COMMISSIONER OF INCOME TAX Vs. P. PRAVIN

JUDGEMENT

(1.) THE CIT, Gujarat -IV, Ahmedabad, the applicant herein, has sought the opinion of this Court on the following five questions of law under Section 256(2) of the IT Act, 1961 ('the Act'), stated to arise out of the Tribunal's order dt. 21st Feb., 1986, in ITA No. 1576/Ahd/1984 :

(2.) THE respondent -assessee is a registered firm carrying on construction work on contract basis. The assessment year is 1979 -80, and the relevant accounting period is the year ended 30th June, 1978.

(3.) THE explanation tendered by the assessee that the steel rounds had been received earlier in point of time and had been consumed in the construction work was not accepted by the assessing authority. The reasons for not accepting the explanation were, firstly, that the materials were such that they could not have been utilised within a short period, and the onus was on the assessee to prove that such materials purchased had, in fact, been consumed and were, therefore, not available as closing stock. The assessee's further explanation that the closing stock reflected the actual quantity of the items lying with the assessee was rejected for the reason that the verification of the stock was carried out by the employees of the assessee, and hence, the said items could have been excluded by the staff on being instructed to do so by partners of the assessee -firm.