31 July 2010
There has been an addition for the differnce between the stock as per books and stock statement given to bank for credit facilities. Is there any judgements for deletion of such additon.???
31 July 2010
THERE IS NO JUDGEMENT. IF YOU HAVE PROVIDED STOCK STATEMENT TO BANK FOR CREDIT FACLITY ON HIGH I.E YOU HAVE MISLEADING THE BANK TO MAINTIAN YOUR DRAWING POWER AGASINT CREDIT FACLIIIES AGAISNT FAKE STOCK. IF YOU SAY THAT YOU HAVE PROVIDED CORRECT STOCK TO BANK, IT MEANS YOU HAVE UNDERSTATED STOCK IN BALANCE SHEET FOR REDUCING PROFIT.
I.E AO HAS RIGHT TO MAKE ADDITION ON SUCH DIFFERENCE . YOU CAN'T SAY THAT BANK STOCK IS WRONG , IF YOU SAY THAT YOUR BANK FACLITIES MAY BE FREEZED AND BANK CAN SUIT YOU AGAISNT FRAUDLENT .
02 August 2010
Sir thanks for replying me but for your kind information there are judgements relating to that supporting the same see ACIT vs Jyoti Woolen Mills ITAT (Del) 125 TTJ 810 wherein it was held by the tribunal that addition could not be made on mere comparison of the stock declared to bank and the one shown in the books of accounts. I need more judgements for clarity on the same if anyone knows kindly reply me.
SECTION 69 Where the assessee showed higher stock for availing credit facility from the bank against hypothecation of stock and there was no evidence on record to show that the assessee possessed the higher quantity of stock as declared to the bank, addition cannot be made on mere comparison of the stock declared to the bank with that shown in the books of account ruled the Delhi ‘D’ Bench in ACIT v. Jyoti Wollen Mills (2009) 125 TTJ (Del) 810.
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