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TMI Blog2005 (7) TMI 100X X X X Extracts X X X X X X X X Extracts X X X X ..... R. K. Upadhayay for the Commissioner. JUDGMENT The judgment of the court was delivered by Rajes Kumar J.—The Income-tax Appellate Tribunal has referred the following questions of law under section 256(1) of the Income-tax Act, 1961 (hereinafter referred to as "the Act"), for the assessment years 1981-82 and 1982-83 for opinion of this court : "(a) Whether, on the facts and in the circumstances of the case, the Tribunal was correct in confirming the order of the Commissioner of Income-tax (Appeals) holding that the difference between the stock value shown in the books of account of the assessee and value disclosed to the bank was not assessable to tax as deemed income ? (b) Whether, on the facts and circumstances of the case, the Tri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Total of balance-sheet 1,72,546 — 2,14,500 — 3. From the balance-sheet which was filed with the Union Bank of India, it was found by the Assessing Officer that stock of harrow and chaff cutter was of Rs. 82,325 and Rs. 25,638 for the assessment year 1981-82 and Rs. 63,700 and Rs. 24,361 for the assessment year 1982-83, while as per the balance-sheet submitted to the Department, the assessee showed closing stock respectively of Rs. 12,325 and Rs. 4,521 for the assessment year 1981-82 and Rs. 18,381 and Rs. 2,815 for the assessment year 1982-83. Thus, the Assessing Officer found an excess stock of Rs. 70,000 and Rs. 21,117 respectively for the assessment year 1981-82 and Rs. 45,319 and Rs. 21,546 for the assessment year 1982-83. The exp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to before us. After doing so we note that the substance in the submission of the assessee has substantial force which was consequently rightly appreciated by the Appellate Commissioner. The Commissioner of Income-tax (Appeals) found that though, the balance-sheet was presented before the bank, neither the bank has physically verified and certified the stock available with the assessee nor even the Assessing Officer has gone to that extent to device and find out the measure to establish that the assessee did have the balance of stock of harrow and chaff cutter as shown in the alleged inflated figures of these two items submitted to the bank. He was convinced that there was no reason to disregard the version of the assessee as the physical pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Bank of India for purposes of obtaining an overdraft are not concerned with the actual stock valuation for determining the trade results for purposes of ascertaining the profits and gains derived from that business and that, therefore, the addition made by the Assessing Officer was unsustainable. After proper appraisal of the facts and circumstances of the case in the light of the submissions made before us and after a perusal of the relevant pages of the paper book highlighted by the parties concerned as referred to above, we are of the considered opinion that the case law cited by the Revenue are distinguishable as urged by the assessee, in the instant case and further that we are also convinced with the reasonings assigned by the Commis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on, finding of the Tribunal is the finding of fact based on material on record and cannot be said to be perverse or without any material. The decision of this court relied upon by learned standing counsel in the case of Swadeshi Cotton Mill Co. Ltd. v. CIT [1980] 125 ITR 33 is not applicable to the present case. In the said case, the Income-tax Officer gathered information from the bank about the goods pledged and found that the goods pledged with the bank were in excess of the stock as per books and rejected the books. Discrepancies found was not only in respect of valuation of goods but also in respect of quantum thereof. The explanation given by the assessee with regard to the discrepancies were not accepted. In reference, the Division B ..... X X X X Extracts X X X X X X X X Extracts X X X X
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