- (1.) The Tribunal, Delhi, has referred the following two questions of law under s. 256(2) of the IT Act, 1961 (hereinafter referred to as the Act) for opinion to this Court : 1. Whether the Tribunal's order deleting the addition of Rs. 13,96,080 is not vitiated on account of its failure to consider all relevant facts ?
(2.) Whether the assessee had discharged its onus of proving that the stock statement submitted by it to the bank showed inflated figures ? 2. The matter relates to the asst. yr. 1979-80.
(3.) Briefly stated, the facts giving rise to the present reference are as follows : The assessee-respondent has been carrying on the business in re-rolling of M.S. rods. It has taken overdraft facility from the State Bank of India, Bulandshahar. On 31st March, 1979, i.e., on the last day of the accounting year, an amount of Rs. 5,10,114 was outstanding under the overdraft facility. The said overdraft was stated to have been secured against the plants, machinery and building. The ITO during the course of assessment proceedings found that the stock as per balance sheet was only Rs. 2,33,631 and the value of the fixed assets including building and machinery was Rs. 1,55,000. The total of these two sums comes to Rs. 3,83,000. It was much below the overdraft obtained. He was of the view that as the overdraft facility was to the tune of Rs. 5,10,114 and was higher than the stocks shown in the books of assessee, the assessee was indulging in out-of-book transactions. The explanation offered by the assessee with regard to the above discrepancy was rejected by the ITO and he made an addition to the assessee's income on the above terms. The assessment order was confirmed in appeal by the CIT(A). However, in further appeal by the assessee, the Tribunal allowed the appeal of the assessee and deleted the additions made by the ITO on the finding that there are authorities to show that the practice of declaring higher stock to the bank to get higher loan facility is a fact of life.;