SHRI KUSHAL KUMAR LUNAWAT, JAIPUR V. ASSISTANT COMMISSIONER OF INCOME TAX, JAIPUR

ITA 140/JPR/2018

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 5695 (ITAT-JAIPUR)
• Duration Of Justice: 11 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-01-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2015-2016
• Appeal Filed On: 05-02-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: KALIKA SINGH
• Keywords: Unexplained investment; Search and seizure; Fair market value; Valuation report; Block assessment
• Section: 132; 250; 64; 13; 22; 20

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENC HE-B, JAIPUR JH FOT; IKY JKO] U;KF;D LNL; ,OA JH FOE FLAG ;KNO] YS[KK LNL; DS LE{K BEFORE: SHRI VIJAY PAL RAO, JM & SHRI VIKRA M SINGH YADAV, AM VK;DJ VIHY LA- @ ITA NO. 140/JP/2018 FU/KZKJ.K O'K Z @ ASSESSMENT YEAR :2015-16 KUSHAL KUMAR LUNAWAT JAIPUR CUKE VS. THE ACIT, CENTRAL CIRCLE-1, JAIPUR LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: AATPL2105L VIHYKFKHZ@ APPELLAN T IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ L S@ ASSESSEE BY : SHRI G. M. MEHTA (CA) JKTLO DH VKSJ LS @ REVENUE BY : SHRI KALIKA SINGH (CIT) LQUOKBZ DH RKJH[ K@ DATE OF HEARING : 31/10/2018 MN?KKS'K.KK DH RKJH[ K@ DATE OF PRONOUNCEMENT: 30/01/2019 VKNS'K@ ORDER PER: VIKRAM SINGH YADAV, A.M. THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF LD. CIT(A)-4, JAIPUR DATED 01.12.2017 WHEREIN THE ASSESSEE HAS TA KEN THE FOLLOWING GROUNDS OF APPEAL:- (1) WITHOUT FINDING ANY INCRIMINATING MATERIAL OR OTHER EVIDENCE DURING COURSE OF SEARCH IN RESPECT OF PURCHASE OF ANY GOOD S OUT OF BOOKS, LD. CIT(A) WAS NOT JUSTIFIED IN SUSTAINING ADDITION OF RS. 2,00,24,661/- ON THE BASIS OF VERY HIGH VALUATION OF EXISTING BROUGHT FO RWARD STOCK OF PRECIOUS AND SEMI-PRECIOUS STONES (VALUED BY AN INEXPERIENCE D VALUER OF THE DEPARTMENT HAVING NEGLIGIBLE KNOWLEDGE ABOUT THE NA TURE AND TYPE OF STONES), THOUGH THE TOTAL STOCK WAS FOUND RECORDED IN STOCK REGISTERS IN TERMS OF QUANTITY AS BROUGHT FORWARD BALANCES OF EA RLIER YEARS AND THE SAME WAS REGULARLY DISCLOSED AS SUCH IN TRADING ACC OUNT SUBMITTED AS PART OF RETURN OF INCOME IN PRECEDING MORE THAN EIG HT YEARS. ITA NO. 140/JP/2018 KUSHAL KUMAR LUNAWAT, JAIPUR VS. ACIT, JAIPUR 2 (2) WITHOUT PREJUDICE TO GROUND NO. (1) LD. CIT(A) WAS NOT JUSTIFIED IN IGNORING THE LAW LAID DOWN BY HONBLE APEX COURT IN VARIOUS JUDGMENTS THAT STOCK IS TO BE VALUED AT COST OR MARKET WHICHE VER IS LOWER AND ONE CANNOT MAKE PROFIT FROM HIMSELF. 2. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT T HE ASSESSEE THROUGH HIS PROPRIETORSHIP CONCERN M/S S K INTERNATIONAL WAS EN GAGED IN TRADING ACTIVITIES OF PRECIOUS/SEMI-PRECIOUS STONES AND GOLD JEWELLERY . A SEARCH & SEIZURE OPERATION WAS CARRIED OUT AT VARIOUS PREMISES OF CO RAL GROUP ON 17.12.2014 AND BUSINESS/RESIDENTIAL PREMISES OF THE ASSESSEE W ERE ALSO COVERED IN THE SAID SEARCH AND SEIZURE OPERATION. DURING THE COURSE OF SEARCH, THE DEPARTMENTS REGISTERED VALUER HAS VALUED THE STOCK OF PRECIOUS/ SEMI PRECIOUS STONES AT RS. 2,24,97,496/- AS AGAINST STOCK OF RS. 24,72,835 /- AS PER THE BOOKS OF ASSESSEE. THUS, EXCESS UNDISCLOSED STOCK OF PRECIOU S/ SEMI PRECIOUS STONES OF RS. 2,00,24,661/- WAS FOUND DURING THE COURSE OF SE ARCH. 3. THE ASSESSEE SUBSEQUENTLY FILED HIS RETURN OF IN COME DECLARING TOTAL INCOME OF RS. 1,93,730 WHEREIN UNDISCLOSED STOCK OF PRECIOUS /SEMI PRECIOUS STONES WAS NOT DISCLOSED. DURING THE COURSE OF ASS ESSMENT PROCEEDINGS, A SHOW CAUSE NOTICE WAS ISSUED TO THE ASSESSEE AS TO WHY THE EXCESS UNDISCLOSED STOCK OF RS. 2,00,24,661/- SHOULD NOT BE TREATED AS UNDISCLOSED INCOME FOR THE IMPUGNED ASSESSMENT YEAR. IN RESPONSE, THE ASSESSEE SUBMITTED THAT HE MAINTAINS DAY TO DAY STOCK REGISTER OF THE GOODS TR ADED AS WELL AS REGULAR BOOKS OF ACCOUNTS AND THESE WERE PRODUCED BEFORE TH E SEARCH TEAM WHICH WAS ALSO EXAMINED BY THEM. IT WAS SUBMITTED THAT IN TER MS OF QUANTITY, THE STOCK FOUND DURING THE COURSE OF SEARCH WAS PERFECTLY AS PER STOCK REGISTER. HOWEVER, THE REGISTERED VALUER ENGAGED BY THE SEARCH TEAM WA S NOT EVEN CONVERSANT WITH THE NATURE AND TYPE OF PRECIOUS AND SEMI-PRECI OUS STONES LYING AS STOCK- IN-TRADE WITH THE ASSESSEE AND HAS VALUED THE STOCK AT HIS OWN CHOICE. IT WAS ITA NO. 140/JP/2018 KUSHAL KUMAR LUNAWAT, JAIPUR VS. ACIT, JAIPUR 3 SUBMITTED THAT THE REGISTERED VALUER HAD AVOIDED TH E STOCK REGISTER IN WHICH THE SAME STOCK OF GOODS WAS FOUND RECORDED, HE HAD AVOIDED THE PURCHASE PRICE AS PER THE PURCHASE INVOICES OF THE GOODS AND HE HAD VIOLATED THE LAW LAID DOWN BY HONBLE SUPREME COURT WHEREIN IT HAS BEEN W ELL LAID DOWN THAT THE STOCK IS TO BE VALUED AT COST OR MARKET WHICHEVER I S LOWER. IN SUPPORT OF HIS CONTENTIONS, AN EXAMPLE OF VALUATION OF SEMI-PRECIO US BEADS WAS GIVEN WHICH AS PER PURCHASE/IMPORT PRICE WAS OF RS. 4,68,000/- BUT THE SAME WAS VALUED BY THE REGISTERED VALUER AT RS. 1,37,06,225/-. 4. IT WAS FURTHER SUBMITTED THAT THE ASSESSEE IN HI S STATEMENT RECORDED DURING THE COURSE OF SEARCH U/S 132(4) HAS RAISED S TRONG OBJECTIONS FOR THE HIGH VALUATION BY THE REGISTERED VALUER ENGAGED BY THE S EARCH TEAM AND THAT THE ASSESSEE EVEN REQUESTED THE SEARCH TEAM TO GET THE STOCK REVALUED AT HIS COST BY ANOTHER VALUER BUT IN VAIN. IT WAS FURTHER SUBMI TTED THAT THE SEARCH WAS COMPLETED ON 19 TH DECEMBER, 2014 AND ON THE VERY NEXT DAY OF SEARCH, VIDE HIS LETTER DATED 20 TH DECEMBER, 2014 SENT THROUGH E-MAIL TO CHAIRMAN CBD T AND ON NEXT WORKING DAY VIDE, LETTER 22 ND DECEMBER, 2014 TO DGIT, JAIPUR, THE ASSESSEE HAD REQUESTED TO APPOINT ANOTHER VALUER TO VALUE HIS STOCK IN TRADE AS THE VALUATION OF THE STOCK BY THE REGISTERED VALUER OF THE DEPARTMENT WAS NOT CORRECT AS HE HAD NO KNOWLEDGE ABOUT THE PRECIOUS A ND SEMI PRECIOUS STONES AND THE VALUATION THEREOF. IT WAS FURTHER SUBMITTED THAT ON 2 ND JANUARY, 2015, THE ASSESSEE HAS GOT THE STOCK VALUED BY ANOTHER VA LUER APPROVED BY THE GOVT. OF INDIA WHO HAS VALUED THE SAME STOCK OF SEMI-PREC IOUS BEADS WITH GROSS WEIGHT OF 401.933 KGS AT RS. 4,86,545/- AS AGAINST RS. 1,37,06,225/- VALUED BY THE REGISTERED VALUER AT THE TIME OF SEARCH. 