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TMI Blog2018 (2) TMI 1598X X X X Extracts X X X X X X X X Extracts X X X X ..... g the margin requirements of the bank. Tribunal was of the view that no addition should be made on such count and dismissed the appeal filed by the revenue and allowed the cross objection filed by the assessee. Difference in stock statement was as regards the value of the stock and not the quantity thereof. Insofar as the value of the stock is concerned, as noted by the Tribunal, the value shown in the books of account was at cost or market price, whichever is lower and the value adopted for the stock statement supplied to the bank was at market price. Inflated statements came to be furnished to the bank authorities for the purpose of availing larger credit facilities, wherein the value of the stock was inflated. In the absence of any di ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessment year is 2008-09 and the relevant accounting period is the previous year 2007-08. 3. In this case, the assessment for the assessment year 2008-09 was completed by passing an order under section 143(3) of the Act on 22.10.2010, determining the total income of ₹ 1,64,26,762/- as against the returned income of ₹ 9,11,190/-. While scrutinizing the return of income the Assessing Officer noticed that in the trading account for the year ended on 31.3.2008, the assessee had shown closing stock of cotton seeds and cotton bales at ₹ 2,98,61,831/-. It was further found that the assessee had taken credit facilities from Bank of Baroda, Mehsana, and accordingly information was called for from the bank to furnish the stock ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n assumptions and surmises. It was, accordingly, urged that the appeal does give rise to the questions as proposed or as may be deemed fit by the court and the appeal deserves to be admitted. 6. A perusal of the order passed by the Commissioner (Appeals) indicates that he, after appreciating the material on record, has found that the stock statement given to the bank on 9.4.2008 represented a better estimate of closing stock as on 31.3.2008 as far as the quantities are concerned. He, however, agreed with the assessee that when the statements are given to the banks, the valuation rates can be roughly estimated and the actual calculation of rates to be applied can differ. The actual calculation of rates would involve checking of not only t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iling larger credit facilities and was of the opinion that no addition can be made only on such basis. The Tribunal further observed that it was an acceptable position in the commercial world that whenever cash credit facilities are availed by a businessman from the banks, to safeguard his cash credit limit, inflated stock statements are supplied to the banks for the purpose of fulfilling the margin requirements of the bank. Accordingly, the Tribunal was of the view that no addition should be made on such count and dismissed the appeal filed by the revenue and allowed the cross objection filed by the assessee. 8. From the facts as emerging from the record, it is evident that difference in stock statement was as regards the value of the s ..... X X X X Extracts X X X X X X X X Extracts X X X X
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