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TMI Blog2022 (2) TMI 1040X X X X Extracts X X X X X X X X Extracts X X X X ..... 17/-. The assessment was completed under section 143(3) of the Act on 31/12/2007 at total income of Rs. 2,80,56,498/-. The return was processed under section 143(1) of the Act on 21/1/2006. The case was selected for scrutiny. Therefore, notice under section 143(2) of the Act dated 16/10/2006 was issued and served upon the assessee in time. 3. The assessee-Company, during the period relevant to assessment year 2005-2006, was engaged in manufacturing and trading of edible oils and grains. It declared its total turnover of Rs. 30,64,07,764/- as against turnover of Rs. 16,56,31,644/-. The NP (Net Profit) for year under consideration was declared at Rs. 6,18,151/- as against NP of Rs. 13,92,831/- declared in the preceding year. The stock statem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct of purchase made, if any. Consequently, the Assessing Officer found the value of stock shown in stock statement submitted to State Bank of India reflecting raw material, stock-in-process and finished goods (opening and closing stock item-wise, quantity-wise, rate-wise and value-wise) far in excess to the value of stock shown in the audit report and the difference was to the tune of Rs. 2,71,47,665/-. The assessee-Company, despite opportunity afforded, could not either reconcile the difference or explain the reasons therefor. Consequently, the Assessing Officer found that the aforesaid difference amount, since was not shown in the books of accounts of the assessee-Company maintained for the year under consideration, therefore, the same wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee to reconcile the unreadable stock position as on 28.03.2005 sent to the Bank with the stock position shown in the balance sheet as on 31.03.2005. That was not done. Hence, the Tribunal, in the fitness of things, set aside the order of CIT(A) remanding the case to the Assessing Officer to again afford an opportunity to the assessee to explain the difference as aforesaid and, thereafter, re-adjudicate the issue in accordance with law. 6. The set aside assessment was framed on 31.03.2013 (Annexure P/4). The Assessing Officer in a tabular format explained the difference of raw material, stock-in-process and finished goods as per bank statement as on 28.03.2005 and as per audit report. The same reads thus:- ISSUES FOR ADDITION The di ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntary evidence in that behalf, the stock details given to the Bank as on 28.03.2005 were found to be actual, in contrast to the stock valued in the audit report for the period ending 31.03.2005 and, therefore, the difference between the two i.e. Rs. 2,71,47,665/- has again been added to the income of assessee under section 69B of the Act. 7. On appeal, the Commissioner in paragraph 5.1.1 of his order dated 22/2/2017 (Annexure P/5) has deleted the addition by referring to a chart indicating stock position as on 28.3.2005 (wrongly typed as 28.03.2008) submitted to the Bank with the stock position as per stock register on 28.03.2005. 8. On appeal before the Income Tax Appellate Tribunal by the Revenue, the Tribunal discussed the issue in par ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d finished goods referring to the books of accounts, balance sheet and audit report and, therefore, proposed a question as to whether the Tribunal was justified in setting aside the order of CIT(Appeal) and allowing the addition made by Assessing Officer as undisclosed income of Rs. 2,71,47,665/- to the income of assessee under section 69B of the Act. In support of his contentions, learned counsel has placed reliance on decision of the High Court of Gujarat in Tax Appeal No. 83/2007 (Commissioner of Income Tax, Rajkot-I Vs. Veerdip Rollers P. Ltd.) affirmed by the Apex Court. 10. This Court has carefully perused the order of Assessing Officer, CIT (Appeal) and Income Tax Appellate Tribunal. As a matter of fact, the entire controversy revol ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nlal Kacharulal Tejmal Vs. CIT (146 ITR 368 (Bom), Pooranlal Raj Kumar Vs. CIT (107 CTR Cal. 27), CIT Vs. A. Yunuskunju (189 ITR 672, Kerala), CIT Vs. South India Rubber Products (166 ITR 687 (Kerala) and Coimbatore Spng. & Wvg. Co. Ltd. Vs. CIT (1974)95 ITR 375, referred to). Once the Assessing Officer finds that there was excess stock, in absence of explanation by the assessee, the conclusion is inescapable that the excess stock, if any, was from undisclosed sources. Further, once the assessee's explanation, if any, has not been accepted, the resultant position is that there was excess stock un-disclosed in the books of accounts and non disclosure was only with a view to suppress the income. Consequently, this Court up-helds the ord ..... X X X X Extracts X X X X X X X X Extracts X X X X
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