5. THE SUBMISSIONS OF THE ASSESSEE WERE CONSIDERED BUT NOT FOUND ACCEPTABLE TO THE ASSESSING OFFICER. REGARDING THE CLAIM OF THE ASSESSEE THAT THE STOCK OF PRECIOUS AND SEMI-PRECIOUS BEADS, THE NET WEIGHT OF WHICH IS ITA NO. 140/JP/2018 KUSHAL KUMAR LUNAWAT, JAIPUR VS. ACIT, JAIPUR 4 368.582 KGS FOUND AS PER THE BOOKS OF ACCOUNTS IS T HE SAME AS GROSS WEIGHT OF 401.933 KGS AS PER VALUATION REPORT, THE ASSESSING OFFICER OBSERVED THAT THE VALUATION REPORT OF THE DEPARTMENTS VALUER MENTION S THE STOCK OF SEMI- PRECIOUS STONES AT VARIOUS PAGES OF HIS VALUATION R EPORT AND THEREFORE IT IS NOT DISCERNABLE FROM THE VALUATION REPORT WHICH ARE THE SEMI PRECIOUS STONES WHICH ARE CONTAINED IN 368.582 KGS OF MIX SEMI-PRECIOUS B EADS AS PER THE STOCK REGISTER MAINTAINED BY THE ASSESSEE AND THEREFORE, IT IS NOT AT ALL VERIFIABLE. IT WAS FURTHER OBSERVED BY THE ASSESSING OFFICER THAT WHERE SEMI PRECIOUS STONES WOULD HAVE BEEN EXCLUSIVELY VALUED BY THE REGISTERE D VALUER, ONLY THEN THESE ARGUMENTS WOULD HAVE BEEN VALID AND ONLY THEN THE O PENING STOCK OF MIX SEMI PRECIOUS BEADS AS PER PAGE 14 OF STOCK REGISTER COU LD HAVE BEEN CONSIDERED TO BE THE SAME STOCK AS MIX SEMI PRECIOUS STONES AS FO UND DURING THE COURSE OF SEARCH BUT THE FACT OF THE MATTER IS THAT MIX SEMI PRECIOUS STONES ARE COVERED IN THE ENTIRE VALUATION REPORT AND THE QUANTITY OF STOCK OF MIX SEMI PRECIOUS STONES AS PER THE VALUATION REPORT OF THE DEPARTMEN T IS MUCH HIGHER THAN 401.933 KGS. THEREFORE, THE TWO QUANTITIES 401.333 KG AND 368.582 KG OF MIX SEMI-PRECIOUS STONES/BEADS AS PER THE STOCK REGISTE R OF THE ASSESSEE CANNOT BE COMPARED. IT WAS FURTHER OBSERVED BY THE ASSESSING OFFICER THAT THE BILLS FURNISHED BY THE ASSESSEE ARE ONLY OF STOCK CATEGOR IZED AS MIX SEMI PRECIOUS BEADS AND IN THE STOCK REGISTER OF THE ASSESSEE, TH ERE ARE OVERLAPS AS WELL WITH THE OTHER ITEMS OF THE STOCK. REGARDING THE VALUATI ON DONE BY SOME OTHER REGISTERED VALUER AFTER 14 DAYS OF SEARCH, THE ASSE SSING OFFICER OBSERVED THAT IT IS PRACTICALLY NO WAY TO ASCERTAIN THAT EXACTLY THE SAME STOCK WOULD HAVE BEEN VALUED ON 02.01.2015 AND IT CANNOT BE DENIED THAT T HE STOCK AT THE TIME OF SEARCH WOULD HAVE BEEN TAMPERED WITH AND THE VALUAT ION WOULD HAVE BEEN DONE AFTER 14 DAYS TO SUIT THE ASSESSEES OWN REQUI REMENTS. THE SAID VALUATION WAS DONE BY THE ASSESSEES VALUER AT THE BACK OF TH E DEPARTMENT AND THEREFORE IN THE ABSENCE OF THE DEPARTMENT, THE SAID VALUATIO N CANNOT BE VERIFIED. REGARDING ASSESSEES CLAIM THAT REGISTERED VALUER O F THE DEPARTMENT WAS NOT ITA NO. 140/JP/2018 KUSHAL KUMAR LUNAWAT, JAIPUR VS. ACIT, JAIPUR 5 CONVERSANT WITH THE NATURE AND TYPE OF STONES, THE SAME WAS NOT FOUND ACCEPTABLE AS THE VALUER WAS THE REGISTERED VALUER APPROVED BY THE GOVERNMENT OF INDIA AND THEREFORE, HE CANNOT BE QUE STIONED AND BOTH THE PARTIES, THE ASSESSEE, THE DEPARTMENT AND TWO INDEP ENDENT WITNESSES WERE PRESENT AT THE TIME OF VALUATION BY THE REGISTERED VALUER AT THE TIME OF SEARCH. 6. FURTHER, THE ASSESSEE CLAIM, ON THE BASIS OF THE SECOND VALUATION REPORT FURNISHED AFTER VALUATION BY ANOTHER REGISTERED VAL UER (KANKARIYA JEWELLERS) THAT THE GROSS WEIGHTS OF STONES VALUED BY THE REGI STERED VALUER OF THE DEPARTMENT INCLUDED THE WEIGHT OF BOXES AND PACKING MATERIAL, WAS ALSO NOT FOUND ACCEPTABLE TO THE ASSESSING OFFICER. AS PER T HE ASSESSING OFFICER, THE REGISTERED VALUER HAS MENTIONED THE WEIGHTS OF STON ES AS GROSS WEIGHT ONLY FOR THE REASON THAT STONES DO NOT NEED TO BE QUANTIFIED ON A NET BASIS. IF IT WOULD HAVE BEEN GOLD JEWELLERY STUDDED WITH POLKI, OR KUN DAN MEENA, THEN THE NET WEIGHT WOULD HAVE BEEN RELEVANT. SINCE THE ITEM BEI NG DISCUSSED IS ONLY PRECIOUS AND SEMI-PRECIOUS STONES, THE QUESTION OF NET WEIGHT DOES NOT ARISE. THE WEIGHTS WERE TAKEN ON A GROSS BASIS NOT BECAUSE THEY INCLUDED THE WEIGHT OF BOXES, BUT ONLY BECAUSE OF THE ABOVE REASON. EVE N OTHERWISE, THE CLAIM BY THE ASSESSEE OF INCLUSION OF BOXES AND PACKING MATE RIAL IN THE GROSS WEIGHTS BY THE REGISTERED VALUER OF THE DEPARTMENT IS NOT VERI FIABLE. 7. IT WAS FURTHER HELD BY THE ASSESSING OFFICER THA T IT CANNOT BE VERIFIED IN ANY WAY WHETHER THE STONES WHOSE BILLS HAVE BEEN FU RNISHED BY THE ASSESSEE ARE THE SAME SEMI-PRECIOUS STONES WHICH WERE FOUND AT THE TIME OF SEARCH. SINCE, THERE ARE SO MANY OVERLAPS BETWEEN THE BILLS , STOCK REGISTER AND THE VALUATION REPORT OF THE DEPARTMENT, IT CANNOT BE SA ID THAT THE STOCK FOUND DURING THE SEARCH, RECORDED ON PAGE NOS. 6 TO 8 OF THE VALUATION REPORT OF THE DEPARTMENT, IS THE SAME STOCK AS PER THE PURCHASE B ILLS FURNISHED BY THE ASSESSEE. THE LINKAGE BETWEEN THE BILLS PRODUCED AN D STOCK FOUND, THUS, ITA NO. 140/JP/2018 KUSHAL KUMAR LUNAWAT, JAIPUR VS. ACIT, JAIPUR 6 CANNOT BE ESTABLISHED. BASED ON THE ABOVE DISCUSSIO N, THE EXCESS UNDISCLOSED STOCK OF PRECIOUS/SEMI PRECIOUS STONES OF RS. 2,00, 24,661/- WAS ADDED AND BROUGHT TO TAX AS THE UNEXPLAINED INVESTMENT IN THE HANDS OF THE ASSESSEE. 