TaxTMI 
TaxTMI 
TaxTMI 
1988 (1) TMI 65
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....be restored." 2. The assessee-firm derives income from husking of paddy. It was enjoying over-draft facilities with the bank against hypothecation of its stock in the form of paddy rice etc. The ITO called for the statements of the stock of hypothecation with the bank on different dates. According to the ITO, excess stock was hypothecated with the bank as compared with the stock available as per books of accounts. He worked out the peak of such stock at Rs. 13,22,977 as on 22nd Nov., 1981. The assessee was called upon to explain the discrepancy. It appears that the ITO was partly satisfied with the explanation given and ultimately he made an addition of 4,28,226 on account of excess hypothecation with the bank. The discrepancy of Rs. 4,28....
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....k as per books of accounts of the assessee. It was also urged before him that the assessee could always show that statements given to the bank were motivated. Reliance in this connection was placed on judgment of Hon'ble Madras High Court in the case of Coimbatore Spinning & Weaving Co. Ltd. vs. CIT (1974) 95 ITR 375 (Mad)and again of the same High Court in the case of CIT vs. Ramakrishan Mills (Coimbatore) Ltd. (1974) 93 ITR 49 (Mad) where similar statements sent to the Government agencies by the said mill were accepted, which tallied with the stock as per books of accounts and addition was deleted. The above submission found favour with the CIT(A) and he deleted the addition. 4. The Revenue aggrieved with the order of the CIT(A), is in ....
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....e by the assessee to the bank on that date. It appears that the bank authorities carried the same figures to 22nd Nov., 1981 as were declared by the assessee on 20th Nov., 1981. In view of this position, we are inclined to agree with the learned counsel for the assessee, as well as the CIT(A) that position could not be compared of 20th Nov., 1981 with 22nd Nov., 1981. The Revenue has also not controverted the fact that the stock position as per statements furnished to the various Government agencies tallied with the position in the book of accounts. Their Lordships of Hon'ble Madras High Court in the case Coimbatore Spinning & Weaving Co. Ltd. vs. CIT (1974) 95 ITR 375 (Mad) have held that the alleged practice said to be followed business h....