TMI Blog2017 (1) TMI 1241X X X X Extracts X X X X X X X X Extracts X X X X ..... ck item in its relevant books or other evidence. It is thus apparent that the impugned addition is based upon assessee’s stock statement given to the bank as prepared on estimation basis only instead of actual figures. - Decided in favour of assessee Disallowance is of interest expenses - Held that:- We reiterate that the impugned quantum disallowance has been made only on the ground that the assessee had utilized interest bearing fund for non business purposes u/s.36(1)(iii) of the Act. This is not the Revenue’s case that it had not disclosed all the relevant particulars resulting in the impugned disallowance. It is thus evident that the assessee sought to contest Assessing Officer’s show cause alleging diversion of interest bearing fun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 377; 25,32,450/-. Its appeal ITA No.2187/Ahd/2011 for assessment year 2001-02 filed earlier than the former appeal raises two substantive grounds inter alia challenging unaccounted stock addition of ₹ 16,06,680/- along with GP computed there upon of ₹ 7,85,192/- by the Assessing Officer and restricted to that to ₹ 3,04,786/- in the lower appellate proceedings. A combined perusal of the instant case file reveals that this is second round of litigation between the parties before this tribunal. The Assessing Officer had framed a regular assessment in assessee s case on 19.03.2004 adding a sum of ₹ 41,39,130/- in the nature of unexplained excess stock. He arrived at the said conclusion after noticing that the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d like the Assessing Officer to ask the assessee to submit the stock statement furnished to the bank as on the end of the accounting year relevant to assessment years 1999-2000 2000-01 and work out the alleged discrepancy existing in those years and as claimed by him before us. If any quantitative difference is discovered in these two earlier years, then assessment for these two assessment years wi11 be reopened by the Assessing Officer for taxing the discrepancy pertaining to these years. If no such discrepancy in quantity is found in those two years, then no discount is to be given from the discrepancy of the present year and additions as proposed by the Assessing Officer for ₹ 41,39,130/- is confirmed. In case, re-opening of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aggrieved in both the impugned assessment years. 5. We have heard both the parties. Case files perused. Learned counsels strongly reiterate their respective pleadings in the course of hearing. It is evident that the lower authorities have simply gone by stock statement difference in assessee s books as compared to that declare to the above stated co-operative bank totaling to ₹ 41,39,130/- in the first round and the same has been split over in the two impugned assessment years in the latter consequential round subject matter of appeal before us. They don t even refer to a single piece of evidence apart from assessee s stock statement disclosed to the bank which could indicate there has been any excess stock item in its relevant boo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mpugned penalty thus has no legs to stand. The third disallowance is of interest expenses. The Assessing Officer held the assessee to have diverted interest bearing funds to disallow the above interest amount in first round of assessment (supra). This tribunal s order dated 11.09.2009 upheld the same after observing that the assessee s balance sheet at page 59 of the paper book did not demonstrate any capital, reserve or interest free funds. The Assessing Officer thus penalized the assessee by concluding that it had committed default within the meaning of Section 271(1)(c) of the Act without even specify as to whether the same was in the nature of furnishing of inaccurate particulars or that of concealment of income. His only view was that ..... X X X X Extracts X X X X X X X X Extracts X X X X
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