2006 (10) TMI 124

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....he case formulating the following substantial questions of law. "(1) Whether, on the facts and circumstances of the case, the Tribunal was right in deleting the addition made to the closing stock, in respect of the difference between value of the stock reported to the bank and the Income-tax return ? (2) Whether, on the facts and circumstances of the case, the Tribunal was right in holding that the value of stock as reported by the assessee to its bank cannot be added to the value of the closing stock ? (3) Whether, on the facts and circumstances of the case, the Tribunal was right in holding that the assessee can adopt one stock value for the bank purpose and other for the Income-tax purpose ?" 2. The brief fa....

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.... counsel appearing for the Revenue, submitted that the assessee had, in order to obtain higher loan facilities, inflated its stock figure in the statement given to the bank and hence the statement should be accepted. Hence the Assessing Officer is right in adding the difference between the two figures to the total income of the assessee. 5. Learned counsel appearing for the assessee submitted that for the purpose of bank loan, stock statement was given on estimate basis. The assessee maintained day-to-day accounts on production and the declared closing stock for assessment purpose, was based on actual physical verification. Hence, the estimated value of the stock given to the bank cannot be taken as the correct value of stock. 6. Hear....