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2008] 305 ITR 199 [2009] 176 TAXMAN 178 (DELHI) HIGH COURT OF DELHI Commissioner of Income-tax *, Delhi-VIII, New Delhi v. Capital Tyres Mfg. Unit MADAN B. LOKUR AND V.B. GUPTA, JJ. IT APPEAL NO. 341 OF 2007â-  APRIL 9, 2008 Section 143, read with section 145, of the Income-tax Act, 1961 - Assessment - Additions to income - Assessment year 2001-02 - Assessee had hypothecated its stock with bank for availing overdraft facility - Value of stock given to bank was much higher than value of stock declared in assessee's books of account - Assessing Officer made an addition on account of such difference - On appeal, Commissioner (Appeals) confirmed addition but held that difference in valuation of closing stock was to be reduced by similar difference in opening stock - Tribunal upheld order of Commissioner (Appeals) - Whether approach of Tribunal was justified - Held, yes FACTS During the assessment proceedings, the Assessing Officer noted that the assessee had hypothecated its stock with bank for availing overdraft facility; and that value of stock declared to bank was much higher than value of stock declared in its books of account. The Assessing Officer rejected the assessee's explanation in that regard and made an addition on account of the difference. On appeal, the assessee raised a fresh plea that as closing stock shown to bank and the stock shown in the balance sheet was to be confirmed, reduction should be allowed for the difference which was there in the opening stock. The Commissioner (Appeals) accepted the assessee's plea and held that the addition made on account of difference in the valuation of closing stock was to be reduced by the similar difference in the opening stock. The Tribunal confirmed the order of the Commissioner (Appeals). HELD Both the authorities had taken into account the opening and closing stock of last year and had rightly excluded the inflated stock pertaining to the immediately preceding year. Thus, the approach of Tribunal could not be said to be perverse or erroneous. Ms. P.L. Bansal for the Appellant. S. Krishnan for the Respondent. JUDGMENT V.B. Gupta, J. - The Income-tax Appellate Tribunal (for short as 'Tribunal') vide…

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