9911796707
TMI Blog1971 (3) TMI 43X X X X Extracts X X X X X X X X Extracts X X X X ..... ur of the assessee - - - - - Dated:- 29-3-1971 - Judge(s) : H. N. SETH., R. S. PATHAK. JUDGMENT The judgment of the court was delivered by H. N. SETH J.-This is a reference under section 66(2) of the Indian Income-tax Act, 1922, in pursuance of an order made by this court on 6th August, 1964. The Tribunal was required to submit a statement of case in respect of the following question: "Whether it was legal for the Tribunal to work out unaccounted-for stocks pledged with the bank as on 8th April, 1957, with the assessee's stocks as obtaining on 8th April, 1957 ? " The assessee in this case is Messrs. Gopi Nath Hari Kishan and the assessment year in question is the year 1958-59. The income-tax authorities have proceeded on the b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ility, wherein the goods pledged were not locked in the godown but remained in the factory compound and the assessee carried on husking operation in respect of these goods and, therefore, there was a difference between the figures of stock as shown by the bank and those as shown by the assessee in its account books. After considering the manner in which the bank maintained the " open account for over-draft facilities, the Income-tax Officer came to the conclusion that the discrepancy could not be explained on the basis of explanation given by the assessee. In view of the discrepancy mentioned above, the Income-tax Officer concluded that the assessee had suppressed the truth. He observed that the stock outside the books of the assessee was m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tement as on 7th April, 1957, the extent of such profits would have been reduced by about Rs. 15,000. The Income-tax Appellate Tribunal repelled the contention raised on behalf of the assessee and observed as follows: " There is not much force in the contention that we should consider the stocks pledged with the bank with the stocks in the assessee's books on 7th April, 1957. According to the bank's certificate stock pledged remained unchanged even on April 8, 1957. The assessee incorporated in the accounts the closing stock as on 8th April, 1957 (though according to the counsel the closing date should have been April 7, 1957). Since the book version of the closing stock as on April 8, 1957, has formed the basis in the assessee's own prof ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessee and has been referred to us for opinion is whether the income-tax authorities were right in computing the discrepancy on the basis of stock position, as shown in the assessee's register on 8th April, 1957, or whether it should have been worked out on the basis of stock position shown by the assessee in its register on 7th April, 1957. Learned counsel for the revenue contends that the observations made by the Income-tax Appellate Tribunal, which have already been quoted, show that, in the opinion of the Tribunal, the relevant accounting year ended on 8th April, 1957, and not on 7th April, 1957, and, therefore, there could be no objection if the departmental authorities took the stock position as stated in the assessee's own boo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he relevant accounting year up to 8th April, 1957, the income tax authorities were required to work out the suppressed income of the assessee in respect of its business conducted in the relevant accounting year, namely, the period between 19th of April, 1956, and 7th of April, 1957. The assessee might have entered into certain transactions, even though outside its books, on' 8th of April, 1957, but the, income derived on those transactions will be liable to be included in assessee's income for the assessment year 1959-60 and not in the assessment year 1958-59. In the circumstances, if the Income-tax Officer wanted to work out suppressed profits on the basis of the discrepancy between the stock position as shown in the assessee's own books a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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