TMI Blog2019 (1) TMI 1528X X X X Extracts X X X X X X X X Extracts X X X X ..... at the bank statement was submitted by the assessee showing estimated stock only. The stock was not pledged before the bank but hypothecated to avail the large margin of Drawing Power. The AO has not made any independent enquiry to establish his case that he was also in a position of any such evidence of negate that the purchase and sales made by the AO were not correct. Hon'ble Gujarat High Court in the case of CIT vs. Arrow Exim Pvt. Ltd. [2010 (1) TMI 769 - GUJARAT HIGH COURT] wherein it was held that where there was discrepancy between stock as per books of accounts and that shown in the statement given to bank allegedly to obtain higher credit facilities, Tribunal had accepted explanation given by assessee and in that context had stated that when books of accounts or accounting system had been found to be genuine supported by vouchers, etc. , addition was not justified. - Decided in favour of assessee. - I. T. A. No. 2435/Ahd/2016 - - - Dated:- 29-1-2019 - SMT. DIVA SINGH, JUDICIAL MEMBER AND SHRI O. P. MEENA, ACCOUNTANT MEMBER For The Assessee : Shri Rasesh Shah CA For The Revenue : Shri P. S. Choudhary Sr. DR ORDER PER O . P ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the final figure audited financials and corroborated by the ledger accounts and bank accounts to the satisfaction of the ld. AO. The assessee has not done this exercise before the ld. AO or even in the appellate proceedings. The two different accounts found, it is onus of the assessee to prove which account is correct to the satisfaction of the AO by corroborating the same with independently verifiable evidences such as bank accounts. Therefore, the explanation of the assessee was not found acceptable, accordingly this addition was confirmed. 6. Being aggrieved, the assessee has filed this appeal before us. The ld. Counsel for the assessee reiterated the submissions made before the Lower Authorities whereas on the other hand the ld. Sr. DR submitted that the assessee is not able reconcile the debtors list given to the bank and as reflected in audited accounts with corroborative evidences. Therefore, Lower Authorities are justified in making such addition. 7. We have heard the rival submissions and perused the material on record. It is seen that the assessee is not able to reconcile with corroborative evidences i. e. copy of ledger accounts etc. , to prove that the figure ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... practically difficult for the assessee to provide exact and perfect data to the bank on monthly basis and that too within a short span of time allowed by them. It was further submitted that the books of accounts of assessee are duly audited u/s. 44AB of the Act and no defects were pointed out by the AO in the books of accounts nor the books of accounts were rejected. The assessee has also placed reliance on the decision of Hon'ble Gujarat High Court in the case of CIT vs. Riddhi Steeel and Tube Pvt. Ltd. [2014] 220 taxman 148 (Guj) (HC) and CIT vs. Arrow Exim Pvt. Ltd. , [2010] 230 CTR 293 (Gujarat) (HC). However, the CIT(A) observed that the detailed stock statement furnished by the assessee to the bank for availing loan / credit is accepted by the bank after making due enquiry and due diligence. Hence, such stock statement cannot be brushed aside as a fictional document. The assessee has failed to do any reconciliation of the two stock statements before the AO as well as during the appellate proceedings. The AR s alternative plea that yarn is used for manufacturing Grey Cloth so adding both excess consumption of yarn and excess sale of Grey Cloth amounts to double addition. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... had accepted explanation given by assessee and in that context had stated that when books of accounts or accounting system had been found to be genuine supported by vouchers, etc. , addition was not justified. Tribunals finding need not call for any interference, therefore, the deletion of addition was justified. In another case of CIT vs. Veerdip Rollers (P) Ltd. 323 ITR 341, the Hon'ble Gujarat High Court has held that addition on account of difference in the value of inflated closing stock furnished to the bank and as per the books of accounts furnished to Income Tax Authorities, addition u/s. 69B could not be sustained. 12. Per contra, the ld. Senior Departmental Representative (Sr. DR) supported the orders of the Lower Authorities. 13. We have heard the rival submissions and find that the books of accounts of the assessee are audited u/s. 44AB of the Act and no adverse comments has been made by auditor in his report. Moreover, the AO has also not pointed out any defects in the maintenance of books of accounts of the assessee nor has pointed out any irregularities in the books of accounts, further, the books of accounts duly reflected purchase and sales and month wis ..... X X X X Extracts X X X X X X X X Extracts X X X X
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