1983 (3) TMI 103 - AT - Income Tax

Summary

Issues:
- Dispute over deletion of unaccounted stock value from bank pledge
- Validity of affidavits and supporting evidence
- Interpretation of pledge certificate statement
- Comparison with previous tribunal decision

Analysis:

1. The main issue in this case is the disagreement over the deletion of a sum representing the value of unaccounted stock pledged with the bank. The revenue contended that the CIT(A) erred in deleting the amount, arguing that the goods pledged were admitted to belong to the assessee-firm based on a certificate submitted to the bank. This led to an addition of Rs. 4,06,560 as unexplained income chargeable to tax under section 69 of the IT Act.

2. The CIT(A) considered various pieces of evidence, including affidavits, account copies, and a bank certificate, to support the assessee's claim that the stocks belonged to sister concerns and not the assessee. The CIT(A) emphasized the need to evaluate the totality of circumstances in such cases of circumstantial evidence and ultimately deleted the disputed amount based on the combined effect of the evidence presented.

3. The revenue disputed the CIT(A)'s decision, arguing that the assessee's statement in the pledge certificate to the bank should be conclusive. The Departmental representative relied on a previous case to support the position that contradictory statements should not be accepted. However, the assessee's counsel referenced a previous tribunal decision that supported the assessee's position based on similar circumstances.

4. The Tribunal, after considering all the facts and submissions, upheld the CIT(A)'s decision. The Tribunal highlighted the importance of the pledge certificate statement made by the assessee to the bank, emphasizing that such declarations should not be easily dislodged by subsequent evidence. The Tribunal also pointed out various factors that supported the assessee's claim, including the involvement of sister concerns, affidavits with permanent account numbers, and the flow of funds related to the pledged goods.

5. The Tribunal concluded that the burden of proof had been discharged by the assessee in showing that the goods pledged actually belonged to the sister concerns and not the assessee. The Tribunal found no reason to disturb the CIT(A)'s decision, as it was based on a thorough analysis of the evidence and the specific circumstances of the case. Therefore, the revenue's appeal was dismissed, affirming the deletion of the disputed amount from the assessment.