1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION INCOME TAX APPEAL NO. 331 OF 2006 M. Ambalal & Co. ...Appellant Versus The Commissioner of Income-tax, City-XV, Mumbai ... Respondent Ms. Aasifa Khan for the Appellant Mr. Vinod Gupta for the Respondent. CORAM: B ILAL NAZKI and S.S. SHINDE, JJ. DATE: JUNE 27, 2008 P.C.:- Heard the learned counsel for the parties. 2. Following questions have been framed:- “(1) Whether, on the facts and in the circumstances of the case and in law the ITAT erred in setting aside the issue of addition of Rs.88,72,947/-, made u/s. 69 of the Act, to the file of the Assessing Officer directing him to verify the stock on the basis of the existence of the stock register found at the time of search, without considering the fact that the Appellant was maintaining two stock registers (manufacturing and trading division) and the stock register of Manufacturing division was seized by the Customs Department? 2 (2) Whether, on the facts and in the circumstances of the case and in law the ITAT failed to appreciate that the Appellant had recorded the seizure of diamonds of Rs.88,72,947/- by the Customs Department in its books of account as the closing stock, as such the same have been accounted and considered while computing the income and therefore, once again making the addition u/s.69 of the Act by the Assessing Officer amounts to double addition? (3) Whether, on the facts and in the circumstances of the case and in law the ITAT failed to consider the fact that the Customs Department had seized the diamonds with different purpose and object and therefore, the findings and presumption made by them for the seizure of the diamonds are not available to the Income Tax Department while assessing the income of the Appellant when, in fact, all the evidence in support of the possession and ownership of the diamonds was produced at the time of assessment? (4) Whether, on the facts and in the circumstances of the case and in law the ITAT was right in setting aside, to the file of the Assessing Officer, the issue of addition made in respect of the rough, cut and polished diamonds of the manufacturing division when the Assessing Officer has not doubted the genuineness of the entries in the stock register of the manufacturing division? (5) Whether, on the facts and in the circumstances of the case and in law the ITAT erred in setting aside the issue to the file of the Assessing Officer only on the ground of verification of stock register, without considering the evidence or documents produced before it regarding the stock of diamonds of the manufacturing and trading division and those received from the karigars? (6) Whether, on the facts and in the circumstances of the case and in law the order passed by the ITAT, without considering the facts of the case, is perverse? 3 (7) Whether, on the facts and in the circumstances of the case and in law the ITAT was right in holding that any addition made u/s.69 of the Act is not the income derived from the export and therefore, it is not eligible for deduction u/s. 80HHC of the Act? (8) Whether, on the facts and in the circumstances of the case and in law the ITAT failed to appreciate that the Appellant was dispossessed of the stock of diamonds by the Customs Department from the day of the search and only the confiscation order was passed, later therefore, the claim of Rs.88,72,947/- ought to be allowed as business loss?” 3. These questions are basically framed by the appellant on an assumption that the facts, as mentioned in the Tribunal's order, are not correct. Certain questions are sought to be justified to be substantial questions of law on the ground that the appellant has produced stock registers; but in question No.1 itself, it is stated that the appellant was maintaining two stock registers, and the stock register of Manufacturing Division was seized by the Customs Department. Therefore, the Tribunal was right in holding, against the learned Deputy Registrar' s order, that there is no stock register, as mentioned by the Assessing Officer. At least, nothing was produced before him. If there was any, it must have been seized by the Customs Department. No 4 such evidence has been produced. In absence of genuine stock register of Manufacturing Division, the CIT(A) was not justified in deleting the addition. The appellant relied on certain papers from the assessee's paper book, but which were admitted to be not the stock register. Therefore, the conclusion drawn was based on facts, and the appellant has not been even able to produce the stock register before the authorities concerned. Therefore, it could not be said that the appellant had recorded the seizure of diamonds by the Customs Department in its books of account as the closing stock. Since no stock register was maintained, there was no question of coming to a conclusion other than to which the Tribunal came. 4. The next challenge relates to addition made under Section 69 of the Income Tax Act. The Tribunal came to the factual conclusion, and, therefore, applied Section 69. 5. In the facts and circumstances, we do not think that any question of law arises for our consideration. The appeal is accordingly disposed of. 5 BILAL NAZKI, J. S.S. SHINDE, J.