Appeal Details
Counselvise Citation
[2018] 125 COUNSELVISE.COM (IT) 1229 (ITAT-CHANDIGARH)
Assessee PAN
Bench
Appeal Number
CRN Number
Duration Of Justice
1 year(s) 7 month(s) 7 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
04-09-2018
Appeal Filed By
Assessee
Order Result
Allowed
Bench Allotted
Not Allotted
Assessment Year
2013-2014
Appeal Filed On
27-01-2017
Judgement Text
IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH B, CHANDIGARH BEFORE MS. DIVA SINGH, JUDICIAL MEMBER AND MS. ANNAPURNA GUPTA, ACCOUNTANT MEMBER ITA NO. 247 /CHD/2 017 ASSESSMENT YEAR: 2013-14 THE DCIT, VS. PALACE JEWELLERS PVT. LTD., CENTRAL CIRCLE-III, B-XIX, 548, GOVT. COLLEGE R OAD, LUDHIANA. CIVIL LINES, LUDHIANA. PAN NO. : AADCG9237H & ITA NO. 187 /CHD/2017 ASSESSMENT YEAR: 2013-14 PALACE JEWELLERS PVT. LTD., VS THE DCIT, B-XIX, 548, GOVT. COLLEGE ROAD, CENTRAL CIRCLE-II I, CIVIL LINES, LUDHIANA. LUDHIANA. PAN NO. : AADCG9237H (APPELLANT) (RESPONDENT) APPELLANT BY: SHRI ASHISH ABROL, CIT-DR RESPONDENT BY: SHRI TEJ MOHAN SINGH, ADVOCATE DATE OF HEARING : 06.08.2018 DATE OF PRONOUNCEMENT : 04.09.2018 ORDER PER DIVA SINGH,JM THE REVENUE AS WELL AS THE ASSESSEE RESPECTIVELY CH ALLENGE THE CORRECTNESS OF THE ORDER DATED 23/11/2016 OF CIT(A)5 LUDHIANA PERTAINING TO 201314 ASSESSMENT YEAR ON THE FOLLOWING GROUNDS: (REVENUES GROUNDS OF APPEAL : ITA NO. 247/CHD/2017) 1. THAT THE LD.CIT(A),LUDHIANA HAS ERRED IN DELETING T HE ADDITION OF RS.2,50,37,428/- MADE ON ACCOUNT OF EXCESS STOCK FOUND DURING SEARCH WITHOUT APPRECIATING THAT THE SURRENDER OF RS.2,64,12,058/- WAS AN ACCOUNT OF SURRENDER IN RES PECT OF UNACCOUNTED PURCHASES MENTIONED IN ANNEXURE A-L, A-19 AND A-18 SEIZED FRO M THE RESIDENT R-L AND ANNEXURE A- 4, A-14 SEIZED FROM THE BUSINESS PREMISES WHICH WAS NOT RECORDED IN THE BOOKS IGNORING THE FACT THAT THE ASSESSEE HAS FAILED TO P ROVE THE NEXUS OF THE UNACCOUNTED PURCHASES WITH THE EXCESS STOCK FOUND. 2. THAT THE LD.CIT(A), LUDHIANA HAS ERRED IN DELETING THE ADDITION OF RS.46,99,812/- MADE ON ACCOUNT OF PROFIT EARNED ON UNACCOUNTED SALES OF RS .6,31,69,524/- IGNORING THE FACT THAT THE ASSESSEE HAS FAILED TO PROVE THE NEXUS WITH THE SUR RENDERED CASH / SURRENDERED INCOME. ITA 247/CHD/2017 & 187/CHD/2017 A.Y. 2013-14 PAGE 2 OF 45 3. THAT THE LD.CIT(A), LUDHIANA HAS ERRED IN DELETING THE ADDITION OF RS.94,75,428/- MADE ON ACCOUNT OF UNACCOUNTED INVESTMENT @15% OF UNACCO UNTED SALES OF RS.6,31,69,524/- IGNORING THE FACT THAT THE ASSESSEE HAS FAILED TO P ROVE THE NEXUS WITH THE SURRENDERED CASH / SURRENDERED INCOME. (ASSESSEE'S GROUNDS OF APPEAL : ITA NO.187/CHD/2017) 1. THAT THE LD. CIT(A) HAS GROSSLY ERRED ON FACTS IN S USTAINING ADDITION OF RS. 4,01,69,168/- WITHOUT APPRECIATING THAT THERE WAS NO DIFFERENCE I N STOCKS AS VALUED BY THE APPROVED VALUER DURING THE COURSE OF SEARCH UNDER SECTION 132 VIS-A -VIS STOCKS AS REFLECTED IN PEN DRIVE GIVEN THE NOMENCLATURE OF 'STOCK MANAGEMENT SYSTEM SUMMAR Y' 2. THAT BOTH THE LD. CIT(A) AND THE LD ASSESSING OFFIC ER WHILE SUSTAINING AND MAKING ADDITION OF RS. 4,01,69,168/- WRONGLY ARROGATED TO THEMSEL VES THE ROLE OF THE QUALIFIED VALUER FOR CONVERSION OF JEWELLERY WEIGHING DIFFERENTLY IGNORI NG THE VALUATION REPORT. 3. THAT WHILE SUSTAINING ADDITION OF RS. 4,01,69,168 /- AS BEING EXCESS STOCK AS RECORDED IN 'STOCK MANAGEMENT SYSTEM SUMMARY' OTHER THAN THE TO TAL STOCK FOUND AND VALUED BY THE APPROVED VALUER THE LD. CIT(A) ERRONEOUSLY UPHELD THE CONVERSION OF 22GMS & 18/14GMS INTO 24 GMS BY THE LD. ASSESSING OFFICER. 4. THAT WHILE SUSTAINING ADDITION OF RS. 4,01,69,168/- THE LD. CIT(A) FURTHER DID NOT APPRECIATE THAT AS PER ITEM WISE DETAILS OF JEWELLERY/DIAMONDS IN THE VALUATION REPORT BY THE APPROVED VALUER THE NET QUANTITY OF GOLD WEIGHED WAS EXACTLY THE SAME AS RECORDED IN PEN DRIVE AT 43,581.660 5. THAT THE LD. ASSESSING OFFICER AND THE LD. CIT(A) F URTHER DID NOT APPRECIATE THAT AFTER THOROUGH SEARCH BOTH THE BUSINESS AND RESIDENTIAL P REMISES THERE COULD BE NOT EVEN A GRAM OF GOLD/DIAMOND LEFT OUT AS COULD BE ASSUMED HYPOTH ETICALLY AND TAKEN TO BE CONCEALED/HIDDEN ELSEWHERE AS A COROLLARY. 6. THAT WHILE SUSTAINING ADDITION OF RS. 4,01,69,168/- AS REPRESENTING EXCESS STOCK OTHER THAN FOUND AND VALUED THE LD. CIT(A) IGNORED DEDUCTIONS AS ALLOWABLE AND ALLOWED BY THE APPROVED VALUER FOR CONVERSION OF JEWELLERY OF THE SIZES OF 22,18 & 14 GRAMS TO 24 GRAMS INTER-ALIA DIAMONDS OF DIAMONDS FOUND ON SEARCH. 7. THAT THE APPELLANT RESERVES THE RIGHT TO ADD , ALTE R OR TAKE FRESH GROUND EITHER BEFORE OR DURING THE COURSE OF HEARING. 2. THE APPEALS WERE HEARD ON VARIOUS DATES AND IN THE COUR SE OF FINALIZING THE PROPOSED DRAFT ORDER THE APPEALS WERE RE-FIXED FOR CLARIFICATION REQUIRING THE PARTIES TO ADDRESS THE ISSUES OF RECONCILING THE CONTENTS OF T HE PEN DRIVE WITH THE STOCK FOUND AND THE SEIZED DOCUMENTS ETC WHICH ARE SUBJECT MATTER O F CONSIDERATION IN THE APPEAL OF THE ASSESSEE. THESE SUBMISSIONS SHALL BE ADDRESSED SUBS EQUENTLY WHEN WE CONSIDER THE ISSUES RAISED BY THE ASSESSEE IN THE PRESENT APPEAL. BEFO RE ADVERTING TO THOSE SUBMISSIONS, IT WOULD BE APPROPRIATE TO FIRST ADDRESS THE RELEVANT FACTS. THE ASSESSEE'S BUSINESS PREMISES AND RESIDENCE OF ITS DIRECTOR IN THE FACTS OF THE P RESENT CASE WAS SUBJECTED TO SEARCH UNDER SECTION 132 OF THE INCOME TAX ACT,1961 ALONGWITH M/ S PALACE JEWELLERS GROUP OF CASES, LUDHIANA ON 31/10/2012. THE ASSESSEE E-FILED ITS RE TURN ON 30/09/2013 DECLARING AN INCOME OF RS.69,92,010/-. IN RESPONSE TO NOTICES UN DER SECTION 142 (1) THE ASSESSEE AGAIN FILED THE RETURN ON 22.01.2014 AND THEREAFTER FURTH ER REVISED IT WHEREIN ALSO AGAIN SAME INCOME WAS DECLARED. IN JUSTIFICATION OF REVISING T HE RETURN THE ASSESSEE EXPLAINED THAT AN AMOUNT OF RS. 17 LAKH ODD WHICH WAS REQUIRED TO BE PAID AS SELF ASSESSMENT TAX HAD NOT BEEN PAID AT THE TIME OF FILING OF THE ORIGINAL RET URN. CONSEQUENTLY TAKING THE REVISED RETURN INTO CONSIDERATION, THE ASSESSMENT PROCEEDIN GS WERE STARTED. 2.1 THE ASSESSING OFFICER TAKING NOTE OF THE FACT T HAT ASSESSEE COMPANY IS ENGAGED IN ITA 247/CHD/2017 & 187/CHD/2017 A.Y. 2013-14 PAGE 3 OF 45 THE BUSINESS OF TRADING IN MANUFACTURING OF DIAMOND , GOLD, SILVER/JEWELLERY AND OTHER PRECIOUS METALS/STONES REQUIRED THE ASSESSEE TO JUS TIFY THE EXCESS STOCK OF 7973.72 GMS FOUND IN THE COURSE OF THE SEARCH OF THE BUSINESS P REMISES OF THE ASSESSEE. SPECIFIC PARA 5 PAGE 2 OF THE ASSESSMENT ORDER MAKES A MENTION OF T HIS. THE ASSESSEES EXPLANATION AND ALTERNATE ARGUMENTS WERE REJECTED LEADING TO THE AD DITION OF RS.2,50,37,481. 2.2 APART FROM THIS, THE ASSESSING OFFICER CONSIDER ING THE CONTENTS OF A PEN DRIVE THE CONTENTS OF WHICH HAVE BEEN TITLED AS STOCK MANAGE MENT SUMMARY (ANNEXURE A-22) SEIZED FROM THE RESIDENCE OF THE DIRECTOR REQUIRED THE ASSESSEE TO JUSTIFY WHY THE CONTENTS THEREOF SHOULD NOT BE ADDED TO THE INCOME OF THE AS SESSEE. CONSIDERING THE EXPLANATION THE AO REJECTED THE SAME AND MADE AN ADDITION OF RS . 4,01,69,168. 2.3 THE ASSESSING OFFICER REFERRING TO ANNEXURE A 5 SEIZED FROM THE RESIDENCE OF ITS DIRECTOR DESCRIBED AS PARTY R1 MADE AN ADDITION OF RS. 46,99,812/- AS UNACCOUNTED SALES. THE ASSESSEE'S EXPLANATION THAT IT WAS COVERED IN T HE SURRENDER MADE BY THE ASSESSEE WAS REJECTED. 2.4 THE ASSESSING OFFICER THEREAFTER PROCEEDED TO A LSO ESTIMATE THE PROBABLE INVESTMENTS FOR CARRYING OUT THE UNACCOUNTED SALES. ACCORDINGLY AFTER REQUIRING THE ASSESSEE TO JUSTIFY WHY THE SAID ADDITION SHOULD NO T BE MADE HE REJECTED THE EXPLANATION AND PROCEEDED TO MAKE AN ADDITION OF RS.94,75,428 I N THE HANDS OF THE ASSESSEE. 3. THESE ADDITIONS WERE CHALLENGED IN APPEAL BEFORE THE CIT(A) WHO PROCEEDED TO GIVE PART RELIEF TO THE ASSESSEE. AGGRIEVED BY THE ORDER BOTH THE PARTIES ARE IN APPEAL BEFORE THE ITAT RAISING THE AFOREMENTIONED GROUNDS IN THEIR RE SPECTIVE APPEALS. 4. THE LD.CIT-DR ADDRESSING GROUND NO. 1 RAISED BY THE REVENUE IN THE PRESENT PROCEEDINGS INVITED ATTENTIO N TO THE ASSESSMENT ORDER. CARRYING US THROUGH THE FINDINGS ARRIVED AT IN PARAS 5 TO 8 OF HIS ORDER, IT WAS HIS SUBMISSION THAT IN THE FACE OF THE FACTS AVAILABLE ON RECORD, THE CIT(A) W AS NOT JUSTIFIED TO DELETE THE ADDITION IN PARA-3.2 OF HIS ORDER. FOR READY REFERENCE PARA-5 T O 8 OF THE ASSESSMENT ORDER HEAVILY RELIED UPON BY THE REVENUE IN THE PRESENT PROCEEDIN GS IS REPRODUCED HEREUNDER : 5. EXCESS STOCK FOUND IN THE COURSE OF SEARCH AT T HE BUSINESS PREMISES OF THE ASSESSEE COMPANY : WITH RESPECT TO THE EXCESS STOCK WEIGHING 7973.72 G MS. FOUND AT THE TIME OF SEARCH IN THE BUSINESS PREMISES OF THE ASSESSEE COMPANY VALUE D AT RS. 3,28,50,313/-, ASSESSEE HAS IN ITS REPLY RECEIVED IN THE OFFICE OF THE A.O. ON 11.02.2015 SUBMITTED THAT THERE WAS 3671655 GMS. OF PURE GOLD/BULLION AS PER BOOKSJ\4WC 'H HAS NOT BEEN CONSIDERED AT THE TIME OF SEARCH. FURTHER, ACCORDING TO ASSESSEE, EXCESS S TOCK WEIGHING 7973.72 GMS. FOUND AT THE TIME OF SEARCH IN THE BUSINESS PREMISES OF THE ASSESSEE HAS WRONGLY BEEN VALUED AT RS.3,28,50,313/-. ACCORDING TO ASSESSEE, VALUE OF THE ABOVE EXCESS STOCK COMES TO RS.2,50,37,481/- (7973.72 @ RS.3,140/-). A SSESSEE HAS ALSO SUBMITTED ITA 247/CHD/2017 & 187/CHD/2017 A.Y. 2013-14 PAGE 4 OF 45 THAT 6869.70 GMS. OF JEWELLERY OUT OF THE TOTAL JEW ELLERY OF 11082.79 GMS. BELONGING TO THE DIRECTORS AS PER THEIR WEALTH-TAX RETURNS WAS ALSO LYING AT THE BUSINESS PREMISES, CREDIT OF WHICH HAS NOT BEEN GIVEN. 6. IN VIEW OF THE ABOVE, ASSESSEE HAS TRIED TO EXPL AIN THE EXCESS JEWELLERY // WEIGHING 7973.72 GMS. FOUND AT THE TIME OF SEARCH AT THE BUS INESS PREMISES OF THE ASSESSEE AND HAS FINALLY ADMITTED THAT THERE WAS DIFFERENCE OF ONLY 1617.01 GMS. VALUED AT RS.50,77,400/- ( @ RS.3,140/- PER GM.) WHICH IS COVERED IN THE DISCLOS URE OF RS. 4 CRORE. WITHOUT PREJUDICE TO THE ABOVE, ASSESSEE HAS ALSO SUBMITTED THAT EVEN IF ENTIRE DIFFERENCE OF 7973.72 GMS. IS CONSIDERED WHICH ACCORDING TO ASSESSEE, IS VALUED A T RS.2,50,37,481/-, SAME IS OUT OF THE SUPPLIES MADE BY THE SUPPLIERS BUT SINCE ASSESS EE ADMITTEDLY IS NOT IN A POSITION TO GIVE IDENTIFICATION OF THE SAME, THE AFORESAID AMOU NT IS ALSO CLAIMED BY THE ASSESSEE TO BE COVERED IN THE DISCLOSURE OF RS. 4 CRORE. AFORESAID ARGUMENTS OF THE ASSESSEE COMPANY HAVE BE EN CAREFULLY CONSIDERED BUT ARE NOT ACCEPTABLE FOR THE REASONS DISCUSSED BELOW :- 7. AS FAR AS ASSESSEE'S ARGUMENT OF 367.655 G MS. OF PURE GOLD/BULLION AS PER BOOKS OF ACCOUNTS WHICH ACCORDING TO ASSESSEE, HAS NOT BEEN CONSIDERED IS CONCERNED SAME IS NOT ACCEPTABLE FOR WANT OF EVIDENCE. NO SUCH EXPLANATIO N WAS FURNISHED BY THE ASSESSEE AT THE TIME OF SEARCH. AS REGARDS INCORRECT VALUATION OF E XCESS STOCK OF 7973.72 GMS. WHICH HAS BEEN VALUED AT RS. 3,28,50,313/- INSTEAD OF RS. 2,50,37,481/-, SAME IS CORRECT, HENCE ACCEPTABLE. ASSESSEE'S FURTHER ARGUMENT THAT 6869.70 GMS. OF JEWELLERY BELONGING TO THE DIRECTORS WAS ALSO LYING AT THE BUSINESS PREMIS ES IS ALSO NOT ACCEPTABLE BECAUSE SAME IS NOT EVIDENT FROM THE RECORDS/BOOKS OF ACCOUNTS.' IN FACT, STOCK FOUND AT THE TIME OF SEARCH IN THE BUSINESS PREMISES OF THE ASSESSEE COMPANY WA S METICULOUSLY PREPARED AND LISTED. MOREOVER, STOCK FOUND AT THE TIME OF SEARCH AT THE BUSINESS PREMISES OF THE ASSESSEE COMPANY WAS DULY TAGGED. THE ASSESSEE'S ARGUMENT TH AT 6869.70 GMS. OF JEWELLERY BELONGING TO THE DIRECTORS WAS ALSO LYING AT THE BU SINESS PREMISES IS NOT SUPPORTED BY ANY EVIDENCE, AS DISCUSSED ABOVE. EVEN DURING THE COURS E OF SEARCH, THE ASSESSEE WAS SPECIFICALLY ASKED TO IDENTIFY THE JEWELLERY BELONGING TO THE DI RECTORS AND THEIR FAMILY MEMBERS BUT THE ASSESSEE FAILED. FOR THE REASONS DISCUSSED ABOVE, V ARIOUS ARGUMENTS OF THE ASSESSEE EXCEPT WITH REGARD TO INCORRECT VALUATION OF STOCK ARE REJ ECTED. IN VIEW OF THE ABOVE DISCUSSION, EXCESS STOCK OF RS.2,50,37,481/- IS HELD TO BE AN U NEXPLAINED STOCK, INVESTMENT IN WHICH HAS NOT BEEN EXPLAINED BY THE ASSESSEE. 8. THE ASSESSEE'S ALTERNATIVE ARGUMENT THAT AFORESA ID AMOUNT OF RS.2,50,37,481/- IS COVERED IN THE DISCLOSURE OF RS.4 CRORE IS ALSO NOT TENABLE AS ASSESSEE HAS FAILED TO EXPLAIN AND RECONCILE AS TO HOW THE EXCESS STOCK OF RS.2,50 ,37,481/- IS COVERED IN THE DISCLOSURE OF RS. 4 CRORE. IN FACT, AS PER ASSESSEE'S REPLY RECEI VED IN THE OFFICE OF A/O. ON 11.02.2015, DISCLOSURE OF RS. 4 CRORE HAS BEEN MADE ON ACCOUNT OF TRANSACTIONS RECORDED IN ANNEXURE A- 16, A-19, A-18 SEIZED FROM THE RESIDENCE PREMISES R -I (RESIDENCE OF SH. RAKESH JAIN) AND A-4 & A-14 SEIZED FROM THE BUSINESS PREMISES. THE E XCESS STOCK OF RS.2,50,37,481/- IS NOT FOUND COVERED IN THE DISCLOSURE OF RS. 4 CRORE AS E XPLAINED BY THE ASSESSEE IN ITS REPLY FILED BEFORE THE A.O. ON 11.02.2015. IN VIEW OF THE ABOVE DISCUSSION, IT IS HELD THAT AS SESSEE HAS FAILED TO EXPLAIN THE SOURCE OF INVESTMENT OF RS.2,50,37,481/- IN THE EXCESS STOCK OF 7973.72 GMS. FOUND AT THE BUSINESS PREMISES OF THE ASSESSEE AND ACCORDINGLY ADDITION O F RS.2,50,37,481/- IS MADE ON THIS ACCOUNT. SINCE, THE ASSESSEE HAD CONCEALED THE INCOME BY FUR NISHING THE INACCURATE PARTICULARS, AS DISCUSSED ABOVE, THE PENALTY PROCEEDINGS U/S 271 AAB OF THE I.T.ACT,1961 ARE INITIATED SEPARATELY ON THE ABOVE ISSUE. (ADDITION OF RS.2,50,37,481/-) 4.1 CARRYING US THROUGH THE RELIEF GRANTED BY THE CIT(A) CHALLENGED BY THE REVENUE, THE ORDER WAS ASSAILED ON THE GROUNDS OF IGNORING THE S PEAKING ORDER OF THE AO. THE SPECIFIC CONCLUSION SET OUT IN PARA-3.2 AT PAGES 13 TO 17 OF THE IMPUGNED ORDER FOR THE SAKE OF COMPLETENESS IS ACCORDINGLY REPRODUCED HEREUNDER: 3.2 GROUND OF APPEAL NO.2 PERTAINS TO ADDITION OF RS. 2,50,37,481/- ON ACCOUN T OF EXCESS STOCK FOUND AT THE BUSINESS PREMISES OF THE APPELLANT DUR ING THE COURSE OF SEARCH. THE AO MENTIONED THAT THE EXCESS STOCK WEIGHING 7973.72 GMS. WAS FOU ND AT THE TIME OF SEARCH AT THE BUSINESS ITA 247/CHD/2017 & 187/CHD/2017 A.Y. 2013-14 PAGE 5 OF 45 PREMISES OF THE ASSESSEE COMPANY AND VALUED IT AT R S. 3,28,50,313/-. TO THE QUERY BY THE AO, THE ASSESSEE IN ITS REPLY SUBMITTED THAT THERE WAS 367. 