TMI Blog2001 (3) TMI 227X X X X Extracts X X X X X X X X Extracts X X X X ..... Rs. 1,83,044 between the stock as per stock register and the stock statement given to the bank. The explanation of the assessee was that in reality, there was no difference and the statement was given to the bank with a view to cover the prescribed margin for loan purposes. According to the assessee, some time stock as per stock register was much higher than declared to the bank. Further, no defect in the accounts were noticed. However, the said explanation of the assessee was not accepted. It was also observed by the A.O. that "the bank authorities do survey and examine the real stock". Accordingly, the addition was made. The detail of discrepancy in the stock for various months were enclosed along with the assessment order. The appeal wi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ely, it was submitted by him that the Assessing Officer was not justified in adding up all the discrepancies for making the addition. If any addition is required to be made, then only peak amount should be assessed. On the other hand, the ld. Sr. D.R. has strongly supported the order of CIT(A). He drew our attention to the audit report to show that the stock was never verified by the auditors. Further, it is not the case of an ad hoc addition and the figures given by the assessee are very specific. Further, there is no material to show that the stock was verified by any authority at any point of time. He relied on the decision of Madras High Court in the case of Coimbatore Spg. Wvg. Co. Ltd. for the preposition that substandard morality s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... leges that the bank statement is incorrect, then, he must establish the same by bringing on record the direct or circumstantial evidence. In our opinion, the assessee cannot get away just by stating that statement of stock was given to the bank to avail the higher overdraft facility. If, such contention of the assessee is accepted, then, it would encourage the sub-standard of morality opposed to public policy. Such contention has been rejected by the Hon'ble Madras High Court in the case of Coimbatore Spg. Wvg. Co. Ltd. by observing as under: "The alleged practice said to be followed by business of declaring larger stocks to the banks for the purpose of getting higher loans or overdraft facilities has neither been shown to exist nor rec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ied to the present case. Similarly is the position with the decision of Gauhati High Court in the case of Dhansiram Agarwalla. However, the decisions of Allahabad High Court, in the case of Swadeshi Cotton Mills Co. Ltd. and in the case of Century Foams (P.) Ltd. do help the case of revenue. 6. The decision of Madras High Court in the case of Sri Padmavathi Cotton Mills relied upon by the counsel for the assessee has not taken the view contrary to the view taken by the Madras High Court in the case of Coimbatore Spg. Wvg. Co. Ltd. In that case, the Tribunal on the facts held that in the absence of any defect in the books of account, no addition could be made on account of difference in stock. The question before the High Court was wheth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ies. The said decision cannot be applied to the facts of the present case, since, no such material has been brought on the record by the assessee. 8.1 The decision of the Chandigarh Bench in the case of Harpreet Industries is a case where the stock statement to the bank was given on estimate basis. However, in the present case, the exact quantity had been given by the assessee on various occasions which are relevant for making the addition. For example, one of the relevant entries on the basis of which the addition has been made is the stock statement of polyester virgin fibre for the month of October, 1990 wherein the stock as per the register was 10,266 kgs. while, the stock as per bank statement was 11,078 kgs. The difference was 812 k ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
