ASHOK KUMAR Vs. INCOME TAX OFFICER

JUDGEMENT

(1.) THIS appeal under Section 260A of the IT Act, 1961 (hereinafter called as 'Act'), is directed against order dt. 14th Dec, 1999 passed under Section 254(1) of the Act by the Income -tax Appellate Tribunal, Amritsar Bench, Amritsar (hereinafter referred to as 'the Tribunal') in ITA No. 844/Asr/1993 for asst. yr. 1990 -91, whereby the Tribunal allowed the appeal filed by the Department in respect of addition of Rs. 5,76,736 made by the AO on account of closing stock position in the books of account.

(2.) THE appellant is engaged in the business of glassware and crockery goods as wholesaler and retail dealer. The goods are imported from outside the State which are subject to check at the entry point at Lakhanpur barrier. The matter relates to asst. yr. 1990 -91 relevant to year ended on 31st March, 1990. Return of income in respect of aforesaid assessment year was filed by the appellant with the AO showing taxable income of Rs. 67,160. Along with return of income, the appellant submitted copy of its final accounts duly audited by a chartered accountant, who had certified that the trading and P&L; a/.c are in agreement with the books of account. The AO took up the case for detailed examination and during the course of assessment proceedings, the assessee produced ledger, cash book, bank passbooks, sales and purchase invoices and other vouchers, which were examined. The AO also checked the details and inventory of closing stock and found it in order.

(3.) LEARNED Counsel appearing on behalf of the appellant contended that the Tribunal is not justified in law in considering the routine declaration made by the appellant before the bank for obtaining higher cash credit facility for upholding the addition of Rs. 5,76,736. Further, according to learned Counsel, the Tribunal is also not justified in not taking into consideration the value of closing stock as per books of account as on 31st March, 1990 for which final item -wise details and valuation was available and furnished to the AO. Learned Counsel further submits that admission, if any, made by the appellant to the bank had been fully explained but the Tribunal proceeded on complete misunderstanding and misreading of the document in the shape of declaration made by the appellant to the bank. Learned Counsel also submits that the Tribunal failed to appreciate that the document submitted before the bank was for raising cash credit facility and cannot be made basis for addition without any corroborating evidence to the effect that the appellant had made purchases other than those recorded in the books of account.