Law:

Section:

Section 69 of the Income-tax Act, 1961 - Unexplained investments - Assessment year 1993-94 - As there was difference in value of closing stock in two note books seized from assessee's premises, Assessing Officer made addition of said difference under section 69 - Tribunal accepted closing stock value submitted before and accepted by commercial tax department and deleted addition - Whether Assessing Officer did not have any jurisdiction to go beyond value of closing stock declared by assessee and accepted by commercial tax department - Held, yes FACTS During the search operation, a note book was seized which showed closing stock to the value of Rs. 7,51,186 as on 31-3-1993. Another note-book was also seized from the assessee's premises which showed the closing stock to the value of Rs. 10,00,359. As there was no satisfactory explanation for the difference of Rs. 2,49,173, the said amount was brought to tax under section 69. On appeal, both the Commissioner (Appeals) as well as the Tribunal had proceeded on the basis of the return showing closing stock of Rs. 7,51,186, submitted before and accepted by the commercial tax authorities and deleted the addition. In the instant appeal, the revenue contended that the closing stock value submitted before and accepted by the commercial tax department under the Tamil Nadu General Sales Tax Act (TNGST Act) was not binding on the Income-tax authorities and, therefore, the differential value between the two books of account seized from the premises of the assessee was taxable. HELD It is trite law that the Assessing Officer, while computing the income-tax has only the power of examining whether the books of account are certified by the competent authority. In Apollo Tyres Ltd. v. CIT [2002] 255 ITR 273/ 122 Taxman 562 (SC) where a question came up for consideration as to what extent the accounts scrutinized and certified by the authorities under the Companies Act, 1956 with reference to the books of profit as well as net profit, particularly net profit in the profit and loss account prepared in accordance with Parts II and III of Schedule VI to the Companies Act is binding on the Assessing Officer under the Income-tax Act,…

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