Difference between book stock and stock given to bank

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CA Gaurav Makwana (Querist)
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31 July 2010 There has been an addition for the differnce between the stock as per books and stock statement given to bank for credit facilities. Is there any judgements for deletion of such additon.???

CA. BIJENDER KR. BANSAL

CA. BIJENDER KR. BANSAL (Expert)
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31 July 2010 THERE IS NO JUDGEMENT.
IF YOU HAVE PROVIDED STOCK STATEMENT TO BANK FOR CREDIT FACLITY ON HIGH I.E YOU HAVE MISLEADING THE BANK TO MAINTIAN YOUR DRAWING POWER AGASINT CREDIT FACLIIIES AGAISNT FAKE STOCK.
IF YOU SAY THAT YOU HAVE PROVIDED CORRECT STOCK TO BANK, IT MEANS YOU HAVE UNDERSTATED STOCK IN BALANCE SHEET FOR REDUCING PROFIT.

I.E AO HAS RIGHT TO MAKE ADDITION ON SUCH DIFFERENCE .
YOU CAN'T SAY THAT BANK STOCK IS WRONG , IF YOU SAY THAT YOUR BANK FACLITIES MAY BE FREEZED AND BANK CAN SUIT YOU AGAISNT FRAUDLENT .

CA Gaurav Makwana

CA Gaurav Makwana (Querist)
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02 August 2010 Sir thanks for replying me but for your kind information there are judgements relating to that supporting the same see ACIT vs Jyoti Woolen Mills ITAT (Del) 125 TTJ 810 wherein it was held by the tribunal that addition could not be made on mere comparison of the stock declared to bank and the one shown in the books of accounts. I need more judgements for clarity on the same if anyone knows kindly reply me.

CA. BIJENDER KR. BANSAL

CA. BIJENDER KR. BANSAL (Expert)
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02 August 2010 THANKS FOR UPDATE,

SECTION 69
Where the assessee showed higher stock for availing credit
facility from the bank against hypothecation of stock and
there was no evidence on record to show that the assessee
possessed the higher quantity of stock as declared to the bank,
addition cannot be made on mere comparison of the stock
declared to the bank with that shown in the books of account
ruled the Delhi ‘D’ Bench in ACIT v. Jyoti Wollen Mills (2009)
125 TTJ (Del) 810.

CA Gaurav Makwana

CA Gaurav Makwana (Querist)
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05 August 2010 ........?????

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