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TMI Blog2013 (5) TMI 578X X X X Extracts X X X X X X X X Extracts X X X X ..... addition of Rs. 49,68,844/- made by Assessing Officer on account of negative stock. 2. On the facts and in the circumstances of the case Ld. Commissioner of Income Tax (A) has erred in deleting the addition of Rs. 63,628/-. 3. The appellant craves leave for reserving the right to amend, modify, alter, add or forego and ground(s) of appeal at any time before or during the hearing of this appeal." 3. Apropos deletion of addition of Rs. 49,68,844/- on account of negative stock. In this case the assessee is a proprietor of M/s Anand Prakash Ankit Kumar and is engaged in the business of wholesale food grains. The assessee has the domestic turnover of Rs. 51,36,65,913/- and export turnover of Rs. 29,79,81,966/- and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d that the books of accounts of the assessee are audited and all the quantitative details of the food grains are given in Col. No. 28(a) of the Audit Report and all the books of accounts are properly maintained vide column no. 9(b) of the Audit Report. It was further submitted that the Assessing Officer has taken the wrong way of computing the profit because the Assessing Officer has taken the GP rate @ 4.83% and the Assessing Officer has tried to compute stock for each month and has given to the peculiar conclusion that there has been negative stock in the month of February, 2008. It was further submitted that there has been no finding by the Assessing Officer regarding any inflated purchases or unaccounted sales and purchase and sale and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tried to apply this rate of 4.83% in every month and tried to arrive at the closing balance of stock every month. He submitted that the above is totally erroneous approach. He submitted that the proper quantitative stock has been duly culled out from the submissions made before the authorities below and the same was submitted before the Ld. Commissioner of Income Tax (A) in Paper Book Page no. 22. From this Chart, the ld. Counsel of the assessee argued that there is no case of negative closing stock. He further submitted that the accounts of the assessee have been properly maintained; books of accounts have been audited; quantitative details have been duly given and certified by the Auditors. The Assessing Officer has not been able to find ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing Officer noted that from the perusal of the balance sheet and Annexures it was noted that the assessee has taken loans from banks, amounting to RS. 8,32,93,610/- in the form of secured loan and also from other parties, amounting to Rs. 56,20,479/- in the form of unsecured loans. The Assessee has also taken loans of RS. 4,63,90,000/- in his personal capacity and has used it in his business of share trading. The assessee is paying interest thereon, amounting to RS. 1,66,86,977/- to banks and Rs. 2,02,45,961/- to others. Further, the assessee has advanced interest free friendly loans to various parties. This amounts to Rs. 42,52,300/-. The assessee was asked to explain why proportionate disallowance not be made from the interest expenditure ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... om the order of the Assessing Officer and the submissions of the assessee, the Ld. Commissioner of Income Tax (A) noted the following facts :- "The capital account of the assessee shows the opening balance of Rs.2,68,58,924/- and net profit of Rs. 30,98,004/- has been added and the total capital is of Rs.9,82,26,929/- which included the loan of Rs. 6,82,70,000/-. The closing balance of capital is of Rs. 2,41,71,248/- (Rs. 9,82,26,929/- (-) Rs. 7,40,55,681/-) after the drawing of Rs. 7,40,55,681/-. The assessee has unsecured loans and advances of Rs. 56,20,479/- and has given loans and advances of Rs. 42,52,300/-. The assessee has also taken the bank loan of Rs. 7,32,93,609/- and another amount of Rs. 1,00,00,000/-. The assessee has also ta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ers of the Assessing Officer. Ld. Counsel of the assessee on the other hand submitted that Assessing Officer has wrongly arrived the figure of disallowance out of interest. He submitted that the assessee has sufficient own funds out of which the interest free advances has been given. He further submitted that similar disallowances was made by the Assessing Officer in A.Y. 2007-08 and on the similar facts Ld. Commissioner of Income Tax (A) allowed the assessee's appeal. The Revenue has not agitated against the above order of the Ld. Commissioner of Income Tax (A). Hence, the ld. Counsel of the assessee pleaded that the order of the Ld. Commissioner of Income Tax (A) be affirmed. 12. We have carefully considered the submissions and perused t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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