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TMI Blog2015 (4) TMI 585X X X X Extracts X X X X X X X X Extracts X X X X ..... d in the quantity of copper2 under-process. While book figure of the copper scrap as on 31.03.2007 was at 3.0 Metric Tons (MT), that furnished to the bank as on that date was at 5.7 MT. On being inquired in the matter, it was explained by the assessee that the figure as supplied to the bank was tentative and provisional. The same was sought to be supported by the fact that while the valuation of copper as made in the inventory submitted to the bank was at Rs. 276.74 per kg., its actual cost was Rs. 319/- per kg., which was accordingly applied for valuing the closing stock of copper while finalizing the balance sheet. No cognizance, accordingly, it was prayed, be taken of the said discrepancy. The same was not accepted by the Assessing Officer (AO) as the assessee was maintaining day-to-day stock register for the purpose of excise duty. There was accordingly no basis for it to say that the stock statement furnished to the bank, which was on 17.04.2007, i.e., over two weeks after the closing date, was at a provisional figure. Lending credence to the said explanation would, rather, imply that the stock register and/or record maintained by the assessee is not reliable, so that its' boo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wever, omits or fails to do so, and throughout. This, rather, is the Revenue's case, with the A.O. stating that not so doing, i.e., adopting the quantity as furnished to the bank, would imply not relying upon and, consequently, rejection of the assessee's books of account (also refer para 2 above, as well as paras 3.2 and 4.3 of the assessment and the impugned order respectively). That is, the assessee, by not furnishing its' stock records, which it contends to form the basis of its final accounts, acts contrary to its own explanation (i.e., for the purported excess stock), defeating its case. Even the audit confirmation under excise law, as produced (PB pg. 72), is a blank page, and therefore to no avail, even as was observed by the Bench during the course of hearing, wondering as to why in that case the same stands adduced, to no reply or answer by the ld. AR. 3.2 The assessee's plea as to the bank stock being provisional, is, again, infirm, for the same reason/s. Firstly, if that is so, how is it, then, that the stock quantity of all other items matches with the book stock (refer PB pgs.33-34 and 48)? Two, a provisional figure, by definition, only implies a figure which is yet ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4.2007 (PB pgs. 35-46), reveals in fact a credit balance of Rs. 95,67,128/- as on 31.03.2007 (PB pg. 38), so that the assessee, instead of a borrowing, has, on the contrary, a positive balance, with the bank (which alone is relevant) as on that date. Without prejudice, even the book figure, i.e., as per the assessee's accounts, reflects a borrowing of Rs. 503.37 lacs in the cash credit account with the bank, i.e., against hypothecation of stock and book debts, which are at Rs. 57.93 lacs and Rs. 763.99 lacs respectively as on 31.03.2007 (refer the relevant schedules to the balance-sheet, at PB pgs. 16,18 & 19), so that the assessee has adequate margin, and did not require to manipulate its stock figure to the bank so as to enable availment of a higher credit. In fact, as stated by it; there being also a difference in valuation (which though has been - and rightly so - ignored by the Revenue), the net difference between the value of the stock as per the balance-sheet and that furnished to the bank, is only to the tune of Rs. 1 lac, i.e., Rs. 1,00,475/- to be precise (PB pg. 49). Further, even considering the impact of the impugned difference of 2.7 MT, the same would work to Rs. 6.9 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 's case before us as well as before the authorities below has been that the loans under reference had been taken in the past. The assessee had consistently in the past paid interest at the rate of 21% p.a., which had not been disturbed or unaccepted by the Department. We are unable to, we are afraid, appreciate the assessee's case. Firstly, there is no material on record to show that the Revenue had at any time accepted the same. True, there has been no such adjustment in its assessment for A.Y. 2005-06 (PB pgs. 61-62), but then the assessee has not exhibited that it was enquired in the matter during assessment proceedings, so as to infer acceptance of the assessee's case by the Revenue, even if the same does not find mention in the assessment order, which is the case. Again, for A.Y. 2004-05, the Revenue has raised this issue, making a disallowance, only to be deleted by the first appellate authority (PB pgs. 55-58). It is not clear if the Revenue has appealed against the same, and which may, assuming so, well be for the reason of low tax effect; the amount involved for that year being only Rs. 3,53,392/-. There is, in any case, no estoppel against law, and each year is an indepen ..... X X X X Extracts X X X X X X X X Extracts X X X X
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