DURGA DASS BANARSI DASS JEWELLERS PVT LTD,RAJPURA V. DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE, PATIALA

ITA 242/CHANDI/2024

AI Insights

The case involves Durga Dass Banarsi Dass Jewellers Pvt. Ltd., which appealed against the order of the Commissioner of Income Tax (Appeals)-5, Ludhiana, confirming an addition of Rs. 1,10,036 to their income for the assessment year 2018-19. This addition was based on the presumption of unaccounted sales of 1196.76 grams of jewelry, which were found short during a search operation. The company argued that the discrepancy was due to legitimate reasons, including sending jewelry for testing and resetting, but failed to provide sufficient evidence to substantiate these claims. The Tribunal dismissed the appeal, supporting the lower authorities' decisions.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 712328 (ITAT-CHANDIGARH)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-07-2025
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Assessment Year: 2018-2019
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: MANAV BANSAL
• Assessee Lawyers: PARIKSHIT AGGARWAL
• Keywords: Opportunity of being heard; Corroborative evidences
• Section: 132

Judgement Text

" आयकर अपीलȣय अͬधकरण,चÖडीगढ़ Ûयायपीठ, चÖडीगढ़ IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCH, ‘A’, CHANDIGARH BEFORE SHRI RAJPAL YADAV, VICE PRESIDENT & SHRI KRINWANT SAHAY, ACCOUNTANT MEMBER आयकर अपील सं./ ITA No. 242/CHD/2024 Ǔनधा[रण वष[ / Assessment Year : 2018-19 Durga Dass Banarsi Dass Jewellers Pvt. Ltd., 21-23, SBS Colony, Rajpura, Patiala 140401 Vs. बनाम The DCIT, Central Circle, Patiala èथायी लेखा सं./PAN No: AAECP5583G अपीलाथȸ/ APPELLANT Ĥ×यथȸ/ REPSONDENT ( PHYSICAL HEARING ) Ǔनधा[ǐरती कȧ ओर से/Assessee by : Shri Parikshit Aggarwal, CA राजèव कȧ ओर से/ Revenue by : Shri Manav Bansal, CIT DR सुनवाई कȧ तारȣख/Date of Hearing : 07.05.2025 उदघोषणा कȧ तारȣख/Date of Pronouncement : 29.07.2025 आदेश/Order Per Krinwant Sahay, A.M.: Appeal in this case has been filed by the Assessee against the order dt. 11.01.2024 of the ld. Commissioner of Income Tax (Appeals)-5, Ludhiana [herein referred to as ‘CIT(A)’] pertaining to assessment year 2018-19. 2. Grounds of appeal are as under: Printed from counselvise.com 242-Chd-2024 Durga Dass Banarsi Dass Jewellers Pvt. Ltd,. Rajpura 2 1. That on the facts, circumstances and legal position of the case, the Worthy CIT(A)-5, Ludhiana in Appeal No. 10511/2019- 20/CIT(A)-5/Ldh/2019-20 has erred in passing order u/s 250 dtd. 11.01.2024 as the same is in contravention of provisions of s. 250 of the Income Tax Act, 1961 (hereinafter referred to as \"Act\") 2. That on facts, circumstances and legal position of the case, the Worthy CIT(A) has erred in confirming the addition of Rs. 1,10,036/- made by the Ld. AO by raising presumption that the appellant had conducted unaccounted sales of stocks found short to the extent of 1196.76 gms. during the search proceedings. 3. That on facts, circumstances and legal position of the case, the order passed by Ld. AO and then by Worthy CIT(A) deserves to be quashed since the same have been passed without affording reasonable opportunity of being heard to the appellant. 4. That the appellant craves leave for any addition, deletion or amendment in the grounds of appeal on or before the disposal of the same. 3. Brief facts of the case as per the order of the CIT. CIT(A) are as under: - The appellant assessee is a Private Limited Company incorporated under the Companies Act, 1956. It is primarily engaged in the business of designing and producing gold ornaments ant jewellery including diamond Printed from counselvise.com 242-Chd-2024 Durga Dass Banarsi Dass Jewellers Pvt. Ltd,. Rajpura 3 and stone studded jewellery and for this purpose, the manufacturing unit has been established at Rajpura. All the necessary books of account including receipt and expense vouchers and supporting evidence are being maintained by consistently following the mercantile system of accounting. A search operation was conducted on 12.04.2017, in Aggarwal Group of cases and warrant u/s. 132 was executed in the case of assessee. During the search operation, certain documents /papers/ records relating to the period under reference, were impounded for verification. After getting back copies of the records, the accounts and records of the business activities conducted during the period under reference and maintained by the assessee in the normal course, were got audited and Audit Report in Form 3CB and 3CD were obtained from the Chartered Accountants. Return of income, declaring net Loss of Rs. 1,21,16,926/-, based on the Audit Report and Financial Statements extracted