8. BEING AGGRIEVED, THE ASSESSEE CARRIED THE MATTE R IN APPEAL BEFORE THE LD CIT(A) AND REITERATED THE SUBMISSIONS MADE BEFORE T HE ASSESSING OFFICER. FURTHER, THE ASSESSEE FURNISHED DETAIL RECONCILIATI ON OF STOCK OF PRECIOUS AND SEMI PRECIOUS STONES AS PER THE APPROVED VALUER ENG AGED BY THE DEPARTMENT AT THE TIME OF SEARCH, AS PER THE APPROVED VALUER E NGAGED BY THE ASSESSEE SUBSEQUENT TO THE SEARCH, AND THE STOCK AND THE COR RESPONDING VALUE IN THE BOOKS OF ACCOUNTS. IT WAS SUBMITTED THAT THERE IS NO DIFFERENCE IN QUANTITY OF THE STOCK RECORDED IN THE BOOKS OF ACCOUNTS AND FOU ND DURING THE COURSE OF SEARCH AND ONLY ON THE BASIS OF HIGHER VALUATION MA DE BY THE APPROVED VALUER ENGAGED BY THE DEPARTMENT, THE AO HAS MADE ADDITION OF RS. 2,00,24,661/-. THE LD. CIT(A) HELD THAT THE APPELLANT HAS NOT ABLE TO MATCH THE ITEMS OF PRECIOUS AND SEMI PRECIOUS STONES FROM THE INVENTOR Y DRAWN BY THE DEPARTMENT VALUER WITH THE STOCK REGISTER WHICH APPELLANT CLAI MS THAT THESE CONTAIN ALL THE ITEM INVENTORIZED BY THE DEPARTMENT VALUER. IN OTHE R WORDS, IT IS ESSENTIAL TO MATCH THE ITEMS ON ONE TO ONE BASIS IN DEPARTMENTAL VALUATION REPORT WITH THE STOCK REGISTER MAINTAINED BY THE APPELLANT. THE APP ELLANT ON THE OTHER HAND HAS PASSED UNSUBSTANTIATED VALUE JUDGMENTS ON THE C OMPETENCY OF DEPARTMENTAL VALUER AND HAS PUT ACROSS HIS OWN VALU ATION REPORT DONE BY HIS VALUER EVEN AT THE APPELLATE PROCEEDINGS, THE DISCR EPANCIES POINTED OUT BY THE AO HAS NOT BEEN REBUTTED BY THE ASSESSEE. ACCORDING LY, THE LD. CIT(A) WAS OF THE VIEW THAT THE STOCK FOUND DURING THE COURSE OF SEARCH DOES NOT TALLY WITH THE STOCK FOUND IN THE BOOKS OF ACCOUNTS AND ACCORD INGLY, ADDITION MADE BY THE ASSESSING OFFICER WAS CONFIRMED. NOW THE ASSESSEE I S IN APPEAL AGAINST THE SAID FINDING OF THE LD. CIT(A). ITA NO. 140/JP/2018 KUSHAL KUMAR LUNAWAT, JAIPUR VS. ACIT, JAIPUR 7 9. DURING THE COURSE OF HEARING, THE LD. AR SUBMITT ED THAT THE ASSESSEE AS PROPRIETOR OF M/S. S.K. INTERNATIONAL WAS DEALINGS IN PRECIOUS/SEMI PRECIOUS STONES AND GOLD MOUNTING AT A VERY SMALL SCALE LEVE L. SEARCH AND SEIZURE OPERATION U/S. 132 OF I.T. ACT 1961 TOOK PLACE ON 1 7 TH DECEMBER 2014. DURING THE COURSE OF SEARCH, NO INCRIMINATING MATERIAL OR OTHER EVIDENCE EITHER OF PURCHASE OR SALE OF GOODS OR OTHER TRANSACTIONS OUT OF BOOKS WAS FOUND. THE MAJOR STOCK IN TRADE WAS BROUGHT FORWARD BALANCES F ROM EARLIER YEARS (QUALITY AND QUANTITATIVE-WISE STOCK MAINTAINED). WHEN NOTH ING INCRIMINATING WAS FOUND, THE SEARCH TEAM, BY ENGAGING AN INEXPERIENCE D VALUER TO VALUE THE STOCK IN TRADE (PRECIOUS AND SEMI PRECIOUS STONES) GOT IT VALUED AT EXORBITANT HIGH VALUE WHICH WAS MORE THAN 15 TIMES OF EVEN SAL E PRICE. SINCE THE VALUER HAD NEGLIGIBLE KNOWLEDGE EVEN IN RESPECT OF NAMES O F DIFFERENT TYPE OF PRECIOUS/SEMI PRECIOUS STONES, ASSESSEE RAISED HIS STRONG OBJECTION FOR VALUATION IN HIS STATEMENT DATED 19.12.2014 U/S. 13 2(4) OF IT ACT AND REQUESTED SEARCH TEAM FOR REVALUATION OF STOCK IN T RADE BY ANY OTHER EXPERIENCED VALUER. FOR SUCH AN ARBITRARY HIGH VALU ATION OF EXISTING STOCK IN TRADE, WHEN ASSESSEES PROTEST REMAINED IN VAIN, AF TER CONCLUSION OF SEARCH IN THE EVENING ON FRIDAY, 19 TH DECEMBER 2014, ASSESSEE EXPRESSED HIS RESENTMENT AND PROTEST OF SUCH HIGH VALUATION TO HIGHER AUTHO RITIES OF DEPARTMENT, WHICH HE DID AS PER FOLLOWING DETAILS: DATE & DAY SUBMITTED TO REMARKS P.B. PAGE 20.12.2014, SATURDAY CHAIRMAN, CBDT, N.DELHI THROUGH E.MAIL 13 A & B 22.12.2014, MONDAY D.G.I.T. (INVESTIGATION), JPR THR. RECEIPT 14 FOR ABOUT 10 DAYS AFTER REQUEST FOR REVALUATION OF THE STOCK IN TRADE, ASSESSEE WAITED FOR THE RESPONSE BUT WHEN NOTHING WAS HEARD FROM DEPARTMENT, ITA NO. 140/JP/2018 KUSHAL KUMAR LUNAWAT, JAIPUR VS. ACIT, JAIPUR 8 ASSESSEE HIMSELF GOT THE STOCK REVALUED THROUGH AN EXPERIENCED VALUER WHO WAS ALSO ENGAGED BY THE SEARCH TEAM TO VALUE PERS ONAL JEWELLERY OF THE ASSESSEE AND HIS FAMILY IN ASSESSEES SEARCH PROCEE DINGS. 10. IT WAS FURTHER SUBMITTED THAT BOTH THE LOWER AU THORITIES HAVE MADE/SUSTAINED THE ADDITIONS IGNORING THE FOLLOWIN G: (1) THE STOCK IS TO BE VALUED AT COST OR MARKET WHICHEV ER IS LOWER. (2) NO INCRIMINATING MATERIAL WAS FOUND DURING THE COUR SE OF SEARCH EVIDENCING PURCHASE/SALE OF GOODS OUT OF BOOKS; (3) STOCK REGISTERS IN TERMS OF QUANTITY FOR LAST TEN Y EARS ARE BEING MAINTAINED AND FOUND DURING THE SEARCH. QUANTITY & QUALITY OF AVAILABLE STOCK WAS AS PER STOCK REGISTER; (4) THROUGH OVER-VALUING EXISTING UNSOLD STOCK NO ADDI TION COULD HAVE BEEN MADE ; (5) ADDITION WAS MADE IN AVOIDANCE OF ASSESSEES REQUES T OF REVALUATION IN HIS STATEMENT U/S. 132(4) AND THEREAFTER TO CHAIRPERSO N, CBDT AND AGAIN TO DGIT, JAIPUR; (6) NO MISTAKE WAS NOTICED/FOUND IN THE VALUATION REPOR T OF INDEPENDENT VALUER (KANKARIA JEWELLERS); (7) IT IS SETTLED LAW THAT IN SEARCH CASES, THE ADDITIO N, IF ANY, CAN ONLY BE MADE ONLY ON THE BASIS OF INCRIMINATING MATERIAL FO UND DURING THE COURSE OF SEARCH. IT IS RELEVANT TO REFER THE FOLLOWING J UDICIAL PRONOUNCEMENTS (HEAD NOTES): (I) CIT VS. DR. RATAN KUMAR SINGH (2014) 265 CTR (ALL) 103: UNDISCLOSED INCOME OF THE BLOCK PERIOD HAS TO BE DETERMINED ON THE BASIS OF EVIDENCE FOUND AS RESULT OF SEARCH OR REQUISITION OF BOOKS O F ACCOUNTS OR OTHER DOCUMENTS AND SUCH OTHER MATERIAL OR INFORMATION A S ARE AVAILABLE WITH THE AO AND RELATABLE TO SUCH EVIDENCE. IT IS NOT OP EN FOR THE AO TO COMPUTE INCOME ON THE BASIS OF HIS BEST JUDGMENT. ITA NO. 140/JP/2018 KUSHAL KUMAR LUNAWAT, JAIPUR VS. ACIT, JAIPUR 9 (II) PR. CIT VS SAUMYA CONSTRUCTION P. LTD (2016) 387 IT R 529 (GUJ):APPLICATION OF SECTION 153A. CONDITION PRECED ENT. DISCOVERY OF INCRIMINATING MATERIAL DURING SEARCH. ASSESSMENT ON BASIS OF STATEMENT OF THIRD PERSON- NOT VALID (HERE THIRD PERSON IS THE V ALUER ENGAGED BY SEARCH TEAM TO VALUE THE STOCK AVAILABLE WITH THE APPELLAN T). (III) CIT VS. PINAKI MISHRA (2017) 392 ITR 347 (DEL): UND ISCLOSED INCOME TO BE DETERMINED ON THE BASIS OF MATERIAL FOUND DURING CO URSE OF SEARCH. ADDITION MADE ON THE BASIS OF EVIDENCE GATHERED FRO M EXTRANEOUS SOURCE AND ON BASIS OF STATEMENT OR DOCUMENTS RECEIVED SUB SEQUENT TO SEARCH. NOT FORMING PART OF UNDISCLOSED FOR BLOCK PERIOD. A O HAS NO JURISDICTION TO MAKE ADDITIONS. (IV) CIT VS. SMT. S. JAYALAKSHMI AMMAL (2017) 390 ITR 18 9 (MAD): BLOCK ASSESSMENT. CORROBORATIVE EVIDENCE NEEDED IN CASE O F STATEMENT. FINDING THAT ADDITIONS WERE NOT SUSTAINABLE- JUSTIFIED. (V) PR. CIT VS. DEVANGI ALIAS RUPA (2017) 394 ITR 184 (GUJ): ASSESSMENT OF UNDISCLOSED INCOME- CONDITION PRECEDENT- ASSESSMENT MUST BE ON BASIS OF DISCOVERY OF INCRIMINATING MATERIAL DURING SEARCH. (8) NET WEIGHT OF THE GOODS WAS TO BE CONSIDERED FOR V ALUATION EXCLUSIVE OF BOXES AND OTHER PACKING MATERIAL WHEREAS DEPARTME NT VALUER (KAMAL KANT PAREKH) HAD