This appeal has been preferred by the assessee under Section 260A of the Income Tax Act, 1961. The High Court of Ounjab & Haryana in case of Smt.Shakuntla Thukral vs Commissioner Of Income Tax on 6 February, 2014 confirmed that Excessive Stock Statement Given to Bankers, Difference will be added to Income of the assessee
Facts of the case:
The assessee is a resident of Ludhiana. She is engaged in the business of manufacture, purchase and sale of cloth and fabrication. She filed return of income declaring income at ‘ 2,80,161/- for the assessment year 2005-06 on 31.10.2005. The return was selected for scrutiny. Upon notice, the assessee appeared and submitted the relevant documents. The Assessing Officer raised objections regarding closing stock, unaccounted fabrication work and depreciation claimed by the assessee as under:-
i) Difference of stock Rs.28,73,640/-, ii) Unaccounted fabrication work ‑Rs.5,20,889/- and iii) Depreciation on machinery Rs.1,45,214/-
2) It was further explained by the assessee that she had applied for machinery term loan from the bank for importing computerized “Flat knitting bed knitting machine” from Taiwan. The said loan could not be sanctioned by the bank due to technical reasons and the machinery for which order was placed on 30.1.2005 reached India on 18.2.2005. The appellant explained to the Bank officials that in case the loan was not disbursed, she shall be liable for demurrage charges as per norms of port authorities. The Bank officials however agreed to release the payment from cash credit limit account if the same was provided at inflated amount. To meet the need of the time, the inflated stock statement was given taking into consideration the stock lying at the factory premises of the assessee as well as of the fabricators and the assessee also increased the hypothecated quantity to get the payment of the machinery purchased. During the assessment proceedings, the assessee filed reply dated 29.11.2007 explaining the objections raised by the Assessing Officer.
Judgements:
1) After examining the documents on record, the Assessing Officer passed assessment order dated 27.12.2007 and made additions. Aggrieved by the order, the assessee filed appeal before the Commissioner of Income Tax (Appeals) [CIT(A)].
2) the CIT(A) partly allowed the appeal while upholding the additions made by the Assessing Officer. Still not satisfied, the assessee filed appeal before the Tribunal. The Tribunal partly allowed the appeal while upholding the findings recorded by the CIT(A) on first two issues whereas the issue pertaining to depreciation was remanded to the Assessing Officer
3) The Tribunal impugned herein while affirming the findings recorded by the Assessing Officer and the CIT(A) and confirms the addition of Rs. 28,73,640/- by CIT(A) under the head ‘Difference of stock’ as shown in the books and shown in the bank statement without any base and reason thereof.
4) The Assessing Officer and the CIT(A) had discussed the material on record in detail and had come to the conclusion that there was difference of stock amounting to ‘ 28,73,640/- as per books of account of the assessee and as shown in the inflated stock statement given to the Bank.
5) The Tribunal affirmed the aforesaid findings. Similarly, the addition made by the Assessing Officer of Rs. 5,20,889/- due to unaccounted fabrication work was affirmed by CIT(A) and the Tribunal. Learned counsel for the appellant has not been able to point out any illegality or perversity in the findings recorded by the Tribunal while affirming the findings recorded by the Assessing Officer and the CIT(A).
6) No substantial question of law arises in this appeal. Consequently, the same is hereby dismissed.