Addition can not be deleted on ground that assessee used to show higher stock to avail high cash credit limit from bank
Where High Court upheld Tribunal’s order deleting addition made to assessee’s income on account of discrepancy in stock as per books of account of assessee and that shown in bank statements by taking a view that assessee had tendency to show higher value in bank statements in order to enjoy higher cash credit limit, SLP filed against High Court’s order was to be granted
SUPREME COURT OF INDIA
Principal Commissioner of Income-tax
Janam Steel and Alloys*
SPECIAL LEAVE PETITION (CIVIL) DIARY NO. 21910 OF 2019†
JULY 12, 2019
Section 145 of the Income-tax Act, 1961 – Method of accounting (Valuation of stock) – In course of assessment, Assessing Officer made addition to assessee’s income on account of discrepancy in stock as per books of account of assessee and that shown in bank statements – Tribunal deleted said addition by taking a view that assessee had tendency to show higher value of stock in bank statements in order to enjoy higher cash credit limit – High Court upheld order passed by Tribunal – Whether, on facts, SLP filed against High Court’s order was to be granted – Held, yes [Para 2] [In favour of revenue]
Pr. CIT v. Janam Steel & Alloys 108 taxmann.com 349 (Guj.) [SLP granted; See annex].
Ms. Pinky Anand, ASG, Kumar Anurag Singh, Ms. Niranjana Singh, Chakitan Vikra, Shekhar Papta, Advs. and Mrs. Anil Katiyar, AOR for the Petitioner.
1. Learned Additional Solicitor General invited our attention to orders dated 07.07.2004 and 05.09.2004 passed by this Court in SLP(C) No. 17635 of 2014.
2. Delay condoned.
3. Leave granted.
4. List along with Civil Appeal No.8588/2014.
 108 taxmann.com 349 (Guj.)
HIGH COURT OF GUJARAT
Principal Commissioner of Income Tax v. Janam Steel & Alloys
AKHIL KURESHI AND B.N. KARIA JJ.
R/TAX APPEAL NO. 1240 OF 2018
OCTOBER 9, 2018
Mrs. Mauna M. Bhatt for the Petitioner.
Akil Kureshi, J. – Revenue is in appeal against the judgment of the Income Tax Appellate Tribunal dated 23.03.2018 raising following question for our consideration:
“Whether the Appellate Tribunal has erred in law and on facts in deleting the addition of Rs.1,59,22,356/- due to discrepancy found in stock statements, and by not considering the evidences in form of stock statements which were submitted by the assessee to his banker, Punjab National Bank?”
2. On 08.10.2018, we had considered such a question at the instance of the Revenue in Tax Appeal No.1198 of 2018 making following observations:
” Question  pertains to addition of a sum of Rs. 1.59 crores [rounded off] made by the Assessing Officer on account of discrepancy in the stock, as per the books of account of the assessee and that shown in the bank statements. Upon appeal, CIT [A] had given substantial relief retaining only Rs. 19.46 lakhs [rounded off] of such addition, deleting the rest. In further appeal, the Tribunal deleted the remaining amount also inter alia observing that there was no difference in the physical stock and the stock shown in the account of the assessee on the date of survey. Sole ground for making the addition was difference between the accounts maintained by the assessee and the stock statement filed with the Bank. It was noted that the stock statements filed with the Bank pertain to the months of April to August, whereas, the survey took place in the month of September. It was also noticed that the tendency to show higher value in the bank statements to enjoy higher cash credit limit. The entire issue is thus based on facts duly appreciated by the CIT [A] and the Tribunal. No question of law arises.
Question  is nothing but an element of the first question. No separate discussion is therefore necessary.
Third question pertains to deletion of a sum of Rs. 7.48 Crore added by the Assessing Officer on the strength of entries made in the diaries seized during the survey operation. CIT [A] and the Tribunal concurrently held that these entries pertain to one Shri Rajesh P Patel and not the assessee. The said Rajesh P Patel had also confirmed this during his examination. He had also filed an affidavit in support thereof.
Such being the position, no question of law arises.
In the result, Tax Appeal is dismissed.”
3. In the result, Tax Appeal is dismissed.