TMI Blog2017 (7) TMI 728X X X X Extracts X X X X X X X X Extracts X X X X ..... tion of the inflation of quantity of stock material in view of this the reliance placed by the revenue on all those decision does not help its case. Ground No. 1 of the appeal of the revenue is dismissed - ITA No.1032/De/2014 - - - Dated:- 7-2-2017 - SHRI H.S.SIDHU, JUDICIAL MEMBER AND SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER For The Appellant : Ms. Rachna Singh, CIT DR For The Respondent : Sh. KVSR Krishna, CA Sh. Nirdesh Garg, Adv. ORDER PER PRASHANT MAHARISHI, A . M . 1. This is appeal filed by the revenue against the order of the ld CIT (A)-V, New Delhi dated 21.11.2013 for the Assessment Year 1999-2000. 2. The revenue has raised the following grounds of appeal:- 1 . 1 On the facts and in the circumstances of the case, the ld CIT ( A ) has erred in deleting of Rs . 113905000 /- made by the Assessing Officer on account of excess stock . 1 . 2 On the facts and in the circumstances of the case, the ld CIT ( A ) has erred in deleting the said addition made by the Assessing Officer ignoring the fact that the assessee could not substantiate the different between the stock reported to the bank and the stoc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in case of Dhansiram Agarwalla V CIT 201 ITR 192, Hon ble Madras High Court in case of Coimbatore spinning and weaving company Ltd versus CIT 95 ITR 375, Hon ble Karnataka High Court in case of Recon machine tools private Ltd versus CIT 286 ITR 637, Hon ble Andhra Pradesh High Court in case of CIT versus mopeds India 173 ITR 347 and Hon ble Bombay High Court in case of Molmould Corporation versus CIT 202 ITR 789. 5. The Ld. authorized representative first referred to the para No. 11 of the order of the coordinate bench where from the issue has been restored back to the file of the Ld. CIT appeal. According to him, the matter was restored to the file of the Ld. CIT appeal was with respect to the bank statement and excise records with both of whom are official records and their needs to be verified and therefore a specific finding is required to be given. Accordingly the Ld. CIT (A) was directed to give the assessee are reasonable unfortunately of hearing and to produce the evidence to show that what is stated in the stock statement submitted to bank was not correct in what is stated in the account book is correct. He further referred to a comparative chart of opening and closing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rrect. He specifically less stress on page No. 45 of the paper book. He further referred to para No. 9 of the order of the learner CIT appeal wherein it is been mentioned by the assessee in written submission before him that on 10/03/1998 the closing stock of the sober for the season of 96-97 was 3.365 quintiles only he stated that these are the different dates then the dates on which the stock have been submitted to the bank. Therefore he submitted that according to the Ld. assessing officer the differences arising is correctly calculated and the Ld. CIT appeal has erroneously held that the differences only for three quintiles. 7. We have carefully considered the rival contentions. In the present case the reopening has been initiated by the Ld. assessing officer after completing the assessment under section 143 (3 wide order dated 28/03/2002, on receipt of information received from Central bank of India on the ground that assessee has understated the sugar stock by 87191 bags in the books is against the stock reported to the bank by way of pledge. This resulted into the addition of the above sum of ₹ 11.39 crores in the hands of the assessee. The fact that remained uncont ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... acked by the RG - 1 register and in Form 3CD duly audited by the auditors . The sum and substance of the argument of the appellant is that the stock statement submitted before the bank is for the limited purpose for obtaining credit limit and that beyond this no further value should be attached to this statement . The appellant has placed heavy reliance on the RG - 1 Register maintained by the appellant under the Central Excise Regulations for day - to - day production of sugar and removal thereof from the factory premises / warehouses, on day to day basis . That the Register is duly verified by the Excise Inspector as evidenced by the verification available on the register itself . The AO in his order u / s 143 ( 3 ) / 147 has also noted that appellant vide letter dated 15 . 12 . 2006 filed submissions before the AO including copies of the Excise Register namely RG - 1 and for BISS quantity ( sub - standard sugar ). On the perusal of the RG I registers the opening stock of sugar as on 1 . 4 . 1998 is 3,84,300 Qtls . This comprises of stock of season 1996 - 97 at NIL, and for season 1997 - 98 at 3,84,300 Qtls and closing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... would be improper to place reliance on the book stock for opening balance and in the same breadth the bank statement for closing balance . Therefore, the opening stock of sugar ( which has been duly verified by the Central Bank of India vide letter dated 2 . 9 . 2013, in response to notice u / s 133 ( 6 ) of the Act ) as well as the closing stock of sugar, if both are considered as per the statement given to the bank then what remains is quantitative difference of only 3 Qtls . of sugar which is practically negligible . Therefore seen from this perspective too there is no ground for making addition to income on account of excess stock of sugar in the previous year relevant to this assessment year . These facts also lend credence to the submission of the appellant that the statement of stock pledged with the bank is only for availing financial credit . Consequently, the addition of Rs . 11,39,05,000 /- made by the AO on account of excess stock on basis of bank statement per se is not tenable and therefore the AO is directed to delete the same . 8. According to us, ld CIT (A) has correctly stated that during the year there is onl ..... X X X X Extracts X X X X X X X X Extracts X X X X
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