655GMS OF PURE AS PER BOOKS WHICH HAS NOT BEEN CONSIDERED AT THE TIME OF SEARCH. THE ASSE SSEE FURTHER SUBMITTED THAT EXCESS STOCK FOUND WEIGHING 7973.73 GMS HAS WRONGLY BEEN VALUED AT RS. 3 ; 28,50,313/-. ACCORDING TO THE ASSESSEE VALUE OF THE ABOVE EXCESS STOCK COMES TO RS. 2,50,37,481/ - (7973.72GMS @ 3140/-). ASSESSEE HAD ALSO SUBMITTED THAT 6869.70 GRMS. OF JEWELLERY, OUT OF T HE TOTAL JEWELLERY FOUND, BELONGED TO THE DIRECTORS AS PER THEIR WEALTH-TAX RETURNS WHICH WAS LYING AT THE BUSINESS PREMISES BUT NO CREDIT OF THE SAME HAS BEEN GIVEN. THE ASSESSEE HAS TRIED TO EXPLAIN THE EXCESS JEWELLERY WEIGHING 7973.72 GMS FOUND AT THE TIME OF SEARCH AND FINALLY ADMITTE D THAT THERE WAS DIFFERENCE OF ONLY 1617.01GMS. VALUED AT RS. 50,77,400/- (@ RS.3140/-P ER GMS) WHICH IS COVERED IN THE DISCLOSURE OF RS. 4 CRORE. THE ASSESSEE ALSO SUBMITTED THAT, WITH OUT PREJUDICE TO THE ABOVE, EVEN IF ENTIRE DIFFERENCE OF 7973.72GMS IS CONSIDERED WHICH IS VAL UED AT RS. 2,50,37,481/-, THE SAME IS COVERED IN THE DISCLOSURE OF RS. 4 CRORE. THE ARGUMENTS OF THE ASSESSEE WERE NOT FOUND ACCEPTABLE BY THE AO FOR THE REASONS THAT THERE IS NO EVIDENCE PR OVIDED REGARDING AVAILABILITY OF ABOUT 367.655 GMS. OF PURE GOLD/BULLIONS FOUND AT THE TIM E OF SEARCH AS PER BOOKS OF ACCOUNTS AND ALSO THAT NO SUCH EXPLANATION WAS FURNISHED BY THE ASSESSEE AT THE TIME OF SEARCH. AS REGARDS INCORRECT VALUATION OF EXCESS STOCK OF 7973.72 GMS. WHICH HAS BEEN VALUED AT RS.3,28,50,313/- INSTEAD OF RS. 2,50,37,481/- ; SAME IS FOUND CORRECT AND HENCE ACCEPTED BY THE AO . ASSESSEE'S FURTHER ARGUMENT THAT 6869.70 GMS. OF JEWELLERY BEL ONGING TO THE DIRECTORS WAS ALSO LYING AT THE BUSINESS PREMISES WAS ALSO NOT ACCEPTABLE BECAU SE AS PER AO SAME IS NOT EVIDENT FROM THE RECORDS/BOOKS OF ACCOUNTS. EVEN DURING THE COURSE O F SEARCH, THE ASSESSEE WAS SPECIFICALLY ASKED TO IDENTIFY THE JEWELLERY BELONGING TO THE DI RECTORS AND THEIR FAMILY MEMBERS BUT THE ASSESSEE FAILED TO DO SO. THE AO MENTIONS THAT IN V IEW OF THE ABOVE REASONS, THE VARIOUS ARGUMENTS OF THE ASSESSEE EXCEPT WITH REGARD TO INC ORRECT VALUATION OF STOCK, WERE NOT FOUND ACCEPTABLE AND HENCE REJECTED. FURTHER, THE ASSESSE E'S ALTERNATIVE ARGUMENT THAT AFORESAID AMOUNT OF RS. 2,50,37,481/-WAS COVERED IN THE DISCL OSURE OF RS.4 CRORE WAS ALSO NOT FOUND TENABLE BY THE AO AS ASSESSEE HAD FAILED TO EXPLAIN AND RECONCILE AS TO HOW THE EXCESS STOCK OF RS. 2,50,37,481/- WAS COVERED IN THE DISCLOSURE OF RS. 4 CRORE. THE AO MENTIONED THAT AS PER ASSESSEE'S REPLY RECEIVED IN THE OFFICE OF A.O. ON 11.02.2015, DISCLOSURE OF RS.4 CRORE HAS BEEN MADE ON ACCOUNT OF TRANSACTIONS RECORDED IN ANNEXUR E A-16, A-19, A-18 SEIZED FROM THE RESIDENCE PREMISES R-L (RESIDENCE OF SH. RAKESH JAI N) AND A-4 & A-14 SEIZED FROM THE BUSINESS PREMISES AND THE EXCESS STOCK OF RS. 2,50, 37,481/- IS NOT FOUND COVERED IN THE DISCLOSURE OF RS. 4 CRORE AS EXPLAINED BY THE ASSESSEE IN ITS REPLY FILED BEFORE THE A.O. ON 11.02.2015. ACCORDINGLY THE EXCESS STOCK OF RS. 2,50,37,481/- W AS HELD BY THE AO TO BE AN UNEXPLAINED STOCK, INVESTMENT IN WHICH HAS NOT BEEN EXPLAINED B Y THE ASSESSEE. THE AO THEREFORE MADE THE ADDITION OF RS. 2,50,37,481/- EQUIVALENT TO VAL UE OF THE EXCESS STOCK OF 7973.72GMS. FOUND AT THE BUSINESS PREMISES OF THE ASSESSEE. THE FACTS OF THE CASE, THE BASIS OF ADDITIONS MADE BY THE A.O. AND THE ARGUMENTS OF THE AR DURING THE APPELLATE PROCEEDINGS HAVE BEEN CONSIDER ED. THE AR HAS REPEATED THE ARGUMENT THAT THERE WAS NO EXCESS STOCK AND THE STOCK DISCLO SED IN THE W.T. RETURNS AND AS PER BOOKS WAS MORE THAN THE STOCK FOUND AT THE TIME OF SEARCH . IT HAS ALSO BEEN ARGUED THAT THE STOCK OF JEWELLERY WEIGHING 7973.72GMS. VALUED AT RS. 2,50,3 7,4817- (AT THE RATE OF RS. 3140 PER GMS.) IS TRULY COVERED BY THE SURRENDER OF THE ADDITIONAL INCOME OF RS. 4 CRORES MADE FOR THE ASSESSMENT YEAR 2013-14 AT THE TIME OF SEARCH. THE AR FILED THE DETAILS OF SURRENDER MADE ON THE ACCOUNT OF EXCESS STOCK AS UNDER: AS REGARDS THE OBSERVATIONS OF THE AO RELATING TO T HE SURRENDER WITH THE DOCUMENTS FOUND AT THE TIME OF SEARCH, THE AR REFER TO THE STATEMENT OF SH . RAKESH JAIN, THE DIRECTOR OF THE ASSESSEE COMPANY, RECORDED ON 02.11.2012 WHERE THE DETAILS O F THE EXCESS STOCK FOUND AND SURRENDER ON ACCOUNT OF THE SAME HAS BEEN RECORDED ALONG WITH TH E RELATION TO THE ENTRY IN THE DOCUMENTS SEIZED AT ANNEXURE A-16, A-19, A-18 SEIZED FROM THE RESIDENCE AND A-4, A-14 SEIZED FROM THE SI NO. DESCRIPTION OF GOOD QUANTITY RATE (RS.) PER AMOUNT(RS.) 1 GOLD ORNAMENTS 4,914.750 GMS 2,876.00 GMS 1,41,34,820.00 2 ORNAMENTS 14KT 3,712.500GMS 1,837.00 GMS 68,19,862.00 3 DIAMOND IN ORNAMENTS 675.000CT 8,085 CT 54,57,375.00 TOTAL 2,64,12,057.00 ITA 247/CHD/2017 & 187/CHD/2017 A.Y. 2013-14 PAGE 6 OF 45 BUSINESS PREMISES. THE RELEVANT PART (QUESTION AND ANSWER) OF THE FINAL STATEMENT DATED 2.11.2012 RECORDED AT THE TIME OF SEARCH IS AS UNDE R:- '0.6 I AM SHOWING YOU A DIARY MARKED AS ANNEXURE A- 20 SEIZED FROM YOUR RESIDENCE R-L. PLEASE EXPLAIN THE NATURE OF ENTRY IN THIS ANNEXURE ? A6. SIR, THIS DIARY CONTAINS THE RECEIVABLES ON ACC OUNT OF SALES OF JEWELLERY. SOME OF THESE SALES ARE OUTSIDE THE REGULAR BOOKS OF ACCOUNTS AND IS OUT OF THE PURCHASES AS REFLECTED IN DIARIES MENTIONED ABOVE I.E. A-16, A-18 & A-19 SEIZ ED FROM R-L AND A-4 & A-14 SEIZED FROM B-L. I HAVE VOLUNTARILY DISCLOSED I AN AMOUNT OF 3. 61 CRORES AS UNACCOUNTED INCOME IN M/S PALACE JEWELLERS (P), ' LIMITED FOR THE F.Y. 2012-1 3 PERTAINING TO ALL THESE TRANSACTIONS OVER AND ABOVE THE NORMAL BUSINESS INCOME FOR THE Y EAR. I WOULD ALSO LIKE TO STATE THAT THE DISCREPANCY IN STOCK IS ON ACCOUNT/OF SOME OF THESE PURCHASES LYING M THE STOCK Q. 11 PHYSICAL STOCK WAS TAKEN AT YOUR SHOP AND IT WAS FOUND THAT EXCESS STOCK FOUND WAS AS FOLLOWS: GOLD ORNAMENTS (CONVERTED- - 7973.72 GMS VALU ED AT RS. 2,50,37,481/- INTO 24 CARAT PURE GOLD WEIGHT) DIAMONDS IN ORNAMENTS - 935 CARATS VALUED AT RS. 75,59,635/- COLOUR STONE - VALUED AT RS. 1,26,692/- GOLD IMAGES - VALUED AT RS. 1,15,115/- LOOSE DIAMONDS -14.5 CARATS VALUED AT RS. 1,13, 901/- TOTAL VALUE - RS. 3,28,50,313/- THE TOTAL EXCESS STOCK FOUND AT THE BUSINESS PREM ISES IS VALUED AT RS. 3,28,50,313/- PLEASE EXPLAI N THE EXCESS STOCK ? A.11 THE EXCESS STOCK AS PER THE VALUER'S REPORT CO NTAINS SOME JEWELLERY BELONGING TO THE FAMILY WHICH WAS PLACED IN THE STRONG ROOM OF THE SHOP, SINCE WE DO NOT HAVE THE NEED OF ANY LOCKERS. THE JEWELLERY HERE IS THE OLD JEWELLERY WHICH IS NOT WORN BY THE LADIES REGULARLY AND IS THEREFORE, KEPT IN THE STRO NG ROOM FOR SECURITY PURPOSES. THIS JEWELLERY WAS IDEN TIFIED BY MY SON GOURAV ON THE DATE OF THE SEARCH. THE DIFFERENCE IN STOCK FOUND AT THE SHOP IS ON ACC OUNT OF THE UNACCOUNTED PURCHASES AS MENTIONED ABOV E BY ME, LYING UNSOLD IN THE STOCK. I HAVE VOLUNTARIL Y DISCLOSED AN AMOUNT OF RS. 3.61 CRORES IN M/S PAL ACE JEWELLERS (P) LIMITED ON ACCOUNT OF SUCH UNEXPLAINE D INVESTMENT IN JEWELLERY PURCHASED AND THE DISCREPANCY IN STOCK, IF ANY ALSO STANDS COVERED WI THIN THE SAID DISCLOSURE.' THE SURRENDER AMOUNT WAS LATER REVISED TO RS. 4 CRO RES (RS. 2,64,12,057 ON ACCOUNT OF STOCK AND RS. 1,35,87,943/- ON ACCOUNT OF CASH). THE REVALUAT ION OF THE EXCESS STOCK FOUND AT THE TIME OF SEARCH WHICH WAS. ORIGINALLY VALUED AT RS.3,28,50,3 13/- HAS BEEN ACCEPTED BY THE AO AT RS. 2,50,37,481/- ON THE BASIS OF RATES PREVAILING ON T HE DATE OF SEARCH. THEREFORE THE VALUE OF THE EXCESS STOCK HAS BEEN TAKEN AT RS. 2,50,37,481/- (7 973.72GMS @ RS 3,140/-). FROM THE PERUSAL OF THE FINAL STATEMENT OF SH. RAKESH JAIN RECORDED ON 02.1 1.2012 IT IS CLEAR THAT ANNEXURE A-L, A-19, A-18 SEIZED FROM THE RESIDENCE R-1 AND ANNEXURES A- 4 AND A-14 SEIZED FROM THE BUSINESS PREMISES B-L RELATES TO PURCHASE OF JEWELLERY WHICH WAS OUTSIDE REGULAR BOOKS OF ACCOUNTS AND THE DIFFERENCE IN STOCK FOUND AT THE SHOP WAS ON AC COUNT OF THESE UNACCOUNTED I PURCHASES MADE BY THE ASSESSEE FOR WHICH SURRENDER OF RS. 3.61 CRO RES WAS OFFERED (WHICH WAS LATER REVISED TO RS. 2,64,12,057/-). IN VIEW OF THE ABOVE FACTS THER E IS MERIT IN THE ARGUMENTS OF THE AR THAT THE ADDITION OF RS. 2,50,37,441/- MADE BY THE AO ON ACCOUNT OF EXCESS STOCK FOUND AT THE TIME OF SEARCH IS COVERED BY THE SURRENDER AMOU NT OF RS. 2,64,12,058/- MADE BY THE ASSESSEE UNDER THE 'STOCK SURRENDER BECAUSE THE SURRENDER IS ON ACCOUNT OF THE UNRECORDED PURCHASES MENTIONED IN ANNEXURE A-L, A-19, A-18 SEIZED FROM E RESIDENCE R-1 AND ANNEXURES A-4 AND A- 14 SEIZED FROM THE BUSINESS PREMISES B-L WHICH WERE NOT RECORDED IN THE BOOKS. THE UNRECORDED PURCHASES WILL NATURALLY RESULT IN CREATION OF UNAC COUNTED STOCK. THE OBSERVATIONS OF THE AO THAT SURRENDER IS ON ACCOUNT OF ANNEXURE A-L, A-19, A-18 SEIZED FROM THE' RESIDENCE R-1 AND ANNEXURES A-4 AND A-14 SEIZED FROM THE BUSINESS PRE MISES B-L AND NOT ON ACCOUNT OF THE EXCESS STOCK IS THEREFORE FLAWED ON THE FACTS OF THIS CASE . UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE AND ON THE BASIS OF THE DETAILS SUBMITTED BY THE AR, HIS A RGUMENTS ARE FOUND ACCEPTABLE THAT THE SURRENDER AMOUNT 'ON ACCOUNT OF STOCK' DULY COVERS THE 'EXCES S STOCK PHYSICALLY FOUND' AT THE TIME OF SEARCH. IN VIEW OF THE ABOVE, THE ADDITION OF RS. 2,50,37,428/ - MADE BY THE AO, SEPARATELY ON ACCOUNT OF EXCESS STOCK FOUND, OVER AND ABOVE THE SURRENDER OF RS. 2,64,12,058/- MADE BY THE ASSESSEE ON ACCOUNT OF THE STOCK, IS NOT FOUND SUSTAINABLE ENHANCE DELE TED. ACCORDINGLY THIS GROUND OF APPEAL IS ALLOWE D. 4.1.1 ASSAILING THE SAME, IT WAS HIS SUBMISSION THA T THE ADDITION MADE BY THE AO MAY BE SUSTAINED. THE LD. CIT DR ON THE BASIS OF THE ABOVE FACTS AND SUBMISSIONS CONTENDED THAT THE CLAIM OF THE ASSESSEE THAT THE TOTAL DECLARATIO N OF RUPEES 4 CRORE WOULD COVER THE SAID STOCK HAS BEEN CONSIDERED BY THE AO AND THE EXPLANA TION OFFERED BY THE ASSESSEE HAS BEEN CONSIDERED AND DISCARDED AFTER GIVING COGENT AND DE TAILED REASONS SET OUT IN THE ITA 247/CHD/2017 & 187/CHD/2017 A.Y. 2013-14 PAGE 7 OF 45 ASSESSMENT ORDER. SINCE HEAVY RELIANCE IT WAS SUBMI TTED IS BEING PLACED BY THE REVENUE ON THE SAME THE CASUAL WAY IN WHICH THE CONCLUSION HAS BEEN DRAWN BY THE CIT-A, IT WAS SUBMITTED IS CONTRARY TO THE SPEAKING FINDINGS OF T HE ASSESSING OFFICER 4.2. THE LD. AR ON THE OTHER HAND HEAVILY RELYING UPON THE ORDER OF THE CIT-A SUBMITTED THAT IT IS NOT A CRYPTIC ORDER AS IS SOUGHT TO BE M ADE OUT BY THE LD. CIT-DR AND INFACT IT IS A SPEAKING ORDER EVEN THOUGH THE ASSESSEES GRIEVANCE STILL PERSISTS ON THE OTHER ISSUES. INVITING ATTENTION TO THE RECORD IT WAS HIS SUBMISS ION THAT THE SURRENDER HAS BEEN MADE SPECIFICALLY IN TERMS OF THE ALL DOCUMENTS FOUND IN THE COURSE OF SEARCH . INITIALLY THE SURRENDER WAS MADE OF RUPEES 3.61 CRORE AS PER LETT ER DATED 02/11/2012 AND ULTIMATELY ON GOING THROUGH THE RECORDS AND DOCUMENTS, THE SURREN DER WAS INCREASED TO RUPEES 4 CRORE IN TERMS OF THE LETTER DATED 11/01/2013 . COPY OF T HIS LETTER IT WAS SUBMITTED HAS BEEN PLACED AT PAPER BOOK PAGE 51 OF THE SECOND SET OF D OCUMENTS/PAPER BOOK. IT WAS HIS SUBMISSION THAT IT WAS A CONSOLIDATED DISCLOSURE. REFERRING TO THE RECORD, IT WAS SUBMITTED, THAT THE REPLY DATED 11/02/2015 HAS BEEN PARTLY ACC EPTED BY THE AO AND ALL THE DETAILS WERE ALL ALONG AVAILABLE BEFORE THE ASSESSING OFFIC ER. STATEMENT OF THE ASSESSEE AVAILABLE AT PAPER BOOK PAGE 43 TO 49 OF THE PAPER BOOK MADE BY THE DIRECTOR SH. RAKESH JAIN RECORDED ON 02/11/2012 WAS HEAVILY RELIED UPON. SPECIFIC EMP HASIS WAS LAID ON PAGE 45. ACCORDINGLY IT WAS HIS SUBMISSION THAT SURRENDER WAS MADE FOR A LL THE DOCUMENTS SEIZED OR FOUND. IN THE CIRCUMSTANCES IT WAS HIS PRAYER THAT THE DEPART MENTAL GROUND MAY BE DISMISSED. 4.3 WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSE D THE MATERIAL AVAILABLE ON RECORD. IT IS SEEN THAT THE CIT DR IN THE COURSE OF HIS ARG UMENTS HAS HEAVILY RELIED UPON THE REASONING AND CONCLUSION OF THE ASSESSING OFFICER S TATING THAT THE EXPLANATION OFFERED BY THE ASSESSEE HAS BEEN DISCARDED. HEAVY RELIANCE IS PLACED BY THE REVENUE ON THIS REASONING. WE FIND ON GOING THROUGH THIS EXPLANATIO N FOUND RECORDED IN THE ASSESSMENT ORDER IT IS SEEN THAT THE ASSESSEE EXPLAINED THAT T HE EXCESS STOCK FOUND IN THE COURSE OF THE SEARCH INCLUDED THE ASSESSEES FAMILY JEWELLERY WHI CH WAS STORED IN THE STRONGROOM OF THE BUSINESS PREMISES. THE AVAILABILITY OF JEWELLERY IN THE HANDS OF THE FAMILY MEMBERS IS SUPPORTED BY DECLARATION MADE IN THE WEALTH TAX RET URNS OF THE FAMILY MEMBERS. THE CONSOLIDATE STATEMENT DETAILS ARE AVAILABLE AT PAPE R BOOK PAGE 52. THESE STAND UNASSAILED ON RECORD. WE HAVE GONE THROUGH THE STATEMENTS OF THE FAMILY M EMBERS RECORDED IN THE COURSE OF THE SEARCH AVAILABLE IN THE PAPER BOOK WH EREIN WHILE PROVIDING THE DETAILS OF THE SPECIFIC BANK ACCOUNTS OF THE FAMILY MEMBERS THAT I T IS STATED CATEGORICALLY THAT NO LOCKER HAS BEEN TAKEN IN ANY OF THE BANKS BY THE FAMILY ME MBERS. THE FAMILY JEWELLERY, IT IS CONSISTENTLY STATED HAS BEEN STORED IN THE STATE-OF -THE-ART STRONGROOM AT THE BUSINESS PREMISES. WE FIND THAT THE SAID EXPLANATION WAS NOT ACCEPTED BY THE ASSESSING OFFICER ON ITA 247/CHD/2017 & 187/CHD/2017 A.Y. 2013-14 PAGE 8 OF 45 THE REASONING THAT THE SAID EXPLANATION WAS NOT OFF ERED AT THE TIME OF THE SEARCH TO THE INVESTIGATION WING. WE ARE UNABLE TO AGREE WITH THE AFORESAID REASONING. IT IS SEEN THAT APART FROM THIS STAND ALONE REASON THERE IS NO OTHE R FACT OR EVIDENCE AVAILABLE ON RECORD TO UPSET THE CONSISTENT EXPLANATION. THE FACTS REMAINS THAT APART FROM THIS REASON, THE AO HAS NOT CARED TO UPSET THE CONSISTENT STAND OF THE ASSE SSEE THAT THE FAMILY MEMBERS DO NOT OWN ANY LOCKERS. THIS OBSERVATION BECOMES IMPORTANT IN VIEW OF THE FACT THAT THE BUSINESS PREMISES OF THE ASSESSEE AND THE RESIDENCES OF THE DIRECTORS OF THE ASSESSEE COMPANY HAVE BEEN SEARCHED AND THERE IS NOTHING ON RECORD TO UPS ET THIS CONSISTENT STAND. EVEN IN THE PRESENT APPEAL NO EVIDENCE OF REBUTTING THIS FACT I S PLACED ON RECORD BY THE REVENUE. THE LD. CITDR MERELY RELIES ON THE REASONING OF THE AO. IT IS FURTHER SEEN THAT AS PER THE STATEMENTS RECORDED OF THE DIRECTORS IT IS AN UNDIS PUTED FACT THAT THE ASSESSEE WAS INDULGING IN DISCLOSED SALES AND UNDISCLOSED SALES ON ACCOUNT OF WHICH FACT INITIALLY AN AMOUNT OF RUPEES 3.61 CRORES WAS OFFERED IN THE HAN DS OF THE ASSESSEE. SUBSEQUENTLY IT WAS REVISED TO AN AMOUNT OF RUPEES 4 CRORE. CONCLUS ION DRAWN BY THE CIT(A) BECOMES FURTHER FORTIFIED BY THE FACT THAT THE ASSESSEE IN THE COURSE OF HIS ARGUMENTS QUA GROUND NO. 3 IN THE REVENUES APPEAL WHICH WE PROPOSE TO D ISCUSS IN GREATER DETAIL LATER IN THE ORDER WHILE DEALING WITH THE SPECIFIC GROUND RAISED IN ASSESSEE'S APPEAL, HOWEVER, FOR THE SAKE OF COMPLETENESS, WE DEEM IT APPROPRIATE TO NOT E THAT AMPLE EVIDENCE HAS BEEN LED TO SHOW THAT IN THE SPECIFIC NATURE OF ASSESSEES BUS INESS THE JEWELLERY WAS NOT NORMALLY PURCHASED AS IT WAS RECEIVED ON CREDIT FROM VARIOUS JEWELLERS ETC. AND IT HAS BEEN CLAIMED THAT PERIODICALLY AS AND WHEN IT WAS SOLD THE AMOUN TS WERE RETURNED BACK TO THE JEWELLERS OVER A PERIOD OF TIME FOR THE JEWELLERY PIECES SOLD . THIS ASSERTION WE NOTE HAS BEEN SUPPORTED ON THE BASIS OF THE JOURNAL ENTRIES MADE IN THE SPECIFIC LEDGERS OF THE SPECIFIC JEWELLERS WHERE PAYMENTS HAVE BEEN MADE BY CHEQUES MENTIONING THE SPECIFIC BANK AND THE SPECIFIC ACCOUNT NUMBERS. THE CHEQUE NUMBER AND THE AMOUNT REMITTED ON SPECIFIC DATES. THESE REFERENCES, ARGUMENTS AND SUPPORTING D OCUMENTS HAVE ALL BEEN PLACED ON RECORD BY THE ASSESSEE AND ARE ALSO AVAILABLE IN TH E PAPER BOOK. WE FIND ON CONSIDERING THE ARGUMENTS OF THE PARTIES WHEN CONSIDERED IN THE LIGHT OF THE EVIDENCES ON RECORD THAT IT IS IMPERATIVE IN ORDER TO CONSIDER THE FACTS AND EV IDENCES IN A HOLISTIC MANNER AND NOT IN A PIECE MEAL MANNER AS HAS BEEN ATTEMPTED BY THE TAX AUTHORITIES. AS SUCH AN APPROACH WILL LEAD TO COMING TO INCORRECT CONCLUSIONS. ON GOING T HROUGH THE ARGUMENTS ADVANCED, MATERIAL AVAILABLE ON RECORD AND THE FINDINGS RECOR DED IN THE RESPECTIVE ORDERS WE ARE OF THE VIEW THAT THE LINGERING DISPUTE QUA THE ASSESSE E AND THE DEPARTMENT IN THE PECULIAR FACTS AND CIRCUMSTANCES OF THE PRESENT CASE IS QUA THE ISSUE ON ACCOUNT OF THE RELUCTANCE AND ADAMANCY OF THE REVENUE IN TAKING A NARROW VIEW AS OPPOSED TO CONSIDERING THE ISSUE IN A COMPREHENSIVE HOLISTIC MANNER. ON GOING THROUG H THE MATERIAL ON RECORD THE ITA 247/CHD/2017 & 187/CHD/2017 A.Y. 2013-14 PAGE 9 OF 45 SUBMISSIONS OF THE PARTIES WE HOLD THAT IN THE FACE OF THE FACTS AS THEY STAND THE ARGUMENTS OF THE ASSESSEE AS ADDRESSED BEFORE THE ASSESSING O FFICER AND THE CIT-A PART OF WHICH HAVE BEEN EXTRACTED IN THE ORDERS AND AVAILABLE IN THE P APER BOOKS WHEN CONSIDERED ALONGWITH THE DOCUMENTS AVAILABLE ON RECORD WHICH CONTAINS CO PIES OF THE SEIZED DOCUMENTS ALONGWITH SUBMISSIONS OF THE ASSESSEE BEFORE THE AO THE CIT-A WE FIND THAT THE ARGUMENTS OF THE ASSESSEE THAT IT WAS A CONSOLIDATED DISCLOSU RE DESERVES TO BE ACCEPTED. ACCORDINGLY, CONSIDERING THE DOCUMENTS AVAILABLE ON RECORD WHICH CONTAINS COPIES OF THE SEIZED DOCUMENTS AND THE EXPLANATIONS OF THE ASSESSEE ON R ECORD BEFORE THE TAX AUTHORITIES AND THE REASONING OF THE RESPECTIVE TAX AUTHORITIES WE FIND NO GOOD REASON TO VARY THE CONCLUSION DRAWN BY THE CIT(A). HOLDING THE GROUND TO BE DEVOID OF MERIT FOR THE REASONS SET OUT HEREINABOVE, GROUND NO. 1 OF THE REVENUE IS DISMISSED. 5. ADDRESSING THE NEXT ISSUE RAISED BY THE REVENUE IN THE PRESENT PROCEEDINGS WHEREIN THE CIT-A HAS DELETED THE ADDITIONS MADE ON THE BASIS OF AVERAGE OF PRE-SEARCH AND POST-SEARCH GP. THE LD. CITDR RELIES ON THE REA SONING OF THE ASSESSING OFFICER WHICH HAS BEEN ELABORATED BY THE AO IN THE ASSESSMENT ORD ER. IT IS SEEN THAT THE FACTS ARE FOUND DISCUSSED IN PARAS 14 TO 16 AT PAGES 12 TO 15 OF TH E ASSESSMENT ORDER. SINCE HEAVY RELIANCE IS PLACED BY THE REVENUE THEREON THE SAME IS REPROD UCED FOR READY REFERENCE: 14. 