TMI Blog1994 (7) TMI 61X X X X Extracts X X X X X X X X Extracts X X X X ..... disclosed to the bank and the stock as reflected in the books of account ? " The present application relates to the assessment year 1978-79. The brief facts of the case are that the assessee is a registered firm and was engaged in the business of running a rice mill. The assessee had an overdraft facility with Bareilly Corporation Bank, Bisalpur, District Pilibhit. The original assessment in this case was completed on March 25, 1986, by making an addition of Rs. 3,78,270 as unexplained investment in 4,203 quintals of paddy as on November 8, 1977. The Appellate Commissioner deleted the addition, and the Revenue went in second appeal to the Income-tax Tribunal. The matter was restored to the assessing authority by the Tribunal to cross-ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appellate authority deleted the same to the tune of Rs. 3,78,270. The said addition was also maintained by the Tribunal. The Revenue being aggrieved has filed the present application before this court for referring the aforesaid question. The reliance placed upon the statement of Sri Ram Pal by the first appellate authority to disbelieve that the bank officers made inspection of the stock was sought to be challenged. The statement to the effect that the stock was inflated in order to avail of higher credit facilities to help the firm to obtain larger credit should not have been considered, for which the reliance was placed on the case of Coimbatore Spinning and Weaving Co. Ltd. v. CIT [1974] 95 ITR 375 (Mad) (headnote) : " The alleged ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . " From a perusal of the aforesaid decision, it is true that in order to obtain higher credit, the figures given by the assessee are generally inflated ; of course, that is subject to scrutiny by the bank officials. However, in a case where the only evidence on record is the inflated figures given by the assessee and during the assessment proceedings he wants to wriggle out of the said figures on account of their being inflated, in such contingency, we feel that the observation in the case of Coimbatore Spinning and Weaving Co. Ltd. [1974] 95 ITR 375 (Mad) is fully justified. In such a case, it is not proper for the income-tax authority to take judicial notice of such inflated figures, which stands on sub-standard morality on the part of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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