ADOPTED GROSS WEIGHT VALUATION OF PRECIOUS AND SEMI PRECIOUS STONES (INCLUDING OF BOXES AND OTHER PACKI NG MATERIAL) (9) THE DEPARTMENT HAD BEEN ACCEPTING THE TRADING RESUL TS OF THE APPELLANT UP TO THE A.Y. 2014-15 BUT AFTER ACTION U/S. 132 OF IT ACT, BOTH THE LOWER AUTHORITIES DID NOT AGREE TO THE B/F. VALUE OF PREC EDING YEARS STOCK OF SEMI PRECIOUS/PRECIOUS STONES INCLUDING MIXED BEADS WHER EAS THE QUANTITATIVE FIGURES OF DIFFERENT STONES WERE SUPPORTED BY THE S TOCK REGISTER . ON THE ITA NO. 140/JP/2018 KUSHAL KUMAR LUNAWAT, JAIPUR VS. ACIT, JAIPUR 10 BASIS OF SUCH FAULTY HIGH VALUATION BY THE VALUER E NGAGED BY THE SEARCH TEAM, UNJUSTIFIED ADDITIONS OF RS.2,00,24,661/- WAS MADE. (10) SUMMARY OF VALUATION OF INDIVIDUAL PRECIOUS & SEMI PRECIOUS STONES AS PER REPORT OF KANKARIA JEWELLER (THE APPROVED VALUER EN GAGED BY THE ASSESSEE), SHRI KAMAL KANT PAREEK (THE APPROVED VAL UER ENGAGED BY THE SEARCH TEAM) AND VALUE (AT COST) APPEARING IN THE BOOKS OF ACCOUNTS IS COMPARED HEREUNDER: WEIGHT AND VALUATION OF PRECIOUS STONES: (1) EMERALD AS PER APPROVED VALUERS REPORT (KANKARI A) AS PER BOOKS OF ACCOUNTS S.NO. AS PER VALUATION REPORT GROSS WEIGHT WEIGHT (CTRS) NET WEIGHT VALUE (RS.) NET WEIGHT (CTRS) VALUE (RS.) 14. 900.00 635.18 7,628.00 7,039.03 2,81,766.35 15. 2,650.00 1,715.10 68,604.00 20. 2,160.00 1,415.30 11,312.00 33. 1,175.00 615.67 52,332.00 34. (PART) 955.00 (BOTH) 602.95 12,059.00 34. (PART) 9.37 27,173.00 35. 2,417.00 1,558.07 93,484.00 36. 415.00 309.45 15,472.00 37. 245.00 180.73 6,325.00 TOTAL 10,917.00 7,041.82 2,94,399.00 7 ,039.03 2,81,766.35 WEIGHT/VALUE BY SH. K.K PAREEK 10,917.50 NOT PROVIDED 18,44,050.00 - - ITA NO. 140/JP/2018 KUSHAL KUMAR LUNAWAT, JAIPUR VS. ACIT, JAIPUR 11 (2) RUBY AS PER APPROVED VALUERS REPORT (KANKARIA) AS PER BOOKS OF ACCOUNTS S.NO. AS PER VALUATION REPORT GROSS WEIGHT (CTRS) NET WEIGHT (CTRS) VALUE (RS.) NET WEIGHT (CTRS) VALUE (RS.) 12. (PART) 1,052.50 897.02 16,146.00 1,612.05 63,408.46 12. (PART) 281.50 (BOTH) 1.28 20,480.00 21. 151.70 14,411.00 32. 840.00 561.60 14,040.00 TOTAL 2,174.00 1,611.60 65,077.00 1,612.05 63,408.46 WEIGHT/VALUE BY SH. PAREEK 2,174.00 NOT PROVIDED 1,77,137.00 (3) SAPPHIRE AS PER APPROVED VALUERS REPORT (KANKARIA) AS P ER BOOKS OF ACCOUNTS S.NO. AS VALUATION REPORT GROSS WEIGHT (CTRS) NET WEIGHT (CTRS) VALUE (RS.) NET WEIGHT (CTRS) VALUE (RS.) 21 891 550.90 11,569.00 550.93 10,942.04 TOTAL 891 550.90 11,569.00 550.93 10,942.04 WEIGHT/VALUE BY SH. K. K. PAREEK 891 NOT SHOWN 1,78,200.00 SUMMARY OF WEIGHT AND VALUE OF TOTAL PRECIOUS STON ES (AS ABOVE) AS PER REPORT OF K.K. PAREEK AS PER KANKARIA AS PER BOOKS OF ACCOUNTS PRECIOUS STONES GROSS WEIGHT (CTRS) VALUE (RS.) GROSS WEIGHT (CTRS) VALUE (RS.) NET WEIGHT (CTRS) VALUE (RS.) ITA NO. 140/JP/2018 KUSHAL KUMAR LUNAWAT, JAIPUR VS. ACIT, JAIPUR 12 EMERALD 10,917.50 18,44,050.00 10,917.00 2,94,399.00 7,039.03 2,81,766.35 RUBY 2,174.00 1,77,137.00 2,174.00 65,07 7.00 1,612.05 63,408.46 SAPPHIRE 891.00 1,78,200.00 891.00 11,569.00 550.93 10,942.04 13,892.50 21,99,387,00 13,892.00 3,71,045.00 9,202,01 3,56,116.85 WEIGHT, VALUATION & BOOK VALUE OF SEMI-PRECIOUS STO NES: (1) GARNET AS PER APPROVED VALUERS REPORT (KANKARIA) AS PER BOOKS OF ACCOUNTS S.NO. AS PER VALUATION REPORT GROSS WEIGHT (CTRS) NET WEIGHT (CTRS) VALUE (RS.) NET WEIGHT (CTRS) VALUE (RS.) 13. 10,705.00 10,231.03 20,462.00 16,314.10 77,155,83 16. 6,900.00 6,083.10 60,831.00 TOTALS 17,605.00 16,314.13 81,293.00 16,314.10 77,155.83 WEIGHT/VALUE BY SH. PAREEK 17,605.00 NOT PROVIDED 6,00,700.00 (2) PERIDOT AS PER APPROVED VALUERS REPORT (KANKARIA) AS PER BOOKS OF ACCOUNTS S .NO. AS PER VALUATION REPORT GROSS WEIGHT (CTRS) NET WEIGHT (CTRS) VALUE (RS.) NET WEIGHT (CTRS) VALUE (RS.) 19. 3,190.00 3,138.60 25,109.00 3,544.39 59,768.33 38. 405.80 405.80 36,522.00 TOTALS 3,595.80 3,544.40 61,631.00 3,544.39 59,768.33 ITA NO. 140/JP/2018 KUSHAL KUMAR LUNAWAT, JAIPUR VS. ACIT, JAIPUR 13 WEIGHT/VALUE BY SH.K.K. PAREEK 3,595.80 NOT PROVIDED 1,16,554.00 (3) AMETHYST AS PER APPROVED VALUERS REPORT (KANKARIA) AS PE R BOOKS OF ACCOUNTS S.NO. AS PER VALUATION REPORT GROSS WEIGHT (CTRS) NET WEIGHT (CTRS) VALUE (RS.) NET WEIGHT (CTRS) VALUE (RS.) 08. 4,567.50 4,435.95 17,744.00 24,459.71 2,05,273.00 18. 7,450.00 (BOTH) 6,934.02 1,52,548.00 18. 8.47 1,058.00 23. 14,580.00 13,082.57 39,248.00 TOTALS 26,597.50 24,461.01 2,10,598.00 24,459.71 2,05,273.00 WEIGHT/VALUE BY SH. K.K. PAREEK 26,578.55 NOT PROVIDED 24,19,409.00 (4) AMETHYST (CIT) - MIX AS PER APPROVED VALUERS REPORT (KANKARIA) AS PER BOOKS OF ACCOUNTS S.NO. AS PER VALUATION REPORT GROSS WEIGHT (CTRS) NET WEIGHT (CTRS) VALUE (RS.) NET WEIGHT (CTRS) VALUE (RS.) 23. 18.95 18.95 852.00 18.95 852.75 TOTALS 18.95 18.95 852.00 18.95 852.75 WEIGHT/VALUE BY SH.K.K. PAREEK 18.95 NOT PROVIDED 1,516.00 (5) IOLITE AS PER APPROVED VALUERS REPORT (KANKARIA) AS PER BOOKS OF ITA NO. 140/JP/2018 KUSHAL KUMAR LUNAWAT, JAIPUR VS. ACIT, JAIPUR 14 ACCOUNTS S.NO. AS PER VALUATION REPORT GROSS WEIGHT (CTRS) NET WEIGHT (CTRS) VALUE (RS.) NET WEIGHT (CTRS) VALUE (RS.) 03. 77.50 77.50 775.00 1,514.53 29,437.47 09. 1,477.50 1,437.03 28,740.00 TOTALS 1,555.00 1,514.53 29,515.00 1,514.53 29,437.47 WEIGHT/VALUE BY SH. K.K. PAREEK 1,555.00 NOT PROVIDED 43,307.00 (6) CITRINE AS PER APPROVED VALUERS REPORT (KANKARIA) AS PE R BOOKS OF ACCOUNTS S.NO. AS PER VALUATION REPORT GROSS WEIGHT (CTRS) NET WEIGHT (CTRS) VALUE (RS.) NET WEIGHT (CTRS) VALUE (RS.) 17. 6,880.00 6,880.00 1,16,960.00 11,977.92 1,80,501.26 38. 879.20 848.40 46,662.00 11. (PART) 4,252.08 4,252.08 15,960.00 TOTALS 12,011.28 11,980.48 1,79,582.00 11,977.92 1,80,501.26 WEIGHT/VALUE BY SH. K.K. PAREEK 12,011.28 NOT PROVIDED 4,48,258.40 (7) TOPAZ AS PER APPROVED VALUERS REPORT (KANKARIA) AS PER BOOKS OF ACCOUNTS S.NO. AS PER GROSS WEIGHT NET WEIGHT VALUE (RS.) NET WEIGHT VALUE (RS.) ITA NO. 140/JP/2018 KUSHAL KUMAR LUNAWAT, JAIPUR VS. ACIT, JAIPUR 15 VALUATION REPORT (CTRS) (CTRS) (CTRS) 11 (PART) 835.42 835.42 4,390.00 835.42 4,918.16 TOTAL 835.42 835.42 4,390.00 835.42 4,918.16 WEIGHT/VALUE BY SH. K.K. PAREEK 835.42 NOT PROVIDED 25,062.60 (8) MOONSTONE AS PER APPROVED VALUERS REPORT (KANKARIA) AS PER BOOKS OF ACCOUNTS S.NO. AS PER VALUATION REPORT GROSS WEIGHT (CTRS) NET WEIGHT (CTRS) VALUE (RS.) NET WEIGHT (CTRS) VALUE (RS.) 10 (PART) 224.65 224.65 56,162.00 11,192.95 1,05,345.81 22. 