'Q. 1. UNACCOUNTED TURNOVER YOUR HONOUR HAVE MENTIONED THAT DURING THE COURSE O F SEARCH OPERATIONS, CERTAIN LOOSE PAPERS WERE FOUND FROM THE RESIDENCE OFSH. RAKESH J AIN, ONE OF THE DIRECTORS OF THE ASSESSEE COMPANY AS ANNEXURE A-5 OF R-L ALONG WITH OTHER DIARIES A-16, A18, AND A 19 AND A-4 AND A-14 FROM THE BUSINESS PREMISES (B-L ) IN WHICH CERTAIN ENTRIES WERE FOUND WHICH APPEAR TO BE UNACCOUNTED. YOUR HONOUR HAVE AL SO CALCULATED THE AMOUNT OF TOTAL SALES AS PER ANNEXURE A-5 AND HAS BEEN WORKED OUT A T RS. 20,27,60,951/- . HOWEVER, IN THE STATEMENT GIVEN BY SH. RAKESH JAIN ON 02.11.201 2 DURING THE COURSE OF SEARCH ON CONFRONTING THE SAME ANNEXURE STATED THAT THE TOTAL TURNOVER OF THE ASSESSEE COMPANY AS PER THESE PAPERS SHOULD BE AROUND RS.13 TO RS. 14 C RORES WHILE THE SALES AS BOOKS MUST BE AROUND RS. 10 CRORES. YOUR HONOUR HAVE ASKED US TO SHOW CAUSE AS TO WHY APPROPRIATE ADDITION ON ACCOUNT OF UNACCOUNTED SALES MAY NOT BE MADE. IN REPLY, IT IS RESPECTFULLY SUBMITTED THAT THE PAGES IN ANNEXURE A-5, ARE DATE -WISE SUMMARY OF TOTAL ENTRIES/ CASH TRANSACTIONS/SALES MADE BY THE ASSESSEE COMPAN Y. AS SUCH THESE INCLUDE SALES BOTH ACCOUNTED AND UNACCOUNTED. YOUR HONOUR WILL APPRECI ATE THAT IN THE CASE OF ASSESSEE COMPANY'S LINE OF TRADE NORMALLY CUSTOMERS DO NOT W ANT TO HAVE ANY SALE BILL. RATHER THEY USED TO PURCHASE ITEMS IN CASH. BUT THE ASSESSEE CO MPANY HAS TO SHOW SALES. THEREFORE, THE ASSESSEE COMPANY USED TO ISSUE BILLS EITHER OF THE SAME AMOUNT OR OF A DIFFERENT AMOUNT IN CASH OR IN THE NAME AS PER DESIRE OF THE CUSTOMER. AS SUCH, THE SALES WHICH YOUR HONOUR HAVE CONSIDERED AS PER ANNEXURE A-5 INCLUDES SALES WHICH HAVE ALREADY BEEN ACCOUNTED FOR BY THE ASSESSEE COMPANY IN ITS BOOKS OF ACCOUNTS. F URTHER, IT IS SUBMITTED THAT THERE ARE SOME MISTAKES IN CALCULATING THE SALES BY YOUR HONO UR WHICH HAS BEEN WORKED OUT AT RS. 20,27,60,951/-, SUCH AS THE OPENING CASH IN HAND OF THE DAY IS INCLUDED IN THE TOTAL SALES FOR THE DAY, THE AMOUNT WITHDRAWN FROM CHEST (OOPER SE) OR LIKE OTHER MISTAKES. THE ASSESSEE COMPANY HAS DRAWN A CHART SHOWING TOTAL SA LES AS PER THESE PAPERS (ANNEXURE A- 5) WHICH HAS BEEN WORKED OUT AT RS. 16,47,31,990/-, DETAILS OF WHICH HAS ALREADY BEEN SUBMITTED WHILE REPLYING TO ANNEXURE- 5 SEPARATELY. AS MENTIONED EARLIER, THIS INCLUDES BOTH ACCOUNTED AND UNACCOUNTED SALES AS THE ENTIRE WORKI NG OF THE DAY HAS BEEN GIVEN ON THESE PAPERS (DATE-WISE) ONLY. IF THE AMOUNT OF SALES UP TO THE DATE OF SEARCH I.E. 31.10.2012 AMOUNTING TO RS. 10,15,62,4661- IS REDUCED FROM THE TOTAL SALES AS PER ANNEXURE A-5 AS WORKED OUT BY THE ASSESSEE COMPANY, THE UNACCOUNTED SALES COMES TO RS. 6,31,69,5241-. ITA 247/CHD/2017 & 187/CHD/2017 A.Y. 2013-14 PAGE 10 OF 45 THE GROSS PROFIT MARGIN OF THE ASSESSEE COMPANY WAS 2.76 % FOR THE ENDING 30.10.2012. IF THIS RATE OF GROSS PROFIT IS APPLIED, THE PROFIT EL EMENT COMES TO RS. 17,43,480/- ON THE AMOUNT OF UNACCOUNTED SALES, -WHICH STANDS COVERED BY THE AMOUNT OF ADDITIONAL INCOME OF RS. 4 CRORES ALREADY SURRENDERED WHILE MA KING A STATEMENT U/S 132 (4) OF THE ACT. NO SEPARATE ADDITION IS CALLED FOR IN SUCH CIRCUMSTANCES. 15. AFORESAID ARGUMENTS OF THE ASSESSEE COMPANY HAV E CAREFULLY BEEN CONSIDERED. AS PER ASSESSEE' S ARGUMENT SALES MADE OUTSIDE THE BOO KS OF ACCOUNTS, AS NOTED IN ANNEXURE A-5 SEIZED FROM PREMISES R-I I.E. RESIDENCE OF SH. RAKESH JAIN; ONE OF THE DIRECTORS OF THE ASSESSEE COMPANY ADMITTEDLY ARE OF RS. 16,47,31,990 /- AS AGAINST SALES OF RS.10,15, 62,466/- RECORDED IN THE BOOKS OF ACCOUNTS AT THE T IME OF SEARCH DATED 31.10.2012. ASSESSEE HAS TRIED TO EXPLAIN THE EXCESS SALES OF R S.6,31,69,524/- (16,47,31,990 - 10,15,62,466) BY STATING THAT PROFIT ON THE BASIS O F G.P. MARGIN ON ABOVE SALES AT 2.76%' COMES TO RS.17,43 ,480/- WHICH STANDS COVERE D IN THE ADDITIONAL INCOME OF RS.4 CRORE SURRENDERED WHILE MAKING A STATEMENT U/S 132( 4) OF THE ACT AND NO SEPARATE ADDITION IS CALLED FOR ON THIS ACCOUNT. AFORESAID ARGUMENTS OF THE ASSESSEE HAVE BEEN CONSIDERED BUT ARE NOT ACCEPTABLE. 16. AS PER SEIZED DOCUMENTS, ASSESSEE HAS MADE SALE S OUTSIDE THE BOOK OF ACCOUNTS AND, THEREFORE, APPROPRIATE ADDITION ON ACCOUNT OF PROFIT ON SUCH SALES AND INVESTMENT MADE TO EFFECT SUCH UNACCOUNT ED SALES OF RS.6,31,69,524/- IS ALSO REQUIRED TO BE MADE. AS FAR AS PROFIT ELEMENT IS CONCERNED, IT IS SEEN THAT ASSESSEE HAS SHOWN G.P. OF 2.76% ON THE SALES MADE BETWEEN THE P ERIOD 01.04.2012 TO 31.10.2012 I.E. UPTO THE DATE OF SEARCH IN THE F.Y. 2012-13 AND G.P . OF 12.13% ON THE SALES MADE FORM 01.11.2012 TO 31.03.2013 I.E. REMAINING PART OF THE F.Y. 2012-13. IN OTHER WORDS, THERE IS A / JUMP OF ALMOST 10% IN THE G.P. RATE FROM THE PRE-SEARCH PERIOD TO THE POST-/ SEARCH PERIOD WHICH IS SURPRISING. TAKING INTO ACCO UNT FACTS DISCUSSED ABOVE, GROSS PROFIT IS ESTIMATED AT 7.44% (AVERAGE OF G.P. OF 2. 76% SHOWN IN THE PRE-SEARCH PERIOD AND OF 12.13% SHOWN IN THE POST-SEARCH PERIOD) ON T HE UNACCOUNTED SALES OF RS.6,31,69,5247- WHICH COMES TO RS.46,99,812/- INST EAD OF RS. 17,43,4807-. ACCORDINGLY, ADDITION OF RS.46,99,812/- IS MADE ON ACCOUNT OF PROFIT EARNED ON THE UNACCOUNTED SALES OF RS.6,31,69,524/-, AS THE SAME CAN NOT BE SAID TO BE COVERED IN THE DISCLOSURE OF RS. 4 CRORES, AS THE ASSESSEE HAS FAI LED TO RECONCILE ME SAME. SINCE, THE ASSESSEE HAD CONCEALED THE INCOME BY FUR NISHING THE INACCURATE PARTICULARS, AS DISCUSSED ABOVE, THE PENALTY PROCEEDINGS U/S 271AAB OF THE I.T. ACT, 1961 ARE INITIATED SEPARATELY ON THE ABOV E ISSUE. (ADDITION OF RS.46,99,812/-) 5.1 THE ISSUE WAS CARRIED IN APPEAL BEFORE THE CIT- A WHO HAS ADDRESSED THE SAME IN PARA-3.4 AT PAGES 24 AND 25 OF HIS ORDER. CARRYING US THROUGH THE SAME THE RELIEF GRANTED BY THE LD. CIT(A) WAS ASSAILED BY THE LD. CIT DR. R ELEVANT FINDINGS UNDER CHALLENGE BY THE REVENUE ARE REPRODUCED HEREUNDER FOR READY REFERENC E : 3.4 GROUND OF APPEAL NO. 4 PERTAINS TO ADDITION OF RS. 46,99,812/- ON ACCOUN T OF ESTIMATED PROFIT ON UNACCOUNTED TURNOVER NOTICED DURING THE COURSE OF SEARCH. THE AO MENTIONED THAT DURING THE SEARCH A BUNCH OF DATE-WISE LOOSE PAPER CONTAINING DAILY SALES OF THE ASSESSEE WAS SEIZED W HICH SHOWED THAT THE TOTAL SALE OF THE ASSESSEE COMPANY TILL DATE OF SEARCH (I.E 31.10 .2012) WAS RS. 20,27,60,951/-.THE DIRECTOR SH. RAKESH JAIN REPLIED ON THE QUERY ABOUT THIS UNRECORDED SALES IN HIS STATEMENT DATED 02-11-2012 AT THE TIME OF SEARCH AS UNDER: 'Q.3 I AM SHOWING YOU ANNEXURE A-5 SEIZED FROM YOUR RESIDENCE I.E. 11-12, RAM BAGH, ADJOINING AGGAR NAGAR-A LUDHIANA (PREMISE CODE R-L) PLEASE EXPLAIN THE NATURE OF ENTRIES IN THIS ANNEXURE? A.3 THIS IS A DATE WISE ACCOUNT OF ALL THE TRANSACT IONS IN M/S. PALACE JEWELLERRS (P) LIMITED FROM THE DATE OF OPENING OF THE CONCERN I.E . 14.04-2012 TILL 29.10-2012. THIS CONTAINS BOTH THE ACCOUNTED AND UNACCOUNTED TRANSAC TION OF THE CONCERN. THE TOTAL TURNOVER OF THE CONCERN AS PER THESE PAPERS SHOULD BE AROUND RS. 13 TO RS. 14 CRORES, ITA 247/CHD/2017 & 187/CHD/2017 A.Y. 2013-14 PAGE 11 OF 45 WHILE. THAT AS PER BOOKS MUST BE AROUND RS. 10 CRO RES. I SHALL HAVE TO GO THROUGH THESE PAPERS CAREFULLY TO DETERMINE THE SAME.' AS PER AO, DURING THE ASSESSMENT ON 25.02.2015 THE ASSESSEE WAS CONFRONTED WITH THE TOTAL SALES OF RS. 20,27,60,951/- AND WAS GIVEN A SHOW CAUSE WHY APPROPRIATE ADDITION ON ACCOUNT OF UNACCOUNTED SALE S MAY NOT BE MADE ACCORDINGLY. THE ASSESSEE COMPANY FILED REPLY DATED 02.03.2015 E XPLAINING THAT IN THE STATEMENT GIVEN BY SH. RAKESH JAIN ON 02.11.2012 DU RING TIE COURSE OF SEARCH, ON CONFRONTING THE SAME ANNEXURE, STATED THAT THE TOTA L TURNOVER OF THE ASSESSEE COMPANY AS PER THESE PAPERS SHOULD BE AROUND RS. 13 TO RS.1 4 CRORES WHILE THE SALES AS BOOKS MUST BE AROUND RS. 10 CRORES. REGARDING THE ADDITIO N ON ACCOUNT OF UNRECORDED SALE THE ASSESSEE SUBMITTED THAT THE PAGES IN ANNEXURE A -5, ARE DATE WISE SUMMARY OF TOTAL ENTRIES/ CASH TRANSACTIONS/ SALES MADE BY THE ASSES SEE COMPANY. AS SUCH THESE INCLUDE BOTH ACCOUNTED AND UNACCOUNTED SALES. FURTHER, IT W AS SUBMITTED THAT THERE ARE SOME MISTAKES IN CALCULATING THE SALES WHICH HAS BEEN WO RKED OUT AT RS 20, 27,60, 951/- SUCH AS THE OPENING CASH IN HAND OF THE DAY IS INCL UDED IN THE TOTAL SALES FOR THE DAY, THE AMOUNT WITHDRAWN FROM CHEST (OOPER SE) HAS ALSO BEE N INCLUDED APART FROM SUCH OTHER MISTAKES. THE ASSESSEE COMPANY HAS DRAWN A CHART SH OWING TOTAL SALES AS PER THESE PAPERS (ANNEXURE A-5) WHICH INCLUDES BOTH ACCOUNTED AND UN ACCOUNTED SALES AS THE ENTIRE WORKING OF THE DAY HAS BEEN GIVEN ON THESE PAPERS ( DATE-WISE). AS PER THE ASSESSEE IF THE AMOUNT OF SALES RECORDED UP TO THE DATE OF SEARCH I .E. 31.10.2012 AMOUNTING TO RS. 10,15,62,466/- IS REDUCED FROM THE TOTAL SALES AS P ER ANNEXURE A-5 AS WORKED OUT BY THE ASSESSEE COMPANY, THE UNACCOUNTED SALES COMES TO RS . 6,31,69,524/-. THE GROSS PROFIT MARGIN OF THE ASSESSEE COMPANY WAS 2.76% FOR THE PE RIOD ENDING 30.10.2012 AND IF THIS RATE OF GROSS PROFIT IS APPLIED, THE PROFIT ELEMENT ON THE AMOUNT OF UNACCOUNTED SALES COMES TO RS. 17,43,480/-' WHICH STANDS COVERED BY T HE AMOUNT OF ADDITIONAL INCOME OF RS. 4 CRORE ALREADY SURRENDERED WHILE FM ALONG A ST ATEMENT U/S 132(4) OF THE ACT. AS PER THE ASSESSEE NO SEPARATE ADDITION IS CALLED FOR IN SUCH CIRCUMSTANCES. THESE ARGUMENTS OF THE ASSESSEE COMPANY WERE CONSIDERED BUT NOT FOUND ACCE PTABLE BY THE A.O. AS PER THE A.O. THE ASSESSEE HAS ACCEPTED SALES OF RS. 6,31,69,524/-OUT SIDE THE BOOKS OF ACCOUNTS, THEREFORE APPROPRIATE ADDITION ON ACCOUNT OF PROFIT ON SUCH S ALES AND INVESTMENT MADE TO EFFECT THESE UNACCOUNTED SALES IS ALSO REQUIRED TO BE MADE . THE A.O. TOOK THE AVERAGE OF PRE- SEARCH PERIOD GP RATE ( 2.76% ) AND POST SEARCH PER IOD GP RATE ( 12.13%) FOR CALCULATING THE PROFIT AND APPLIED THE GP RATE OF 7 .44 % ON UNACCOUNTED SALES AND CALCULATED THE UNDISCLOSED PROFIT EARNED AS RS. 46, 99,812/-(6,31,69,524 X 7.44%). HENCE ADDITION OF RS 46,99, 812/- WAS MADE ON ACCOUNT OF PROFIT EARNED ON THE UNACCOUNTED SALE OF RS. 6,31,69,524/- BY OBSERVING THAT THE SAME CAN NOT BE SAID TO BE COVERED IN THE DISCLOSURE OF RS. 4 CRORE, AS THE ASSESSEE HAD FAIL ED TO RECONCILE THE SAME. THE FACTS OF THE CASE, THE BASIS OF ADDITIONS MADE BY THE A.O. AND THE ARGUMENTS OF THE AR DURING THE APPELLATE PROCEEDINGS HAVE BEEN C ONSIDERED. THE AR ARGUED THAT THE UNACCOUNTED SALES RELATES TO PRE-SEARCH PERIOD ONLY AND THEREFORE THE GROSS PROFIT RATE OF 2.76 % AS PER THE BOOK RESULT ON 31.10.2012 SHOULD BE APPLIED AND NOT THE AVERAGE PROFIT RATE OF PRE SEARCH I PERIOD AND THE POST SEARCH PERIOD. AS PER SUBMISSION, BY APPLYING THIS RATE THE GROSS PROFIT COME TO RS. 17,43, 480/- WHICH IS MORE THAN ADEQUATELY STANDS COVERED IN THE SURRENDE R AMOUNT OF RS. 4 CRORES MADE BY THE ASSESSEE UNDER SECTION 132(4). THE AR ARGUED TH AT NO SEPARATE ADDITION IS CALLED FOR. THE AR HAS FILED THE COPY OF THE FINAL STATEME NT OF SH. RAKESH JAIN, DIRECTOR RECORDED ON OATH ON 02.11.2012 AT THE TIME OF CONCL UDING THE SEARCH AND Q.5 IS RELEVANT FOR THE PURPOSE OF THE UNRECORDED SALES. T HE SAME IS REPRODUCED BELOW: Q5. ARE THESE ENTRIES REFLECTED IN THE BOOKS OF A CCOUNTS? A5. NO SIR, THESE SOLES ARE MADE OUTSIDE REGULAR BO OKS OF ACCOUNTS. IN ORDER TO COVER UP MY UNEXPLAINED INVESTMENT FOR THE PURCHASE OF TH IS JEWELLERY AND THE PROFIT EARNED THEREON, I HEREBY VOLUNTARILY DISCLOSE AN AMOUNT OF RS. 3.61 CRORES AS UNACCOUNTED INCOME IN M/S PALACE JEWELLERY (P) LTD. FOR THE F.Y . 2012-13 OVER AND ABOVE THE NORMAL BUSINESS INCOME FOR THE YEAR.' THE SURRENDER AMOUNT HAS LATER BEEN REVISED AS 4 CR ORE VIDE LETTER DATED 11.01.2013 AND THE HEADS OF THE SURRENDER, AS ALREADY MENTIONE D, WERE STOCK RS. 2,64,12,057/- AND ADDITIONAL INCOME RS. 1,35,87,943/-. UNDER THESE FA CTS AND CIRCUMSTANCES OF THE CASE THE ARGUMENTS OF THE AR ARE FOUND ACCEPTABLE THAT T HE INCOME EARNED ON UNACCOUNTED SALES AND THE INVESTMENT MADE THEREIN STANDS DULY C OVERED BY THE SURRENDER AMOUNT OF ITA 247/CHD/2017 & 187/CHD/2017 A.Y. 2013-14 PAGE 12 OF 45 RS. 4 CRORE WHICH HAS BEEN OFFERED FOR THE ASSESSME NT YEAR 2013-14 AND ACCEPTED BY THE A.O. THE FINAL STATEMENT RECORDED AT TIME OF SE ARCH ON 02.11.2012 CLARIFIES THE POSITION THAT THE SURRENDER WAS MADE ON ACCOUNT OF BOTH, THE UNACCOUNTED INVESTMENT IN STOCK AS WELL AS THE INCOME EARNED ON THE SAME. A SUM OF RS. 1,35,87,943 HAS BEEN SURRENDERED EXCLUSIVELY ON ACCOUNT OF INCOME EARNED OUT OF THE UNACCOUNTED SALES. SINCE NO INADEQUACY/IRREGULARITY IN THIS REGARDS (I N THE SURRENDER MADE) HAS BEEN POINTED OUT BY THE A.O., THE ADDITION MADE BY THE A .O. ON ACCOUNT OF PROFIT EARNED ON UNACCOUNTED SALES OVER AND ABOVE THE DISCLOSURE OF RS. 4 CRORE IS NOT FOUND SUSTAINABLE AND HENCE DELETED. ACCORDING THIS GROUND OF APPEAL IS ALLOWED. 5.2 THE LD. CIT DR HEAVILY RELYING UPON THE ASSESS MENT ORDER SUBMITTED THAT THE ASSESSING OFFICER HAS PASSED A SPEAKING ORDER BRING ING OUT THE RATIONALE FOR APPLYING THE AVERAGE GP OF THE ASSESSEE ITSELF OF THE PRE-SEARCH AND POST SEARCH AND THE CIT-A IN THE FACTS AND CIRCUMSTANCES OF THE PRESENT CASE HAS DRA WN A CONCLUSION WITHOUT ADDRESSING THE REASONS. READING FROM THE ORDER ASSAILED IT WAS SUB MITTED THAT THE CIT(A) HAS BLINDLY ACCEPTED THE SUBMISSIONS ADVANCED ON BEHALF OF THE ASSESSEE AND HAS HELD THAT IT IS COVERED IN THE SURRENDER MADE. THE REASONING OF THE CIT-A IT WAS SUBMITTED IS HEAVILY QUESTIONED BY THE DEPARTMENT THE ADDITION MADE BY T HE ASSESSING OFFICER, IT WAS REQUESTED BE RESTORED. 5.3 THE LD. AR ON THE OTHER HAND HEAVILY RELYING U PON THE IMPUGNED ORDER SUBMITTED THAT IN THE SURRENDER MADE BY THE ASSESSEE INITIALL Y OF RS. 3.61 CRORES WHICH WAS REVISED TO RS. 4 CRORES THE GP RATE ON THE SALE OF UNDISCLOSED TRANSACTIONS HAD ALREADY BEEN FACTORED IN. THE SURRENDER IT WAS SUBMITTED IS NOT MADE IN A IR AND IS MADE BASED ON THE SEIZED DOCUMENTS AND THUS TO THEREAFTER CONSIDER MAKING TH E SAID ADDITION IN THE PECULIAR FACTS IT WAS SUBMITTED WOULD NOT ONLY BE MOST UNFAIR AND INC ORRECT, IT WOULD ALSO AMOUNT TO DOUBLE ADDITION AS IT HAS ALREADY BEEN FACTORED IN THE SURRENDER. THE REASONING AND RATIONALE OF THE ASSESSING OFFICER IT WAS SUBMITTED ON THE OTHER HAND WAS CONTRARY TO FACTS ON RECORD AND WAS MOST UNFAIR AND INCORRECT IN THE PECULIAR FACTS AND CIRCUMSTANCES OF THE PRESENT CASE. THE GROUND IT WAS SUBMITTED MAY BE DI SMISSED. 