- (1.) THESE three appeals arise out of the common judgment of the learned Tribunal dt. 14.7.2003. Appeals relate to different assessment years, with respect to same assessee, and have been filed by the Revenue, involving common question, and therefore, are being decided by this common order.
(2.) THE necessary facts are that assessment was made for different years, under Section 143(3)/250 of the Income Tax Act by the Assessing Officer. We need not go into other aspects of the assessment order, and would better like to mention the facts only about the precise question involved in these appeals, on which these appeals have been admitted being: Whether in the facts and circumstances of the case, the additions made in the income of the assessee by the Assessing Officer on account of difference in the stock valuation as per statement given to the bank and as per the books of account were justified? The Assessing Officer found, that in the balance sheet the assessee had shown the closing stock of the goods at a particular amount in different assessment years, while the statement submitted by the assessee to the Bank for the purpose of obtaining financial assistance, did also come to the notice of the Assessing Officer, wherein a higher valuation of the stock was given, and therefore, the Assessing Officer, after making certain calculation, added the different amounts, as income of the assessee from undisclosed source. In so making these additions, the learned Assessing Officer relied upon a judgment of Madras High Court, in Coimbtore Spinning and Weaving Co. Ltd. v. Commissioner of Income Tax reported in : [1974]95ITR375(Mad) . The assessee unsuccessfully assailed the order in appeal before the learned Commissioner Income Tax (Appeals), who negated the contention, though partly allowed the appeal, vide order dt. 18.7.2002. The matter was further carried in appeal before the Tribunal. The learned Tribunal considered the matter from different aspects, as contended by the rival parties, with respect to each of the assessment year, and also considered the judgment in Coimbatore Spinning and Weaving Co.'s case, so also some five judgments cited on the side of the assessee, and recorded a finding as under:.perusal of the facts of the case we find that in the case under consideration for all the assessment years the stock was merely hypothecated to the bank and the goods remaining under the possession and control of the assessee which were not physically verified at the time of hypothecation. Such verification is made by the bank only when the goods are pledged with them. Besides, we find that the AO had not been able to point out any discrepancy in the quantity of stock hypothecated to the bank and the quantity of stock as per books of accounts.
(3.) THUS , in this regard the appeal was allowed.;