2016 (2) TMI 384

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....h credit facility) was Rs. 7,23,98,153/- and that it did not match with the stock enlisted in the books maintained by the Assessee. There was a difference to the extent of Rs. 4,81,53,843/-. This resulted in making of the addition of stock in assessee's income. 2. Aggrieved over the same, the Assessee preferred an appeal before the Commissioner of Income Tax (Appeals), and the appeal  was allowed on 18.03.2010. Challenging the same, the Revenue preferred an appeal and the co-ordinate bench of the Tribunal remanded the issue back to the Assessing Officer. The Assessing Officer could not find any evidence to come to the conclusion that the actual stock of the Assessee was more than the book value, but,  relied upon the fact tha....

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....o back on the stock statement as it would amount to recognizing bad morality on the part of the assessee. 5.1. This issue has been answered in the decision of the Hon'ble Apex Court in the case of T.A.Qureshi vs. CIT (287 ITR 547), wherein, it has been held that cases are to be decided by the Court on legal principles and not on one's own moral views. The Tribunal has also relied upon a decision reported in 26 ITR 159 (Pandit Bros. vs. CIT), wherein, it was held that, the fact that profit appeared too low or that no stock register was maintained would not be sufficient material to reject the books of account; these would only be material for provoking further enquiry; the Income Tax Officer must discover other materials and evidenc....

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....take or omission in the books of account of the assessee. Apart from that, the Bank authorities did not claim that they actually verified the assessee's stock. Therefore, the burden shifited on the revenue to prove that the stock statement submitted to the Sales Tax authorities was erroneous. There was no proof available for revenue to show that such statement to Sales Tax Authorities was wrong. Under such circumstances, the assessee contends that the inflated reporting of stock to the Bank should not be accepted, since the inflated statement was for the purpose of obtaining more cash credit facility. 5.5. Which out of the two authorities, whether the Bank Authorities or the Sales Tax Authorities would have been more interested in asce....