TaxTMI 
TaxTMI 
TaxTMI 
2021 (10) TMI 683
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....ed by the assessee for obtaining loans/CC limits and to supply the stock statement submitted to the bank. It was informed by the bank that the stock belonging to the assessee were hypothecated/charged to the bank. Copies of the stock statement for Financial Year 2012-13 were also furnished. Perusal of the stock statement submitted by the assessee to the bank revealed that stock (item wise) on 28.02.2013 was declared at Rs. 2,34,50,000/- and it was duly verified by the bank. On the basis of information of sale and purchases provided by the assessee, the stock as on 31.03.2013 was calculated by taking into consideration the stock declared by assessee to bank as on 28.02.2013. The AO accordingly determined the difference of stock on the value of stock given to the bank and as per books of accounts as on 31.03.2013 at Rs. 2,19,65,351/-, the details of which are as under : Name of Product Stock as on 28.02.2013 as per bank stock statement Purchases from 01.03.2013 to 31.03.2013 Sales from 01.03.2013 to 31.03.2013 Effective stock as on 31.03.2013 (2+3-4) As per Balance Sheet as on 31.03.2013 Difference 1 2 3 4 5 6 7 DAP Khad 72,00,000 58,02,915 73.536 1,29,29,....
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....mily. He, therefore, asked the assessee to explain as to why the household drawings of Rs. 30,000/- per month should not be considered for keeping his life style and status in the society enjoyed. It was explained by the assessee that expenses shown at Rs. 1,12,010/- is sufficient for self, wife and two children. However, the Assessing Officer did not accept the explanation of the assessee. Considering the estimated value of expenditure at Rs. 30,000/- per month, the Assessing Officer made addition of Rs. 2,47,990/- to the total income of the assessee on account of household withdrawals. Thus the Assessing Officer determined the total income at Rs. 2,36,72,550/-. 6. Before the learned CIT(A), the assessee challenged all the three additions. So far as the addition on account of difference of stock value of Rs. 2,19,65,361/-is concerned, it was argued that the assessee was dealing in government controlled items like fertilizers and chemicals and the same are subject to physical verification by the agriculture department. At the time of receipt of goods the bills are not received and as such the entries in purchase account could not be made at the time of receipt of stock. The bulk o....
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....e. 7.1. Based on the arguments advanced by the assessee, the learned CIT(A) deleted the addition of Rs. 2,19,65,351/- by observing as under:- "I have considered the submissions and facts placed before me along with judgments cited by the appellant as well as relied by the AO. The facts of the case relied by the AO cannot be followed in the case of the appellant as differentiated by the appellant herein above. The case of the appellant is fully covered by the judgment of jurisdictional High Court of P&H in the case of CIT v. Sidhu Rice and General Mills, (2006) reported at 281 ITR 428 and judgment of Hon'ble Madras High Court in the case of Commissioner Of Income-Tax vs N. Swamy reported at 241 ITR 363. The addition made by the AO is not based on any valid evidence. The AO cannot be assumed to make addition only on the basis of statement furnished to third party i.e. bank as the same is without any substantial valid evidence of having undisclosed income. Thus, the addition of Rs. 2,19,65,351/- made by the AO is hereby deleted. This ground of appeal is allowed." 8. So far as the addition of Rs. 9,04,506/- on account of difference in cash is concerned, it was argued that no busin....
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....f alleged low H/H expenses is warranted. In view of above your good self is prayed to please delete the addition of Rs. 247990/- made by the AO. In view of the submissions made by the appellant and considering that the family resides in their own house in a small city, I do not see any justification in making such an addition and I delete the same. This ground of appeal is allowed. 10. Aggrieved with such order of the learned CIT(A), the Revenue is in appeal before the Tribunal by raising the following grounds:- 1. On the facts and circumstances of the case, the Ld. CIT(A) has erred in deleting the addition of Rs. 2,19,65,361/- on account of difference of stock value as per the bank stock statement and as per the books of accounts as on 31.03.2013 as observation of CIT(A) cannot be relied upon that any statement of facts furnished by the assessee to the bank, whose assets are at stake, cannot be taken as true. 2. On the facts and circumstances of the case, the Ld. CIT(A) has erred in deleting the addition of Rs. 9,04,506/- on account of difference in cash in hand as the statement furnished to bank and as per the cash book of the assessee as it is wrong from the part of CI....
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....the bank officials. It would, therefore, show that the stock statement submitted by the assessee to the bank was not produced before the AO. The bank has merely explained their general practice for verifying the stock statement. However, what happened in the case of the assessee has not been clarified by the bank. Thus, the authorities below merely relied upon the general practice of the bank instead of verifying the actual fact of the case of the assessee. The assessee submitted that as on the closing of the financial year the closing stock was of Rs. 1,88,17,001/- which is also reported to the bank on the same date which is also certified by the bank (PB-11). It would, therefore, show that the stock statement tally with the stock statement submitted to the bank at the end of the financial year on 31.03.2014. The assessee, therefore, rightly contended that the stock statement submitted on 28.02.2014 prior to close of the financial year was on estimate basis and not on actual basis. The assessee also rightly contended that since assessee deals in controlled items like fertilizer and chemicals, therefore, it is subject to physical verification by Agriculture Department. No enquiries....
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....iven by the Ld. CIT(A) while deleting the addition has already been reproduced in the preceding paragraph. Since the Ld. CIT(A) while deleting the addition has relied upon the decision of the jurisdictional High Court in the case of Commissioner of Income Tax vs., Sidhu Rice and General Mills (supra), therefore, in the absence of any contrary material brought to our notice against the decision of the Hon'ble jurisdictional High Court relied upon by the Ld. CIT(A), we do not find any infirmity in his order deleting the addition. Accordingly, ground of appeal number 2 raised by the Revenue is dismissed. 13. Ground of appeal number.3 by the Revenue relates to the order of the Ld. CIT(A) in deleting the addition of Rs. 2.47.990/- made by the A.O. on account of low house hold withdrawals. 13.1. After hearing both the sides, we find the A.O. in the instant case made an addition of Rs. 2,47,990/- on the ground that the withdrawal of Rs. 1,12,010/- shown by the assessee towards house hold expenses is very low keeping in view the rising of price day by day and the minimum expenses required for sustaining the family. We find the Ld. CIT(A) deleted the addition, the reasons of which have al....