TMI Blog2003 (4) TMI 52X X X X Extracts X X X X X X X X Extracts X X X X ..... t considering the facts of the case especially when it was an admitted fact that there existed difference in stock as per bank statement furnished to the bank and the stock register maintained by the assessee ?" - No material was produced by the Department to show that the assessee had deliberately over-valued the stock for the purpose of securing higher credit from the bank. Therefore, the so-called discrepancy in the bank statement and the account books could not be made the basis for making additions in the declared income of the assessee - - - - - Dated:- 25-4-2003 - Judge(s) : G. S. SINGHVI., S. S. GREWAL. JUDGMENT The judgment of the court was delivered by G. S. SINGHVI J. - In this appeal under section 260A of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ions. . The Revenue challenged the appellate order before the Income-tax Appellate Tribunal, Amritsar Bench, Amritsar (for short, "the Tribunal"), in I. T. A. No. 538/ASR of 1992. After hearing the representatives of the Department and the assessee and examining the record, the Tribunal confirmed the order passed by the Commissioner of Income-tax (Appeals). Dr. N. L. Sharda argued that the Commissioner of Income-tax (Appeals) committed a serious illegality by deleting the additions made by the Assessing Officer despite the fact that the entries contained in the bank statement and the books of account regarding the value of the paddy were at a variance and the explanation given by the assessee was wholly unsatisfactory. He relied on orde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and the concerned clients, whereas the position of the stock as reflected in the stock register is relevant to many other authorities. These are checked and verified by some Government agencies like civil supplies department, sales tax authorities, etc. As mentioned in the assessment order the Assessing Officer did examine the books of account and no discrepancy was noticed. The only discrepancy pointed out is that stocks mentioned in the bank statement differ from the stock available as per stock register. Now the issue is whether the stock statements given to the bank are more reliable than the books of account which have been test checked by the Assessing Officer and have relied upon otherwise. Counsel of the appellant-firm has given r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ,180 quintals the remaining discrepancy even as per calculation of the Assessing Officer would be 2,795 quintals. For this the appellant has given a reasonable explanation that since the stock was being shown only of paddy in the bank statement and were being valued at a lower rate the quantity might have been inflated. Thus, the appellant-firm has been able to furnish a reasonable explanation regarding the difference in quantity in the bank statement furnished to the bank, in such circumstances when it is clear that statements had been furnished to the bank in an ad hoc manner much reliance should not be placed on these statements. Regarding the reliability of the books of account the Supreme Court had an occasion to consider this issue in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... th the Tribunal that he did not commit any illegality by deleting the additions made by the Assessing Officer. The decision of the Supreme Court on which reliance has been placed by Dr. Sharda is clearly distinguishable. In that case, the Gauhati High Court had, on a consideration of the material before it, came to the conclusion that the assessee had made over valuation of the stock for the purpose of securing larger credit from the bank and held that it was liable to be assessed at a higher income. This view was approved by the Supreme Court while dismissing the S. L. P. filed by the assessee. Likewise, in the case of Devgon Rice and General Mills v. CIT [2003] 263 ITR 391 (P H), one of us (G. S. Singhvi J.) held that there was a discre ..... X X X X Extracts X X X X X X X X Extracts X X X X
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