(PER : HONOURABLE MS JUSTICE SONIA GOKANI) Challenging the order of the Income Tax Appellate Tribunal, Ahmedabad [ Tribunal for short] dated 11th May 2012, this Tax Appeal is preferred raising following substantial questions of law for our consideration :-
{A} Whether the tribunal was right in law in deleting the findings made by assessing officer in disallowing the social forestry expenses amount of Rs.61,76,818/- and amortization of social forestry expenses of Rs.80,45,449/- in computation of income ? .
{B} Whether the tribunal was right in law in deleting the addition of Rs.11,41,230/- on account of difference in valuation of closing stock in the books and as per bank statement ? .
{C} Whether the tribunal was right in law in deleting the addition of Rs.4,01,500/- as unexplained creditors ? .
Heard learned counsel Shri Sudhir Mehta for the Revenue. As far as Question {A} is concerned, we are given to understand that a Tax Appeal is admitted in case of this very assessee being Tax Appeal No. 1102 of 2011, and therefore, this question raised for the A.Y 2007-08 requires consideration.
As far as Question {B} is concerned, it touches the addition of Rs. 11,41,230/= made on account of difference in valuation of the closing stock in the books and the Bank statement. The Assessing Officer had added said income keeping in view the difference in the value of the closing stock.
CIT [A] had restored matter back to the files of the Assessing Officer for fresh decision; keeping in view assessee s own case for A.Y 2004-05. Tribunal on the ground that there is no factual difference that could be pointed out in the present appeal, did not interfere with the order of the CIT [A].
Learned counsel is not able to state as to whether the said issue has been carried in appeal for the earlier year to the High Court. Be that as it may, merely because there was a difference in the statement of the Bank and in the books of account, that per se would not give rise to making of any additions. There could be various reasons why the Bank statement would have different value of the stock being put by the assessee-respondent. It is by now a well recognized aspect that reflecting an enhanced value of stock in the Bank statement can not automatically furnish a ground to make addition in the income of the assessee. CIT [A] and the Tribunal when concurrently chose to remit the matter back to the Assessing Officer, we see no reason to interfere with the same.
The third question concerns deletion of addition of Rs. 4,01,500/= made in respect of unexplained creditors for A.Y 2007-08. The Tribunal, on examining the material available on record, found that the CIT [A] had followed decision of this High Court rendered in case of Ambica Mills Limited v. CIT, reported in 54 ITR 167. Tribunal noted from the record that in both the years, in the books of account of the assessee, the amount was shown as liability and the same was not written back by way of credit in Profit & Loss Account. Decisions of the Apex Court rendered in case of Sugali Sugar Works v. CIT, reported in 236 ITR 518 and in case of Kesaria Tea Company Limited, reported in 254 ITR 434 (SC) were not found applicable to the facts of this case after the amendment of Section 41 (1) by way of Explanation [1] and when it was found that the assessee had not written back the liability in the books, both the CIT (A) and the Tribunal had chosen not to invoke the provisions of Section 41 (1) of the Act holding that the said provision would not apply. We do not find any error in the approach of both the authorities of concurrently holding in favour of the assessee.
Tax Appeal therefore stands admitted for consideration of following substantial question of law:-
{A} Whether the tribunal was right in law in deleting the findings made by assessing officer in disallowing the social forestry expenses amount of Rs.61,76,818/- and amortization of social forestry expenses of Rs.80,45,449/- in computation of income ? .
To be heard with Tax Appeal No. 1102 of 2011.
(AKIL KURESHI, J.) (Ms.
SONIA GOKANI, J.) Prakash* Page 4 of 4