2025 (2) TMI 1029

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....on the following grounds of appeal: "1. On the facts and circumstances of the case, the order passed by the Ld. Commissioner of Income Tax (Appeals) (CIT(A)] is bad both in the eye of law and on facts. 2(i) On the facts and circumstances of the case, the Ld. CIT(A) has erred both on facts and in law in confirming the action of AO who made addition amounting to Rs. 43,88,755/- on account of difference of stock valuation given to bank for credit facility. (ii) That the Ld. CIT(A) has erred both on facts and in law in rejecting the explanation and evidences brought on record by the assessee 3(i) On the facts and circumstances of the case, the learned CIT(A) has erred both on facts and in law in confirming th....

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....47,96,000/-, and after considering the purchases made thereafter, between the period from 01.02.2015 to 17.03.2015, and the cost of goods sold during this period, the AO worked out the existence of excess stock of Rs. 43,88,755/- being the difference between stock position as on date of survey as computed by AO and the value of stock physically found. 3.2 During the course of survey, the stock of the physically verified which was valued at Rs. 60,87,362/-. The Ld. AR submitted that the stock statement submitted to the bank should not be taken as sacrosanct, as normally the stock value provided to the bank shows inflated prices of stocks in order to avail larger bank limits. The assessee has maintained regular books of account, including ....

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....survey. Therefore, no addition is required to be made, and she, therefore, prayed for the deletion of the addition so made. 4. On the other hand, the Ld. Sr. DR supported the order of the lower authorities and submitted that during the course of the survey, the stock physically verified was valued at Rs. 60,87,362/-, as against which the stocks statement submitted to the bank contained the corresponding value as on 31.01.2015 at Rs. 1,47,96,000/- and corresponding value of stock value as per books of account was Rs. 1,08,29,830/-. He further submitted that the AO, while computing the stock as on the date of survey, has been fair enough in allowing the adjustments with regard to the purchases as well as the cost of goods sold during the p....

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....ated for the reasons that in order to avail the larger bank credits. The Hon'ble Gujarat High Court in the case of Avi Polymers Limited (supra) also held that no addition could be made on account of difference between the stocks as per the books and the stocks statements submitted to the bank. Therefore, we are of the view that, for computing the stocks position as per the books of accounts as on the date of survey, the AO should have taken into consideration the stocks as per the books of accounts as on 31.01.2015, as against the stocks as per the statement submitted before the bank. 6. Now, coming to the amount of addition, if the value of the stock as per the books of account as on 31.01.2015 is replaced, and further adjustments for p....