8,827.50 8,827.50 44,137.00 10 (PART) 2,140.80 2,140.80 3,000.00 TOTALS 11,192.95 11,192.95 1,03,299.00 11,192.95 1,05,345.81 WEIGHT/VALUE BY SH. K.K.PAREEK 11,192.95 NOT PROVIDED 3,35,788.50 (9) CUBIC ZIRKONIA: AS PER APPROVED VALUERS REPORT (KANKARIA) AS PER BOOKS OF ACCOUNTS S.NO. AS PER VALUATION REPORT GROSS WEIGHT (CTRS) NET WEIGHT (CTRS) VALUE (RS.) NET WEIGHT (CTRS) VALUE (RS.) 10 (PART) 373.48 373.48 800.00 373.43 1,120,29 TOTAL 373.48 373.48 800.00 373.43 1,120,29 WEIGHT/VALUE BY SH. K.K.PAREEK 373.43 NOT PROVIDED 11,202.90 ITA NO. 140/JP/2018 KUSHAL KUMAR LUNAWAT, JAIPUR VS. ACIT, JAIPUR 16 (10) MISCELLANEOUS: AS PER APPROVED VALUERS REPORT (KANKARIA) AS PER BOOKS OF ACCOUNTS S.NO. AS PER VALUATION REPORT GROSS WEIGHT (CTRS) NET WEIGHT (CTRS) VALUE (RS.) NET WEIGHT (CTRS) VALUE (RS.) 10 (PART) 5,010.00 5,010.00 1,500.00 5,010.00 2,104.20 TOTAL 5,010.00 5,010.00 1,500.00 5,010.00 2,104.20 WEIGHT/VALUE BY SH. K.K.PAREEK 5,010.00 NOT PROVIDED 1,50,300.00 (11) BLACK STAR: AS PER APPROVED VALUERS REPORT (KANKARIA) AS PE R BOOKS OF ACCOUNTS S.NO. AS PER VALUATION REPORT GROSS WEIGHT (CTRS) NET WEIGHT (CTRS) VALUE (RS.) NET WEIGHT (CTRS) VALUE (RS.) 10 (PART) 814.86 814.86 1,100.00 814.86 1,629,72 TOTAL 814.86 814.86 1,100.00 814.86 1,629.72 WEIGHT/VALUE BY SH. K.K. PAREEK 814.86 NOT PROVIDED BUT SAME 24,445.80 (12) TANZANITE: AS PER APPROVED VALUERS REPORT (KANKARIA) AS PE R BOOKS OF ACCOUNTS S.NO. AS PER VALUATION REPORT GROSS WEIGHT (CTRS) NET WEIGHT (CTRS) VALUE (RS.) NET WEIGHT (CTRS) VALUE (RS.) 10 (PART) 9.15 9.15 3,500.0 0 9.15 4,950.96 TOTAL 9.15 9.15 3,500.00 9.15 4,950.96 ITA NO. 140/JP/2018 KUSHAL KUMAR LUNAWAT, JAIPUR VS. ACIT, JAIPUR 17 WEIGHT/VALUE BY SH.K.K. PAREEK 9.15 NOT PROVIDED BUT SAME 274.50 (13) CROME DIOPSIDE: AS PER APPROVED VALUERS REPORT (KANKARIA) AS PER BOOKS OF ACCOUNTS S.NO. AS PER VALUATION REPORT GROSS WEIGHT ( CTRS) NET WEIGHT (CTRS) VALUE (RS.) NET WEIGHT (CTRS) VALUE (RS.) 10 (PART) 649.20 649.20 16,464.00 649.20 22,825.87 TOTAL 649.20 649.20 16,464.00 649.20 22,825.87 WEIGHT/VALUE BY SH.K.K.PAREEK 649.20 NOT PROVIDED BUT SAME 19,476.00 (14) ROSE QUARTZE: AS PER APPROVED VALUERS REPORT (KANKARIA) AS PER BOOKS OF ACCOUNTS S.NO. AS PER VALUATION REPORT GROSS WEIGHT ( CTRS) NET WEIGHT (CTRS) VALUE (RS.) NET WEIGHT (CTRS) VALUE (RS.) 01. 447.50 447.50 8,055.00 828.17 11,595.38 04. 290.00 290.00 5,220.00 10 (PART) 90.41 90.41 900.00 TOTAL 827.91 827.91 14,175.00 828.17 11,594.38 WEIGHT/VALUE BY SH. K.K. PAREEK 827.91 NOT PROVIDED BUT SAME 24,837.30 (15) CATS EYE: AS PER APPROVED VALUERS REPORT (KANKARIA) AS PER BOOKS OF ACCOUNTS S.NO. AS PER VALUATION REPORT GROSS WEIGHT ( CTRS) NET WEIGHT (CTRS) VALUE (RS.) NET WEIGHT (CTRS) VALUE (RS.) ITA NO. 140/JP/2018 KUSHAL KUMAR LUNAWAT, JAIPUR VS. ACIT, JAIPUR 18 27. 13.89 13.89 50,004.00 291.00 1,76,867.30 28. 8.00 8.00 13,600.00 29. 22.41 21.08 35,836.00 30. 8.47 7.70 11,550.00 31. 74.84 74.84 67,356.00 02 (PART) 165.49 165.49 3,300.00 TOTAL 293.01 291.00 1,81,646.00 291.00 1,76,867.30 WEIGHT/VALUE BY SH. K.K. PAREEK 293.01 NOT PROVIDED 5,86,822.70 (16) APATITE: AS PER APPROVED VALUERS REPORT (KANKARIA) AS PER BOOKS OF ACCOUNTS S.NO. AS PER VALUATION REPORT GROSS WEIGHT ( CTRS) NET WEIGHT (CTRS) VALUE (RS.) NET WEIGHT (CTRS) VALUE (RS.) 02 (PART) 94.51 94.51 1,900.00 388.10 20,016.74 05 225.00 225.00 4,500.00 31 (PART) 68.85 68.85 15,491.00 TOTALS 388.36 388.36 21,891.00 388.10 20,016.74 WEIGHT/VALUE BY SH. K.K. PAREEK 388.36 NOT PROVIDED BUT SAME 23,355.30 ITA NO. 140/JP/2018 KUSHAL KUMAR LUNAWAT, JAIPUR VS. ACIT, JAIPUR 19 (17) MOTHER PEARL: AS PER APPROVED VALUERS REPORT (KANKARIA) AS PER BOOKS OF ACCOUNTS S.NO. AS PER VALUATION REPORT GROSS WEIGHT ( CTRS) NET WEIGHT (CTRS) VALUE (RS.) NET WEIGHT (CTRS) VALUE (RS.) 06 (PART) 120.48 120.48 600. 00 120.48 794.17 TOTAL 120.48 120.48 600.00 120.48 794.17 WEIGHT/VALUE BY SH. K.K. PAREEK 120.48 NOT PROVIDED BUT SAME 3,012.00 (18) TOURMALINE: AS PER APPROVED VALUERS REPORT (KANKARIA) AS PER BOOKS OF ACCOUNTS S.NO. AS PER VALUATION REPORT GROSS WEIGHT ( CTRS) NET WEIGHT (CTRS) VALUE (RS.) NET WEIGHT (CTRS) VALUE (RS.) 07 837.50 835.93 12,539.00 4,082.66 3,99,923.56 31 (PART) 3,246.73 3,246.73 3,85,461.00 TOTALS 4,084.23 4,082.66 3,98,000.00 4,082.66 3,99,923.56 WEIGHT/VALUE BY SH. K.K. PAREEK 4,084.23 NOT PROVIDED 6,74,468.00 (19) AQUAMARINE: AS PER APPROVED VALUERS REPORT (KANKARIA) AS PER BOOKS OF ACCOUNTS S.NO. AS PER VALUATION REPORT GROSS WEIGHT ( CTRS) NET WEIGHT (CTRS) VALUE (RS.) NET WEIGHT (CTRS) VALUE (RS.) 06 (PART) 627,02 610.83 ITA NO. 140/JP/2018 KUSHAL KUMAR LUNAWAT, JAIPUR VS. ACIT, JAIPUR 20 12,564.00 9,221.25 3,43,305.70 24 6,100.00 6,100.00 2,44,000.00 31 (PART) 2,534.58 2,510.42 1,03,897.00 TOTALS 9,261.60 9,221.25 3,60,461.00 9,221.25 3,43,305.70 WEIGHT/VALUE BY SH. K.K. PAREEK 9,261.60 NOT PROVIDED 8,88,594.00 (20) SEMI PRECIOUS BEADS: AS PER APPROVED VALUERS REPORT (KANKARIA) AS PER BOOKS OF ACCOUNTS S.NO. AS PER VALUATION REPORT GROSS WEIGHT (KGS) NET WEIGHT (KGS) VALUE (RS.) NET WEIGHT (KGS) VALUE (RS.) 1 TO 33 (I) 401.933 353.648 4,86,545.00 368.582 4,68,423.00 25 2.300 2.300 2,875.00 26 8.000 8.000 10,000.00 TOTALS 412.233 363.948 4,99,420.00 368.582 4,68,423.00 WEIGHT/VALUE BY SH. K.K.PAREEK 412.233 NOT PROVIDED 1,39,00,725.00 (* RS. 137,06,225 + 34,500 + 1,60,000 S. NO. 25 & 26 AT P. B PAGE 60 WHICH ARE ALSO SEMI-PRECIOUS BEADS BUT SHOWN SEPARATELY BY SHRI PA REEK IN HIS VALUATION REPORT) ITA NO. 140/JP/2018 KUSHAL KUMAR LUNAWAT, JAIPUR VS. ACIT, JAIPUR 