2011 (9) TMI 1056 - AT - Income Tax

Summary

Issues involved: Appeals by Revenue regarding addition on the difference between real declared book stock and inflated stock furnished to the bank for assessment years 2000-01, 2001-02, 2002-03, and 2008-09.

In the judgment by the Appellate Tribunal ITAT CHENNAI, the case involved the assessee, a dealer in sanitary wares, who inflated stocks for a higher loan limit. A search under Section 132 of the Income-tax Act, 1961 was conducted, revealing no unaccounted excess stock. However, the Assessing Officer (A.O.) added the difference between real declared book stock and inflated stock, leading to additions in subsequent years. The Tribunal directed the A.O. to decide the issue based on previous orders. The Tribunal found that the burden was on the Revenue to prove the submitted stock was erroneous, and as no mistake was detected, the issue was decided in favor of the assessee for assessment year 2002-03. It was argued that the issue was covered by a previous Tribunal order for assessment year 2001-02, and accordingly, the appeal of the Revenue was dismissed.

For assessment year 2008-09, a similar issue was involved, and based on similar reasoning, the appeal of the Revenue was also dismissed. Therefore, both appeals filed by the Revenue were ultimately dismissed by the Tribunal. The order was pronounced on 8th September, 2011.