Ita/101/2005 Of Commnr.of Income Tax v. Hindustan Trading Co

02. 21.01.2014 Present : Mr. A.K. Mohapatara, Sr. Standing Counsel for the Revenue. This appeal has been preferred by the appellant under Section 260 A of the Income Tax Act, 1961 proposing following substantial question of law which has been pressed at the time of argument. “i. Whether on the facts and in the circumstances of the case, the learned Tribunal was justified in law to hold that the addition of account of unexplained cash balance was not justified.” A search and seizure operation was carried out on the premises of the assessee on 10.3.1999 and 11.3.1999 and books of account were seized. Assessment was completed under Section 158BC of the Act. Additions were made, inter alia, on the ground that stock valuation was not proper, which was sustained on appeal, but the Tribunal deleted the addition observing that the assessee had arrived at the value of stock by adopting the method of cost price which method of valuation was permissible. The assessing authority by taking MRP method and taking the valuation on the date of search could not doubt the correctness of the valuation of stock at the time of closure. The observation of the Tribunal is as follows:- The third ground relates to allegation of excess stock amounting to Rs.4,38,810/- for the assessment year 1999-2000 as per para 5.7 page 14 of the assessment order. The contention of the Ld. Counsel is that this was done taking into consideration of the physically inventory of stock figure compared with the book stock on the date of search. Sales figure was reduced by the cost and applying the G.P. the figures were arrived at. According to the Ld. Counsel the search was conducted on 10-3-99 i.e. 20 days before the closure of the financial year. Stock is valued on a given date according to the method of accounting following consistent basis to ensure that settled position is not unsettled by unreasonable suspicion and surmises. No material has been discovered to make a departure of valuing the stock giving rise to block assessment and resorting to practice of adoption of G.P. rate so a deficit will come out. Further the Ld. Counsel gave stress on the point that the goods are valued by the Department on M.R.P. basis without due regard to the cost thereof. On the other hand, the Ld. D.R. took the contention that no stock register was maintained, reconciliation was made by the Revenue on the basis of the stock inventory. Therefore, he relied on the order of the A.O. and the CIT (A). On going through the contentions of both the parties we find force in the reasoning given by the Ld. Counsel and accordingly we order to delete the addition. The assessee succeeds on this ground. xxx xxx xxx” We have heard learned counsel for the Revenue. Finding recorded by the Tribunal clearly shows that the decision on the issue is an adjudication of a factual aspect. Even if two views are possible, the view taken by the Tribunal is not liable to be interfered with under Section 260 A of the Income Tax Act. No substantial question of law arises. The appeal is dismissed. ……......……………… A.K.Goel, C.J. ……………………….. Dr. A.K. Rath, J.