5.4 WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUS ED THE MATERIAL AVAILABLE ON RECORD. WE FIND THAT IN THE FACTS OF THE PRESENT CASE THE ASSE SSING OFFICER HAS MADE THE GP ADDITION OF RS. 46,99,812/- APPLYING THE ESTIMATED AVERAGE GP R ATE OF THE PRE-SEARCH AND POST SEARCH PERIOD ON THE UNACCOUNTED SALES OF RS. 6,31,69,524/ - . THE AMOUNT OF 6 CRORE ODD HAS BEEN CALCULATED ON THE BASIS OF CERTAIN LOOSE PAPERS FOU ND FROM THE RESIDENCE OF SH. RAKESH JAIN ONE OF THE DIRECTORS OF THE ASSESSEE COMPANY. THE S TATEMENT OF SH. RAKESH JAIN HAS BEEN RELIED UPON WHO HAS ACCEPTED THE FACT THAT THERE WE RE CERTAIN UNACCOUNTED SALES. A PERUSAL OF THE ASSESSMENT ORDER SHOWS THAT THE ASSE SSEE WAS CONFRONTED WITH THE SEIZED DOCUMENTS DESCRIBED AS ANNEXURE A5 ON THE BASIS OF WHICH THE DIRECTOR WAS REQUIRED TO EXPLAIN THE SAME. THE ASSESSING OFFICER HAS TAKEN N OTE OF THE FACT THAT THE TOTAL SALES AS PER ITA 247/CHD/2017 & 187/CHD/2017 A.Y. 2013-14 PAGE 13 OF 45 THIS DOCUMENT WORKS OUT TO RS.20,27,60,951/-. THE A SSESSEE IN ITS EXPLANATION DATED 02/11/2012 RECORDED IN THE ASSESSMENT ORDER ITSELF IS KNOWN TO HAVE STATED THAT AS PER THE PAPERS THE TOTAL TURNOVER SHOULD BE RS. 13 TO RS. 1 4 CRORES. THE ASSESSING OFFICER TAKES NOTE OF THE FACT THAT THE SALES AS PER THE BOOKS WERE AR OUND RS. 10 CRORES. CONFRONTED WITH THE FACT THAT THE DOCUMENTS DESCRIBED AS ANNEXURE A5 I NFACT RECORDS TOTAL SALES OF RS. 20,27,60,951/- THE ASSESSEE IS KNOWN TO HAVE STATED IN REPLY AS RECORDED IN THE ASSESSMENT ORDER THAT, THE PAGES IN ANNEXURE A5, ARE DATE WISE SUMMARY OF TOTAL ENTRIES/CASH TRANSACTIONS/SALES MADE BY THE ASSESSEE COMPANY. AS SUCH THESE INCLUDE SALES BOTH ACCOUNTED AND UNACCOUNTED. YOUR HONOUR WILL APPRECIATE THAT IN THE CASE OF ASS ESSEE COMPANYS LINE OF TRADE NORMALLY CUSTOMERS DO NOT W ANT TO HAVE ANY SALE BILL. RATHER THEY USED TO PURCHASE ITEMS IN CASH. BUT THE ASSESS EE COMPANY HAS TO SHOW SALES. THEREFORE, THE ASSESSEE COMPANY USED TO ISSUE BILLS EITHER OF THE SAME AMOUNT OR OF A DIFFERENT AMOUNT IN CASH OR IN THE NAME AS PER DESI RE OF THE CUSTOMER. AS SUCH, THE SALES WHICH YOUR HONOUR HAVE CONSIDERED AS PER ANNEXURE A 5 INCLUDE SALES WHICH HAVE ALREADY BEEN ACCOUNTED FOR BY THE ASSESSEE COMPANY IN ITS BOOKS OF ACCOUNTS. FURTHER, IT IS SUBMITTED THAT THERE ARE SOME MISTAKES IN CALCUL ATING THE SALES BY YOUR HONOUR. ON A READING OF THE ORDER, IT IS SEEN THAT THE CALCULA TION MISTAKES WERE ACCEPTED BY THE ASSESSING OFFICER WHO FINALLY COMPUTED THAT THERE W AS UNACCOUNTED SALES OF RS. 6,31,69,524/-. THE ASSESSEES SUBMISSIONS RECORDED IN THE ASSESSMENT ORDER ITSELF, IT IS SEEN BROUGHT TO THE NOTICE OF THE AO THAT THE GP RATE F OR THE YEAR ENDING 30/10/2012 IS OF 2.76% AND IT HAS BEEN STATED THAT IT HAS BEEN APPLI ED TO THE UNACCOUNTED SALES. THE ASSESSEE SUBMITTED AT THE FIRST INSTANCE ITSELF THA T THE RESULTANT PROFIT THEREON WORKED OUT WOULD BE RS.17,43,480/- AND IT STANDS COVERED IN TH E ADDITIONAL INCOME OF RS. 4 CRORES SURRENDERED. A PERUSAL OF THE ASSESSMENT ORDER SHOW S THAT THE ASSESSING OFFICER CONSIDERING THE FACT THAT THE ASSESSEE HAS SHOWN A GP RATE OF 2.76 UPTO THE DATE OF SEARCH AND A GP RATE OF 12.13% ON THE SALES MADE FROM 01/1 1/2012 TO 31/03/2013 APPLIED THE AVERAGE GP RATE OF PRE-AND POST SEARCH WHICH WORKED OUT TO 7.44% AND APPLIED THE SAME TO MAKE THE ADDITION UNDER CHALLENGE. THE SAID ORD ER WAS UPSET BY THE CIT-A AND THE SAID DECISION HAS BEEN ASSAILED BY THE REVENUE. A PERUSA L OF THE IMPUGNED ORDER WHICH HAS ALSO BEEN EXTRACTED IN THE EARLIER PART OF THIS ORDER SH OWS THAT THE DELETION HAS BEEN MADE ON THE GROUNDS THAT THE ASSESSEE REFERRING TO THE MATE RIAL AVAILABLE ON RECORD SUBMITTED THAT THE UNDISCLOSED SALES PERTAINED TO THE PRE-SEARCH P ERIOD AND THEREFORE THE GROSS PROFIT RATE OF 2.76% AS PER BOOKS RESULT AS ON 31/10/2012 ASSAI LED BY THE DEPARTMENT SHOULD BE APPLIED. ATTENTION HAS BEEN INVITED TO THE FINAL ST ATEMENT OF SH. RAKESH JAIN, DIRECTOR RECORDED ON OATH ON 02/11/2012 AT THE TIME OF CONCL USION OF THE SEARCH WHEREIN ON BEING CONFRONTED WITH THE SPECIFIC DOCUMENT HE WAS REQUIR ED TO ADDRESS THE SAME IN QUESTION ITA 247/CHD/2017 & 187/CHD/2017 A.Y. 2013-14 PAGE 14 OF 45 NO. 5 RECORDED BY THE INVESTIGATION WING. THE QUEST ION PUT FORTH BY THE REVENUE WAS THAT ARE THESE ENTRIES REFLECTED IN THE BOOKS OF ACCOUN TS? IN RESPONSE TO THIS QUESTION NO. 5 THE ASSESSEE AS PER THE PAPER BOOKS AVAILABLE ON RE CORD AND THE RELEVANT EXTRACT AVAILABLE IN THE IMPUGNED ORDER HAS STATED, NO SIR, THESE SALES ARE MADE OUTSIDE REGULAR BOOKS OF ACCOUNTS. IN ORDER TO COVER UP AND ANY UNEXPECTED I NVESTMENT FOR THE PURCHASE OF THIS JEWELLERY AND THE PROFIT EARNED THEREON, I HEREBY V OLUNTARILY DISCLOSE AN AMOUNT OF RS. 3.61 CRORES AS UNACCOUNTED INCOME IN M/S PALACE JEWELLER Y (P) LTD FOR THE YEAR FY 2012 13 OVER AND ABOVE THE NORMAL BUSINESS INCOME FOR THE YEAR IT IS SEEN THAT THE SUBMISSION OF THE ASSESSEE HAVE BEEN CONSIDERED AND FOUND SUPPORTED B Y STATEMENTS RECORDED AT THE TIME OF THE SEARCH AND MATERIAL AVAILABLE ON RECORD. THE CIT-A TAKES NOTE OF THE FACT THAT THE SURRENDERED AMOUNT WAS LATER REVISED TO RUPEES 4 CR ORE VIDE LETTER DATED 11/01/2013. THUS, IT IS SEEN THAT THE CONCLUSION HAS BEEN ARRIV ED AT AFTER CONSIDERING THE FACTS AND EVIDENCES WHEREUPON THE CIT-A HELD THAT THE SUBMISS IONS OF THE ASSESSEE TO BE ACCEPTABLE AND HELD THAT THE SURRENDER WAS MADE ON ACCOUNT OF UNACCOUNTED INVESTMENT IN STOCK AS WELL AS INCOME EARNED OUT OF THE UNACCOUNTED SALES. IN THE ABSENCE OF ANY CONTRARY FACT OR EVIDENCE CONSIDERING THE MATERIAL AVAILABLE ON RECO RD WE FIND NO INFIRMITY ARRIVED AT BY THE CIT-A IN THE IMPUGNED ORDER. ACCORDINGLY BEING SATI SFIED BY THE REASONING AND THE CONCLUSION THE DEPARTMENTAL GROUND IS DISMISSED. 6. THE LAST ISSUE AGITATED BY THE REVENUE IN THE PR ESENT PROCEEDINGS IT WAS SUBMITTED BY THE LD. CIT DR IS DISCUSSED IN PARAGRAPH 17 AT P AGE 15 TO 17 OF THE ASSESSMENT ORDER. RELYING ON THE SAME IT WAS HIS SUBMISSION THAT THE DELETION OF THE ADDITION IN THE FACE OF THE REASONED SPEAKING ORDER OF THE AO IT WAS SUBMIT TED WAS CONTRARY TO FACTS. CARRYING US THROUGH THE REASONS SET OUT IN THE ASSESSMENT ORDER WHICH HAD BEEN DELETED BY THE CIT-A, THE ORDER PASSED BY THE APPELLATE AUTHORITY WAS ASS AILED. FOR THE SAKE OF COMPLETENESS THE RELEVANT FINDINGS OF THE ASSESSING OFFICER HEAV ILY RELIED UPON BY THE REVENUE ARE REPRODUCED HEREUNDER: 17. AS REGARDS INVESTMENT MADE TO EFFECT THE UNACCOUNTED SALES OF UNACCOUNTED SALES OF RS.6,31,69,524/-, SAME WILL ALSO HAVE TO B E ESTIMATED IN THE ABSENCE OF SPECIFIC DETAILS GIVEN BY THE ASSESSEE IN THIS REGARD. FOR THE PURPO SE OF MAKING INVESTMENT TO EFFECT THE UNACCOUNTED SALES OF RS.6,31,69,524/-, ONE CAN REAS ONABLY RELY UPON THE FUNDS USED TO EFFECT THE TURNOVER AS RECORDED IN THE REGULAR BOOKS OF AC COUNTS. THE EXTRACTS OF THE BALANCE SHEET FOR THE YEAR ENDE D 31.03.2013 FILED BY THE ASSESSEE DURING THE COURSE OF ASSESSMENT PROCEEDINGS IS AS UNDER: SRNO. PARTICULARS AMOUNT (IN RS.) AS ON 31.03.2013 AS ON EQUITY & LIABILITIES 1 SHARE CAPITAL 8402000 2 RESERVE & SURPLUS 34221647 ITA 247/CHD/2017 & 187/CHD/2017 A.Y. 2013-14 PAGE 15 OF 45 3 LONG TERM BORROWINGS 41075689 4 DEFERRED TAX LIABILITIES 577837 5 SHORT TERM BORROWINGS 98258145 6 TRADE PAYABLES 4133255 7 OTHER CURRENT LIABILITIES 4274101 8 SHORT TERM PROVISIONS 9429600 TOTAL 200372275 ASSETS 1 TANGIBLE ASSETS 26839935 2 OTHER NON CURRENT ASSETS 25336 3 LONG TERM LOANS & ADVANCES 38350 4 INVENTORIES 168443664 5 TRADE RECEIVABLE 333891 6 CASH & CASH EQUIVALENT 886585 7 SHORT TERM LOAN & ADVANCES 3804514 TOTAL 200372275 IT IS NOTICED FROM BALANCE-SHEET AND PROFIT & LOSS ACCOUNT OF THE ASSESSEE COMPANY FOR THE YEAR RELEVANT TO THE CURRENT A.Y. I.E. A.Y. 2013-14 , AS NOTED IN THIS ORDER THAT THE TOTAL LIABILITIES OF RS. 20 CRORES HAVE BEEN SHOWN TO EFFECT THE TURNOVE R OF RS.21.68 CRORES. HOWEVER, THE LIABILITIES OF RS. 20 CRORES HAVE ALSO BEEN INVESTED INTER-ALIA ; IN THE FIXED ASSETS OF RS. 2.68 CRORES AND INVENTORIES OF RS. 16.84 CRORES. IN VIEW OF THE ABO VE, IT IS DIFFICULT TO IDENTIFY THE ACTUAL INVESTMENT MADE TO EFFECT THE TURNOVER OF RS. 21.68 CRORES OUT OF THE TOTAL AVAILABLE FUNDS OF RS. 20 CRORES. TAKING INTO ACCOUNT ALL THE FACTS AND CI RCUMSTANCES OF THE CASE, IT WOULD BE REASONABLE AND JUSTIFIED TO ESTIMATE THE INVESTMENT IN UNACCOUNTED SALES OF RS.6,31,69,524/- AT 15% OF THE TOTAL SUCH TURNOVER WHICH COMES TO RS.94,75,428/-. ACCORDINGLY, ADDITION OF RS.94,75,428/- IS MADE ON THIS ACCOUNT. IT IS CLARIFIED HERE THAT THE AFORESAID SALES RECORDED IN ANNEXURE A-5 SEIZED FROM PREMISES R-I BASED ON WHICH UNACCOUNTED SALES OF RS.6,31,69,524/- ARE WORKED OU T, HAVE NOT BEEN TAKEN INTO ACCOUNT BY THE ASSESSEE WHILE WORKING PEAK OF THE DISCLOSURE M ADE ON THE BASIS OF DOCUMENT NO. A-16, A-19, A-18 SEIZED FROM THE PREMISES R-I (RESIDENCE OF SH, RAKESH JAIN) A-4 AND A-14 SEIZED FROM THE PREMISES B-I I.E. BUSINESS PREMISES . IN VIEW OF THE ABOVE, SEPARATE ADDITION OF RS.94,75,428/- IS MADE ON ACCOUNT OF IN VESTMENT MADE TO EFFECT THE UNACCOUNTED SALES OF RS.6,31,69,524/-. SINCE, THE ASSESSEE HAD CONCEALED THE INCOME BY FUR NISHING THE INACCURATE PARTICULARS, AS DISCUSSED ABOVE, THE PENALTY PROCEEDINGS U/S 271AAB OF THE L.T.ACT,1961 ARE INITIATED SEPARATELY ON THE ABOVE ISSUE. (ADDITION OF RS.94,75,428/-) 6.1 THE LD. CIT DR CARRYING US THROUGH THE SPECI FIC PARAS OF THE IMPUGNED ORDER WHEREIN RELIEF HAS BEEN GRANTED BY THE CIT-A CHALLENGED BY THE REVENUE IN THE PRESENT PROCEEDING ASSAILED THE FINDING STATING THAT RELIEF HAS BEEN G RANTED ON THE BASIS OF PRESUMPTIONS . THE RELEVANT FINDING IN PARA-3.5 AT PAGES 26 TO 27 OF T HE CITS ORDER IS REPRODUCED HEREUNDER FOR THE SAKE OF COMPLETENESS: 3.5 GROUND OF APPEAL NO. 5 PERTAINS TO ADDITION OF RS. 94,75,428/- ON ACCOUNT OF ALLEGED ESTIMATED INVESTMENT REQUIRED FOR THE PU RPOSE OF EFFECTING THE UNACCOUNTED TURNOVER OF RS. 6,31,69,524/-. THE A.O. NOTICED THAT FROM THE BALANCE SHEET AND PROFIT & LOSS ACCOUNT OF THE ASSESSEE COM PANY FOR THE YEAR RELEVANT TO THE A.Y. 2013-14, THE TOTAL LIABILITIES OF RS 20 CRORE HAVE BEEN SHOWN TO EFFECT THE ITA 247/CHD/2017 & 187/CHD/2017 A.Y. 2013-14 PAGE 16 OF 45 TURNOVER RS. 21.68 CRORE. HOWEVER THE LIABILITIES O F RS. 20 CRORE HAVE ALSO BEEN INVESTED INTER-ALIA IN THE FIXED ASSET OF RS. 2.86 CRORE AND INVENTORY OF RS. 16.84 CRORE. IN VIEW OF THE ABOVE, AS PER AO IT WAS DIFFICULT TO IDENTIFY THE ACTUAL INVESTMENT MADE TO AFFECT THE TURNOVER OF RS. 21.68 CRORE, OUT OF T HE TOTAL AVAILABLE FUNDS OF RS. 20 CRORE. THE A.O. MENTIONED THAT TAKING INTO ACCOUNT ALL THE FACTS AND CIRCUMSTANCES OF THE CASE, IT WOULD BE REASONABLE AND JUSTIFIED TO E STIMATE THE INVESTMENT IN UNACCOUNTED SALES OF RS. 6,31,69,524/- AT 15% OF TH E SUCH TOTAL TURNOVER, WHICH COMES TO RS. 94,75,428/-. HENCE ADDITION OF R S. 94,75,428/- WAS MADE BY THE A.O. ON ACCOUNT OF INVESTMENT MADE TO EFFECT TH E UNACCOUNTED SALES OF RS. 6,31,69,524/- . THE FACTS OF THE CASE, THE BASIS OF ADDITIONS MADE BY THE A.O. AND THE ARGUMENTS OF THE AR DURING THE APPELLATE PROCEEDINGS HAVE BEEN CONSIDER ED. THE AR ARGUED THAT NO SEPARATE INVESTMENT WAS REQUIRED AS THE GOLD ORNAME NTS WERE BEING TAKEN/BOUGHT ON CREDIT VARYING FROM THREE TO FIVE MONTHS AND IN SUPPORT, THE AR FILED COPY OF ACCOUNTS OF THE PARTIES FROM WHOM THE JEWELLERY WAS BOUGHT. IT WAS FURTHER ARGUED THAT THOUGH NO NEW INVESTMENT WAS MADE, ALTERNATIVE LY SAME WOULD STAND ADEQUATELY COVERED IN THE AMOUNT SURRENDERED. THE ASSESSEE HAS SURRENDERED RS. 4 CRORE AND AS ALREADY MENTIONED IT WAS ON ACCOUNT OF STOCK RS. 2, 64,12,057/- AND SURRENDER INCOME AS CASH RS. 1,35,87,943/-. IT IS ALSO TO BE NOTED THAT THE INVESTMENT HAS BEEN ESTIMATED AT 15% OF THE TURNOVER AND THE A.O. HAS NO BASIS FOR T HIS PERCENTAGE. UNDER THESE FACTS AND CIRCUMSTANCES OF THE CASE THE ARGUMENTS OF THE AR A RE FOUND ACCEPTABLE THAT THE UNACCOUNTED SALE, IF ANY, WERE MADE OUT OF THE UNRE CORDED STOCKS ONLY. SINCE THE ADDITIONAL STOCKS HAS ALREADY BEEN SURRENDERED BY T HE ASSESSEE AND ACCEPTED BY THE A.O., NO FURTHER ADDITION ON ACCOUNT OF INVESTMENT WAS RE QUIRED. THE RATE ADOPTED BY THE A.O. AT 15 % OF THE UNACCOUNTED SALES IS ALSO WITHOUT AN Y BASIS AND THEREFORE THE SAME IS NOT FOUND SUSTAINABLE AND HENCE DELETED. ACCORDING THIS GROUND OF APPEAL IS ALLOWED. 6.2 HEAVILY RELYING UPON THE ASSESSMENT ORDER IT WA S SUBMITTED BY THE LD. CIT-DR THAT THE ASSESSING OFFICER IN THE FACTS OF THE PRESENT C ASE HAS ELABORATELY DISCUSSED AND MOST FAIRLY AND REASONABLY CONSIDERED THAT COST OF INVES TMENT TO THE EXTENT OF ONLY 15% OF UNACCOUNTED SALES SHOULD BE ADDED. THE SAID EXERCIS E IT WAS SUBMITTED HAS NOT BEEN CASUALLY CARRIED OUT BY THE AO AS HE HAS ATTEMPTED TO CONSIDER THE AVAILABILITY OF THE FUNDS WITH THE ASSESSEE. ACCORDINGLY IN THE PECULIAR FACT S AND CIRCUMSTANCES THE DELETION OF THE SAID ADDITION BY THE CIT-A WITHOUT ADDRESSING THESE FACTS WAS HEAVILY ASSAILED ON GROUNDS OF BEING CONTRARY TO FACTS AND RECORD. 6.3 THE LD. AR ON THE OTHER HAND INVITING ATTENTIO N TO PAGE 97 OF THE PAPER BOOK WHEREIN THE ASSESSEE HAS CARRIED OUT A RECONCILIATI ON OF VALUATION OF STOCK AS ON 31/03/2013 AFTER CONSIDERING PAGES 95 TO 97 READ AL ONG WITH THE DVOS REPORT WHICH IS AVAILABLE AT PAPER BOOK PAGE 23 TO 31 INVITED SPECI FIC ATTENTION TO PAPER BOOK PAGE 32 WHEREIN THE SUM TOTAL OF THE ENTIRE CALCULATIONS OF THE DVO HAVE BEEN TOTALLED AT THE END. IT WAS SUBMITTED THAT WHEN THESE ARE READ ALONGWITH THE ASSESSEES REPLY DATED 10/2/2016 AVAILABLE BEFORE THE ASSESSING OFFICER FROM PAGES 1 30 TO 138 OF THE PAPER BOOK, A PORTION OF THIS HAS BEEN EXTRACTED IN THE ASSESSMENT ORDER ALS O, IT WOULD BE SEEN THAT THE SPECIFIC TOTAL OF ALL THE GOLD (ORNAMENTS, COINS ETC) DIAMON DS, LOOSE STONES ETC. WHETHER FOUND FROM THE BUSINESS PREMISES OF THE ASSESSEE OR THE RESIDE NTIAL PREMISES OF THE DIRECTORS HAVE ALL ITA 247/CHD/2017 & 187/CHD/2017 A.Y. 2013-14 PAGE 17 OF 45 BEEN ADDRESSED BOTH GROSS WEIGHT-WISE AND THE NET W EIGH-WISE OF GOLD JEWELLERY WITH/WITHOUT STONES, DIAMONDS ETC. IN THE RECONCILI ATION PLACED ON RECORD BY THE ASSESSEE BEFORE THE ASSESSING OFFICER ITSELF. ATTENTION WAS INVITED TO PAPER BOOK PAGES 95, 96 AND 97 AVAILABLE ON RECORD. REFERRING TO THE REPORT OF THE VALUATION OFFICER OF THE DEPARTMENT AS WELL AS THE RECONCILIATION OF THE ASSESSEE AND THE CONSISTENT EXPLANATION AVAILABLE ON RECORD IT WAS SUBMITTED THAT NOT ONLY THE GROSS AND NET WEIGHT OF GOLD CONVERTED INTO 24 K. HAD BEEN ADDRESSED BUT ALSO THE WEIGHT OF THE LOOSE DIAMONDS; DIAMONDS IN JEWELLERY; THE WEIGHT OF THE STONES WHETHER LOOSE OR IN THE JEWELL ERY FROM THE RESPECTIVE PLACES HAS BEEN FULLY ADDRESSED BY THE ASSESSEE WHICH THE AO PROCEE DS TO IGNORE FOR UNSTATED REASONS. IT WAS SUBMITTED THAT ONCE THE RECONCILIATION OF THE A SSESSEE AND THE DVOS REPORT ARE SEEN WHEN READ ALONG WITH THE SURRENDERED AMOUNTS FOR ST OCK AND PROFITS ETC. IT WOULD BE SEEN THAT IT IS IDENTICAL TO WHAT HAS BEEN TOTALLED BY T HE DEPARTMENTAL VALUATION OFFICER. REFERRING TO THE SAID LETTER ADDRESSED BY THE ASSES SEE TO THE AO, IT WAS HIS SUBMISSION THAT IT EXPRESSES THE ASSESSEES EXTREME SHOCK AND SURPR ISE WHERE DESPITE THE FACT THAT THE ASSESSEE HAS MADE A DISCLOSURE OF RS. 4 CRORES IN G OOD FAITH, THE DEPARTMENT DESPITE THIS CHOOSES TO CONSIDER THIS TO BE NOT ADEQUATE AND PRO POSES TO RANDOMLY ESTIMATE THE PROBABLE EXPENDITURE ON INVESTMENT FULLY AWARE OF T HE BUSINESS REALITIES. NOT ONLY IGNORING THE BASIC FACT THAT THE FUNDS WERE AVAILABLE ON ROT ATION WITH THE ASSESSEE WHICH HAVE BEEN UTILISED BY THE ASSESSEE AS IT WAS NOT THE CASE OF DEPARTMENT THAT ANY INVESTMENTS HAVE BEEN. THE UNFAIRNESS OF THE DEPARTMENT, IT WAS SUB MITTED, WOULD BE EVIDENT AS THE AO ALSO PROCEEDS TO SEPARATELY ADDRESS THE CONTENTS OF A PEN DRIVE WHICH CONTAINED THE REFERENCES TO THESE VERY SALES ETC SOME OF WHICH CO NSTITUTED DISCLOSED SALES AND SOME UNRECORDED/UNDISCLOSED SALES. IT WAS HIS SUBMISSION THAT ADMITTEDLY THE ASSESSEES PREMISES HAVE BEEN SEARCHED AND THE ENTIRE STOCK AV AILABLE HAS BEEN FOUND TO BE LESS THAN WHAT WAS AVAILABLE IN THE BOOKS . AT THE COST OF RE ITERATION IT WAS SUBMITTED THAT THE JEWELLERY AVAILABLE PARTLY CONSISTED OF JEWELLERY O F THE FAMILY MEMBERS. INVITING ATTENTION TO LETTER DATED 10.02.2016 ADDRESSED TO THE ASSESSI NG OFFICER COPY PLACED AT PAPER BOOK PAGE 130 IT WAS SUBMITTED THAT THE BUSINESS PREMISE S AS PER THE SAID LETTER ITSELF BOASTED INSTALLATION OF THE BEST STRONGROOM FOR STORAGE AND SAFE CUSTODY OF JEWELLERY REFERRING TO PAGE 131 OF THE PAPER BOOK IT WAS SUBMITTED THAT PH YSICAL INVENTORY BOTH AT THE BUSINESS PREMISES AS WELL AS THE RESIDENTIAL PREMISES OF THE DIRECTORS HAD BEEN CARRIED OUT BY THE DEPARTMENT ALONGWITH A REPORT OF THE VALUATION OFFI CER SH. ARUN TALWAR AND SH. ANAND PRAKASH SEKHRI (REFERRING TO PAGE 131 OF THE PAPER BOOK) THE ASSESSEE IT WAS SUBMITTED RIGHT AT THE OUTSET PLEADED THAT DIFFERENCE IS ON A CCOUNT OF VALUATION THAT IS RATE AND NOT ON ACCOUNT OF QUANTITY, ATTENTION WAS INVITED TO PAPER BOOK PAGE 132 OF THE PAPER BOOK; REFERRING TO PAGE 134 IT WAS SUBMITTED THAT THE ASS ESSEE HEAVILY RELIES UPON THE ITA 247/CHD/2017 & 187/CHD/2017 A.Y. 2013-14 PAGE 18 OF 45 SUBMISSIONS BEFORE THE AO. SPECIFIC ATTENTION WAS INVITED TO THE FOLLOWING EXTRACT THEREOF WHEREIN ASSESSEE'S OWN WORDS BEFORE THE AO, IT IS P LEADED A FTER HAVING SEARCHED EXTENSIVELY THERE WAS AND COULD NOT BE ANY ITEM OF JEWELLERY OR EVEN A GRAIN OF THE SAME AS COULD BE SAID TO EMERGE FROM NOWHERE DURING THE