2007 (10) TMI 376

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....t. JUDGMENT 1. Heard learned counsel for the appellant. 2. The following question is proposed for admission in this appeal. "Whether, on facts and circumstances of the case the Income-tax Appellate Tribunal was right in law in deleting the addition under section 69B of the Income-tax Act, 1961, made on account of difference in the closing stock furnished before the bank authorities for....

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.... Officer has verified the stock statement which was submitted along with the return Moreover, the Assessing Officer has also worked out the closing stock of emery power and machinery spares as per the return and the value comes to Rs. 14,07,156. We find that the Assessing Officer has verified the value of stock which was given to the bank, wherein the assessee has inflated the value of stock and s....

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....the present case at hand, it is not disputed by the Revenue that in order to avail of cash credit facility against hypothecation of stock to the bank, the assessee has submitted the inflated stock and not the actual stock. The inflated stock was hypothetical and not pledged. The bank official had not verified the said statement showing the inflated stock so produced by the assessee or the same was....

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....n of CIT v. N. Swamy [2000] 241 ITR 363 (Mad). In view of the above, there is no justification for making any addition on the allegation of inflated stock shown to the bank. We may mention here that this Bench had occasion to deal with identical issue in some cases and the same has been resolved in favour of the assessee. In the case of Deputy CIT v. Patidar Silica Pot. Ltd. in I. T. A. Nos. 2104 ....