by the Auditors, was filed on 30.10.2018. The case had been taken up by the D.C.I.T., Central Circle, Patiala, for scrutiny and assessment. During the assessment proceedings, the information and evidence as called for by the Ld. Assessing Officer which includes the show cause notices issued during the proceedings, was provided. Books of account and other relevant records were also produced during the proceedings for perusal of the Id. Assessing Officer. The Ld. Assessing Officer has finalised the assessment proceedings, vide impugned order dated 26.12.2019. The book results have been Printed from counselvise.com 242-Chd-2024 Durga Dass Banarsi Dass Jewellers Pvt. Ltd,. Rajpura 4 resulted and Section 145(3) has been applied. The net Loss has been assessed at Rs. 1,20,06,890/-, while making addition of Rs.1,10,036/-on account of Gross Profit against alleged unaccounted sales of Rs.39,58,123/- determined towards value of stocks of ornaments and Jewellery found short to the extent of 1196.76 gms. The Ld. Officer has also initiated the penalty proceedings under section 271AAB of the Income Tax Act 1961. Copy of the impugned assessment order has been served upon the assessee on 30.12.2019.” 4. Although the Assessee has taken four grounds of appeal, but the only relevant ground is ground No.2, wherein, the Assessee has challenged the CIT(A)’s action of confirming the addition of Rs. 1,10,036/- made by the Assessing Officer raising presumption that the Assessee had conducted unaccounted sales of the stock found short to the extent of 1196.76 gms of jewellery during search proceedings. In fact, the addition in this case has been made by the Assessing Officer and sustained by the Ld. CIT(A) for unaccounted sales of stock found short to the extent of 1196.76 gms during search proceedings. 5. During the appellate proceedings, the Assessee took the plea that the discrepancy in the stock of jewellery to the Printed from counselvise.com 242-Chd-2024 Durga Dass Banarsi Dass Jewellers Pvt. Ltd,. Rajpura 5 tune of 1196.76 gms was because the gold jewellery of 499.36 gms was sent to one M/s M. S. Jewellers for testing purposes and gold jewellery of 697.4 gm was sent to M/s Pancham Jewellers Pvt. Ltd. for resetting. But the Assessing Officer has given a very clear finding that in support of this claim, no details documents etc. was produced before the Assessing Officer during the assessment proceedings. The AO has further stated that the director of the company was categorically asked during the search proceedings whether any cash / goods in stock /valuables were kept in any other place, except the shop. The director in his statement very clearly stated that no stock or valuables or cash which belonged to the Assessee company was kept anywhere else. The Assessee could not rebut this statement either before the Assessing Officer or before the Ld. CIT(A). Therefore, on the basis of short stock to the extent of 1196.76 gms of jewellery found during the search, and the statement given by the director of the company, the AO had made the addition. The Assessee could not rebut this finding of the Assessing Officer before the Ld. CIT(A), therefore, the Ld. CIT(A) confirmed this addition. Printed from counselvise.com 242-Chd-2024 Durga Dass Banarsi Dass Jewellers Pvt. Ltd,. Rajpura 6 6. Even during the proceedings before us, the ld. Counsel for the Assessee reiterated the same submissions as were made before the authorities below without bringing anything to rebut the findings of the Assessing Officer and its confirmation by the Ld. CIT(A). 7. The ld. DR relied on the orders of the authorities below. 8. We have heard the rival contentions of the both the parties and have gone through the record. We have also considered the assessment order passed by the Assessing Officer and the appellate order by the Ld. CIT(A). We are of this considered view that in the absence of any meaningful rebuttal by the Counsel of the Assessee during proceedings before us, we do not find any reason to interfere in the findings given by the Ld. CIT(A). Accordingly, Assessee’s appeal on this issue is dismissed. 8. In the result, Assessee’s appeal is dismissed Order pronounced on 29.07.2025. Sd/- Sd/- ( RAJPAL YADAV ) ( KRINWANT SAHAY) Vice President Accountant Member “आर.क े.” Printed from counselvise.com 242-Chd-2024 Durga Dass Banarsi Dass Jewellers Pvt. Ltd,. Rajpura 7 आदेश कȧ ĤǓतͧलͪप अĒेͪषत / Copy of the order forwarded to : 1. अपीलाथȸ/ The Appellant 2. Ĥ×यथȸ/ The Respondent 3. आयकर आयुÈत/ CIT 4. ͪवभागीय ĤǓतǓनͬध, आयकर अपीलȣय आͬधकरण, चÖडीगढ़/ DR, ITAT, CHANDIGARH 5. गाड[ फाईल/ Guard File आदेशानुसार/ By order, सहायक पंजीकार/ Assistant Registrar Printed from counselvise.com "