2005 (1) TMI 680

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....that the stock statement submitted by it to the bank showed inflated figures ?" 2. The matter relates to the assessment year 1979-80. 3. Briefly stated the facts giving rise to the present reference are as follows: The assessee-respondent has been carrying on the business in rerolling of M.S. Rods. It has taken overdraft facility from the State Bank of India, Bulandshahar. On 31-3-1979, i.e., on the last day of the accounting year an amount of Rs. 5,10,114 was outstanding under the overdraft facility. The said overdraft was stated to have been secured against the plants, machinery and building. The Income-tax Officer during the course of assessment proceedings found that the stock as per balance sheet was only Rs. 2,33,631 and the value....

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....s the security be furnished. The assessee filed a letter dated 15th of December, 1982 of the State Bank of India. A perusal of the said letter shows that the bank has taken the value of the stocks as represented by the assessee through the stock statement dated 19-2-1979. The assessee also produced copy of the stock statement which was given to the bank on 19-2-1979. It has been found by the Commissioner of Income-tax (Appeals) that the goods hypothecated to the State Bank of India were the properties of the assessee which were purchased by them against the full payment. The goods were valued according to the market rate and were fully insured. The Tribunal observed that wrong declaration of the stock to the bank could not warrant any addit....