21 SUMMARY OF GROSS/NET WEIGHT AND VALUE OF TOTAL SEM I - PRECIOUS STONES & BEADS (AS ABOVE) (KANKARIA) K.K.PAREEK(SEARCH TEAM) KANKARIA JEWELLERS (REGD. VALUER) AS PER BOOKS OF ACCOUNTS S.NO. SEMI-PREC. STONES GROSS WEIGHT (CTRS) VALUE (RS.) GR. WEIGHT (CTRS) NET WEIGHT (CTRS) VALUE (RS.) NET WEIGHT (CTRS) VALUE (RS.) 1. GARNET 17,605.00 6,00,700.00 17,605.00 16,314.13 81,293.00 16.314.10 77,155.83 2. PERIDOT 3,595.80 1,16,554.00 3,595.80 3,544.40 61,631.00 3,544.39 59,768.33 3. AMETHYST 26,578.55 24,19,409.0 0 26,597.50 24,461.01 2,10,598.00 24,459,71 2,05,273.00 4. AMETH. CITMIX 18.95 1,516.00 18.95 18.95 852.00 18.95 852.75 5. IOLITE 1,555.00 43,307.00 1,555.00 1,514.53 29,515.00 1,514.53 29,437.47 6. CITRINE 12,011.28 4,48,258.40 12,011.28 11,980.48 1,79,582.00 11,977.92 1,80,501.26 7 TOPAZ 835.42 25,062.60 835.42 835.42 4,390.00 835.42 4,918.16 8. MOONSTONE 11,192.95 3,35,788.50 11,192.95 11,192.95 1,03,299.00 11,192.95 1,05,345.81 9. CUBIC ZIRKONIA 373.43 11,202.90 373.48 373.43 800.00 373.43 1,120.29 10. MISCELLANEO US 5,010.00 1,50,300.00 5,010.00 5,010.00 1,500.00 5,010.00 2,104.20 11. BLACK STAR 814.86 24,445.80 814.86 814.86 1,100.00 814.86 1,629.72 12. TANZANITE 9.15 274.50 9.15 9.15 3,500.00 9.15 4,950.96 13. CROME DIOPSIDE 649.20 19,476.00 649.20 649.20 16,464.00 649.20 22,825.87 14. ROSE QUARTZE 827.91 24,837.30 827.91 827.91 14,175.00 828.17 11,594.38 15. CATS EYE 293.01 5,86,822.70 293.01 291.00 1,81,646.00 291.00 1,76,867.30 ITA NO. 140/JP/2018 KUSHAL KUMAR LUNAWAT, JAIPUR VS. ACIT, JAIPUR 22 16. APATITE 388.36 23,355.00 388.36 388.36 21,891.00 388.10 20,016.74 17. MOTHER PEARL 120.48 3,012.00 120.48 120.48 600.00 120.48 794.17 18. TOURMALINE 4,084.23 6,74,468.00 4,084.23 4,0 82.6 6 3,98,000.00 4,082.66 3,99,923.56 19. AQUAMARINE 9,261.60 8,88,594.00 9,261.60 9,221.25 3,60,461.00 9,221.25 3,43,305.70 TOTALS FROM (1) TO (19) 95,225.18 63,97,384.00 95,244.18 91,650.17 16,71,297.00 91,646.27 16,48,385.50 (DIFFERENCE OF 19 CTRS IN GROSS WEIGHT IN ITEMS AT S. NO. (3) (18.95 CTRS) AND ITEM NO. (9) (0.05 CTR S) IN GROSS WEIGHT NOTICED BY SHRI K.K. PAREEK AND VALUATION O F M/S. KANKARIA JEWELLERS. DIFFERENCE OF 3.9 CTRS I N NET WEIGHT OF M/S. KANKARIA JEWELLERS AND AS PER STOCK REGISTE R OF THE ASSESSEE).. SUMMARY OF VALUATION OF STOCK BY BOTH VALUERS & BOO K VALUE OF SEMI PRECIOUS STONES, SEMI PRECIOUS BEADS & PRECIOUS STONES: S.NO. NATURE OF GOODS MR. KAMAL KANT MR. KANKARIA AS PER BOOKS 1. SEMI PREC. STONES 63,97,384.00 16,71,297.00 16,48,385.50 2. SEMI PREC. BEADS 1,39,00,725.00 4 ,99,420.00 4,68,423.00 3. PREC. STONES 21,99,387.00 3,71,045.00 3,56,116.85 TOTALS 2,24,97,496.00 25,41,762.00 24,72,925. 35 ADDITION MADE/SUSTAINED: S.NO. VALUATION/BOOK VALUE AMOUNT 1 VALUATION OF STOCK BY K.K. PAREEK 2,24,97,496 2. BOOK VALUE OF AVAILABLE STOCK 24,72,925 3. ADDITION MADE/SUSTAINED 2,00,24,571* (*THERE WAS CALCULATION MISTAKE OF RS.90/- IN ACTUA L ADDITION OF RS.2,00,24,661/- MADE BY LD. AO) 11. WITHOUT PREJUDICE TO ABOVE, IT WAS SUBMITTED TH AT BOTH THE LOWER AUTHORITIES HAVE REFUSE TO ACCEPT THE SUBMISSIONS O F THE ASSESSEE AND FOLLOW THE JUDGMENTS OF THE HONBLE SUPREME COURT OF INDIA THAT STOCK IS TO BE VALUED ITA NO. 140/JP/2018 KUSHAL KUMAR LUNAWAT, JAIPUR VS. ACIT, JAIPUR 23 AT COST OR MARKET WHICHEVER IS LOWER SO ALSO THAT N O ONE CAN MAKE PROFIT FROM HIMSELF, HOWEVER THESE WERE NOT APPLIED BY THEM. IN ASSESSEES CASE VIRTUALLY, EACH AND EVERY PRECIOUS AND SEMI-PRECIOUS STONE WAS VALUED AT VERY HIGH VALUE BY THE VALUER ENGAGED BY THE DEPARTMENT AT THE TIME OF SEARCH. IT IS ALSO ESTABLISHED LAW THAT NO ADDITION CAN BE MADE WHEN T HERE IS NO DIFFERENCE IN QUANTITY OF THE STOCK. RELIANCE IS PLACED ON THE F OLLOWING JUDICIAL PRONOUNCEMENTS: (1) CIT VS. LALSONS ENTERPRISES (2010) 324 ITR 426 (DEL ): NO ADDITION CAN BE MADE WHEN THERE IS NO DIFFERENCE IN QUANTITA TIVE TERMS. (IN APPELLANTS CASE THERE IS NO DIFFERENCE IN QUANTITY OF STOCK AS PER NET WEIGHT I.E. WITHOUT PACKING MATERIAL) (2) VOLTAMP TRANFORMERS LTD. VS. CIT (2010)327 ITR 360 (GUJ), AO HAS LIMITED POWER TO CHANGE VALUATION OF CLOSING STOCK MORE SO WHEN THERE IS NO EVIDENCE THAT VALUATION IS NOT CORRECT. (3) CIT VS. INDIAN SUGAR AND GENERAL INDUSTRY EXPORT IM PORT (2012) 349 ITR38 (DEL): VALUATION OF CLOSING STOCK TO BE MAD E AT COST OR MARKET PRICE WHICHEVER IS LOWER; (4) SHAKTI TRADING CO. VS. CIT (2001) 250 ITR 871 (SC): VALUATION OF STOCK- PROPER PRACTICE- TO VALUE CLOSING STOCK AT C OST OR MARKET WHICHEVER IS LOWER. (5) SANJEEV WOOLEN MILLS VS. CIT (2005) 279 ITR (SC): C HOICE OF METHOD REGULARLY ADOPTED BY ASSESSEE. REAL INCOME, PROFIT AND GAINS SHOULD BE DEDUCTIBLE. DISCRETION TO BE EXERCISED JUDICIALLY AND REASONABLY. CLOSING STOCK CANNOT BE VALUED AT MARKET PRICE- HIGHER THAN COST PRICE. GENERAL PRINCIPLES- A FIRM CANNOT MAKE PROFIT OUT OF ITSELF . IT IS THE REAL INCOME THAT IS TAXABLE. (6) CIT VS. HINDUSTAN ZINC LTD. (2007) 291 ITR 392 (SC) : (RECONFIRMED IN HINDUSTAN ZINC LTD. VS. CIT (2007) 295 ITR 453 (SC) : CLOSING STOCK ITA NO. 140/JP/2018 KUSHAL KUMAR LUNAWAT, JAIPUR VS. ACIT, JAIPUR 24 VALUATION- ESTABLISHED PRINCIPLE- TO VALUE AT COST OR MARKET PRICE WHICHEVER WAS LOWER. IT WAS SUBMITTED THAT AVOIDING THE LAW LAID DOWN BY THE HONBLE APEX COURT, BOTH THE LOWER AUTHORITIES WERE NOT JUSTIFIED IN MA KING/SUSTAINING ADDITION OF RS.2,00,24,661/- ON THE BASIS OF HIGH VALUATION OF EXISTING STOCK IN THE BUSINESS OF THE APPELLANT. IT WAS ACCORDINGLY SUBMITTED THAT THE ADDITION SO MADE BY THE AO AND CONFIRMED BY THE LD CIT(A) BE DELETED. 12. THE LD DR IS HEARD WHO HAS VEHEMENTLY ARGUED TH E MATTER. HE TOOK US THROUGH THE FINDINGS OF THE LOWER AUTHORITIES AN D SUBMITTED THAT IT IS A CLEAR CASE OF EXCESS UNDISCLOSED STOCK FOUND DURING THE S OURCE OF SEARCH AND THUS THERE IS NO BASIS IN VARIOUS CONTENTIONS SO RAISED BY THE LD AR AND THE ADDITIONS SO MADE BY THE AO HAS BEEN RIGHTLY CONFIRMED BY THE LD CIT(A) AND ACCORDINGLY, THE ORDER OF THE LD CIT(A) SHOULD BE C ONFIRMED. 13. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. IN THIS CASE, SEARCH WAS CONDUCTED AT T HE PREMISES OF THE ASSESSEE ON 17.12.2014 AND HIS STATEMENT U/S 132(4) WAS RECO RDED AND THE RELEVANT PART THEREOF READS AS UNDER: IZ'U 5 IZ'U 2 ESA CRK, X, VUQLKJ CRK, FD VKI ES-,L- DS-BUVJUS'KUY ESA FDL IZDKJ DS TOKGJKR DK DK;Z DJRS GKS\ IW.KZ FOLRKJ LS CRK,WA\ MKJ ESA BLESA VF/KDRE DK;Z YKSDY T;IQJ CKTKJ LS RS ;KJ PRECIOUS & SEMI PRECIOUS STONE [KJHN DJ FONS'K LS IZKIR EAKX VUQLKJ MUGSA CSPRK F KK ORZEKU ESA BLESA UGH ADS CJKCJ GH YKHK GKSRK GSA DHKH&DHKKJ YKSDY CKTKJ ESA EKY CSP FN;K GKS RKS EQ>S ;KN UGHA GSA BL CONCERN ESA IWOZ ESA TOSYJH DK DK;Z HKH DJRS JGS GSA VK;KR O FU;KZR DK DK;Z GKSRK GSA ITA NO. 140/JP/2018 KUSHAL KUMAR LUNAWAT, JAIPUR VS. ACIT, JAIPUR 25 IZ'U 6 VKT RYK'KH DS NKSJKU VKIDS BL IZFRBKU 451& 452 BKDQJ IPSRJ DH XYH] JKEXAT T;IQJ ESA LVKWD DK EWY;KADU FY;K X;K FT LESA VKIDKS FN[KK JGK GS FTLESA ES- ,L-DS- B.VJUS'KUY DK LVKWD DK EWY;KADU G EKJS FOHKKXH; VF/KD`R EWY;KADUDRKZ }KJK FD;K X;K FTLDH VALUATION REPORT DS VUQLKJ PRECIOUS ,O SEMI PRECIOUS STONE DK EWY; :I;S 2]24]97]496@& IK;K X;K TCFD VKIDH YS[KK IQLRDKSA DS VUQLKJ PRECIOUS ,OA SEMI PRECIOUS STONES DK EWY; :I;S 24]72]835@& CRK;K X;K GSA BL IZDKJ PRECIOUS ,OA SEMI PRECIOUS STONES DK EXCESS STOCK RS.2,00,24,662/- VKRK GS@FEYK GSA BL CKJS ESA VKIDK D;K DGUK GS\ MKJ TH GKWA] ESUSA VKIDS EWY;KADU DRKZ JH DEYDKUR IKJH[K DH EWY;KADU FJIKSZV FNUKAD 18-12-14 DKS TKS ESJS IZFRBKU 451&452] BKDQ J IPSRJ DK JKLRK JKEXAT] T;IQJ IJ DH XBZ MLS NS[K FY;K GSA ;G EWY;KADU ESJS IFJLJ ESA FD;K X;K GS RFKK BL LVKWD DK OTU ESJS LE{K FD;K X; GSA ESA TOKG JKR DK O;OLK; FINYS 39 OKZ LS DJRK VK JGK GWWA FOHKKX }KJK APPROVED VALUER US GEKJS EKY DK TKS EWY;KADU FD;K GS] MLLS ESA DRBZ LGER UGHA GWWAA EKU ;OJ EWY;KADUDRKZ US FCUK FDLH VK/KKJ DS DKYIFUD EWY;KADU DJK GSA EWY;KDUDRKZ DKS PRECIOUS AND SEMI PRECIOUS STONES DKS IWJH RJG LS IJ[KUS IGPKUUS DKSBZ KKU UGHA GS] U RKS IRFKJ DS CKJS ESA KKU GS] VKSJ UK GH MLDS OKLROHD EWY; DS CKJS ESA] VIUH EUETHZ LS EWY;KADU FD;K GSA TKS FDLH HKH IZDKJ LS MFPR UGHA G S SEMI PRECIOUS STONES (MIX STONE) DH BEADS TKS FD IWOZ ESA GEUS IMPORT DJH FKH MLDH COST PRICE RS.4,68,423/- DH VKRH] LECU/KHR ISIJ LHKH EKSTWN GS] MLDK EWY;KA DUDRKZ US :I;S 1]37]06]225@& ,D DJKSM+ LSRHAL YK[K N GTKJ NK S LKS IPPHL DH DHER VKADH GS] OG FCYDQY XYR FUJK/KKJ] CSCQFU;KN GS A ESJK VKILS FOUEZ FUOSNU GS FD FDLH VU; VUQHKOH EWY; KADUDRKZ LS GEKJS EKY DK IWU% EWY;KADU DJK;SA IZ'U 7 TSLK FD VKIUS MKJ IZ'U LA[;K 6 DS ESA CRK; K FD EWY;KADU DRKZ DKS PRECIOUS ,OA SEMI PRECIOUS STONES DKS IWJH RJG LS IJ[KUS O IGPKUUS DK DKSBZ KKU UGHA GS U IRFKJ DS CKJS ESA KKU GS U GH MLDS OK LRFOD EWY; DS CKJS ESA KKU GSA D`I;K EWY;KADU DRKZ DH FJIKSVZ DKS IQU% NS[KDJ CRK,WA FD EWY;KADU DRKZ US DKSU LS IRFKJ DKS IGPKUUS ESA XYRH DH GS] CRK,\ MKJ FYLV DKS NS[KDJ UGHA CRK;K TK LDRK] EKY DS BOX DKS NS[KDJ CRK LDRK GWWA 14. WE THEREFORE FIND THAT THE ASSESSEE HAS DISPUTE D THE VALUATION OF STOCK AT THE TIME OF SEARCH STATING THAT THE VALUER SO APPOI NTED BY THE DEPARTMENT DOESNT HAVE THE REQUISITE KNOWLEDGE AND UNDERSTAND ING OF PRECIOUS AND SEMI- ITA NO. 140/JP/2018 KUSHAL KUMAR LUNAWAT, JAIPUR VS. ACIT, JAIPUR 26 PRECIOUS STONES AND THERE IS NO RATIONALE VALUATION METHODOLOGY WHICH HAS BEEN ADOPTED BY HIM. FURTHER, THE ASSESSEE HAS REQ UESTED TO GET THE VALUATION TO BE CARRIED OUT BY ANOTHER VALUER. THEREFORE, IT IS A CASE WHERE THE VALUATION OF STOCK FOUND DURING THE COURSE OF SEARCH HAS BEEN DISPUTED BY THE ASSESSEE AT THE TIME OF SEARCH ITSELF. THEREFORE, IT IS NOT A CASE WHERE THE ASSESSEE HAS ADMITTED THE UNDISCLOSED STOCK AT THE TIME OF SEARC H AND SUBSEQUENTLY, HAS NOT DISCLOSED THE SAME FILING HIS RETURN OF INCOME. FR OM PERUSAL OF RECORDS, WE ALSO FIND THAT IMMEDIATELY AFTER THE SEARCH, THE ASSESSE E HAS REACHED OUT TO HIGHER AUTHORITIES IN THE DEPARTMENT AND HAS AGAIN DISPUTE D THE VALUATION SO DONE AT THE TIME OF SEARCH AND HAS REQUESTED TO CARRY OUT T HE VALUATION AS PER ANOTHER APPROVED VALUER. HOWEVER, WE FIND THAT THERE ARE N O STEPS TAKEN BY THE REVENUE TO ADDRESS THE CONCERNS SO RAISED BY THE AS SESSEE. ON HIS PART, THE ASSESSEE HAS CARRIED OUT THE VALUATION THROUGH ANOT HER APPROVED VALUER AND THROUGH SUCH VALUATION HAS SUBMITTED THAT THERE IS A MINOR DIFFERENCE IN VALUATION OF STOCK WHICH THE APPROVED VALUER HAS VA LUED THE STOCK AT RS 25,41,762 AS AGAINST STOCK AS PER BOOKS OF ACCOU NTS OF RS 24,72,925. HOWEVER, THE FACT OF THE MATTER IS THAT EVEN THE SA ID VALUATION IS BEING DISPUTED BY THE REVENUE HOLDING THAT THE SAME HAS BEEN CARRI ED OUT AFTER 14 DAYS OF SEARCH AND TO SUIT THE INTEREST OF THE ASSESSEE AND IN ABSENCE OF ANY DEPARTMENTALS REPRESENTATIVE. THEREFORE, ONLY REAL ISTIC WAY IN WHICH THE PRESENT DISPUTE CAN BE ANALYSED IS FIRSTLY TO EXAMI NE THE PHYSICAL STOCK AS PER BOOKS OF ACCOUNTS AND AS FOUND DURING THE COURSE OF SEARCH AND DETERMINING THE EXCESS STOCK, IF ANY. SECONDLY, THE VALUATION O F SUCH EXCESS STOCK IS REQUIRED TO DETERMINE THE INVESTMENT WHICH HAS BEEN MADE IN SUCH EXCESS STOCK AND WHICH HAS REMAINED UNDISCLOSED TO THE REV ENUE AUTHORITIES. THE INVESTMENT IS STOCK IS THUS THE FUNCTION OF PRICE O R COST AT WHICH STOCK HAS BEEN PURCHASED BY THE ASSESSEE AND THEREFORE, WHAT IS TO BE DETERMINED AT THE COST PRICE OF SUCH STOCK AND NOT THE MARKET PRICE. WHERE SUCH STOCK IS ULTIMATELY SOLD, ANY PROFIT ARISING THEREFROM WOULD BE BROUGHT TO TAX IN REGULAR COURSE AND ITA NO. 140/JP/2018 KUSHAL KUMAR LUNAWAT, JAIPUR VS. ACIT, JAIPUR 27 THE DETERMINATION OF MARKET PRICE WOULD BE RELEVANT AT THAT POINT IN TIME. HOWEVER, FOR THE PRESENT PURPOSES, THE VALUE OF UND ISCLOSED PHYSICAL STOCK IS THE VALUE AT WHICH SUCH STOCK HAS BEEN PURCHASED BY THE ASSESSEE. ON PERUSAL OF RECORDS, WE FIND THAT THERE IS STOCK OF PRECIOUS STONES IN FORM OF EMERALD, RUBY, SAPPHIRE, STOCK OF SEMI-PRECIOUS STONES IN FO RM OF