TaxTMI 
TaxTMI 
TaxTMI 
2013 (4) TMI 66
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....re us the Revenue has raised the following grounds:- "1. The Ld. CIT(A)-XX, Ahmedabad has erred in law and on facts in deleting the addition of Rs.30,92,616/- made by the A.O. on account of unexplained investment in stock, without properly appreciating the facts of the case and the material brought on record by the A.O. 1.2. In doing so, the Ld CIT(A)-XX, Ahmedabad has erred in law and on facts in not appreciating that the said excess stock appearing in the bank statement furnished by the assessee was also physically verified by the bank and in the additional statement submitted by the assessee to the bank in connection with the physical verification of stock by the bank authority, the assessee had also admitted the physical possession of the said excess stock shown to the bank. 1.3. In doing so, the Ld. CIT (A)-XX, Ahmedabad has erred in law and on facts in not appreciating the ratio of the following decisions of the Hon'ble High Courts: i) 207 ITR 909 (Kerala) ii) 201 ITR 191 (Gauhati) and iii) 125 ITR 33 (Allahabad) 2. The Ld. CIT (A)-XX, Ahmedabad has erred in law and on facts in deleting the addition of Rs.22,660/- made by the A.O. by disallowing a part of the interest ....
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..... CIT (A) after considering the submissions made by the assessee deleted the addition by holding as under:- "3.1. I have gone through the facts of the case and also the contentions raised by the A.R. in his written submission. The A.O. during the course of assessment proceedings, observed difference in the value of closing stock as per appellant's books and that as per stock statements submitted to the bank as on 31-3-2006.It is a known factor that such statements have to be mandatorily furnished to banks in order to procure or enhance cash credit facilities, without which there will be a dearth in the working capital flow. Therefore, it is very clear that such statements are usually exaggerated to procure maximum benefits from the bank. On the other hand, there is nothing on record nor has the A.O. highlighted any instances to prove that the appellant had made unexplained investment in stock. The A.O. has not pointed out any defects in the books of account which could prove that the books of accounts and entries therein are not reliable. The A.O. has made the addition u/s. 69B of the Act as unexplained investment. The basic condition to be satisfied under this section is that the....
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....artner of the assessee firm in his statement submitted to the Bank admitted the value of stock to be of Rs.34,02,218/-. He further submitted that the assessee's stock statement was received by A.O. from bank in pursuance of the notice u/s. 133 (6). The Ld. D.R. further submitted that the assessee could not reconcile the difference of stock by bringing any tangible material on record. He further submitted that CIT (A) while deleting the addition has given a general statement without bringing any material on record in support of his observation that the stock statements submitted to banks are generally exaggerated. Thus, D.R. supported the order of A.O and also relied on the decision of the Hon'ble Gauhati High Court in the case of Dhansiram Agarwalla vs. CIT (1993) 201 ITR 192 (Gau.),wherein Hon'ble High Court had concluded that when assessee has not put-forward any explanation as regards the discrepancy in the value of stock as disclosed to the Bank and shown in the balance sheet addition u/s. 60B was justified. 11. He further relied on the decision of Punjab and Haryana High Court in the case of B. T. Steels Ltd. vs. CIT (2010) 328 ITR 471 (P& H) where the assessee neither denied....
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....sputed fact that the assessees is engaged in the business of diesel engines, gear box and spare parts of diesel engine and the sale of goods are in numbers and not on the basis of weight. It does not sell the diesel engine spares on the basis of weight. The assessee has not produced a single invoice before us to demonstrate that the sales are made on the basis of weight and not on the basis of numbers. Even in the stock statement which forms part of tax audit report, the assessee has shown the quantitative stock in numbers and not in kilos. Nothing has been brought on record by the assessee to substantiate its stand that though the unit of measurement of its sale/purchase is number but for the purpose of submission of stock statement to bank the quantity is reported in kilograms. The explanation of the assessee also seems improbable in view of the fact that a trader is required to disclose the quantitative details of stock by using the same unit of measurement in which it generally deals. Before us the assessee has not brought on record any copies of the purchase or sales bills or the stock statement submitted to bank for the earlier period where the unit of measurement used for su....
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....660/- on account of interest expenses. 14. During the course of assessment proceedings A.O. observed that assessee has granted loan to Shri Jayantibhai Maniar of Rs.1,51,067/- out of interest bearing funds of the firm. In reply to the show cause notice of the A.O. the assessee submitted that the borrower is a son of another partner and is also Manager of the firm. The amount was borrowed for the purpose of business. A.O. was of the view that when assessee accepts loan on interest from outside parties and also gives interest on the capital to the firm, interest must be charged from partner's son. He accordingly calculated the interest @ 15% of Rs.1,51,067/- and added Rs.22,660/- as the income of the assessee. Aggrieved by the order of A.O. assessee carried the matter before the CIT (A). 15. CIT (A) after considering the submissions of the assessee deleted the addition by holding as under:- "4.1. I have gone through the facts of the matter, as narrated by the A.O. in the assessment order and as argued by the A.R. of the appellant. It is seen that, though Shri Jayantibhai Maniar was son of one of the partner, it can also not be ruled out that he was also an employee of the firm, fu....