis, when the stock statement had reflected inflated value of the stock, in wake of otherwise satisfactory explanation, both - ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