COURSE OF EXAMINATION OF RECORDS OR AT THE STAGE OF ASSESSMENT THE DEPARTMENT OFFICIALS FINDING NO ADVERSE AS ABOVE IMPOUNDED AND SEIZED DOCUMENTS FROM BOTH THE PREMISES AND PRESSURISED TH E COMPANY AND ITS OFFICIALS FOR DECLARATION OF ADDITIONAL INCOME.. UNDER THE SCARE OF SEARC H AND TO AVOID ANY LITIGATION AND CONSEQUENT LOSS OF PEACE WITH ITS RESULTANT EFFECT ON BUSINESS , THE APPLICANT VOLUNTARILY OFFERED RS. 4,00,00,000 (RS. 4 CRORE) UNDER SECTION 132 (4) READ WITH SECTION 271 AAB OF THE INCOME TAX ACT, 1961 ON ACCOUNT OF ANY ITEM OF JEWELLERY/CASH AND/O R ANY ADDITION AS MAY BE LIABLE TO BE MADE ON ACCOUNT OF PROFITS EARNED/INVESTMENT MADE IN SOME U NRECORDED TRANSACTIONS AS MAY BE LATER ADJUDGED, OPINED, CONSIDERED TO BE IN EXCESS OF WHA T ALREADY STOOD RECORDED IN THE BOOKS REGULARLY MAINTAINED AS HAD BEEN SHOWN IN THE WEALTH TAX RETU RN IS BEING REGULARLY FILED BY THE DIRECTORS IN THESE CIRCUMSTANCES IT WAS SUBMITTED THE RANDOM ADDITIONS PROPOSED BY THE ASSESSING OFFICER SOME OF WHICH HAVE BEEN DELETED BY THE CIT -A APART FROM THE ADDITION WHICH HAS BEEN SUSTAINED QUA WHICH THE ASSESSEE IS IN APPEAL BEFORE THE ITA T IN THE SAID BACKGROUND IT WAS HIS SUBMISSION THAT NO ADDITION IN THE FACE OF THE SURRENDER OF THE ASSESSEE WAS REQUIRED. INVITING ATTENTION TO PAPER BOOK PAGE 95, 96 AND 97 AGAIN IT WAS SUBMITTED THAT COMPLETE RECONCILIATION WITH WHAT WAS FOUND IN THE COURSE OF THE SEARCH AND WHAT HAS BEEN EXTRACTED IN THE A 22 WHICH IS THE EXTRACT OF THE PEN DRIVE DESCRIBED BY THE DEPARTMENT AS STOCK MANAGEMENT SUMMARY WHICH WOUL D BE ADDRESSED IN THE ASSESSEES APPEAL IN GREATER LENGTH AND ALSO THE LOOSE DOCUMEN TS FOUND FROM THE DIRECTORS RESIDENCE WHEREIN IT HAS BEEN EXPLAINED THAT BILLS ETC WERE M ADE AT THE REQUEST OF THE PARTIES MENTIONING THE AMOUNTS AS PER THEIR REQUIREMENTS AN D AT TIMES THE PARTIES DID NOT WANT A BILL AND PURCHASES WERE MADE IN CASH IN ALL THESE E VENTUALITIES THE ASSESSEE IN ITS OWN INTERESTS NECESSARILY WANTED TO MAINTAIN A CHECK ON WHAT WAS SOLD AS RECORDED AND WHAT WAS SOLD WHERE THE CLIENTELE EITHER DID NOT WANT A BILL OR WANTED THAT A DIFFERENT AMOUNT BE RECORDED. THE LOOSE DOCUMENTS AND ALSO THE STOC K MANAGEMENT SUMMARY I.E. THE PEN DRIVE CONTAINED THE DESCRIPTION OF THE VERY SAME TR ANSACTIONS I.E. RECORDED AND UNRECORDED SALES AND THAT TOO HAPHAZARDLY AND IT IS FOR THIS S PECIFIC REASON AND THESE FACTS WHICH HAD BEEN COVERED IN THE SURRENDER OF RS. 4 CRORE IN ORD ER TO BUY PEACE. THUS, SEPARATE ADDITIONS ON DIFFERENT COUNTS, IT WAS SUBMITTED, W AS CONTRARY TO FACTS AND LAW AS THERE WAS NOTHING AVAILABLE ON RECORD TO JUSTIFY THE ADDITION S. FOR READY REFERENCE WE REPRODUCE PAGES 95; 96 AND 97 HEAVILY RELIED UPON BY THE LD. AR. ITA 247/CHD/2017 & 187/CHD/2017 A.Y. 2013-14 PAGE 19 OF 45 ITA 247/CHD/2017 & 187/CHD/2017 A.Y. 2013-14 PAGE 20 OF 45 ITA 247/CHD/2017 & 187/CHD/2017 A.Y. 2013-14 PAGE 21 OF 45 6.3.1 READING THESE ALONGWITH THE DVOS REPORT IT W AS SUBMITTED, NO ADDITIONS ON FACTS WERE WARRANTED. REFERRING TO THE RECORD IT WAS HIS SUBMISSION THAT THE PRESENT CASE IS NOT A CASE WHERE THE ASSESSEE IN THE COURSE OF THE SEAR CH PROCEEDINGS OFFERS TO SURRENDER A CERTAIN AMOUNT AND THEREAFTER RESILES FROM THE POSI TION ON CONSIDERING THE FACTS AND THE DOCUMENTS AVAILABLE. THE ASSESSEE IN THE FACTS OF T HE PRESENT CASE HAS FULLY ABIDED WITH THE DISCLOSURE MADE. IT WAS ALSO HIS SUBMISSION THAT I T NEEDS BE BORNE IN MIND THAT THE YEAR UNDER CONSIDERATION WAS THE FIRST YEAR OF ASSESSEE S BUSINESS. REFERRING TO THE SUBMISSIONS OF THE ASSESSEE BEFORE THE ASSESSING OFFICER AVAILA BLE ON RECORD IT WAS HIS SUBMISSION THAT DESPITE THE FACT THAT THE ASSESSEE REPEATEDLY MAINT AINING MORE THAN A FEW TIMES IN HIS WRITTEN SUBMISSIONS BEFORE THE ASSESSING OFFICER TH AT INFACT SURRENDER WAS NOT WARRANTED ITA 247/CHD/2017 & 187/CHD/2017 A.Y. 2013-14 PAGE 22 OF 45 HE HAS IN GOOD FAITH NOT ONLY INCREASED THE SURREND ERED AMOUNT FROM RS. 3.6 CRORE TO RS. 4 CRORE BUT HAS ALSO ABIDED BY THE SURRENDER MADE BY PAYING ALL TAXES ETC. THEREON. THE ADDITIONS MADE IN THE MANNER PROPOSED IT WAS HIS SU BMISSION TANTAMOUNTS TO DOUBLE ADDITION. REVERTING TO THE ISSUE UNDER CONSIDERATIO N REFERENCE WAS MADE TO VARIOUS PAGES IN THE PAPER BOOK AVAILABLE BEFORE THE ASSESSING OF FICER AND THE CIT-A ON THE BASIS OF WHICH IT WAS HIS SUBMISSION THAT THE MATERIAL AVAILABLE O N RECORD DEMONSTRATES THAT INFACT THERE WAS NO INVESTMENT FOR STOCK BY THE ASSESSEE. THE AC CEPTED AND PREVALENT TRADE PRACTICE, IT WAS SUBMITTED, IS THAT ORNAMENTS AND JEWELLERY ARE TAKEN ON CREDIT AND AS AND WHEN SALE OCCURS THE PAYMENTS ARE MADE. AS AN ILLUSTRATION AT TENTION WAS INVITED TO PAPER BOOK PAGE NUMBER PAGE 159 WHICH IS A LETTER ADDRESSED TO THE ASSESSING OFFICER. SPECIFIC PAGE 161 WAS ALSO REFERRED TO. ATTENTION WAS AGAIN INVITED TO AS AN ILLUSTRATION TO PAPER BOOK PAGES 123 TO 125 WHICH WOULD SHOW THAT JEWELLERY IS TAKEN ON CREDIT FROM SATYAM JEWELLERY HOUSE OF AMRITSAR. PAGES 123 TO 125, IT WAS SUBMIT TED, IS A COPY OF THE LEDGER ACCOUNT OF THE SAID JEWELLER WHICH WOULD SHOW THAT JEWELLERY I S TAKEN ON CREDIT FROM THE SPECIFIC JEWELLERY SHOP AND PAYMENTS ARE MADE IN A PERIODIC MANNER ON DIFFERENT DATES REPAYING BACK AS AND WHEN SALES OF THEIR JEWELLERY WAS MADE . THE JOURNAL ENTRIES, IT WAS SUBMITTED, WOULD SHOW THAT NOT ONLY THE SPECIFIC BANK ACCOUNT HAS BEEN NAMED BUT EVEN THE SPECIFIC BANK ACCOUNT NUMBER TO WHICH MONEY HAS BEEN REMITTE D IS MENTIONED ALONG WITH THE AMOUNTS REMITTED BY CHEQUES WHEREIN THE SPECIFIC CH EQUE NUMBERS HAVE ALSO BEEN MENTIONED. SIMILARLY ADDRESSING PAPER BOOK PAGES 12 6 TO 128 WHICH IS A COPY OF THE LEDGER ACCOUNT OF A JEWELLER ROYAL JEWELLERY INDIA PRIVAT E LIMITED OF LUDHIANA WHERE AGAIN IT IS EVIDENT THAT JEWELLERY IS TAKEN ON CREDIT AND PAYME NT BY WAY OF SPECIFIC CHEQUES MENTIONING THE BANK; NAMING THE SPECIFIC ACCOUNT NU MBER AND THE CHEQUE NUMBERS ON DIFFERENT DATES REMITTING PAYMENTS FOR THE JEWELLER Y AS AND WHEN SOLD. ACCORDINGLY IT WAS HIS SUBMISSION THAT THE ADDITIONS ON FACTS HAS BEEN CORRECTLY DELETED BY THE CIT (A). 6.4 WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUS ED THE MATERIAL AVAILABLE ON RECORD. THE RELEVANT DOCUMENTS TO WHICH OUR ATTENTION HAS B EEN INVITED BY THE PARTIES HAVE ALL BEEN TAKEN INTO CONSIDERATION BEFORE ARRIVING AT A CONCLUSION. A PERUSAL OF THE RECORD SHOWS THAT THE ASSESSING OFFICER CONSIDERING THE FA CT THAT THE ASSESSEE HAD ADMITTED MAKING UNACCOUNTED SALES MADE ADDITIONS ESTIMATING THE COST OF INVESTMENTS FOR EFFECTING THOSE SALES. CONSIDERING THE BALANCE SHEET OF THE A SSESSEE HE NOTICED THAT THE TOTAL LIABILITIES OF THE ASSESSEE WERE 20 CRORES TO EFFEC T THE TURNOVER OF RS. 21.68 CRORES. HE FURTHER NOTICED THAT THE LIABILITIES OF RS. 20 CROR ES TO THE EXTENT OF RS. 2.68 CRORES HAD BEEN INVESTED IN FIXED ASSETS. APART FROM THAT HE NOTICE D THAT THE ASSESSEE ALSO HAD INVENTORY IS OF RS. 16.84 CRORES . IN THE CIRCUMSTANCES HE WAS O F THE VIEW THAT IT WOULD BE REASONABLE ITA 247/CHD/2017 & 187/CHD/2017 A.Y. 2013-14 PAGE 23 OF 45 AND JUSTIFIED TO ESTIMATE THE INVESTMENT FOR EFFECT ING THE UNACCOUNTED SALES OF RS. 6,31,69,524 AT 15%. ACCORDINGLY, THE ESTIMATED ADDI TION WAS MADE TO ADDRESS THE INVESTMENT MADE TO EFFECT THE UNACCOUNTED SALES. TH E SAID ADDITION ON CHALLENGE BEFORE THE CIT-(A) IN APPEAL WAS DELETED. THE SAID DECISI ON OF THE CIT(A) IS UNDER CHALLENGE IN THE PRESENT PROCEEDINGS. A PERUSAL OF THE IMPUGNED ORDE R WHICH HAS BEEN EXTRACTED IN THE EARLIER PART OF THIS ORDER SHOWS THAT THE CIT-A HAS TAKEN NOTE OF THE ARGUMENTS ADVANCED ON BEHALF OF THE ASSESSEE WHICH IS IN EFFECT REITER ATION OF THE SUBMISSIONS MADE BEFORE THE ASSESSING OFFICER NAMELY THAT IN THE PECULIAR FACTS AND CIRCUMSTANCES OF THE PRESENT CASE NO SEPARATE ADDITION FOR INVESTING IN STOCK WAS INFACT REQUIRED TO BE MADE. IT HAS BEEN REFERRED TO ON BEHALF OF THE ASSESSEE AND THE ARGUM ENTS CONSIDERING THE FACTS HAVE BEEN ACCEPTED BY THE CIT-A NAMELY THAT IN THE BUSINESS O F SALE OF GOLD ORNAMENTS, THE JEWELLERY IS NOT NECESSARILY OUTRIGHTLY PURCHASED. NORMALLY, THE JEWELLERY IS TAKEN ON CREDIT FOR A PERIOD OF 3 TO 5 MONTHS WHICH ARRANGEMENT VARIES FR OM TIME TO TIME WITH THE DIFFERENT PARTIES. IT IS A MATTER OF RECORD THAT COPIES OF AC COUNTS OF THE PARTIES FROM WHOM THE JEWELLERY WAS TAKEN ON CREDIT WERE RELIED UPON AND HAVE BEEN CONSIDERED. WE NOTE THAT IN THE FACTS OF THE PRESENT CASE THE ASSESSEE HAS PUT UP BEFORE THE TAX AUTHORITIES THE PRIMARY CONTENTION THAT IN THE FACTS AND CIRCUMSTANCES OF T HE PRESENT CASE NO INVESTMENT WAS MADE TO CARRY OUT THE UNACCOUNTED SALES. IT IS FURT HER SEEN FROM THE RECORD THAT THE ASSESSEE HAS ALSO CONTENDED THAT THE MONEY AFTER EF FECTING THE ACCOUNTED AND UNACCOUNTED SALES IS ANYWAY ALSO AVAILABLE ON ROTAT ION THUS ON THIS GROUND ALSO ADDITION MADE BY THE ASSESSING OFFICER BY WAY OF ESTIMATES I N THE PECULIAR FACTS AND CIRCUMSTANCES OF PRESENT CASE WAS NOT WARRANTED. APART FROM THESE SUBMISSIONS/CONTENTIONS IT HAS ALSO BEEN SUBMITTED ON BEHALF OF THE ASSESSEE ALTERNATEL Y THAT EVEN OTHERWISE IT WOULD STAND ADEQUATELY COVERED BY THE AMOUNT SURRENDERED BY THE ASSESSEE. A PERUSAL OF THE IMPUGNED ORDER SHOWS THAT THE CIT-A PROCEEDED TO DE LETE THE ADDITION ON THE REASONING THAT THE RATE ADOPTED BY THE ASSESSING OFFICER AT 1 5% HAD NO BASIS FURTHER THE SAME COULD BE HELD TO BE COVERED UNDER THE ADDITIONAL STOCKS S URRENDERED. ACCORDINGLY ON GOING THROUGH THE ENTIRE FACTS CIRCUMSTANCES AND SUBMISSI ONS OF THE PARTIES BEFORE THE BENCH ALONGWITH THE DOCUMENTS TO WHICH OUR ATTENTION HAS BEEN INVITED WE FIND THAT IN THE PECULIAR FACTS AND CIRCUMSTANCES OF THE PRESENT CAS E NOTHING HAS BEEN PLACED BEFORE US BY THE REVENUE TO ASSAIL THE CONSISTENT ARGUMENT THAT AS PER GENERAL TRADE PRACTICES THE JEWELLERY WAS TAKEN ON CREDIT FROM THE RESPECTIVE P ARTIES WHOSE LEDGER ACCOUNTS HAVE BEEN PLACED BEFORE THE TAX AUTHORITIES ON THE BASIS OF WHICH IT HAS BEEN ARGUED THAT THE JEWELLERY WAS OBTAINED ON CREDIT AND AS AND WHEN SA LES WERE AFFECTED THE AMOUNTS WERE REMITTED TO THE SAID JEWELLER AS SUCH NO INVESTMENT S WAS REQUIRED. FURTHER WE NOTICE THAT THE CIT-A HAS TAKEN COGNIZANCE OF THE FACT THAT EVE N OTHERWISE THERE IS A SURRENDER FOR ITA 247/CHD/2017 & 187/CHD/2017 A.Y. 2013-14 PAGE 24 OF 45 UNACCOUNTED STOCK ACCORDINGLY IN THE PECULIAR FACTS AND CIRCUMSTANCES OF THE PRESENT CASE WE FIND OURSELVES UNABLE TO ACCEDE TO THE SUBMISSIO NS OF THE LD. CIT-DR. THE ORDER OF THE CIT(A) IS UPHELD IN THE ABSENCE OF ANY CONTRARY MAT ERIAL. ACCORDINGLY, THE GROUND OF THE REVENUE IS DISMISSED 7. THE SOLE ISSUE AGITATED BY THE ASSESSEE IN T HE PRESENT APPEAL PERTAINS TO THE ADDITION MADE BY THE AO AND SUSTAINED BY THE CIT(A) ON THE B ASIS OF ANNEXURE A-22 WHICH IS AN EXTRACT FROM THE PEN DRIVE FOUND IN THE COURSE OF T HE SEARCH FROM THE RESIDENCE OF DIRECTOR OF THE ASSESSEE DESCRIBED AS STOCK MANAGEMENT SYST EM. THE RELEVANT FACTS ARE FOUND ADDRESSED BY THE ASSESSING OFFICER AT PAGES AT PAGE S 5 TO 11 OF HIS ORDER AND FOR THE SAKE OF COMPLETENESS ARE EXTRACTED HEREUNDER: 9. EXCESS STOCK AS PER STOCK MANAGEMENT SYSTEM SU MMARY: VIDE THIS OFFICE LETTER DATED 23.03.2015 IN PARA 3 THE ASSESSEE WAS SHOW CAUSED AS UNDER :- ' PLEASE REFER TO PARTY R-L, ANNEXURE A-22 WHICH IS A PENDRIVE SEIZED FROM YOUR RESIDENCE, ACCORDING TO WHICH YOUR STOCK AS PER STO CK MANAGEMENT SYSTEM, SUMMARY, GOLD ORNAMENTS, NET WEIGHT IS SHOWN AS 359 28.216 GMS, DIAMOND STUDDED JEWELLERY IS SHOWN AT 34358.526 GMS., D.WEI GHT 5742.460 GMS. THE COPY OF THE PENDRIVE WAS GIVEN TO YOU ON 10.02.2015. SINCE, STOCK IN YOUR BOOKS OF ACCOUNTS OF M/S PALACE JEWELLERS PVT. LTD. HAS BEEN SHOWN AT MUCH LESS WEIGHT /, VALUE, WHY THE EXCESS MAY NOT BE ADDED IN YOUR INCO ME AS PER THIS SHEET. ' IN RESPONSE VIDE REPLY FILED ON 27.03.2015, THE ASS ESSEE HAS STATED AS UNDER:- 'VLDE THE NEXT SHOW CAUSE, YOUR HONOUR HAVE ASKED AS TO WHY THE STOCK AS PER STOCK MANAGEMENT SYSTEM (AS PER ANNEXURE A--22, PAR TY RL) A SUMMARY OF GOLD ORNAMENT WEIGHING 35928.216 GRAMS, DIAMOND STUDDED JEWELLERY WEIGHING 34358.526 GRAMS AND THE DIAMOND WEIGHING 5742.46 GRAMS WAS PR OVIDED WHICH IS AS PER THE STOCKS OF YOUR BOOKS OF ACCOUNTS OF M/S PALACE JEWE LLERS (P) LTD. AND WHEREAS THE STOCK HAS BEEN SHOWN MUCH LESS WEIGHT / VALUE, WHY THE EXCESS MAY NOT BE ADDED IN YOUR INCOME? IN REPLY, IT IS RESPECTFULLY SUBMITTED THAT AS PER THE STOCK SUMMARY PROVIDED BY YOUR HONOUR WHICH APPEARS TO BE OF SOME DATE I.E. LIKELY TO BE OF 28.10.2012 SINCE THE ENTRIES IN THIS STOCK DETAILS ALSO INCLUDES VARIOUS DATES AND ALSO OF 28.10.2012. MOREOVER, NET WEIGHT OF GOLD JEWELLERY AS WELL AS THE DIAMOND STUDDED JEWELLERY IS OF 22 KARAT GOLD AND 14 KARAT GOLD ONL Y. A SEARCH OPERATION HAS BEEN CARRIED OUT AT THE BUSINESS PREMISES OF THE ASSESSE E COMPANY I.E. M/S PALACE JEWELLERS (P) LTD. ON 31.10.2012. STOCK SUMMARY HAS BEEN DRAW N AS PER PHYSICAL AS WELL AS PER BOOKS OF ACCOUNTS. WHATEVER STOCKS WERE FOUND HAVE DULY BEEN EXPLAINED DURING THE COURSE OF ASSESSMENT PROCEEDINGS. AS PER THE PHYSIC AL VERIFICATION STOCK WEIGHING 43,581.66 GRAMS OF 24 KARAT WAS FOUND. IN ADDITION TO THIS, STOCK WEIGHING 5,093.735 GRAMS OF 24 KARAT WAS ALSO LYING WITH LABOUR, WHO T OOK MATERIAL FROM THE ASSESSEE COMPANY AND RETURN AFTER CONVERTING THE SAME INTO O RNAMENTS/ SENT TO THEM FOR REPAIRS/ ALTERATION ETC. THE TOTAL STOCK WEIGHING 48,675.395 GRAMS ( 24 KARAT) WAS FOUND WHICH HAS BEEN DULY MENTIONED IN THE REPLY TO THE SHOW CA USE NOTICE. IN ADDITION TO THIS DIAMOND 4,809.14 CARAT WAS ALSO FOUND. WHATEVER DIF FERENCE WAS THERE IN THE STOCKS AS PER BOOKS OF ACCOUNTS AND PHYSICAL VERIFICATION, HA S DULY BEEN EXPLAINED VIDE REPLY TO YOUR HONOUR'S SHOW CAUSE NOTICE DATED 24.12.2014. I N THE DETAILED REPLY WITH RESPECT TO THE NATURE OF BUSINESS AND SYSTEM OF WORKING AS WELL AS ACCOUNTING WERE ALSO SUBMITTED. IT HAS NEVER BEEN DENIED THAT THE ASSESS EE COMPANY HAS NOT BEEN INDULGED IN PURCHASE / SALES WITHOUT RECORDING THE SAME INTO TH E BOOKS OF ACCOUNTS. THEREFORE, THE SHORTAGE / EXCESS OF STOCK HAS BEEN COVERED BY THE PURCHASES / SALES MADE BY THE ASSESSEE COMPANY WITHOUT RECORDING INTO THE BOOKS O F ACCOUNTS. FINALLY AS ON THE DATE OF SEARCH I.E. ON 31.10.2012, WHEN THE ENTIRE STOCK HAS BEEN PHYSICALLY VERIFIED BY THE LEARNED AUTHORISED OFFICERS AND WHATEVER DIFFERENCE WAS THERE HAS DULY BEEN EXPLAINED AND ADEQUATE SURRENDER OF ADDITIONAL INCO ME WAS ALSO OFFERED ON ACCOUNT OF DIFFERENCE BOTH IN THE STOCK AS WELL AS ON ACCOUNT OF THE PURCHASES & SALES MADE OUT OF ITA 247/CHD/2017 & 187/CHD/2017 A.Y. 2013-14 PAGE 25 OF 45 BOOKS OF ACCOUNTS AND PROFIT ELEMENT THEREON. NOTHI NG IS LEFT FOR CONSIDERATION IN RESPECT OF THIS STOCK SUMMARY. FURTHER, THIS IS A S UMMARY WHICH IS IN BETWEEN DATE OF START OF THE YEAR AS WELL AS THE DATE OF SEARCH AND DULY COVERED BY THE STOCK PHYSICALLY VERIFIED AND AS PER BOOKS. IN VIEW OF THE J SUBMISS ION MADE, NO ADVERSE INFERENCE IS DRAWABLE ON THIS COUNT. ' 11. ASSESSEE'S AFORESAID ARGUMENTS HAVE BEEN CONSI DERED AS DISCUSSED HEREINAFTER. ASSESSEE'S MAIN ARGUMENT IS THAT THE AFORESAID EXCE SS STOCK SHOWN IN THE 'STOCK SUMMARY STATEMENT' HAS BEEN EXPLAINED AND IS OTHERW ISE ALSO COVERED IN THE EXCESS STOCK FOUND AT THE TIME OF SEARCH IN THE BUSINESS PREMISE S OF THE ASSESSEE. MOREOVER, THE SAME IS ALSO COVERED IN THE DISCLOSURE/ADDITIONAL INCOME OF FERED ON ACCOUNT OF DIFFERENCE BOTH IN THE STOCK AS WELL AS ON ACCOUNT OF PURCHASES AND SALES MADE OUT OF BOOKS OF ACCOUNTS AND PROFIT ELEMENT THEREON. AFORESAID ARGU MENTS OF THE ASSESSEE HAVE CAREFULLY BEEN CONSIDERED BUT ARE NOT ACCEPTABLE. A S DISCUSSED IN THE PRECEDING PARAGRAPHS OF THIS ORDER, EXCESS STOCK WEIGHING 797 3.72 GMS. VALUED AT RS.2,50,37,481/- FOUND AT THE BUSINESS PREMISES OF THE ASSESSEE AT THE TIME OF SEARCH HAS BEEN HELD UNEXPLAINED AND CONSEQUENTLY ADDITION OF RS.2,50,37,481/- HAS BEEN MADE ON THIS ACCOUNT. IT HAS ALSO BEEN OBSERVED IN THE PREC EDING PARAGRAPHS THAT VALUE OF EXCESS STOCK OF RS.2,50,37,481/- IS NOT COVERED IN THE DIS CLOSURE OF RS. 4 CRORE. HOWEVER, ASSESSSEE'S ARGUMENTS THAT EXCESS STOCK SHOWN IN TH E STOCK SUMMARY DATED 28.10.2012 IS A PRECURSOR TO THE STOCK/EXCESS STOCK FOUND AT THE TIME OF SEARCH IN THE BUSINESS PREMISES OF THE ASSESSEE ON 31.10.2012 I.E. JUST TWO DAYS BE FORE THE DATE OF SEARCH SEEMS CORRECT. IN OTHER WORDS, STOCK/EXCESS STOCK SHOWN IN THE STO CK SUMMARY DATED 28.10.2010 CAN REASONABLY AND JUSTIFIABLY BE SAID TO BE A PART AND PARCEL OF THE STOCK FOUND AT THE TIME OF SEARCH. IN VIEW, THEREFORE, OF ABOVE DISCUSSION ADJUSTMENT OF THE STOCK SHOWN IN THE STOCK SUMMARY DATED 28.10.2012 VIS-AVIS STOCK FOUND AT THE TIME OF SEARCH ON 31.10.2012 IS REQUIRED TO BE MADE. 12. DURING THE COURSE OF PHYSICAL VERIFICATION, I N SEARCH PROCEEDING, THE GOLD (CONVERTED INTO 24 CT.) WAS FOUND AT 43581.66 GMS W HEREAS AS PER BOOKS OF THE ASSESSEE THE STOCK OF GOLD STOOD AT 35607.94 GMS (CONVERTED INTO 24 CT.) THEREBY EXCESS 24 CT. GOLD FOUND WAS 7973.72 GMS HOWEVER, AS PER COPY OF PRINT TAKEN OUT OF STOCK MANAGEMENT SYSTEM, FROM THE PEN-DRIVE I.E. ANNEXURE A-20 OF R- L I.E. SEIZED FROM THE RESIDENCE OF SH. RAKESH JAIN AND HIS SON SH. GOURAV JAIN WHO IS DIRE CTOR IN THE ASSESSEE COMPANY, THE STOCK OF THE ASSESSEE HAS BEEN SHOWN AT (I) 35928.2 16 GMS OF ORNAMENTS JEWELLERY (II) JEWELLERY IN WHICH DIAMONDS ARE STUDDED IS 34358.52 6 GMS AND (III) DIAMOND WEIGHT HAS BEEN SHOWN AT 5742.460. 