TMI Blog2006 (5) TMI 70X X X X Extracts X X X X X X X X Extracts X X X X ..... cted to audit u/s 44AB to support the value of closing stock declared to the bank? 3. Whether the Tribunal was justified in upholding the impugned addition on account of variation in the value of closing stock between the value declared in the accounts and the value declared to the bank as made by the assessing authority when the assessing authority did not either follow the value shown in the accounts in full or the value as shown in the bank statement in full?" - We answer the first question in favour of the assessee. We further answer questions Nos. 2 and 3 in favour of the Revenue. - - - - - Dated:- 30-5-2006 - Judge(s) : R. GURURAJAN., JAWAD RAHIM. JUDGMENT The judgment of the court was delivered by R. Gururajan J.- The asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... riation of closing stock declared by the appellant in its return of income and the stock statement given to the bank as on the last date of the accounting year relating to the assessment year 1989-90. The said addition was also challenged by way of an appeal before the Appellate Commissioner. He has filed another appeal in so far as addition of closing stock challenged by way of an appeal before the Appellate Commissioner. The assessee while so doing has also challenged the royalty issue before the Appellate Commissioner. The Appellate Commissioner dismissed the appeal. Aggrieved by the same, the appellant filed a second appeal before the Appellate Tribunal. The Tribunal dismissed the appeal. It is in these circumstances, the appellant is b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the case. He would say that the Commissioner has rightly chosen to set aside the findings on "sham" issue. But, however, learned counsel complains that having come to that conclusion the Appellate Commissioner committed a serious error in restricting the claim to 2 per cent, as against 5 per cent. This finding, according to him, is arbitrary and is unsustainable. Learned counsel further would argue that the Tribunal without applying its mind has chosen to blindly accept the order of the Appellate Commissioner. Per contra, Sri Seshachala, learned counsel for the Revenue would argue that the order impugned in this case is supportable in law on the facts of this case. He would say that the material on record would show that the so-called tra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appellant but also to others. The appellate authority also notices that the firm has a separate and independent status on its own, and that even if the firm was not in existence, the concerned directors in their individual capacity would have claimed royalty from the company if they had passed on any technical know-how to the company. The appellate authority has come to the conclusion on the facts that a sham finding is unsustainable in law. This finding has been accepted by the Department. We are, therefore, of the view that a finding of the appellate authority with regard to the transaction being genuine has to be accepted in the light of the detailed finding given in its order at annexure D to this appeal. The only question for cons ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... No acceptable evidence was placed to disbelieve the bank statement as rightly held by the authorities in the case on hand. In fact, the entire amount shown pertains only to the raw materials. In so far as the raw materials are concerned, the same are required to be supported by various statutory registers as ruled by all the authorities. In the circumstances, despite a strong plea made by Sri Parthasarathi, learned counsel for the appellant, we are unable to accept the argument in this regard. In the circumstances, in the absence of acceptable material, it is not possible for this court to dislodge the findings on the facts particularly in the light of the bank statement which is undisputed by the assessing authority. Hence, we accept the f ..... X X X X Extracts X X X X X X X X Extracts X X X X
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