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TMI Blog2021 (6) TMI 244X X X X Extracts X X X X X X X X Extracts X X X X ..... he case of CIT V/s Arrow Exim (P) Ltd [ 2010 (1) TMI 769 - GUJARAT HIGH COURT ] where the stock hypothecated with bank valued higher than shown in the books of accounts. When no defect is found with the accounts of the assessee explanation rendered by the assessee that the inflated statement was given to the bank to avail higher credit is to be considered in its proper perspective, no interference in deleting such addition either by Ld. CIT(A) or by the Tribunal is called for as of the observation of the Hon'ble Court. Considering the explanation rendered by the appellant in support of the accounts maintained by the assessee for inflated statement submitted to the bank to avail higher credit, we find no justification in the order passed by Ld. CIT(A) in deleting such addition made by the Ld. A.O on account of unexplained investment without any ambiguity so as to warrant interference. Hence we find no merit in the appeal preferred by Revenue and the same is, thus, hereby dismissed. - ITA No. 416/Ind/2018 - - - Dated:- 20-5-2021 - HON BLE MANISH BORAD, ACCOUNTANT MEMBER AND HON BLE MADHUMITA ROY, JUDICIAL MEMBER Revenue by : Shri Harshit Bari, Sr.DR Assessee by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the books of accounts and these books were audited by the Chartered Accountant where no adverse comment was made for that quantitative details as maintained by the assessee. The main contention of the assessee is that stock in quantity and the value reflected on estimated basis in the statement furnished to the bank authorities was to avail higher financial credit. Moreso, this inflated and estimated stock is hypothecated and not pledged. Apart from that, the statement given to the bank was estimated basis without any actual physical verification and the same was not supported by the books of accounts. On the other hand the quantitative detail of goods traded being part of the audit report of Form No.3CD for the relevant assessment year show that such details are fully reconciled and are tallied with the books of accounts. No discrepancy, however, to the sales, purchase and expenses was found by the tax auditor. Neither the Ld. A.O found these books of accounts defective or non genuine. Such negative view is neither reflected on the accounts maintained by the assessee in regard to the Krishi Upaj Mandi Samiti, Agar Malwa and the Commercial Tax Department. Further that the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4 28.02.2015 (PB 71) 1,56,110 Statement submitted to bank This document has two dates, 11.03.2015 and 28.02.2015. Thus, it is not clear as to which date the stock position relates. No addition made by Ld. A.O (PB 169 Chart 4)az Statement submitted to KUMS This document is dated 28.02.2015. Weight of gram is stated at 552.34 quintals (qtls) which includes weight of gram dollar of 33.60 qtls. In the statement submitted to Bank, weight of gram and gram dollar are separately mentioned at 518.40 qtls and 33.60 qtls respectively which totals to 552 qtls. Difference in weight of wheat of 4.97 qtls is due to excess which has been shown in the yearly statement at 14.15 qtls. Thus there is no difference in the two stock statements (PB ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and Excise Act. No discrepancy was found by the department. It is the settled position of law that addition cannot be made u/s 69B of the Act based on stock shown and inflated quantity/value of stock given to bank to avail higher credit facilities. If the addition made was allowed to continue, the financial statement would get completely distorted. Such an addition on account of difference in stock can only be made on adequate material which admittedly was filed to be relied upon by the Learned Assessing Officer. 8. We have further considered the order passed by Ld. CIT(A), the relevant portion whereof is as follows:- Any addition on account of difference in stock can be made only on adequate Materials, but not arbitrarily. There was a difference between the value of closing stock declared to the bank and to the income tax authorities. There is no dispute that the appellant was maintaining books of account on day to day trading. The appellant in the present case, has taken the actual physical stock for the purpose of declaring closing stock to the income-tax authorities. Further the purchase and sales were supported by vouchers and the Assessing Officer had not pointed out ..... X X X X Extracts X X X X X X X X Extracts X X X X
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