Case Law Details
ACIT Vs Thatavarthi Ramesh Babu Kanuru (ITAT Visakhapatnam)
It is no doubt true that the initial burden is upon the assessee to prove the correct value of the stock held by the assessee and he has to prove that the value reflected in the books of accounts is correct but the fact remains that the courts have time and again accepted the fact that in open loan system, the parties tend to inflate figures of quantity as well as rate merely to enjoy higher cash credit limits. In the instant case, the assessee filed monthly VAT returns based on the same books of accounts and the same was accepted without making any additions. Neither the bank authorities nor the assessing officer made any effort to verify the actual stock to prove that there is existence of unaccounted stock under these circumstances and consistent with the view taken by the ITAT and various High Courts, we hold that the assessing officer has not made out a case for making an addition referable to unaccounted stock as well as determining the profit on the alleged sale of such unaccounted stock. Under the circumstances, we uphold the order passed by the learned Commissioner (Appeals).
FULL TEXT OF THE ITAT JUDGMENT
This appeal by the revenue is directed against order passed by the Commissioner (Appeals), Vijayawada and it pertains to the assessment year 2011- 12. Following grounds were urged by the revenue:–
1. The order of the learned . Commissioner (Appeals) is erroneous on facts and in circumstances of the case.
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