TMI Blog1998 (9) TMI 27X X X X Extracts X X X X X X X X Extracts X X X X ..... n its books of account. The Income-tax Officer thought that the figures relating to the value of the stocks in the book could not be regarded as the correct value of the stocks as the assessee had given a declaration to the bank from which it had obtained overdraft facilities and in its declaration valued the stock at a figure higher than that in the books of the assessee. The Income-tax Officer computed the difference between the value as recorded in the books and that found in the declaration to the bank and treated the same as income from undisclosed sources. The assessee had contended that the value of the stocks as stated by him in the declaration given to the bank was inflated, that he had not suppressed that value of the stock, and t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4] 95 ITR 375 (Mad). Counsel for the Revenue relied on the decision in Coimbatore Spinning and Weaving Co. Ltd. v. CIT [1974] 95 ITR 375 (Mad), wherein the court observed that the alleged practice said to be followed by business houses of declaring larger stocks to the banks for the purpose of getting higher loans or overdraft facilities has neither been shown to exist nor recognised in commercial circles or by courts and even assuming that such a practice exists, the Tribunal is not expected to take judicial notice of such substandard morality on the part of the assessees so as to enable them to go back on their own sworn statements given to the banks as to the stocks held or hypothecated by them in the banks. We find it a little dif ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t reached by the Tribunal can be sustained. The Division Bench in that case accepted the argument that was advanced by the Revenue that the question whether an explanation offered by the assessee is acceptable or not is a pure question of fact, and that this court is not entitled to examine the correctness of such a finding on a reference. On the facts of that case, the Tribunal had rejected that explanation and this court after examining the facts upheld the rejection. Here the situation is reversed. The Tribunal has accepted the explanation of the assessee and it is the Revenue which wants that order of the tribunal to be set aside on the ground that the explanation could not have been accepted. The rejection of the explanation was a matt ..... X X X X Extracts X X X X X X X X Extracts X X X X
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