TMI Blog2023 (7) TMI 1052X X X X Extracts X X X X X X X X Extracts X X X X ..... ifference was taken and added back as income of the assessee. Tribunal held that the order u/s 263 was a good one except the direction for verification of the stock by reason of the PCIT having discovered there was on record inflated stock statement, submitted by assessee to the bank and therefore further verification of stock was necessary. The Tribunal relied on Malabar [ 2000 (2) TMI 10 - SUPREME COURT] for its view that the AO had correctly taken into account the position of stock of the assessee In Malabar (supra), it will appear from above quoted paragraph, the Supreme Court noted that the AO had accepted the entry in the statement of account filed by appellant in absence of any supporting material and without making any inquiry. On t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al upheld the order of revision made by the Principal Commissioner of Income Tax (PCIT), but interfered with the directions inasmuch as it said that the direction in respect of stock differences found from the record does not require further verification. 3. He submits, the PCIT had on record, inflated stock statement submitted by the assessee to the bank. Therefore, the difference is to be treated as unaccounted sales. In those facts, interfering with the decision gives rise to substantial questions of law. 4. He submits, the Tribunal erroneously relied on judgment of the Supreme Court in Malabar Industrial Co. Ltd. v. CIT reported in (2000) 243 ITR 83 (SC), paragraph-11 (Manupatra print). The paragraph is reproduced below. 11. In the inst ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Tribunal finds that there were excess stocks after rejecting the explanation of the assessee, the conclusion is inescapable that the excess stocks should have come from undisclosed sources. As already pointed out, the finding of the Tribunal that there were excess stocks cannot be interfered with by this court, as it is exclusively a matter for the Tribunal to accept or reject the assessee's explanation on the facts and circumstances of this case, We are, therefore, of the view that the Tribunal is justified in taking the view that the excess stocks should represent the income of the assessee from undisclosed sources. (emphasis supplied) He submits, substantial questions of law be framed for admission of the appeal. 6. Perused impug ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the direction for verification of the stock by reason of the PCIT having discovered there was on record inflated stock statement, submitted by assessee to the bank and therefore further verification of stock was necessary. The Tribunal relied on Malabar (supra) for its view that the AO had correctly taken into account the position of stock of the assessee. 10. In Malabar (supra), it will appear from above quoted paragraph, the Supreme Court noted that the AO had accepted the entry in the statement of account filed by appellant in absence of any supporting material and without making any inquiry. On those facts the conclusion, the Supreme Court said, the order of the ITO was erroneous, is irresistible. 11. Moving on to Coimbatore Spinning We ..... X X X X Extracts X X X X X X X X Extracts X X X X
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