TaxTMI 
TaxTMI 
2021 (6) TMI 244
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....6. 2. The brief fact relating to this issue is this that the firm derived income from wholesale trading of grains and transport business filed its return of income declaring total income at Rs. 1,73,430/- on 20.09.2015. The assessee had availed cash credit limit from State Bank of India, Agar, Malwa against hypothecation of stock. The assessee maintained books of accounts manually and all the information submitted to Krishi Upaj Mandi Samiti, Agar Malwa/Bank/ Sales Tax Department/Income Tax Department as well as to the auditors regarding value and quantity of purchase, sales and closing stock, excess/shortage based on the ledger cum stock register of goods. However the Ld. A.O made the addition of Rs. 2,14,89,267/- u/s 69/115BBE of the A....
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....from that, the statement given to the bank was estimated basis without any actual physical verification and the same was not supported by the books of accounts. On the other hand the quantitative detail of goods traded being part of the audit report of Form No.3CD for the relevant assessment year show that such details are fully reconciled and are tallied with the books of accounts. No discrepancy, however, to the sales, purchase and expenses was found by the tax auditor. Neither the Ld. A.O found these books of accounts defective or non genuine. Such negative view is neither reflected on the accounts maintained by the assessee in regard to the Krishi Upaj Mandi Samiti, Agar Malwa and the Commercial Tax Department. Further that the assessee....
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.... by Ld. A.O (PB 169 - Chart-3) In the statement submitted to Bank, weight of gram and gram dollar are separately mentioned at 518.40 qtls and 33.60 qtls respectively which totals to 552 qtls. Difference in weight of maize of 1.08 qtls is due to moisture and dust. Thus there is no difference in the two stock statements (PB 58-59) 4 28.02.2015 (PB 71) 1,56,110 Statement submitted to bank - This document has two dates, 11.03.2015 and 28.02.2015. Thus, it is not clear as to which date the stock position relates. No addition made by Ld. A.O (PB 169 - Chart 4)az ....
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.... Mandi reconciles with the book results. It appears that the stock as per the books and as per the statement given to the Mandi as on 31.03.2015 has been duly reconciled. The books of accounts seems to have been maintained monthly. During the season of heavy arrival of goods certain entries made remain to be included in the ledger account due to human error which are then corrected in the next fortnight or in the annual statement submitted to the Mandi as the case made out by the assessee also cannot be brushed aside. It is relevant to mention that the explanation rendered by the assessee on the difference due to excess/shortage of stock has been duly accepted by the Ld. A.O. The assessee's contention is that this stock in quantity and valu....
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....y on adequate Materials, but not arbitrarily. There was a difference between the value of closing stock declared to the bank and to the income tax authorities. There is no dispute that the appellant was maintaining books of account on day to day trading. The appellant in the present case, has taken the actual physical stock for the purpose of declaring closing stock to the income-tax authorities. Further the purchase and sales were supported by vouchers and the Assessing Officer had not pointed out any suppression of sales or purchases. The statement given to the bank was on estimate basis without any actual physical verification and the same was not supported by books of account. There is evidence to show that stock declared to the income ....
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....t. 7. INCOME TAX OFFICER vs. MAPINPUBLISHING (P) LTD. IT AT AHMEDABAD 'A' BENCH (2004) 23 CCH 0504 Ahd Trib. In view of above judicial pronouncement the AO is not justified in making the addition. Therefore, the addition made by the AO amounting to Rs. 2,14,89,267/- is Deleted. Therefore, the appeal on this ground is Allowed." 8. We have also considered the order passed by Hon'ble High Court of Gujarat as relied upon by the Ld. AR in the case of CIT V/s Arrow Exim (P) Ltd (supra) where the stock hypothecated with bank valued higher than shown in the books of accounts. When no defect is found with the accounts of the assessee explanation rendered by the assessee that the inflated statement was given to the ba....