2023 (7) TMI 1052

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....or admission of the appeal against order dated 25th September, 2022 passed by the Income Tax Appellate Tribunal (ITAT), Cuttack Bench. He submits, though the Tribunal upheld the order of revision made by the Principal Commissioner of Income Tax (PCIT), but interfered with the directions inasmuch as it said that the direction in respect of stock differences found from the record does not require further verification. 3. He submits, the PCIT had on record, inflated stock statement submitted by the assessee to the bank. Therefore, the difference is to be treated as unaccounted sales. In those facts, interfering with the decision gives rise to substantial questions of law. 4. He submits, the Tribunal erroneously relied on judgment of the Supr....

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....e Tribunal, the resultant position is that there were excess stocks undisclosed in the books of account, and that the nondisclosure was only with a view to suppress the income. Once the Tribunal finds that there were excess stocks after rejecting the explanation of the assessee, the conclusion is inescapable that the excess stocks should have come from undisclosed sources. As already pointed out, the finding of the Tribunal that there were excess stocks cannot be interfered with by this court, as it is exclusively a matter for the Tribunal to accept or reject the assessee's explanation on the facts and circumstances of this case, We are, therefore, of the view that the Tribunal is justified in taking the view that the excess stocks shou....

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....ng on physical verification, by survey. Hence, the difference was taken and added back as income of the assessee. 9. The Tribunal held that the order under section 263 was a good one except the direction for verification of the stock by reason of the PCIT having discovered there was on record inflated stock statement, submitted by assessee to the bank and therefore further verification of stock was necessary. The Tribunal relied on Malabar (supra) for its view that the AO had correctly taken into account the position of stock of the assessee. 10. In Malabar (supra), it will appear from above quoted paragraph, the Supreme Court noted that the AO had accepted the entry in the statement of account filed by appellant in absence of any support....