GARNET, PERIDOT, AMETHYST, TOPAZ, ETC, AND STOCK OF SEMI-PRECIOUS BE ADS WHICH IS FOUND AT THE TIME OF SEARCH AND WHICH HAS ALSO BEEN RECORDED IN THE BOOKS OF ACCOUNTS OF THE ASSESSEE. THE ASSESSEE HAS CARRIED OUT EXTENSI VE RECONCILIATION OF SUCH STOCK AS PER THE VALUATION REPORT AND AS PER HIS BO OKS OF ACCOUNTS AND THE POSITION WHICH EMERGES IS AS UNDER: PARTICULARS CTRS /KGS VALUE (RS.) PRECIOUS STONES STOCK AS PER BOOKS OF A/CS (NET WEIGHT) 9202.01 3,5 6,116.85 STOCK AS PER REPORT OF K.K.PAREEK (GROSS WEIGHT) 13892.50 21,99,387.00 DIFFERENCE IN STOCK (A) (VALUED AT COST) 4690.49 1, 81,521.49 SEMI-PRECIOUS STONES STOCK AS PER BOOKS OF A/CS (NET WEIGHT) 91646.27 1 6,48,385.50 STOCK AS PER REPORT OF K.K. PAREEK (GROSS WEIGHT) 95225.18 63,97,384.00 DIFFERENCE IN STOCK (B) (VALUED AT COST) 3578.91 64 ,371.67 SEMI-PRECIOUS BEADS STOCK AS PER BOOKS OF A/CS (NET WEIGHT) 368.582 4,6 8,423.00 STOCK AS PER REPORT OF K.K.PAREEK (GROSS WEIGHT) 453.433 1,39,00,725.00 DIFFERENCE IN STOCK (C) (VALUED AT COST) 84.851 1,0 7,835.33 ITA NO. 140/JP/2018 KUSHAL KUMAR LUNAWAT, JAIPUR VS. ACIT, JAIPUR 28 TOTAL (A+B+C) 8354.25 3,53,728.49 15. AS PER ABOVE ANALYSIS, THERE IS AN EXCESS STOCK OF 4690.49 CTRS OF PRECIOUS STONES, 3578.91 CTRS OF SEMI-PRECIOUS STONES AND 84 .851 KGS OF SEMI-PRECIOUS BEADS. THE ASSESSEE HAS CARRIED OUT DETAILS RECONC ILIATION IN TERMS OF EACH ITEM OF STOCK FOUND DURING THE COURSE OF SEARCH BY CATER GORISING THE STOCK IN TERMS OF NATURE OF SUCH STOCK IN TERMS OF PRECIOUS STONES , SEMI-PRECIOUS STONES AND SEMI-PRECIOUS BEADS AND AS RECORDED IN THE BOOKS OF ACCOUNTS AND THE CONCERNS OF THE REVENUE HAVE BEEN DULY ADDRESSED. REGARDING THE CONTENTION OF THE ASSESSEE THAT NET WEIGHT OF THE STOCK TO BE CONSIDERED FOR VALUATION EXCLUSIVE OF BOXES AND OTHER PACKING MATERIAL INST EAD OF GROSS WEIGHT AS ADOPTED BY THE DEPARTMENT VALUER (KAMAL KANT PAREKH ), WE DONOT FOUND THE SAID CONTENTION ACCEPTABLE FOR THE REASON THAT WHAT HAS BEEN VALUED IS THE STOCK OF PRECIOUS AND SEMI-PRECIOUS STONES AND NOT ANY PRECIOUS/SEMI-PRECIOUS STUDDED GOLD JEWELLERY WHICH REQUIRE SEPARATION VAL UATION FOR PRECIOUS/SEMI- PRECIOUS STONES AND GOLD, AND FOR SUCH PRECIOUS/SEM I-PRECIOUS STUDDED GOLD JEWELLERY, THE VALUATION METHODOLOGY HAS BEEN DETER MINED WHEREBY GROSS AND NET WEIGHT IS TO BE DETERMINED FOR SUCH JEWELLERY. FURTHER, THE CONTENTION REGARDING THE BOXES AND OTHER PACKING MATERIAL AGAI N CANNOT BE ACCEPTED IN ABSENCE OF ANY MATERIAL ON RECORD TO CORROBORATE TH E SAME. IN VIEW OF THE SAME, WE ARE OF THE CONSIDERED VIEW THAT THERE IS P HYSICAL STOCK OF 4690.49 CTRS OF PRECIOUS STONES, 3578.91 CTRS OF SEMI-PRECIOUS S TONES AND 84.851 KGS OF SEMI-PRECIOUS BEADS WHICH IS NOT FOUND RECORDED IN THE BOOKS OF ACCOUNTS. 16. IN TERMS OF VALUATION OF SUCH UNDISCLOSED STOCK , WHAT HAS TO BE DETERMINED IS THE VALUE AT WHICH SUCH STOCK HAS BEE N ACQUIRED BY THE ASSESSEE AND NOT THE VALUE WHICH SUCH STOCK CAN FETCH IN THE MARKET OR THE FAIR MARKET VALUE OF SUCH STOCK. IN THE INSTANT CASE, IT HAS B EEN CONTENDED THAT THE VALUATION OF THE STOCK HAS BEEN DONE AT EXORBITANT HIGH VALUE WHICH IS MORE ITA NO. 140/JP/2018 KUSHAL KUMAR LUNAWAT, JAIPUR VS. ACIT, JAIPUR 29 THAN 15 TIMES OF EVEN SALE PRICE AND WITHOUT CONSID ERING THE COST DISCLOSED IN THE BOOKS OF ACCOUNTS AND WITHOUT CONSIDERING THE W ELL-ACCEPTED ACCOUNTING POLICY WHICH HAS BEEN FOLLOWED BY THE ASSESSEE WHER E IT VALUES ITS STOCK AT LOWER OF COST AND NET REALIZABLE VALUE. THE COST C AN BE DETERMINED ON THE BASIS OF HISTORICAL AND/OR CURRENT COST SO RECORDED IN THE BOOKS OF ACCOUNTS OR ON THE BASIS OF PURCHASE BILLS IF ANY FOUND DURING THE COURSE OF SEARCH. HOWEVER, IN THE INSTANT CASE, THERE IS NOTHING ON R ECORD EITHER IN TERMS OF SEIZED MATERIAL OR IN THE STATEMENT RECORDED DURING THE COURSE OF SEARCH REGARDING ANY PURCHASE BILLS FOUND DURING THE COURS E OF SEARCH. IN THE PAST, THE BOOK RESULTS HAVE BEEN ACCEPTED BY THE REVENUE AND THEREFORE, ON THE BASIS OF COST SO RECORDED IN THE BOOKS OF ACCOUNTS, THE VALUATION OF SUCH UNDISCLOSED STOCK CAN BE DETERMINED IN THE INSTANT CASE. THEREFORE, ON THE BASIS OF COST RECORDED IN THE BOOKS OF ACCOUNTS, WE FIND THAT COST OF STOCK OF 4690.49 CTRS OF PRECIOUS STONES WILL COME TO RS 181 ,521.49, 3578.91 CTRS OF SEMI-PRECIOUS STONES WILL COME TO RS 64,371.67 AND 84.851 KGS OF SEMI- PRECIOUS BEADS WILL COME TO RS 107,835.33 WHICH IS NOT FOUND RECORDED IN THE BOOKS OF ACCOUNTS. THEREFORE, THE UNDISCLOSED INVES TMENT IN EXCESS STOCK FOUND DURING THE COURSE OF SEARCH COMES TO RS 353,728.49 WHICH CAN BE BROUGHT TO TAX IN THE HANDS OF THE ASSESSEE. 17. IN LIGHT OF ABOVE DISCUSSIONS, IT IS THUS CLEAR THAT DIFFERENCE IN STOCK OF PRECIOUS AND SEMI-PRECIOUS STONES AND BEADS AS PER BOOKS AND AS FOUND AT THE TIME OF SEARCH IS ON ACCOUNT OF EXCESS PHYSICAL STO CK OF 4690.49 CTRS OF PRECIOUS STONES, 3578.91 CTRS OF SEMI-PRECIOUS STON ES AND 84.851 KGS OF SEMI- PRECIOUS BEADS WHICH IS NOT FOUND RECORDED IN THE B OOKS OF ACCOUNTS AND UNDISCLOSED INVESTMENT IN SUCH EXCESS STOCK COMES T O RS 353,728.49. THEREFORE, THE ADDITION TO THE EXTENT OF RS 353,728 .49 IS HEREBY CONFIRMED AND THE BALANCE ADDITION IS HEREBY DIRECTED TO BE DELET ED. ITA NO. 140/JP/2018 KUSHAL KUMAR LUNAWAT, JAIPUR VS. ACIT, JAIPUR 30 IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALL OWED. PRONOUNCED IN THE OPEN COURT ON 30/01/2019. SD/- SD/- FOT; IKY JKO FOE FLAG ;KNO (VIJAY PAL RAO) (VIKRAM SINGH YADAV) U;KF;D LNL;@ JUDICIAL MEMBER YS[KK LNL;@ ACCOUNTANT MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 30/01/2019 * GANESH KR. VKNS'K DH IZFRFYFI VXZSFKR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- KUSHAL KUMAR LUNAWAT, JAIPUR 2. IZR;FKHZ@ THE RESPONDENT- ACIT, CENTRAL CIRCLE-1, JAIPUR 3. VK;DJ VK;QDR@ CIT 4. VK;DJ VK;QDR@ CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR. 6. XKMZ QKBZY@ GUARD FILE {ITA NO. 140/JP/2018} VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASST. REGISTRAR