7.1 IT IS SEEN THAT THE AO AFTER SCANNING THE IT EM WISE SUMMARY OF STOCK MANAGEMENT SYSTEM VALUES THE SAME AS UNDER AND ADDS IT TO THE INCOME OF THE ASSESSEE : THE ABOVE STOCK IS CONVERTED INTO 24 CT GOLD/AS BEL OW : (A) ORNAMENT JEWELLERY AT 35928.216 GMS (22 CT) = 3293 4.198 GMS (B) DIAMOND STUDDED JEWELLERY AT 34358.526 ASSUMING THAT IT IS 14 CT AND 18 CT, THEREFORE TAKI NG ITI AVERAGE AT 16 CT CONVERTED INTO 24 CT = 22905. 683 GMS TOTAL OF CONVERTED TO 24 CT GOLD = 55848.882 G MS LESS STOCK FOUND DURING SEARCH = 43581.66 GMS BALANCE EXCESS 24 CT GOLD FOUND = 12258.222 GMS VALUE OF 12258.222 GMS GOLD @ 3140 PER GMS I.E. THE RATE APPLIED DURING SEARCH = 3,84,90,817/- DIAMONDS AS PER STOCK MANAGEMENT SYSTEM = 5742.460 LESS DIAMONDS FOUND DURING THE SEARCH = 5517.64 CT EXCESS DIAMONDS AS PER STOCK MANAGEMENT SYSTEM = 224.82 CT. THE VALUE OF EXCESS DIAMONDS AS PER SMS, @7465.311 = 16,78,351/- THEREFORE, TOTAL EXCESS STOCK FOUND AS P ER ANNEXURE A-22 COMES OUT TO BE RS.4,01,69,168/-. 13. IN EXPLANATION FURNISHED VIDE ITS REPLY AS REPR ODUCED ABOVE, THE ASSESSEE HAS STATED THAT WHATEVER WAS THE EXCESS STOCK, SAME HAS BEEN TAKEN CARE OF DURING THE COURSE OF SEARCH PROCEEDINGS ON 31.10.2012. HOWEVER, IT IS SEEN, AS ALREADY DISCUSSED IN THE PRECEDING PARAGRAPHS OF THIS ORDER, THE STOCK IN 'STOCK MANAG EMENT SYSTEM SUMMARY' CONTAINS ITA 247/CHD/2017 & 187/CHD/2017 A.Y. 2013-14 PAGE 26 OF 45 ENTRIES OF 28.10.2012 THREE DAYS PRIOR TO THE DATE OF SEARCH. THE EXPLANATION OF THE ASSESSEE THAT SAME IS COVERED IN THE ADDITIONAL INC OME OFFERED IS NOT ACCEPTABLE, AS AT NO POINT OF TIME THE ABOVE STOCK HAS BEEN SHOWN TO HAV E EXISTED IN THE BOOKS OF ACCOUNTS AND THE STOCK OF ; RS.4,01,69,168/- IS OVER AND ABOVE THE VALUE OF STOCK FOUND DURING T HE SEARCH. IN OTHER WORDS WHATEVER STOCK WAS FOUND IN THE COURSE OF SEARCH HAS BEEN TAKEN CARE OF AND REDUCED FROM THE STOCK SHOWN IN THE 'STOCK M ANAGEMENT SYSTEM SUMMARY' REFERRED TO ABOVE. SECONDLY, THE ARGUMENT THAT STOCK OF 5093.73 5 GMS OF 24 CT WAS LYING WITH LABOUR, SAME IS ALSO NOT ACCEPTABLE, AS THE STOCK OF JEWELL ERY IN THE 'STOCK MANAGEMENT SYSTEM SUMMARY' CONSIST OF 22 CT, 14/18 CT GOLD AND/:' DIA MONDS ONLY AND NOT BULLION OF 24 CT WHICH IS ALLEGED TO BE SENT TO LABOUR FOR MANUFACTU RING OF ORNAMENTS. THE THIRD ARGUMENT THAT IT HAS NEVER BEEN DENIED THAT THE ASSESSEE COMPANY HAS NOT BEEN INDULGING IN PURCHASE/SALE WITHOUT RECORDING THE SAME IN TO THE BOOKS OF ACCOU NTS, IT DOES NOT COME TO THE RESCUE OF THE ASSESSEE RATHER STRENGTHENS THE CAUSE OF THE DEPART MENT THAT ASSESSEE HAS INDULGED IN UNACCOUNTED SALES/PURCHASES AND AS SUCH SUBSTANT IATES THE EXCESS STOCK FOUND FROM THE 'STOCK MANAGEMENT SYSTEM SUMMARY' OF THE ASSESSEE P RINTED FROM THE PEN-DRIVE WHICH WAS SEIZED FROM THE RESIDENCE OF THE DIRECTOR DURING TH E SEARCH. WITHOUT PREJUDICE THE ABOVE, EVEN IF ASSESSEE'S ARGUMENTS THAT 5093.735 GMS. OF 24 CARAT GOLD WAS LYING WITH THE LABOUR AT THE TIME OF SEARCH, WHICH WAS NOT TAKEN INTO ACCOUN T THOUGH NOT ADMITTED FOR WANT OF EVIDENCE BUT SUPPOSED TO BE CORRECT, STILL SAME DOES NOT HEL P THE ASSESSEE. IN THAT CASE, ASSESSEE IS REQUIRED TO EXPLAIN THE STOCK OF 5093.735 GMS. OF 2 4 CARAT GOLD WHICH ACCORDING TO ASSESSEE, WAS LYING 1 WITH THE LABOUR AT THE TIME OF SEARCH AND W HICH WAS NOT TAKEN INTO ACCOUNT, WHICH HE HAS NOT EXPLAINED. IN OTHER WORDS, AS ALREADY DISCU SSED ABOVE IN THE PRECEDING PARAGRAPHS OF THE ORDER, FURTHER ADDITION EQUAL TO THE VALUE OF 5 093.735 GMS. OF 24 CARAT GOLD THAT WAS CLAIMED TO BE LYING WITH THE LABOUR AT THE TIME OF SEARCH WILL| ALSO HAVE TO BE MADE BESIDES ADDITION OF RS.2,50,37,481/- BEING A VALUE OF 7973. 72 GMS. OF EXCESS JEWELLERY FOUND AT THE TIME OF SEARCH. IN ANY CASE, SINCE AFORESAID ARGUMENTS H AVE NOT BEEN ACCEPTED, NO SEPARATE ADDITION IS MADE ON THIS ACCOUNT AND SAME IS HELD T O BE COVERED IN THE ADDITION OF RS.4,01,69,168/- AS MENTIONED IN THE PRECEDING LINE S. IN VIEW OF ABOVE DISCUSSION THE CONTENTIONS OF THE ASSESSEE ARE REJECTED AND EXCESS STOCK FOUND AS PER ITEM WISE 'STOCK MANAGEMENT SYSTEM SUMMARY' VALUING AT RS.4,01,69,168/- IS ADDE D TO THE INCOME OF THE ASSESSEE. SINCE, THE ASSESSEE HAD CONCEALED THE INCOME BY FUR NISHING THE INACCURATE PARTICULARS, AS DISCUSSED ABOVE PARTICULARLY AS PER DATA OF STOC K MANAGEMENT SYSTEM TAKEN OUT FROM THE PEN-DRIVE SEIZED FROM THE RESIDENCE OF THE DIRECTOR , THE PENALTY PROCEEDINGS U/S 271AAB OF THE I.T.ACT,1961 ARE INITIATED SEPARATELY ON THE ABOVE ISSUE. (ADDITION OF RS.4,01,69,168/-) 7.2 THE ASSESSEE CARRIED THE ISSUE IN APPEAL BEF ORE THE CIT(A). THE ASSESSEES GROUND WAS DISMISSED BY THE CIT-A. THE SAID CONCLUSION ASSAILE D BY THE ASSESSEE IN THE PRESENT PROCEEDINGS IS FOUND ADDRESSED AT PAGES 17 TO 24 OF THE IMPUGNED ORDER WHEREIN VIDE PARA-3.3 THE ASSESSEES SUBMISSION WERE DISMISSED. THE SAME IS ALSO REPRODUCED HEREUNDER FOR THE SAKE OF COMPLETENESS: 3.3 GROUND OF APPEAL NO. 3 PERTAINS TO ADDITION OF' RS. 4,01,69,168/- ON ACCOU NT OF EXCESS STOCK FOUND FROM PEN DRIVE AS-PER 'STOCK MAN AGEMENT SYSTEM SUMMARY'. THE AO MENTIONS THAT DURING THE ASSESSMENT PRECEDING TH E ASSESSED WAS GIVEN A SHOW CAUSE STATING THAT A PEN DRIVE WAS SEIZED FROM HIS RESIDE NCE ACCORDING TO WHICH THE STOCK AS PER 'STOCK MANAGEMENT SYSTEM SUMMARY' WAS - GOLD OR NAMENTS NET WEIGHT AT 35928.216 GMS, DIAMOND STUDDED JEWELLERY AT 34358.5 26 GMS, DIAMONDS WEIGHT 5742.460GMS, -WHEREAS STOCK IN THE BOOKS OF ACCOUNT OF M/S. PALACE JEWELLERS PVT. LTD HAS BEEN SHOWN AT MUCH LESS WEIGHT/VALUE. IN RESPON SE, THE ASSESSEE GAVE A REPLY STATING THAT THE STOCK SUMMARY PROVIDED BY THE AO A PPEARS TO BE MOST LIKELY OF 28.10.2012 AND THE ENTRIES IN THIS STOCK DETAILS IN CLUDE VARIOUS DATE AND ALSO STOCK OF 28.10.2012. MOREOVER, AS PER THE ASSESSEE, THE NET WEIGHT OF GOLD JEWELLERY AS WELL AS THE DIAMONDS STUDDED JEWELLERY IS OF 22 KARAT AND 1 4 KARAT ONLY. IT WAS ALSO SUBMITTED THAT DURING THE SEARCH ON 31.10.2012 STOCK SUMMARY HAS BEEN DRAWN AS PER PHYSICAL ITA 247/CHD/2017 & 187/CHD/2017 A.Y. 2013-14 PAGE 27 OF 45 AS WELL AS PER BOOKS OF ACCOUNTS AND WHATEVER STOCK S WERE FOUND HAVE DULY BEEN EXPLAINED DURING THE COURSE OF ASSESSMENT PROCEEDIN GS. THE ASSESSEE SUBMITTED THAT AS PER THE PHYSICAL VERIFICATIONS, STOCK (CONVERTED TO 24 KARAT GOLD) WEIGHING 43,581.66 GRAMS WAS FOUND. IN ADDITION TO THIS, STOCK WEIGHIN G 5,093.735 GRAMS OF 24 KARAT WAS ALSO LYING WITH LABOUR, WHO TOOK MATERIAL FROM THE ASSESSEE COMPANY AND RETURN AFTER CONVERTING THE SAME INTO ORNAMENTS/ SENT TO THEM FO R REPAIRS/ ALTERATION . ETC. THUS AS PER ASSESSEE THE TOTAL STOCK (EQUIVALENT TO 24 KARA T GOLD) WEIGHING 48,675.395 GRAMS WAS FOUND, IN ADDITION TO THIS DIAMOND 4,809.14 CAR AT WAS ALSO FOUND. AS PER THE ASSESSEE WHATEVER DIFFERENCE WAS THERE IN THE STOCK S AS PER BOOKS OF ACCOUNTS AND PHYSICAL VERIFICATION, THE SAME HAS DULY BEEN EXPLA INED VIDE REPLY TO SHOW CAUSE NOTICE DATED 24.12.2014. IN THE DETAILED REPLY THE NATURE OF BUSINESS AND SYSTEM OF WORKING AS WELL AS ACCOUNTING WERE ALSO SUBMITTED. THE ASSESSEE ADMITTED THAT IT HAS NEVER BEEN DENIED THAT THE ASSESSEE COMPANY HAS NOT INDULGED IN PURCHASE/ SALES WITHOUT RECORDING THE SAME IN THE BOOKS OF ACCOUNTS . THEREFORE, THE SHORTAGE/EXCESS OF STOCK HAS BEEN COVERED BY THE PURCHASES/SALES MA DE BY THE ASSESSEE COMPANY WITHOUT RECORDING IT INTO THE BOOKS OF ACCOUNTS. FI NALLY ON THE DATE OF SEARCH I.E. ON 31.10.2012 THE ENTIRE STOCK HAS BEEN PHYSICALLY VER IFIED BY THE AUTHORISED OFFICERS AND WHATEVER DIFFERENCE WAS THERE, HAS DULY BEEN EX PLAINED AND ADEQUATE SURRENDER OF ADDITIONAL INCOME WAS ALSO OFFERED ON ACCOUNT OF DIFFERENCE BOTH IN THE STOCK AS WELL AS ON ACCOUNT OF THE PURCHASES & SALES MADE OUTSIDE THE BOOKS OF ACCOUNTS AND PROFIT ELEMENT THEREON. AS PER THE ASS ESSEE NOTHING WAS LEFT FOR CONSIDERATION IN RESPECT OF THIS STOCK SUMMARY. THE ASSESSEE ARGUED THAT THIS IS A SUMMARY WHICH IS IN BETWEEN DATE OF START OF THE YE AR AS WELL AS THE DATE OF SEARCH AND DULY COVERED BY THE STOCK PHYSICALLY VERIFIED AND A S PER BOOKS AND IN VIEW OF THE SUBMISSION MADE, NO ADVERSE INFERENCE IS DRAWABLE I N THIS COUNT. THE ASSESSEE'S AFORESAID ARGUMENTS WERE CONSIDERED BY THE AO AND THE AO OBSERVED THAT THE ASSESSEE'S MAIN ARGUMENT WAS THAT THE AFORESAID EXCESS STOCK SHOWN IN THE 'STOCK MANAGEMENT SYSTEM SUMMARY' HAS BEEN EXPLAINED AND IS OTHERWISE ALSO COVERED IN THE EXCESS STOCK FOUND AT THE TIME OF SEARCH IN THE BUSINESS PREMISES OF THE ASSESSEE. AS PER AO THE OTHER ARGUM ENT OF THE ASSESSEE WAS THAT MOREOVER, THE SAME IS ALSO COVERED IN THE DISCLOSUR E/ADDITIONAL INCOME OFFERED ON ACCOUNT OF DIFFERENCE BOTH IN THE STOCK AS WELL AS ON ACCOUNT OF PURCHASES AND SALES MADE OUT OF BOOKS OF ACCOUNTS A ND PROFIT ELEMENT THEREON. ALL THESE ARGUMENTS OF THE ASSESSEE HAVE BEEN CONSIDERE D BY THE AO. THE AO MENTIONS THAT AS DISCUSSED, EXCESS STOCK WEIGHING 7973.72 GM S. VALUED, AT RS 2,50,37,481/- FOUND AT THE BUSINESS PREMISES OF THE ASSESSEE AT T HE TIME OF SEARCH, HAS BEEN HELD UNEXPLAINED AND CONSEQUENTLY ADDITION OF RS. 2,50,3 7,481/- HAS BEEN MADE ON THIS ACCOUNT. THEREFORE THE ADDITION IS ON ACCOUNT OF EX CESS STOCK FOUND ON PHYSICAL STOCK TAKING AND NOT ON ACCOUNT OF EXCESS AS PER ST OCK MENTIONED IN 'STOCK MANAGEMENT SYSTEM SUMMARY'. HOWEVER, ASSESSEE'S ARG UMENTS THAT EXCESS STOCK SHOWN IN THE STOCK SUMMARY DATED 28.10.2012 IS A PR ECURSOR TO THE STOCK/EXCESS STOCK FOUND AT THE TIME OF SEARCH IN THE BUSINESS P REMISES OF THE .ASSESSEE ON 31.10.2012 I.E. JUST TWO DAYS BEFORE THE DATE OF SE ARCH SEEMS CORRECT. IN OTHER WORDS, STOCK/EXCESS STOCK SHOWN IN THE STOCK SUMMAR Y DATED 28.10-.2012 CAN REASONABLY AND JUSTIFIABLY BE SAID TO BE A PART AND PARCEL OF THE STOCK FOUND AT THE TIME OF SEARCH. AS PER AO, IN VIEW OF ABOVE, ADJUST MENT OF THE STOCK SHOWN IN THE STOCK SUMMARY DATED 28.10.2012 VIS-A-VIS STOCK FOUN D AT THE TIME OF SEARCH ON 31.10.2012 IS REQUIRED TO BE MADE. DURING THE COURS E OF PHYSICAL VERIFICATION, AT THE TIME OF SEARCH PROCEEDING, THE GOLD (CONVERTED INTO 24 CT.) FOUND WAS 43581.66 GMS. HOWEVER, AS PER COPY OF PRINT TAKEN FROM 'STOC K MANAGEMENT SYSTEM SUMMARY' IN THE PEN DRIVE I.E. ANNEXURE A-20 OF R-L (I.E. SE IZED FROM THE RESIDENCE OF DIRECTOR OF THE ASSESSEE COMPANY SH. RAKESH JAIN) T HE STOCK OF THE ASSESSEE HAS BEEN SHOWN AT (I) 35928.216 GMS OF ORNAMENTS/GOLD JEWELL ERY (II) JEWELLERY IN WHICH DIAMONDS ARE STUDDED IS 34358.526 GMS WHICH ON CONV ERSION TO.24 KARAT GOLD GIVES THE TOTAL AMOUNT OF GOLD (24 KARAT) OF 55848.882 GMS AS UNDER: ORNAMENTS JEWELLERY 35928.216 GMS (22 CT) = 32934. 198 GMS (24 CT) DIAMOND STUDDED JEWELLERY 34358.526 GMS ( AVERAGE 16CT) = 22905.683 GMS (24CT) ITA 247/CHD/2017 & 187/CHD/2017 A.Y. 2013-14 PAGE 28 OF 45 THEREFORE, THE AO CALCULATED THE VALUE OF EXCESS ST OCK OF GOLD AND DIAMONDS AS PER 'STOCK MANAGEMENT SYSTEM SUMMARY' OVER AND ABOVE TH E STOCK FOUND AND VALUED DURING SEARCH AS RS. 4,01,69,168/- AND CONFRONTED T HE ASSESSEE WITH THIS FIGURE. IN ITS REPLY THE ASSESSEE HAS STATED THAT WHATEVER WAS .TH E EXCESS STOCK, SAME HAS BEEN TAKEN CARE OF DURING THE COURSE OF SEARCH PROCEEDINGS ON 31.10.2012. THE AO HOWEVER, OBSERVED THAT AS ALREADY DISCUSSED IN THE ASSESSMEN T ORDER, THE STOCK IN 'STOCK MANAGEMENT SYSTEM SUMMARY' CONTAINS ENTRIES OF 28.1 0.2012 I.E THREE DAYS PRIOR TO THE DATE OF SEARCH. THE EXPLANATION OF THE ASSES SEE THAT SAME IS COVERED IN THE ADDITIONAL INCOME OFFERED IS NOT ACCEPTABLE, AS AT NO POINT OF TIME THE ABOVE STOCK HAS BEEN SHOWN TO HAVE ENTERED IN THE BOOKS OF ACCO UNTS AND THE STOCK OF RS 4,01,69,168/- IS OVER AND ABOVE THE VALUE OF STOCK FOUND DURING THE SEARCH. IN OTHER WORDS WHATEVER STOCK WAS FOUND IN THE COURSE OF SEA RCH HAS BEEN TAKEN CARE OF AND REDUCED FROM THE STOCK SHOWN IN THE 'STOCK MANAGEME NT SYSTEM SUMMARY' REFERRED TO ABOVE TO CALCULATE THE EXCESS STOCK. THE ARGUMEN T OF THE ASSESSEE THAT STOCK OF 5093.735 GMS OF 24 CT WAS LYING WITH LABOUR, WAS AL SO NOT ACCEPTED BY THE AO, BECAUSE AS PER AO THE STOCK OF JEWELLERY IN THE 'ST OCK MANAGEMENT SYSTEM SUMMARY' CONSIST OF 22 CT, 14/18 CT GOLD JEWALLERY AND DIAMO NDS ONLY AND NOT BULLION OF 24 CT WHICH IS ALLEGED TO BE SENT TO LABOUR FOR MANUFACTU RING OF ORNAMENTS. AS PER AO THE THIRD ARGUMENT OF THE ASSESSEE THAT IT HAS NEVE R BEEN DENIED THAT THE ASSESSEE COMPANY HAS NOT BEEN INDULGING IN PURCHASE /SALE WITHOUT RECORDING THE SAME IN TO THE BOOKS OF ACCOUNTS, ALSO DOES NOT COME TO THE RESCUE OF THE ASSESSEE, RATHER IT STRENGTHENS THE CASE OF THE DEP ARTMENT THAT ASSESSEE HAS INDULGED IN UNACCOUNTED SALES/PURCHASE AND AS SUCH SUBSTANTIATES THE EXCESS STOCK FOUND FROM THE 'STOCK MANAGEMENT SYSTEM SUMMARY' OF THE ASSESSEE PRINTED FROM THE PEN DRIVE WHICH WAS SEIZED FROM THE RESIDE NCE OF THE DIRECTOR DURING THE SEARCH. AS PER AO WITHOUT PREJUDICE TO THE ABOV E, EVEN IF ASSESSEE'S ARGUMENTS THAT 5093.735 GMS. OF 24 CARAT GOLD WAS LYING WITH THE LABOUR AT THE TIME OF SEARCH, WHICH WAS NOT TAKEN INTO ACCOUNT (THOUGH NO T ADMITTED FOR WANT OF EVIDENCE BUT SUPPOSED TO BE CORRECT) DOES NOT HELP THE ASSESSEE BECAUSE IN THAT CASE, ASSESSEE IS REQUIRED TO EXPLAIN THE STOCK OF 5093.735 GMS. OF 24 CARAT GOLD ALSO WHICH ACCORDING TO ASSESSEE. WAS LYING WI TH THE LABOUR AT THE TIME OF SEARCH AND WHICH WAS NOT TAKEN INTO ACCOUNT IN THE PHYSICAL INVENTORY PREPARED AT THE TIME OF SEARCH AND WHICH THE ASSESSEE HAS NO T EXPLAINED. AS PER AO, IN OTHER WORDS, FURTHER ADDITION EQUAL TO THE VALUE OF 5093.735 GMS. OF 24 CARAT GOLD, THAT WAS CLAIMED TO BE LYING WITH THE LABOUR AT THE TIME OF SEARCH, WILL ALSO HAVE TO BE MADE BESIDES ADDITION OF RS. 2,50,3 7,481/- BEING THE VALUE OF 7973.72 GMS. OF EXCESS JEWELLERY FOUND AT THE TIME OF SEARCH. IN ANY CASE, AS PER AO, SINCE AFORESAID ARGUMENT HAS NOT BEEN ACCEP TED, NO SEPARATE ADDITION IS MADE ON THIS ACCOUNT AND SAME IS HELD TO BE COVE RED IN THE PROPOSED ADDITION OF RS 4,01,69,168/-. IN VIEW OF ABOVE OBSERVATIONS, THE CONTENTIONS OF THE ASSESSEE WERE REJECTED BY THE A.O. AND EXCESS STOCK FOUND AS PER ITEM WISE 'STOCK MANAGEMENT SYSTEM SUMMARY' (OVER AND ABOVE THE VALU E OF THE STOCK INVENTORIED AT THE TIME OF SEARCH), VALUING AT RS. 4,01,69,168/- IS ADDED TO THE INCOME OF THE ASSESSEE . TOTAL CONVERTED TO 24 CT GOLD = 55848.882 GMS LESS STOCK FOUND DURING SEARCH CONVERTED TO 24CT. G OLD = 43581. 222 GMS BALANCE/EXCESS (IN 24 CT GOLD ) = 12258. 