2009 (10) TMI 15

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....g the assessment order, the Assessing Officer has obtained a statement from the bank under Section 133 (6) of the Income-tax Act, 1961. The information, which has been obtained from the bank is with regard to the stocks available with the assessee on different dates. The Assessing Authority, on the basis of the information so furnished, came to the conclusion that the closing stock of the appellant on an average basis for the assessment year under consideration is Rs.9,75,775/-, instead of Rs.3,48,559/- and accordingly enhanced the taxable income. Being aggrieved, an appeal was preferred before the Commissioner of Income-tax Appeals - II and thereafter second appeal was preferred before the Income Tax Appellate Tribunal. Both the Appella....

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....e Tax Appellate Tribunal is justified in confirming the order of CIT (Appeal) despite the presence of perversity that the method applied in determining the closing stock is not as per commercial accounting practices? Learned Counsel for the appellant submits that the difference between the stock value shown in the books of account of the assessee and value disclosed to the bank was not assessable to tax as deemed income, as there was no evidence available before the Assessing Authority and he enhanced the closing stock only on an average basis of stock furnished to the Bank by the assessee for fixation of credit limit and that too only upto 10.11.2001 and undated statement of stock for subsequent months whereas closing stock declares in ....