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TMI Blog2003 (4) TMI 52X X X X Extracts X X X X X X X X Extracts X X X X ..... 4,975.77 quintals of stock of rice and paddy as per bank statement furnished to the bank and as per stock register maintained by the assessee, which accepting the explanation of the assessee and ignoring the deposition of bank official who explained the system of pledge and hypothecation of stock and while ignoring the discrepancies found by the Assessing Officer? 2. Whether the learned Income-tax Appellate Tribunal was justified in dismissing the appeal filed by the Revenue without considering the facts of the case especially when it was an admitted fact that there existed difference in stock as per bank statement furnished to the bank and the stock register maintained by the assessee ?" The respondent-assessee is running a rice mill. I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nation by this court. We have thoughtfully considered the submissions of learned counsel. In our opinion, the questions of which determination has been sought by the Revenue cannot be treated as substantial questions of law within the meaning of section 260A of the Act. The finding recorded by the Commissioner of Income-tax (Appeals) which was confirmed by the Tribunal was that there was no significant discrepancy in the stock maintained by the assessee and the bank statement does not suffer from any patent legal infirmity because the assessee had furnished satisfactory explanation. The Commissioner of Income-tax (Appeals) discussed this aspect of the matter in detail and accepted the plea of the assessee by recording the following observa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nother important feature in this case is that as far as the value of stock is concerned this is more as per stock register. The position of stocks as per stock register as given to the bank does not appear to be correct, here the entire stock has been valued at Rs. 180 per quintal irrespective of the fact whether it is of paddy or rice. A reference to the closing stock at the end of the year shows the value of such rice varied from Rs. 335 to Rs. 400 per quintal. Even otherwise when the value of the closing stock has been shown at Rs. 20,67,119 as on March 31, 1989, the stock as on March 27, 1989, should have also been valued by applying the same rate. Accordingly, it is obvious that there is no over statement as far as the value of the sto ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Thus, the principle is clear. The Department cannot merely rely on the bank statements for stock purposes and on the books of account for all other purposes. The Delhi High Court has also made some pronouncements in the case of Prem Singh and Co. [1987] 163 ITR 434. In view of this discussion I am of the view that without pointing out any discrepancy in the books of account including stock register maintained by the appellant-firm the Assessing Officer was not justified in placing reliance on the bank statement especially in view of the explanation given by the appellant." The Tribunal relied on the order passed by it in I. T. A. No. 227 ASR of 1994 (ITO v. Devi Dayal Rice Mills, decided on November 12, 2001), and the judgments of the D ..... X X X X Extracts X X X X X X X X Extracts X X X X
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