RAJ KUMAR PUGLIA,BIRBHUM vs. ITO, WARD - 3(4), SURI

PDF · subscribers
ITA 2638/KOL/2024Status: DisposedITAT Kolkata24 April 2025AY 2012-13Bench: SHRI RAJESH KUMAR (Accountant Member)3 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that additions cannot be solely based on higher stock figures presented to a bank for securing credit limits, especially when the assessee's books of accounts were duly audited and the stock information was verified by auditors. The Tribunal set aside the CIT(A)'s order and directed the AO to delete the addition.

What were the facts?

The assessee, Raj Kumar Puglia, challenged an addition of ₹12,10,038/- by the AO, confirmed by the CIT(A), for AY 2012-13. The addition was based on a difference between stock declared to the bank for a cash credit limit and the stock recorded in the assessee's audited books, treated by the AO as unexplained investment under Section 69.

What were the issues?

Whether an addition made by treating the difference between stock declared to a bank for credit facilities and stock recorded in audited books as unexplained investment under Section 69 of the Income Tax Act is justified.

Which sections of the Income-tax Act were involved?

Section 143(1),Section 143(3),Section 133(6),Section 69

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “SMC” BENCH, KOLKATA

Before: SHRI RAJESH KUMAR, AM Shri Dilip Chatterjee, AR

For Appellant: Shri Dilip Chatterjee, AR
For Respondent: Shri Madhumita Das, DR
Hearing: 17.04.2025Pronounced: 24.04.2025

This is an appeal preferred by the assessee against the order of the National Faceless Appeal Centre, Delhi (hereinafter referred to as the “Ld. CIT(A)”] dated 30.10.2024 for the AY 2012-13.

2.

The only issue raised by the assessee in the various grounds of appeal is against the confirmation of addition by ld. CIT (A) of ₹12,10,038/- as made by the ld. AO on account of difference in the stocks as disclosed in the audited accounts vis a vis as filed before the bank for securing credit limit. The facts in brief are that the assessee filed the return of income on 28.09.2012, declaring total income of ₹2,74,604/-, which was processed u/s 143(1) of the Act. The case of the assessee was selected for scrutiny and statutory notices along with questionnaire were duly issued and served upon the assessee. The ld. AO noted that the assessee has cash credit account with State Bank of India, Sainthia Branch. The ld. AO issued notice u/s 133(6) of the Act to the bank for

3.

In the appellate proceedings, the ld. CIT (A) dismissed the appeal of the assessee by affirming the order of the ld. AO by holding that the assessee has not brought on record any material to disapprove the AO’s observation with regard to excess stocks shown in the Hypothecation statement.

4.

After hearing the rival contentions and perusing the materials available on record, I find that the assessee having a cash credit limit with State Bank of India upon the securities of stock. The assessee furnished before the AO the stocks in the books of accounts. The ld. AO issued notice u/s 133(6) of the Act to the State Bank of India calling for the security furnished by the assessee for securing such cash credit limit along with bank statements which were furnished by the bank before the ld. Assessing Officer. The ld. AO upon comparison of the details of hypothecated stocks with the stocks as per books of accounts of the assessee noted that the stocks were shown excess to the tune of ₹12,10,038/- in the hypothecation statement. The ld. AO extracted the details of such excess stock in the assessment order. I note that there is a difference between the stocks as peer audited books of accounts and the hypothecated stock statement given to the bank by the

5.

In the result, the appeal of the assessee is allowed.

Order pronounced in the open court on 24.04.2025.

More judgments on Section 133(6)

All 7,227 judgments and leading authorities on Section 133(6) →

Recent GST High Court judgments

Search GST case law →