TaxTMI 
TaxTMI 
2019 (8) TMI 292
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....the assessee for obtaining loans/CC limit and to supply the bank statement submitted to the Bank. The stock statement revealed that on 28.02.2014 stock was declared at Rs. 2,23,86,350/- which is duly verified by the Bank. However, as per balance sheet as on 31.03.2014 the stock statement was at Rs. 1,88,17,001/-. The AO after calling explanation of the assessee and considering the GP rate made the addition of Rs. 25,66,790/- on account of unexplained investment in stock. 5. The assessee challenged the addition before Ld. CIT(A) and it was submitted that assessee was having bank facility from PNB, Narnaul and for getting higher credit, it is a common practice to furnish the stock statement to the bank by estimate and not the actual stock. The assessee did the same and furnished stock statement as on 28.02.2014 on estimate basis to the Bank. Figures furnished to the Bank were on estimate basis and not on actual basis. Further, the Bank officials had also not verified the physical stock at the premises of the assessee nor value the stock as on 28.02.2014. The stock was not under lock and key of the Bank. The assessee was dealing in Government control items like fertilizers and c....
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....n Suri (HUF) has also followed the above judgment and allowed the appeal of assessee. Similarly, the Hon'ble Madras High Court in the case of CIT vs. N. Swamy, 241 ITR 363 has observed as under: "4. We find it a little difficult to agree with those observations. The assessee's income is to be assessed by the Income tax Officer on the basis of the material which is required to be considered for the purpose of assessment and ordinarily not on the basis of the statement which the assessee may have given to a third party unless there is material to corroborate that statement of the assessee given to a third party, even if it be a bank. The mere fact that the assessee had made such a statement by itself cannot be treated as having resulted in an irrebuttable presumption against the assessee. The burden of showing that the assessee had undisclosed income is on the Revenue. That burden cannot be said to be discharged by merely referring to the statement given by the assessee to a third party in connection with a transaction which was not directly related to the assessment and making that the sole foundation for a finding that the assessee had deliberately suppressed his income. ....
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....nt of Jammu & Kashmir High Court in the case of Ashok Kumar vs. Income Tax Officer, 201 CTR 178 in which it was held as under: "Addition could not be made on the basis of difference between closing stock declared in the trading account and the stock shown in the statement submitted by the assessee to the bank as the stock position shown to the bank was on estimate basis and inflated value was shown to avail more credit from bank." He has, therefore, submitted that addition is wholly unjustified. 10. On the other hand, Ld. DR relied upon the orders of the authorities below and submitted that certificate of the bank (PB-11) is additional document which was not filed before the authorities below. 11. I have considered the rival submissions. It is not in dispute that assessee maintained books of accounts which are duly audited. The AO has not pointed out any specific defect in maintenance of the books of account by the assessee. The books of accounts by the assessee have not been rejected by the AO. It is also admitted fact that the turnover and GP ratio is better in assessment year under appeal as compared to preceding assessment year. The AO made the addition becaus....
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....that Revenue authorities are bound to follow the rule of consistency. In view of the above, I am of the view that the addition is wholly unjustified. I, accordingly, set aside the orders of authorities below and delete the entire addition. 12. Ground no. 1 of appeal of assessee is allowed. 13. On ground no. 2, assessee challenged the addition of Rs. 55,000/- on account of low household withdrawal. During the year, under consideration assessee had withdrawn a sum of Rs. 1,85,000/- towards household expenses. The family of the assessee consists of himself and wife only. Both the sons are earning separately and residing in Pune and Chandigarh. The family resides in own house for which no rent is to be paid. The family owns ancestral agricultural land of about 10 acres which belongs to HUF and income from agriculture was also use for household expenses. It was, therefore, submitted that the household shown by assessee at Rs. 1,85,000/- in addition to agricultural income is more than sufficient considering size of the family of the assessee. The AO, however, estimated the household expenses of assessee to Rs. 20,000/- p.m. considering status of the assessee and estimated househ....