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TMI Blog2015 (7) TMI 694X X X X Extracts X X X X X X X X Extracts X X X X ..... in the books of account. However, it is admitted by the assessee himself that he has not completely disclosed the stock in the books of account. Now, considering the proviso of Section 69(B) of the act, we are of the opinion that the assessee had not fully disclosed the stocks in the books of account and therefore, the Assessing Officer as well as the CIT (Appeals) have rightly observed that the case of the assessee would fall under the proviso of Section 69(b) of the act. Disallowance of set off of business loss with income from other sources for the same year? - Held that:- We are also of the opinion that the submissions made by the learned advocate is that the case would fall under the proviso of Section 69(c) of the act does not appl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llenging the judgement and order dated 07.07.2004 passed by the Commissioner of Income Tax (Appeals) Ahmedabad (herein after referred to as 'the CIT (Appeals)' for short) is confirmed and the claim made by the assessee with regard to set off of undisclosed stocks against his losses for the assessment year 2001-02 has not been accepted and enhancement made by the CIT (Appeals) vide order dated 07.07.2004 is confirmed. 2. The following two substantial questions of law were framed at the time of admission of the appeal. [1] Whether, in the facts and circumstances of the case, the Income Tax Appellate Tribunal was right in law in holding that stock of raw material disclosed at the time of survey can be added both u/s 69B as well a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... total turn over. It was also noticed that the value of closing stock was to the tune of ₹ 33,21,944/- shown in the trading account, which included excess stock amounting to ₹ 10,06,987/-. The said stock was disclosed by the assessee himself during the course of survey operation carried out under Section 133(A) of the act on 30.11.2000. Therefore, it comes to fact that if the excess stock disclosed to the tune of ₹ 10,06,987/is not taken into consideration for gross profit, which comes to ₹ 39,53,867/-. 3.3. The return submitted by the assessee for the year 2001-02 was finally scrutinized and the Assessing Officer had passed an order on 28.10.2003, however, did not consider the certain allowance, which the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t. He would further submit that during scrutiny, the assessee had disclosed the income with regard to the undisclosed stock to the tune of ₹ 10,06,987/-. Though, as per the books of account, the value of stock was shown to the tune of ₹ 3,26,498/-. He would further submit that the CIT (Appeals) has accepted the fact that post survey the stock was fully disclosed in the books of account, however, the CIT (Appeals) has erred in coming to the conclusion that the said investment was totally unexplained and hence, the said unexplained expenditure has been shown in the books of account. He would further submit that the CIT (Appeals) has treated the case that the assessment falling under Section 69(B) of the Act and the CIT (Appeals) h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Section 69(C) of the Act, she would submit that the assessee had not disclosed the amount to the tune of ₹ 10,06,987/-, the case would fall under the proviso of Section 69 of the act. By relying upon the case of Attar Singh Gurmukh Singh V. Income Tax Officer, Ludhiana reported in [1991] 191 ITR 667, learned advocate would submit that the Apex Court has considered the unexplained expenditure not to be given set off under the proviso of Section 71 of the Act. Learned advocate would further submit that for the assessment year 2001-02, the closing stock was to the tune of ₹ 10,06,987/-, which might have carried forward by the assessee of the nonassessment year of 2002-03, which the assessee might have taken advantage of the nex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the set off under the proviso of Section 71 of the act. As far as applicability of the case of Commissioner of Income Tax V. Shilpa Dyeing Printing Mills (P.) Ltd. (Supra) is concerned, the same would be applicable since the Court had held that the amount of excess stock would fall under the definition of income as per Section 14 of the Act and therefore, the assessee would be entitled for the set off under proviso of section 71 of the act. As far as the case of Attar Singh Gurmukh Singh V. Income Tax Officer, Ludhiana (Supra) is concerned, the same would not be applicable in the present facts and circumstances of the case since it is not the case that there was unexplained expenditure made by the assessee. 9. Therefore, we are of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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