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2023 (7) TMI 1052 - ORISSA HIGH COURTValidity of Revision u/s 263 - as per ITAT direction in respect of stock differences found from the record does not require further verification - HELD THAT:- The facts are, the assessment had been made on basis of audit report and copy of ledger bank statements etc., in absence of books of accounts. There was discrepancy found by the AO in taking into account difference of stock found during course of survey. It must be remembered that a survey is finding on physical verification, by survey. Hence, the difference 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 those facts the conclusion, the Supreme Court said, the order of the ITO was erroneous, is irresistible. Moving on to Coimbatore Spinning & Weaving Co. Ltd [1973 (3) TMI 27 - MADRAS HIGH COURT] it is seen that the Division Bench in the Madras High Court took view earlier in point of time, consistent with view taken by the Supreme Court in Malabar (supra). It said, once 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. It is evident that the Tribunal, in that case, found existence of stock as unexplained. Here, the Tribunal noted that the PCIT had only come upon an inflated stock statement and there was no inquiry or verification in respect thereof. No substantial question of law arises
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