222 GMS VALUE @ 3140 PER GMS GOLD = RS 3,84,90,817/- DIAMONDS AS PER STOCK MANAGEMENT SYSTEM = 5742.46 CT LESS DIAMONDS FOUND DURING SEARCH = 5517. 64 CT EXCESS DIAMONDS AS PER STOCK MANAGEMENT S YSTEM = 224.82CT. VALUE @ 7465.311 DIAMOND = RS 16,78,351/-' TOTAL OF EXCESS GOLD AND D IAMONDS (3,84,90,817 + 16,78,351) = RS. 4,01,69,168/-. ITA 247/CHD/2017 & 187/CHD/2017 A.Y. 2013-14 PAGE 29 OF 45 THE FACTS OF THE CASE, THE BASIS OF ADDITIONS MADE BY THE A.O. AND THE ARGUMENTS OF THE AR DURING THE APPELLATE PROCEEDINGS HAVE BEE N CONSIDERED. THE AR HAS REPEATED THE ARGUMENTS THAT THE STOCKS MENTIONED IN THE 'STOCK MANAGEMENT SYSTEM SUMMARY' IS THE PRECURSOR OF THE STOCK FOUND AT THE TIME OF SEARCH AND THE SAME HAS BEEN CONSIDERED IN THE SURRENDER MADE AT THE TIME OF SEARCH, IT IS ARGUED THAT THE TOTAL STOCK AS PER 'STOCK MANAGEMEN T SYSTEM SUMMARY' IS 70287 GMS AND THE STOCK ON PHYSICAL VERIFICATION AND VALU ED ITEM WISE AT THAT TIME OF SEARCH WAS 74849 GMS WHICH IS IN EXCESS BY 4562 GMS WHICH COULD BE ON ACCOUNT OF DAY TO DAY TRANSACTION OF SALE AND PURCH ASE. THE AR ARGUED THAT THE ADDITION MADE BY THE AO AMOUNTS TO ADDING THE SAME STOCK TWICE. IT IS ALSO SUBMITTED THAT THE ASSESSEE SURRENDERED AN AMOUNT O F RS. 4 CRORE AND THE DISCREPANCY, IF ANY, IS DULY COVERED IN THE SURREND ER. THE AR ARGUED THAT, THEREFORE NO FURTHER ADDITION ON ACCOUNT OF STOCK M ENTIONED IN THE 'STOCK MANAGEMENT SYSTEM SUMMARY' IS REQUIRED TO BE MADE. TO FULLY APPRECIATE THE STOCKS POSITION IT IS RELEV ANT TO GO THROUGH THE STOCK ON THE DATE OF SEARCH AS PER THE BOOKS OF THE ACCOUNTS , THE STOCKS VALUED BY THE REGISTERED VALUER AT THE TIME OF SEARCH AND THE STOCK FOUND RE CORDED IN 'THE 'STOCK MANAGEMENT SYSTEM SUMMARY'. AS PER THE PAPER BOOK FILED BY THE AR, THE STOCK POSITION AS PER THE BOOKS OF THE ACCOUNT OF THE ASSESSEE ON THE DATE OF SEARCH WAS AS UNDER: STOCK SUMMARY OL-APR-2012 TO 27-OCT-2012 CLOSING BALANCE PARTICULARS QUANTITY RATE VALUE (RS.) COLOUR STONE 3,465.093 GMS 93.91 3,25,408.27 DIAMOND IN ORNAMENTS 3,874.698 CT 8,090.42 3,13,47,930.78 GOD IMAGES 5 PCS 12,790.60 63,953.651 GOLD BULLION 24KT 367.655GMS 2,711.48 9,96,890.07 GOLD ORNAMENTS 28,658.950 GMS 2,513.90 7,20,45,783.13 HAPPY 1 PCS 1.00 1.00 LOOSE DIAMONDS 694.000 CT 7,855.30 54,51,577.80 MAKING 7,79542.36 7,79,542.36, MANORANJAN GOLD 81.020 GMS 0.25 ORNAMENTS 18 KT 1,454.4.45 GMS 3,527.70 51,30,852.74 ORNAMENTS 14 KT 14,136.689 GMS 1,932.73 2,73,22,452.83 PANKAJ 1PCS 1.00 1.00 SANJEEV (-)1.00 GRAND TOTAL 14,34,64,392.23 (EMPHASIS SUPPLIED) THE STOCK SUMMARY AS PER THE VALUATION REPORT PREPA RED AT THE TIME OF SEARCH AND THE COPY ENCLOSED IN PAPER BOOK, WAS AS UNDER: GROSS NET WEIGHT WEIGHT IN VALUE OF WEIGHT VALUE OF WEIGHT OF VALUE O TOTAL VALUE WEIGHT (GMS) 24 CT. GOLD METAL (RS.) OF DIAMOND STONES STONES (RS.) (GMS) (GMS) DIAMON (RS) (GMS) (RS.) APROX. (CTS.) 74,849.260 59,688.740 43581.660 136,846,412 5517.64 41,190,90C 14057.000 452,10 0 178,489,412 STOCK SUMMARY AS PER 'STOCK MANAGEMENT SYSTEM SUMMA RY' (DETAILS GIVEN IN THE ASSESSMENT ORDER) IS AS UNDER: ITA 247/CHD/2017 & 187/CHD/2017 A.Y. 2013-14 PAGE 30 OF 45 NET WEIGHT IN GMS (GOLD JEWELLERY ) GROSS WEIGHT IN GMS (DIAMOND JEWELLERY) PCS DIAMOND WEIGHT ND PCS ED PCS NO.D (ND+ ED) TAGS 35928.216 34358.526 5340 5742.460 9110 16129 25239 3123 FROM THE ABOVE DATA AND FIGURES IT IS SEEN THAT ALT HOUGH THE ASSESSEE IS 'SHOWING BULLIONS IN ITS BOOKS OF ACCOUNTS BUT THE SAME DOSE NOT FIND MENTION IN THE 'STOCK MANAGEMENT SYSTEM SUMMARY' MAINTAINED BY THE DIRECTOR IN THE PEN DERIVE WHICH WAS SEIZED AT THE TIME OF SEARCH. THE QUANTIT Y OF STOCK/ITEMS MENTIONED IN THE 'STOCK MANAGEMENT SYSTEM SUMMARY' RELATES ONLY TO T HE GOLD JEWELLERY AND DIAMOND JEWELLERY/DIAMOND PIECES STUDDED IN THE JEW ELLERY. IT DOES NOT INCLUDE LOOSE DIAMONDS OR THE GOLD BULLION OF 24KT. IT ALSO DOES NOT MENTION THE GOLD OR JEWELLERY GIVEN TO THE LABOUR FOR MAKING THE ORNAME NTS OR FOR REPAIRS /ALTERATION ETC. THEREFORE THE QUANTITY OF JEWELLERY MENTIONED IN TH E 'STOCK MANAGEMENT SYSTEM SUMMARY' DOES NOT REPRESENT THE WHOLE OF THE STOCK OF THE ASSESSEE (IT IS THE SUMMERY IN RESPECT OF GOLD JEWELLERY AND DIAMOND ST UDDED JEWELLERY ONLY). THEREFORE JEWELLERY MENTIONED THERE IN (VIZ IN THE STOCK MANAGEMENT SYSTEM SUMMARY) CAN BE SET-OFF ONLY AGAINST THE GOLD JEWEL LERY AND DIAMOND STUDDED JEWELLERY FOUND AT THE TIME OF SEARCH. THIS EXERCIS E HAS BEEN DONE BY THE AO AND BEFORE COMPARING THE QUANTITIES AS PER THE VALUATIO N REPORT AND AS MENTIONED IN THE 'STOCK MANAGEMENT SYSTEM SUMMARY' THE AO HAS DU LY CONVERTED THE WEIGHTS OF JEWELLERY IN EQUIVALENT OF 24 KT. GOLD. BY THIS CON VERSION THE QUANTITY OF JEWELLERY FOUND AT THE TIME OF SEARCH GIVES A WEIGHT EQUAL TO 24 KT. GOLD AS 43581.660 GMS, WHEREAS THE EQUIVALENT WEIGHT IN 24 KT. GOLD OF THE JEWELLERY MENTIONED IN THE 'STOCK MANAGEMENT SYSTEM SUMMARY' COMES TO 55848.882 GMS ( INCLUDING THE GOLD IN GOLD JEWELLERY AND GOLD IN DIAMOND STUDDED JEWELLERY). A CCORDINGLY THE AO WAS JUSTIFIED IN ARRIVING AT THE EXCESS JEWELLERY (CONVERTED TO 2 4KT.GOLD) MENTIONED IN THE 'STOCK MANAGEMENT SYSTEM SUMMARY' OVER AND ABOVE THE JEWEL LERY FOUND (CONVERTED TO 24KT. GOLD) AT 12258.222 GMS. SIMILARLY THE EXCESS DIAMONDS MENTIONED IN THE 'STOCK MANAGEMENT SYSTEM SUMMARY' OVER AND ABOVE TH E DIAMONDS FOUND AT THE TIME OF SEARCH COMES TO 224.82 CT. THE FACT THAT NO BULLION WAS FOUND AT THE TIME OF SEARCH NEGATES THE ARGUMENTS OF THE ASSESSEE THAT T HE WHOLE OF THE STOCKS BELONGING TO THE ASSESSEE COMPANY WAS FOUND AND VAL UED BY THE REGISTERED VALUER AT THE TIME OF SEARCH. THIS FACT IS FURTHER STRENGTHENED BY THE SUBMISSION OF THE ASSESSEE THAT THE GOLD/JEWELLERY LYING WITH THE LABOUR WAS NOT ACCOUNTED FOR AND TAKEN INTO CONSIDERATION WHILE WORKING OUT THE EXCESS STOCK AT THE TIME OF SEARCH. IN OTHER WORDS THIS GIVES FURTHER STRENGTH TO THE FACT THAT THE EXCESS STOCK MENTIONED IN THE 'STOCK MANAGEMENT SYSTEM SUMMARY' BUT NOT FOUND AT THE TIME OF SEARCH MAY BE LYING WITH THE LABOUR FOR WHICH THE A SSESSEE HAS ALSO PLEADED THAT 5093.735 GMS OF 24CT. GOLD WAS LYING WITH THE LABOU R AT THE TIME OF SEARCH. IT IS A FACT THAT THE JEWELLERY/BULLION WITH THE LABOUR HAS NOT BEEN INCLUDED IN THE VALUATION REPORT PREPARED AT THE TIME OF SEARCH. THERE IS NO MENTION OF ANY BULLION ITEM IN THE VALUATION REPORT. FROM THE DISCUSSIONS AND THE FACTS MENTIONED ABOVE IT FINALLY EMERGES THAT THE 'STOCK MANAGEMENT SYSTEM SUMMARY' MAINTAINED BY THE ASSESS EE (WHICH WAS SEIZED AT THE TIME OF SEARCH IN THE PEN DRIVE) CONSIST OF ALL THE ITEMS OF. GOLD AND DIAMOND JEWELLERY. A PART OF THESE ITEMS OF JEWELLERY WAS F OUND AND VALUED AT THE TIME OF SEARCH. HOWEVER, IN THE BOOKS OF ACCOUNTS OF THE AS SESSEE THE VALUE OF ITEMS RECORDED (AS STOCK OF GOLD AND DIAMOND JEWELLARY) WAS LESS T HAN THIS AND IN FACT IT WAS EVEN LESSER THAN THE ITEMS FOUND AND VALUED AT THE TIME OF SEARCH. THE DIFFERENCE BETWEEN THE STOCK FOUND AT THE TIME OF SEARCH AND THE STOCK AS PER BOOKS WAS SURRENDERED BY THE ASSESSEE IN THE STATEMENT RECORDED ON 2.11.2012. AT THAT TIME THE EXISTENCE OF THIS 'STOCK MANAGEMENT SYSTEM SUMMARY' WAS NOT KNOWN TO THE DEPARTMENT (THE AUTHORISED OFFICER) NEITHER THE SAME WAS REVEALED O R DISCLOSED BY THE ASSESSEE. THEREFORE, THE STOCK MENTIONED IN THE STOCK MANAGEM ENT SUMMARY SYSTEM WAS NEVER CONSIDERED FOR DECIDING THE SURRENDER AMOUNT U/S'13 2(4). HENCE, THE ARGUMENT OF THE ITA 247/CHD/2017 & 187/CHD/2017 A.Y. 2013-14 PAGE 31 OF 45 AR THAT THE EXCESS STOCK MENTIONED AS PER STOCK MAN AGEMENT SUMMARY SYSTEM IS DULY COVERED BY THE SURRENDER AMOUNT IS NOT FOUND TENABL E. WHEN THE PEN DRIVE OR ITS CONTENTS WERE NOT CONSIDERED AT THE TIME OF SURREND ER THEN HOW THE STOCK MENTIONED THEREIN CAN FORM PART OF THE DISCLOSURE. HAD THE AS SESSEE REVEALED THE EXISTENCE OF THIS STOCK MANAGEMENT SUMMARY SYSTEM AND TAKEN INTO ACCO UNT THE STOCK MENTIONED THEREIN ALSO TO ARRIVE AT THE DISCLOSURE AMOUNT AT THE TIME OF SEARCH, THEN THIS ARGUMENT COULD HAVE BEEN VALIDLY APPLICABLE AND CON VINCING. BUT THIS IS NOT SO AND THE STOCK MANAGEMENT SUMMARY SYSTEM CAME TO THE NOTICE OF THE AO AT THE TIME OF ASSESSMENT WHEN THE PEN DRIVE SEIZED FROM RESIDENCE R-L (AT ANNEXURE A-22) WAS EXAMINED AND COPY GIVEN TO THE ASSESSEE ON 10.02.20 15. ACCORDINGLY, THERE IS NO MERIT IN THIS ARGUMENT OF THE AR SINCE THE FACT OF STOCK AS PER STOCK MANAGEMENT SUMMARY SYSTEM WAS NOT CONSIDERED AT THE TIME OF SE ARCH FOR ARRIVING AT THE DISCLOSURE AMOUNT. AS ALREADY MENTIONED THE EXCESS STOCK OF JEWELLERY IS TO BE CALCULATED AS THE DIFFERENCE BETWEEN THE STOCK OF J EWELLERY AS PER STOCK MANAGEMENT SUMMARY SYSTEM AND THE JEWELLERY MENTIONED IN THE B OOKS OF ACCOUNTS. HOWEVER, SINCE THE ASSESSEE HAS ALREADY SURRENDERED THE DIFF ERENCE BETWEEN THE STOCK FOUND AT THE TIME OF SEARCH AND THE STOCK AS PER BOOKS OF AC COUNTS, THEREFORE, ONLY THE DIFFERENCE BETWEEN THE STOCK AS PER STOCK MANAGEMEN T SUMMARY SYSTEM AND THE STOCK FOUND DURING THE SEARCH REMAINED TO BE ADDED. THIS IS PRECISELY WHAT HAS BEEN DONE BY THE AO IN THIS CASE. THE ARGUMENT OF THE AR THAT IF THERE WAS EXCESS STOCK AS PER STOCK MANAGEMENT SUMMARY SYSTEM, THE SAME SHOULD HA VE BEEN FOUND WITH THE ASSESSEE AT THE TIME OF SEARCH, IS COUNTERED BY THE SUBMISSION OF THE ASSESSEE ITSELF THAT THE STOCK LYING WITH THE LABOUR WAS NOT TAKEN INTO ACCOUNT AT THE TIME OF SEARCH. THUS THE ANSWER TO THE QUESTION AS TO WHERE THE EXC ESS STOCK AS PER STOCK MANAGEMENT SUMMARY SYSTEM MAY BE LYING HAS BEEN PRO VIDED BY THE ASSESSEE ITSELF THAT A PART OF ITS STOCK WAS LYING WITH THE LABOUR (WHICH WAS NOT ACCOUNTED FOR, FOR ARRIVING AT THE VALUE OF THE STOCK FOUND WITH THE A SSESSEE AT THE TIME OF SEARCH). UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE AND ON THE BASIS OF THE DETAILS AS MENTIONED AND FOR THE REASONS GIVEN ABOVE, THE ACTI ON OF THE AO IN MAKING OF ADDITION OF RS. 4,01,69,1687- ON ACCOUNT OF THE EXC ESS GOLD & DIAMOND JEWELLERY MENTIONED IN THE 'STOCK MANAGEMENT SYSTEM SUMMARY' OVER AND ABOVE THE JEWELLERY FOUND AT THE TIME OF SEARCH, IS FOUND SUS TAINABLE AND HENCE CONFIRMED. ACCORDINGLY THIS GROUND OF APPEAL IS DISMISSED. 7.3 THE LD. AR REFERRING TO THE RECORD RELYING ON T HE SUBMISSIONS ADVANCED BEFORE THE ASSESSING OFFICER AND THE CIT-A CONTENDED THAT INFA CT NO ADDITION ON THIS COUNT ALSO SHOULD HAVE BEEN MADE BY THE AO OR SUSTAINED IN APPEAL BY THE CIT(A). REFERRING TO THE MATERIAL AVAILABLE ON RECORD WHICH HAD BEEN COPIOUSLY ADDRES SED BEFORE THE TAX AUTHORITIES IT WAS HIS SUBMISSION THAT THE CONTENTS OF THE PEN DRIVE I .E. THE STOCK MANAGEMENT SUMMARY IN EFFECT RECORDS THE TRANSACTIONS WHICH HAVE BEEN INC LUDED IN THE SEIZED DOCUMENTS FROM THE DIRECTORS RESIDENCE AND THE DETAILS MENTIONED HERE IN ARE REFERRING TO ONLY THOSE VERY INSTANCES OF DISCLOSED AND UNDISCLOSED SALE TRANSAC TIONS. IT WAS HIS SUBMISSION THAT THE ASSESSEE HAS ARGUED AND DEMONSTRATED THAT THERE WER E TIMES WHEN DUE TO THE SPECIFIC NEED OF ITS CUSTOMERS, THE PURCHASES AT TIMES WERE MADE IN CASH WHERE THE PARTIES DID NOT WANT THE FULL AND CORRECT AMOUNT TO BE MENTIONED ON THE BILL OR AT TIME DID NOT WANT THE BILL ITSELF AT ALL HOWEVER IN ORDER TO MAINTAIN A R ECORD OF WHAT HAS BEEN SOLD AND AT WHAT PRICE THE ASSESSEE NECESSARILY HAD TO MAINTAIN SOME LEVEL OF CONTROL ON THE BUSINESS FUND APPLICATION ON ACCOUNT OF WHICH FACT THE DETAILS WE RE MAINTAINED. IT WAS HIS SUBMISSION THAT IN VIEW OF THESE KNOWN FACTS AND ON BEING CONF RONTED WITH THE MATERIAL AVAILABLE ON RECORD THE ASSESSEE MADE A SURRENDER INITIALLY OF R S. 3.61 CRORE. IT WAS SUBMITTED THAT AT ITA 247/CHD/2017 & 187/CHD/2017 A.Y. 2013-14 PAGE 32 OF 45 THE COST OF REITERATION THE SAID SURRENDER WAS REVI SED TO RS. 4 CRORE. IT WAS HIS SUBMISSION THAT AGAIN AT THE COST OF REITERATION WITH UTMOST H UMILITY THE ASSESSEE WOULD LIKE TO POINT OUT THAT THE ASSESSEE HAD HONOURED AND ABIDED BY TH E SURRENDER MADE AND EVEN IF IN VARIOUS WRITTEN SUBMISSIONS BEFORE THE ASSESSING OF FICER THE ASSESSEE ON GOING THROUGH THE RECORD AND ON RECEIVING THE ADVISE OF ITS ACCOUNTAN TS ETC. IT WAS NOTICED THAT INFACT SURRENDER WAS NOT WARRANTED HOWEVER THE SURRENDER H AVING BEEN MADE IN GOOD FAITH HAS NOT BEEN RESILED WITH. IN THESE PECULIAR FACTS AND CIRCUMSTANCES ONCE THE ASSESSEE ADMITTEDLY AS PER RECORD HAS MADE A SURRENDER ON TH E STATED GROUND OF UNEXPLAINED INVESTMENTS AND UNDISCLOSED PROFIT IN THESE CIRCUMS TANCES THE INSISTENCE OF THE TAX AUTHORITIES TO INSIST THAT SEPARATE ADDITION ON THE BASIS OF THE CONTENTS OF THE PEN DRIVE, IT WAS SUBMITTED, WAS MOST UNFAIR AND AMOUNTS TO DOUB LE ADDITION. THE CORRECTNESS OF THE SAID CONCLUSION OF THE AO HAVING BEEN CHALLENGED BE FORE THE CIT-A, IT WAS HIS SUBMISSION, THE SAID AUTHORITY ON APPRECIATION OF FACTS SHOULD HAVE UPSET THE AOS FINDING. IT WAS ALSO HIS SUBMISSION, THE SAID AUTHORITY IGNORING THE PEC ULIAR FACTS AND CIRCUMSTANCES OF THE PRESENT CASE WHERE ADMITTEDLY THE ENTIRE BUSINESS P REMISES AND THE RESIDENTIAL PREMISES OF THE DIRECTORS HAVE BEEN SEARCHED ALL THE JEWELLE RY AVAILABLE WITH THE ASSESSEE HAS BEEN FOUND. IT WAS HIS SUBMISSION THAT THERE IS NO SUSPI CION THAT THERE WAS ANY OTHER PLACE WHERE THE ASSESSEE WAS STORING ITS JEWELLERY INFACT EVEN THE FAMILY JEWELLERY OF THE DIRECTORS OF THE ASSESSEE WAS BEING MAINTAINED IN T HE STRONG ROOM AT THE BUSINESS PREMISES. THUS TO PRESUME THAT THERE WAS JEWELLERY OVER AND ABOVE THAT WITHOUT FINDING ANY SUCH JEWELLERY THE ADDITION WAS IN GROSS VIOLAT ION OF LAW. INVITING ATTENTION TO THE PAPER BOOK PAGE 23 TO 32 OF THE PAPER BOOK IT WAS SUBMITT ED THAT THE SAID PAGES CONTAIN A COPY OF THE REPORT OF THE DVO. INVITING ATTENTION TO THE ASSESSMENT ORDER IT WAS HIS SUBMISSION THAT THE ASSESSING OFFICER ADMITTEDLY WAS NOT AN EX PERT ON VALUING JEWELLERY AND DESPITE THIS, HE PRESUMED TO MAKE ESTIMATE AND CONVERT THE JEWELLERY OF DIFFERENT CARROTAGE I.E. 14K, 16K, 18K 22K ETC. AS PER HER/HIS WHIMS TO 24K JEWELLERY. IT WAS HIS SUBMISSION THAT AT THE PRIMARY LEVEL THE SAID ACTION OF THE ASSESSING OFFICER WAS CONTRARY TO ACCEPTED JUDICIAL PRINCIPLES. THE ASSESSING OFFICER NOT BEING AN EXPE RT IN JEWELLERY VALUATION SHOULD HAVE REFERRED THE ESTIMATION EVEN FOR THE PURPOSES OF CO NVERSION OF THE GOLD ORNAMENTS MENTIONED IN THE PEN DRIVE TO THE VALUATION OFFICER AS HAD BEEN DONE BY THE SEARCH WING/INVESTIGATION WING FOR THE STOCK FOUND AT THE BUSINESS PREMISES AND THE RESIDENTIAL PREMISES OF THE DIRECTORS. NO SUCH EXERCISE WAS DON E. THE ACTION WAS ASSAILED BEFORE THE CIT(A) BY ARGUING THAT THE AO COULD NOT ARBITRARILY ATTEMPT CONVERSION AS HE WAS NOT AN EXPERT WHO COMPLETELY IGNORED THE OBJECTIONS OF THE ASSESSEE. EVEN OTHERWISE, IT WAS HIS SUBMISSION THAT IF THE GROSS WEIGHTS OF THE JEWELLE RY MENTIONED IN THE STOCK MANAGEMENT SUMMARY I.E. THE PEN DRIVE IS CONSIDERED IT WOULD BE SEEN THAT THE SAME IS MORE OR LESS ITA 247/CHD/2017 & 187/CHD/2017 A.Y. 2013-14 PAGE 33 OF 45 EQUAL TO WHAT HAS BEEN MENTIONED IN THE LOOSE DOCUM ENTS FOUND FROM THE RESIDENCE OF THE DIRECTOR AND WHEN THE DETAILS OF THESE ARE CONSIDER ED IT WOULD BE SEEN THAT ONCE THE JEWELLERY BELONGING TO THE FAMILY MEMBERS OF THE DI RECTORS IS EXCLUDED SUPPORTED BY WEALTH TAX RETURNS OF THE FAMILY MEMBERS OF THE DIR ECTORS THEN THE RESULTANT DIFFERENCE FROM THE ACTUAL JEWELLERY FOUND AT THE TIME OF THE SEARCH IS VERY MINOR AND THOUGH MAINTAINING THAT INFACT ON FACTS SURRENDER WAS NOT WARRANTED AT ALL THE FACT ON RECORD REMAINS THAT FOR THE DIFFERENCES IF ANY A SURRENDER OF RS. 4 CRORE IS MORE THAN ADEQUATE TO COVER THE DISCREPANCIES IF ANY. INVITING ATTENTION TO THE COPY OF THE VALUATION REPORT OF THE JEWELLERY FOUND FROM THE RESIDENCE OF THE DIRECTORS ATTENTION WAS INVITED TO PAPER BOOK PAGE 35 TO 37. ATTENTION WAS ALSO INVITED TO DVO S REPORT QUA THE BUSINESS JEWELLERY FOUND FROM THE PREMISES OF THE ASSESSEE WHICH IS AV AILABLE AT PAGES 23 TO 31. THE CONTENTS OF THE STOCK SUMMARY FROM 01/04/2012 TO 31 ST OF OCTOBER 2012 