MAHENDRA MILLS LIMITED Vs. DESAI P B AAC

JUDGEMENT

(1.) THE petitioner in this case is a textile mill carrying on its business of manufacturing textiles. By this petition it has prayed for obtaining an appropriate writ quashing and setting aside the order of rectification passed by the concerned AAC on 28th June, 1969, rectifying his assessment order for the asst. year 1960 61.

(2.) SHORT facts leading to this petition are that the assessment of the petitioner's income for the asst. year 1959 60 was undertaken by the concerned ITO. During the course of the said assessment, the ITO found that there was some discrepancy between the stock of cotton shown in the records of the petitioner and in the records of the State Bank of India, with whom the petitioner had hypothecated its said stock of cotton. This discrepancy was sought to be explained by the petitioner by contending that it had given an incorrect figure of its stock to the bank with a view to obtain higher amount of overdraft. The explanation was not accepted by the ITO with the result that the ITO added the amount of Rs. 2,14,682 representing the additional closing stock which was not shown by the petitioner in its books of account. According to the accounts of the petitioner, its closing stock for the asst. year 1959 60 was Rs. 5,89,439 but on account of the above referred addition, its closing stock was calculated at Rs. 8,04,121. Against this order of the ITO, the petitioner preferred an appeal before the concerned AAC but the petitioner failed even in that appeal. Thereafter, the petitioner preferred a second appeal to the Tribunal.

(3.) THEREAFTER , the Tribunal gave its decision in the appeal preferred with regard to the asst. yr. 1959 60, on 22nd January, 1969. By this order, the Tribunal came to the conclusion that the explanation tendered by the petitioner assessee with regard to the over valuation of its stock hypothecated with the bank was acceptable and, therefore, the addition of Rs. 2,14,682 made by the ITO with regard to the asst. year 1959 60 should be deleted. Thus, according to the final order which was passed by the Tribunal with regard to the asst. year 1959 60, the closing stock of the petitioner assessee for the asst. year 1959 60 was as shown by the assessee in its account books, i.e., Rs. 5,89,439.