TMI Blog2022 (2) TMI 1040X X X X Extracts X X X X X X X X Extracts X X X X ..... r obtaining unjustified gains in the form of higher credit facility or loans etc. by showing incorrect statement of stock position to the Bank. In any case, the burden lies upon the assessee to reconcile the difference of stock position presented to the bank with the stock position mentioned in the books of accounts/audit report. Thus excess stock represented the income of the assessee from undisclosed sources. 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. - Decided against assessee. - Income Tax Appeal No.121/2021 - - - Dated:- 18-2-2022 - Hon. Mr. Justice Rohit Arya And Hon. Mr. Justice Satish Kumar Sharma For the Appellant : Shri Yashovardhan Singh, Advocate JUDGMENT This appeal, under section 260A of the Income Tax Act, 1961 ( for short the Act ), at the instance of assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to 31-03-2005. As such, the same remained un-verified. Likewise, the assessee also failed to produce Mandi tax receipts etc. in respect 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 ₹ 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 was un-explained investment in stock from un-disclosed sources. As a result, the same was added to the total income of the assessee-Company under section 69B of the Act. 4. On appeal before the Commissioner under section 250 of the Act ( for brevity CIT(A) ), though the appellate Authority vide its order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5 Qntls Stock in process Quantity ₹ 4,55,000/- 250.00 Qntls ₹ 21,15,400/- (-)₹ 16,60,400/- Finished goods Quantity ₹ 1,72,93,339/- 12,318.00 Qntls ₹ 51,56,715/- 12318.28 Qntls ₹ 1,21,36,624/- Difference ₹ 2,71,47,665/- The difference of stock amounting ₹ 2,71,47,665/- should be added u/s 69B of the Income Tax Act. Because the stock detail in the bank as on 28.03.2005 was submitted by the assessee only. It appeared the stock valued in the audit report is erroneous and not genuine because assessee could not produce the details of purchase, processing and sale between 28.03.2005 to 31.03.2005. Without any documentary evidence the submission produced by the assessee can not be considered. Assessee was provided full opportunity to produce the documentary evidences regarding difference of excessive stock but he failed to follow the same. So stock as on 28.03.2005 is considered genuine and ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Annexure P/6) are wrong, inter alia contending that the CIT (Appeal) had thoroughly examined the difference of stock of raw material, stock-in-process and 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 ₹ 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 revolves around the question as to whether the assessee has been able to provide explanation for difference of stock between the stock submitted to the bank as on 28/3/2005 and the stock indicated in the audit report for the period ending 31/03/2005 relating to raw material, stock-in-p ..... X X X X Extracts X X X X X X X X Extracts X X X X
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