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TMI Blog1980 (2) TMI 131X X X X Extracts X X X X X X X X Extracts X X X X ..... Rs. 15,000 between the value of the stock as per books and the value as determined by the Commercial Taxes Officer. As this difference could not be explained, a notice under s. 22(6) of the Commercial Taxes Act, was issued to the assessee in response to which it was prayed by the assessee that the excess stock may not be seized and the assessee agreed to pay fine of Rs. 3,000. The penalty for Rs. 3,000 was imposed by the CTO by his order dt. 11th Sept., 1974. The ITO asked the assessee to explain as to why on this account addition in the assessment should not be made. In reply it was submitted that an appeal has been filed against the CTO's order dt. 11th Sept., 1974 imposing a penalty of Rs. 3,000. It was further stated that the Commercia ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nor the alleged excess goods valued at Rs. 15,000 had been seized. It was also stated that the order of the Dy. Commissioner, Commercial Taxes, was upheld even by the Board of Revenue. Copies of the orders were filed by the AAC. 4. The ld. AAC considered these submissions and he deleted the addition of Rs. 13,575 with the following observations: "I have considered the arguments of the ld. Advocate of the assessee and have also gone through the order of the ITO and also the order dt. 11th Sept. 1974 of the Commercial Taxes Officer, Ajmer. He has mentioned in the order that after checking the stock of the assessee he found that the assessee had closing stock worth about Rs. 97,000 but in the account books of the assessee the said stock a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ified in treating the alleged stock of Rs. 15,000 as the assessee's stock acquired by the firm by investing a sum of Rs. 13,575 from undisclosed sources and treating the said amount as assessee's income from undisclosed sources. The addition of Rs. 13,575 is, therefore, deleted". 5. Against the decision of the AAC, the Revenue has come up in appeal. It is vehemently urged by the ld. Deptl. Rep. that before the Commercial Taxes authorities the assessee had accepted that while the stock as per books was of the value of Rs. 82,000 the correct value of the stock in the assessee's possession was Rs. 97,000 and, therefore, to the extent of Rs. 15,000 the excess stock was unaccounted for. The assessee, it was emphasised, had even to pay fine of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rawn that it represented only suppressed stock which was not accounted for in the books. The ld. counsel further urged that in order to reach the conclusion that the assessee had undisclosed stock in its possession, it was necessary that the stock was weighed and valued itemwise and compared with the stock as per books. This, however, had not been done. Therefore, even if the value estimated by the Commercial Taxes authorities exceeded the assessee's figures by Rs. 15,000 it could not be said that there was excess stock which had been purchased out side the books of account. Our attention was also drawn to the fact that the assessee never mentioned in the books of account the weight of the goods. If that was so, the figure of the stock with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e value of the goods was mentioned. In such circumstances all that could be said at the most was that the estimate of the authorities of the value of the stock was Rs. 97,000 while according to the assessee's books the value was Rs. 82,000. The manner in which the value of Rs. 97,000 was fixed is a mystery. In the absence of an inventory showing the various items and weight, a proper estimate of value could not be made. It is undisputed that no such inventory was made. This being the position it could not be said that the estimate of the stock at Rs. 97,000 was a proper estimate. This takes away the very basis for the addition made by the ITO. 8. It has been urged that the assessee itself agreed to pay a fine of Rs. 3,000 so that the exce ..... X X X X Extracts X X X X X X X X Extracts X X X X
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