9911796707
TMI Blog1971 (3) TMI 43X X X X Extracts X X X X X X X X Extracts X X X X ..... 57 ? " The assessee in this case is Messrs. Gopi Nath Hari Kishan and the assessment year in question is the year 1958-59. The income-tax authorities have proceeded on the basis that the relevant accounting year is from 19th April, 1956, to 7th April, 1957. The assessee carried on business of rice milling, oil crushing and purchase and sale of grain at its head office at Achalda and branch office at Bharthana. In order to carry on the milling operation it maintained stocks of paddy and rice at both the places, which were pledged with the State Bank of India for securing overdraft facilities. The Income-tax Officer noticed that on the date on which the assessee closed its books, they showed that there was 50 mds. of paddy and 2,865 mds. of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e discrepancy mentioned above, the Income-tax Officer concluded that the assessee had suppressed the truth. He observed that the stock outside the books of the assessee was more than double and this proved that a major portion of the assessee's trade was done outside its books. Unaccounted for stock of paddy at the head office and branch office was found to be 2,931 mds. and it was held that the assessee had traded in respect of this stock outside its books. Calculating the value of such goods at an average rate of Rs. 11 per maund, the concealed income of the assessee was worked out as Rs. 32,230. The Income-tax Officer added this amount and brought it to tax as additional profits made by the assessee. The assessee then went up in appeal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e counsel the closing date should have been April 7, 1957). Since the book version of the closing stock as on April 8, 1957, has formed the basis in the assessee's own profit and loss account, and the stock with the bank as on April 8, 1957, were the same as on April 7, 1957, we are unable to accept the stocks as on April 7, 1957. There is no reason why we should not accept the book version of accounts as having been made out up to April 8, 1957 " With this observation the Tribunal dismissed the appeal filed by the assessee without deciding whether the assessee was right in, contending that if the stock position as on 7th April, 1957, was taken into consideration, and the discrepancy worked out on its basis, the value of the discrepant pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 957, and not on 7th April, 1957, and, therefore, there could be no objection if the departmental authorities took the stock position as stated in the assessee's own books as on 8th April, 1957, while determining the extent of business conducted outside the books. In our opinion this contention of the learned counsel for the revenue cannot be accepted. In its appellate order, dated 14th November, 1961, the Tribunal made the following observation : " The Appellate Assistant Commissioner has referred to the closing date as being April 7, 1957. The learned counsel stated that the previous year covered the period April 19, 1956, to April 7, 1957. As to whether this period will constitute the previous year for the assessment year 1958-59 is not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es, if the Income-tax Officer wanted to work out suppressed profits on the basis of the discrepancy between the stock position as shown in the assessee's own books and the bank statement, he should have taken into consideration such discrepancy as on 7th April, 1957, and not on April 8, 1957. In this case there is no dispute that there is no difference between the stock position of the pledged goods as per bank's account as on April 7, 1957, and 8th of April, 1957. The only difference is about the stock as per the assessee's own books as on 7th and 8th April, 1957. In our opinion, in order to calculate the extent of suppressed income of the assessee on the basis of the discrepancy between the assessee's stock books and the account of pledge ..... X X X X Extracts X X X X X X X X Extracts X X X X
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