IT WAS SUBMITTED IS AVAILABLE AT PAGES 38 AND 39. THE CONTENTS OF THE STOCK SUMMARY AS PER PEN DRIVE MENTIONED AT PAGES 8 AND 9 OF THE ASSESSMENT ORDER BY THE AO IT WAS SUBMITTED IS AT PAGE 40 AND 41 THE CHART SHOWING DIFFERENCE IN VALUATION OF STOCKS IT WAS SUBMITTED IS AVAILABLE AT PAGE 42 THE CONTENTS OF WHICH READ AS UNDER; PALACE JEWELLERS (P) LTD. B-XIX-546, GOVT. COLLEGE ROAD, CIVIL LINES, LUDHIAN A CHART SHOWING DIFFERENCE IN VALUATION OF STOCKS STOCK AS PER VALUATION REPORT 43581.6 60 GMS. STOCK AS PER STOCK SUMMARY AS ON 31.10.2012 35607.940 GMS. DIFFERENCE 7973.72 GMS 7.3.1 INVITING ATTENTION TO PAPER BOOK PAGE 43 TO 49 IT WAS SUBMITTED THAT IT CONTAINS A COPY OF THE FINAL STATEMENT RECORDED ON 2 ND NOVEMBER 2012 OF SH. RAKESH JAIN DIRECTOR, CARRYING US THROUGH THE SAID STATEMENT WHICH HAS BE EN REFERRED TO, IT WAS SUBMITTED WHILE ARGUING THE DEPARTMENTAL APPEAL ATTENTION WAS INVIT ED TO THE DEPARTMENT QUESTION NUMBER 11 WHICH COULD SHOW THAT AS PER THE DEPARTME NTS VERSION THAT THERE WAS EXCESS STOCK FOUND FROM THE BUSINESS PREMISES WHICH WHEN C ONVERTED INTO 24 K WEIGHED 7973.72 GMS. REFERRING TO QUESTION NO. 13 TO 17 IT WAS HIS SUBMISSION THAT VARIOUS DIARIES LOOSE PAPERS ETC WERE CONFRONTED AND ADDRESSED ULTIMATELY IN RESPONSE TO QUESTION NO. 28 THE ASSESSEE FINALLY OFFERED TO SURRENDER AN AMOUNT OF RS. 3.61 CRORE. THE SAID SURRENDER OF RS. 3.61 CRORE IN THE HANDS OF THE ASSESSEE WAS CEMENTE D BY A SPECIFIC LETTER DATED 02/11/2012 AVAILABLE AT PAGE 50 AND ULTIMATELY ON 11 TH JANUARY, 2013, IT WAS SUBMITTED THAT IT WAS REVISED TO RS. 4 CRORE. THE SAID SURRENDER IT WAS S UBMITTED HAS BEEN ABIDED BY THE ASSESSEE IN GOOD FAITH. SINCE THE ARGUMENTS HEAVILY RELYING UPON THE FINAL STATEMENT OF SH. RAKESH ITA 247/CHD/2017 & 187/CHD/2017 A.Y. 2013-14 PAGE 34 OF 45 JAIN RECORDED ON 02/11/2012 IS RELIED UPON, THE SAM E IS REPRODUCED HEREUNDER FOR READY REFERENCE : FINAL STATEMENT OF SH. RAKESH JAIN S/O SH.AMRIT LAI JAIN RESIDENT OF 11-12, RAM BAGH, ADJ. AGGAR NAGAR-A, LUDHIANA RECORDED ON OATH ON 02 /11/2012. OATH: I DO SOLEMNLY AFFIRM/SWEAR IN THE NAME OF GOD THAT I SHALL SPEAK THE TRUTH AND NOTHING BUT THE TRUTH. OATH ADMINISTERED OATH TAKEN SD/- (ADITYA SHUKLA) (RAKESH JAIN) -Q1. PLEASE IDENTIFY YOURSELF? : A1. I AM RAKESH JAIN .S/O SH.AMRIT LAI JAIN RESIDEN T OF 11-12, RAM BAGH, ADJ. AGGAR NAGAR-A, LUDHIANA. Q2. A CASH'OF RS. 21 LACS WAS FOUND AT YOUR RESIDEN CE DURING, THE COURSE OF SEARCH ON 01-11- 2012 AND YOUR FAMILY MEMBERS PRESENT THERE COULD NO T FURNISH ANY EXPLANATION OF THE SAME. PLEASE EXPLAIN THE SOURCE OF THIS CASH OF RS. 21 LA CS? A.2 OUT OF THE CASH FOUND AT HOME, RS. 15 LACS BELO NG TO M/S PALACE JEWELLERS (P) LIMITED WHICH HAD BEEN BROUGHT BY MY SON TO OUR HOME FOR GE TTING IT DEPOSITED INTO THE BANK ON THE NEXT DAY. THIS SUM HAS BEEN DULY REFLECTED IN THE CASH BOOK O F M/S PALACE JEWELLERS (P) LIMITED. I CANNOT OFFER ANY EXPLANATION REGARDING THE REMAINING CASH OF RS. 6 LACS. THIS WAS ON ACCOUNT OF UNACCOUNTED RECEIPTS IN M/S PALACE JEWELLERS (P) LI MITED. I HEREBY VOLUNTARILY DISCLOSE AN AMOUNT OF RS. 6 LACS AS UNACCOUNTED INCOME IN THE HANDS OF M/S PALACE JEWELLERS (P) LIMITED OVER AND ABOVE THE NORMAL BUSINESS INCOME OF THIS CONCERN FO R THE F.Y. 2012-13. Q.3 I AM SHOWING YOU ANNEXURE A-5 SEIZED FROM YOUR RESIDENCE I.E. 11-12, RAM BAGH ADJOINING AGGAR NAGAR -'A', LUDHIANA (PREMISE CODE R-1).' PLEASE EXPLAIN THE NATURE OF ENTRIES IN THIS ANNEXURE? A.3 THIS IS AN DATE WISE ACCOUNT OF ALL THE TRANSAC TIONS IN M/S PALACE JEWELLERS (P) LIMITED FROM THE DATE OF OPENING OF THE CONCERN I.E. 14-04-2012 TILL 29-10-2012. THIS CONTAINS BOTH THE ACCOUNTED AND UNACCOUNTED TRANSACTIONS OF THE CONCE RN. THE TOTAL TURNOVER OF THE CONCERN AS PER THESE PAPERS SHOULD BE AROUND RS. 13.TO RS. 14 CROR ES, WHILE THAT AS PER BOOKS MUST BE AROUND RS. 10 CRORES. I SHALL HAVE TO GO THROUGH THESE PAP ERS CAREFULLY TO DETERMINE THE SAME. Q.4 I AM SHOWING YOU THREE DIARIES MARKED AS ANNEXU RE A-16, A-18 & A-19 SEIZED FROM YOUR RESIDENCE I.E. 11-12, RAM BAGH, ADJOINING AGGAR NAG AR-A', LUDHIANA (PREMISE CODE R-1) I AM ALSO SHOWING YOU TWO DIARIES MARKED AS ANNEXURE A-4 AND A-14 SEIZED FROM THE BUSINESS PREMISES OF M/S PALACE JEWELLERS (P) LIMITED, COLLE GE ROAD, LUDHIANA (PREMISE CODE B-1). PLEASE EXPLAIN THE NATURE OF ENTRIES IN THESE ANNEX URES? A.4 SIR, AS FAR AS DIARIES A-16, A-18 & A-19 SEIZED FROM THE RESIDENCE ARE CONCERNED, THESE ARE ENTRIES PERTAINING TO CERTAIN DEALERS IN THE OPEN M ARKET FROM WHOM WE PURCHASE JEWELLERY. THE JEWELLERY IS THEN SOLD IN THE MARKET. IF SOME JEWEL LERY REMAINS UNSOLD, IT IS RETURNED BACK TO THOSE DEALERS. AS FAR AS DIARIES A AND A-14 SEIZED FROM BUSINESS PREMISE ARE CONCERNED, THESE PERTAIN TO THE UNAACCOUNTED PURCHASES OF DIAMONDS A LONG WITH SOME REPAIR ENTRIES. I ALSO WISH TO STATE THAT SOME OF THESE PERSONS LIKE NASEEM AS ON PAGE 3 IN A-18, DHARMINDER ON PAGE 6 IN A-16 ARE LABOURERS TO WHOM MATERIAL IS GIVEN FOR MA KING ORNAMENTS AND CASH PAYMENT IS MADE FOR THEIR LABOUR. I WOULD ALSO LIKE TO STATE T HAT THE DISCREPANCY IN STOCK IS ON ACCOUNT OF SOME OF THESE PURCHASES LYING IN THE STOCK. Q5. ARE THESE ENTRIES REFLECTED IN THE BOOKS OF ACC OUNTS? A5. NO SIR, THESE SALES ARE MADE OUTSIDE REGULAR BO OKS OF ACCOUNTS. IN ORDER TO COVER UP MY UNEXPLAINED INVESTMENT FOR PURCHASE OF THIS LEWELLE RY AND THE PROFIT EARNED THEREON, I HEREBY VOLUNTARILY DISCLOSE AN AMOUNT OF RS. 3 CRORES AS U NACCOUNTED INCOME IN ; M/S PALACE ITA 247/CHD/2017 & 187/CHD/2017 A.Y. 2013-14 PAGE 35 OF 45 JEWELLERS (P) LIMITED FOR THE F.Y.2012-13 OVER AND ABOVE THE NORMAL BUSINESS INCOME FOR THE YEAR. Q.6 I AM SHOWING YOU A DIARY MARKED -AS ANNEXURE A- 20 SEIZED FROM YOUR RESIDENCE R-1. PLEASE EXPLAIN THE NATURE OF ENTRY IN THIS ANNEXURE ? A6. SIR, THIS DIARY CONTAINS THE RECEIVABLES OP ACCOUNT OF SALES OF JEWELLERY. SOME OF THESE SALES ARE OUTSIDE THE REGULAR BOOKS OF ACCOUNTS AND IS OUT OF THE PURCHASES AS REFLECTED IN DIARIES MENTIONED ABOVE I.E. A-16, A-18 & A-19 SEIZED FROM R-1 AND A-4 & A-14 SEIZED FROM B-1.I HAVE VOLUNTARILY DISCLOSED AN AMOUNT OF RS.3.61 CRO RES AS UNACCOUNTED INCOME IN M/S PALACE JEWELLERS (P) LIMITED FOR THE F.Y.2012-13 PERTAININ G TO ALL THESE TRANSACTIONS OVER AND ABOVE THE NORMAL BUSINESS INCOME FOR THE YEAR. I WOULD ALSO L IKE TO STATE THAT THE DISCREPANCY IN STOCK IS ON ACCOUNT OF SOME OF THESE PURCHASES LYING IN THE STOCK. Q.7 I AM SHOWING PAGE NO.8 OF ANNEXURE A-3 SEIZED F ROM RESIDENCE R-1. PLEASE EXPLAIN THE NATURE OF ENTRIES ON THIS PAGE? A.7 THIS PAGE IS A TOTAL STACK SUMMARY, PREPARED BY US AT SOME POINT IN TIME. IF SOME STOCK F ITEMS ARE NOT ACCOUNTED FOR, THEY ARE COVERED BY TH E UNACCOUNTED PURCHASES MADE BY THE COMPANY AS MENTIONED ABOVE. Q.8 I AM SHOWING YOU DIARIES MARKED AS ANNEXURE A -11, A-12 & A-13 SEIZED FROM YOUR RESIDENCE R-1 AND DIARIES MARKED AS ANNEXURE A-2 & A-5 SEIZED FROM B-1. PLEASE EXPLAIN THE NATURE OF ENTRIES IN THESE DIARIES ? A 8 THESE DIARIES ARE IN THE- NATURE OF ROUGH CON TROL REGISTERS FOR OUR STRONG ROOM AND SHOP. THESE BASICALLY CONTAINS THE DETAILS OF JEWELLERY A ND SETS BEING COUNTED THAN BROUGHT OUT FROM THE STRONG ROOM, SOLD OR TAKEN BACK INTO THE STRONG ROOM ON DAILY BASIS. Q.9 I AM SHOWING YOU DIARY MARKED AS ANNEXURE A-14 SEIZED .FROM YOUR RESIDENCE R-1. PLEASE EXPLAIN THE NATURE OF ENTRIES IN THIS DIARY? A.9 THIS DIARY WAS PREPARED BY MY SON SH. GAURAV JA IN PRIOR TO THE STARTING OF OUR SHOP M/S PALACE JEWELLERS (P) LIMITED. THIS CONTAINS ESTIMAT ES OF THE VARIOUS QUALITIES OF JEWELLERY THAT WERE REQUIRED TO BE PURCHASED/BROUGHT AT THE TIME O F THE STARTING OF THE SHOWROOM. THIS WAS PREPARED IN CONSULTATION WITH CERTAIN EXPERTS FROM THE FIELD OF JEWELLERY SALE. Q.10 I AM SHOWING YOU DIARY MARKED AS ANNEXURE A-15 & A-16 SEIZED FROM YOUR BUSINESS PREMISE B-1. PLEASE EXPLAIN THE NATURE OF ENTRIES? A. 10 SIR, THESE ARE OUR CONTROL DIARIES WHICH CONT AIN DETAIL OF JEWELLERY PIECES GIVEN TO CERTAIN WORKERS FOR REPAIR. THE JEWELLERY IS GIVEN TO US BY THE CUSTOMERS FOR REPAIR WHICH WE GET DONE FROM OUR LABOUR. Q.11 PHYSICAL STOCK WAS TAKEN AT YOUR SHOP AND IT W AS FOUND THAT EXCESS STOCK FOUND WAS AS FOLLOWS:- THE TOTAL EXCESS STOCK FOUND AT THE BUSINESS PREMIS ES IS VALUED AT RS. 3,28,50,3137-. PLEASE EXPLAIN THE EXCESS STOCK? GOLD ORNAMENTS (CONVERTED INTO 24 CARAT PURE GOLD WEIGHT) 7973.72 GMS VALUED AT RS. 25037481/- DIAMONDS IN ORNAMENTS 935 CARATS VALUED AT RS. 7559 635/- COLOR STONE VALUED AT RS. 126692/- GOLD IMAGES VALUED AT RS. 115115/- LOOSE DIAMONDS 14.5 CARATS VALUED AT RS. 113901/- TOTAL VALUE RS. 3,28,50,313/- ITA 247/CHD/2017 & 187/CHD/2017 A.Y. 2013-14 PAGE 36 OF 45 A. 11 THE EXCESS STOCK. AS PER THE VALUER'S REPORT CONTAINS SOME JEWELLERY BELONGING TO THE FAMILY WHICH WAS PLACED IN THE STRONG ROOM OF THE SHOP, SI NCE WE DO NOT HAVE THE NEED OF ANY LOCKERS. THE JEWELLERY HERE IS THE OLD JEWELLERY WH ICH IS NOT WORN BY THE LADIES REGULARLY AND IS THEREFORE, KEPT IN THE STRONG ROOM FOR SECURITY PURPOSES. THIS JEWELLERY WAS IDENTIFIED BY MY SON GOURAV ON THE DATE OF THE SEARCH.THE DIFFERENCE IN STOCK FOUND AT THE SHOP IS ON ACCOUNT OF THE UNACCOUNTED PURCHASES AS MENTIONED ABOVE BY M E, LYING UNSOLD IN THE STOCK. I HAVE VOLUNTARY DISCLOSED AN AMOUNT OF RS. 3.61 CRORES IN M/S PALACE JEWELLERS (P) LIMITED ON ACCOUNT OF SUCH UNEXPLAINED INVESTMENT IN JEWELLERY PURCHAS ED AND THE DISCREPANCY IN STOCK, IF ANY ALSO STANDS COVERED WITHIN THE SAID DISCLOSURE., ' Q12. AS PER THE STATEMENT OF SH.GOURAV JAIN, THIS J EWELLERY IS 1800 CTS OF GOLD. IS THIS THE- JEWELLERY THAT YOU CLAIM TO BE THE FAMILY JEWELLERY ? A12. YES SIR, IT'S BREAKUP IS AROUND 1300GM OF PUR E GOLD AND 260 CTS DIAMONDS. Q13. I AM SHOWING YOU DIARIES MARKED A-10, A-21 SEI ZED FROM YOUR RESIDENCE AND A-11 SEIZED FROM THE BUSINESS PREMISES (B-1). PLEASE EXP LAIN THE ENTRIES IN THIS DIARY. A13. THESE ARE DIARIES PERTAINING TO M/S. PALACE JE WELLERS(OLD CONCERN).THESE ARE THE AMOUNTS WHICH HAD TO BE RECEIVED FROM CUSTOMERS BUT THEY ARE NOT EXPECTED TO PAY THEM. THE SHOP IS ALREADY CLOSED AND THE CUSTOMERS WHO CO ME TO US DO NOT REPAY THE OLD BALANCES. A-11 , B-1 SHOWS THE DETAILS OF RECEIVABL ES AS DIVIDED BY ME AND SH.PARDEEP MITTAL WHEN WE PARTED WAYS AS PARTNERS. I ALSO WISH TO STATE THAT MOST THESE ENTRIES ARE ALSO MAINTAINED SEPARATELY BY SH. PARDEEP MITTAL WHICH M IGHT HAVE BEEN RECOVERED FROM HIS HOME/OFFICE DURING SEARCH AS WELL. Q14. I AM SHOWING YOU LOOSE PAPERS MARKED AS P. 98- 120, ANNEXURE A-9, SEIZED FROM YOUR RESIDENCE. PLEASE EXPLAIN THESE ENTRIES. A14. PAGES 117,118 AND 120 IS THE LIST OF THE SAME RECEIVABLES AS I TOLD YOU IN MY PREVIOUS REPLY. THE ' RECEIVABLES AS PER THESE PAGE S ARE RS.23,52,785 BY SH.PARDEEP MITTAL, RS.18,68,129 BY ME AND RS.66,06, 9097- IN THE COMMON ACCOUNT. BUT AS STATED BY ME PREVIOUSLY, IT IS NOT POSSIBLE FOR US NOW TO RECOVER THESE ADVANCES. SOME OF THE PAGES ALSO REFLECT THE DAILY TRANSACTIO NS IN M/S. PALACE JEWELLERS (OLD). Q15. I AM SHOWING YOU DIARY MARKED A-17,SEIZED FROM YOUR RESIDENCE. PLEASE EXPLAIN THE ENTRIES IN THIS DIARY. A15. THIS DIARY HAS DETAILS OF SOME WORKERS ACCOUNT S TO WHOM MATERIAL WAS ISSUED IN THE OLD PALACE JEWELLERS. SINCE THE ENTRIES HAVE BEEN CUT, ALL ACCOUNTS HAVE BEEN SQUARED OFF AND NOTHING IS PENDING. Q16. I AM SHOWING YOU LOOSE PAPERS MARKED AS P. 15- 16, ANNEXURE A-1, IMPOUNDED FROM THE SHOP OF M/S. PALACE JEWELLERS(OLD) . PLEASE EXP LAIN THESE ENTRIES. A16. THESE ARE AGAIN THE LIST OF RECEIVABLES FOR TH E OLD CONCERN. Q17 ARE THESE RECEIVABLES AS MENTIONED FOR M/S. PAL ACE JEWELLERS REFLECTED IN THE REGULAR BOOKS OF ACCOUNTS. A17. I SHALL HAVE TO VERIFY FROM THE BOOKS AND I SHALL TELL LATER. Q18. I AM SHOWING YOU LOOSE DOCUMENTS SEIZED AS ANN EXURE A-1, PAGE 1, 3 & 4 SEIZED FROM THE HOUSE OF YOUR BROTHER SH. AJAY JAIN. IT IS SEEN THAT PAGE NO. 1 AND PAGE NO. 4 HAVE CERTAIN ENTRIES WITH REGARD TO PLOT NOS. AND FIGURE S WRITTEN IN FRONT OF THEM. PLEASE EXPLAIN THESE ENTRIES? A18. THESE PAPERS PERTAIN TO THE JAGRAON PROJECT OF M/S PALACE INFRATECH (P) LIMITED. THE FIGURES WRITTEN IN FRONT OF THE PLOTS MEANS THE FOLLOWING:- THE FIRST COLUMN HAS THE PLOT NUMBER, THE SECOND CO LUMN IS THE TENTATIVE PLOT SIZE AND THE TENTATIVE SALE RATE THAT THE COMPANY PLANNED TO CHA RGE FROM THE CUSTOMERS FOR SALE. THE THIRD COLUMN, WHEREVER FIGURE IS WRITTEN, IS THE PRODUCT OF THE PLOT SIZE AND THE TENTATIVE SALE RATE THE FOURTH COLUMN CONTAINS DETAILS OF THE ADVANCES RECEIVED BY THE COMPANY FROM SOME DEALERS/BROKERS WHO SOUGHT TO BOOK THE PLOTS F OR CERTAIN CUSTOMERS. ITA 247/CHD/2017 & 187/CHD/2017 A.Y. 2013-14 PAGE 37 OF 45 Q19. ARE THESE ADVANCES BOOKED AS EITHER INCOME OR ADVANCE RECEIVED IN THE BOOKS OF ACCOUNTS OF THE COMPANY? A19. NO, THESE ADVANCES HAVE NOT BEEN ACCOUNTED FOR IN THE REGULAR BOOKS OF-ACCOUNTS. THE ADVANCES ON PAGE NO. 1 & PAGE NO. 4 ARE OVERLAPPING IN THE CASE OF CERTAIN PLOTS. PAGE NO. 4 WAS WRITTEN EARLIER AND PAGE NO. 1 HAS BEEN WRITT EN LATER. IN THE CASE OF AMOUNTS FOR THE SAME PLOT NUMBER, THE FIGURE ON PAGE NO. 1 IS THE F INAL FIGURE FOR-THE AMOUNT RECEIVED AGAINST THE BOOKING OF THE SAID PLOT. THE TOTAL UNA CCOUNTED ADVANCES RECEIVED IN M/S PALACE INFRATECH (P) LIMITED IS AROUND RS. 1.90 CRORES. I THEREFORE, VOLUNTARILY DISCLOSE UNACCOUNTED INCOME OF RS. 1.90 ERORES IN THE HANDS OF M/S PALACE INFRATECH (P) LIMITED FOR THE F.Y. 2012-13 OVER AND ABOVE THE NORMAL BUSINESS INCOME OF THE SAID CONCERN FOR THE SAID YEAR. Q20. PLEASE GIVE THE DETAILED ADDRESSES OF THE PEOP LE FROM WHOM THESE ADVANCES HAVE BEEN RECEIVED? A20. THESE ADVANCES WERE-RECEIVED FROM MARKET COMMI SSION AGENTS/BROKERS WHO WANTED TO BOOK THE PLOTS FOR FINAL CUSTOMERS . WE HAVE NOT MADE ANY BIANAS FOR THE SALE OF THESE PLOTS AND WE JUST GAVE A RECEIPT REGARDING CASH REC EIVED TO THESE BROKERS, ASKING THEM TO PRODUCE THE SAME AT THE TIME OF THE BIANA WHEN THEY BRING THE ACTUAL CUSTOMER WITH THEM. WE THEREFORE, HAVE NO CONTACT DETAILS OF THESE BROK ERS, AS IT NOW THE BROKER WHO HAS TO COME TO THE COMPANY TO GET THE BIANA DONE. Q21. I AM SHOWING YOU PAGE NO. 62 OF ANNEXURE A-3 S EIZED FROM YOUR RESIDENCE (R-1). PLEASE EXPLAIN THE NATURE OF ENTRIES ON THIS PAPER. A21. THE ENTRIES ON THE TOP OF THE PAGE ARE DEPOSIT S IN INDIAN OVERSEAS BANK, WHICH ARE REFLECTED IN THE BOOKS OF ACCOUNTS. THE ENTRIES IN THE LOWER HALF ARE THE SAME ADVANCES RECEIVED AGAINST PLOTS TOTALING AROUND 1.90 CRORES AS MENTIONED PLOT WISE ABOVE. THESE ARE RECEIVED WITH THE NAME OF THE COMMISSION AGENT/BROK ER WRITTEN ALONGWITH, WHO MADE LUMPSUM ADVANCE BOOKING FOR SOME PLOTS. THEREFORE, HERE A TOTAL OF THE ADVANCE RECEIVED COMMISSION AGENT WISE WAS MADE BY US FOR REFERENCE PURPOSES. Q22. PLEASE PROVIDE ADDRESS OF THESE AGENTS. A22. SIR, AS TOLD EARLIER, WE DO NOT TAKE THEIR ADDRESSES. WE JUST GIVE THEM RECEIPTS OF CASH RECEIVED. Q23. I AM SHOWING YOU PAGE NO. 3 OF THE SAME ANNEXU RE A-1 SEIZED FROM THE RESIDENCE OF YOUR BROTHER. PLEASE EXPLAIN THE NATURE OF ENTRIES ON THIS PAPER? A23. THIS PAPER CONTAINS THE DETAIL OF EXPENSES INC URRED ON THE JAGRAON PROJECT, SOME OF WHICH HAVE NOT BEEN ACCOUNTED FOR IN THE REGULAR BO OKS OF ACCOUNTS. THESE EXPENSES HAVE BEEN INCURRED FROM THE ADVANCES RECEIVED AS ME NTIONED ABOVE. THESE EXPENSES STANDS COVERED WITHIN THE DISCLOSURE OF RS. 1.90 CR ORES AS MADE BY ME ABOVE. Q24. 1 AM SHOWING YOU THIS PAPER AGAIN. THE FIRST E IGHT ENTRIES TOTALING RS. 5,30,0007- HAVE BEEN INCURRED IN THE F.Y.. 2011 -12. PLEASE EX PLAIN? A24 I SHALL HAVE TO VERIFY WHETHER THESE EXPENSES H AVE BEEN BOOKED IN THE BOOKS OF ACCOUNTS OR NOT OF THE CONCERN M/S PALACE INFRATECH (P) LIMITED FOR THE F.Y. 2011-12. I CANNOT ANSWER IT RIGHT NOW. Q25. I AM SHOWING YOU PAGE NOS. 1-129 OF ANNEXURE A -7 SEIZED FROM YOUR RESIDENCE (R-1). THESE ARE CERTAIN RECEIPTS. PLEASE EXPLAIN THE NATU RE OF TRANSACTIONS ON THESE PAPERS AND WHETHER THEY ARE ACCOUNTED FOR IN THE BOOKS OF ACCO UNTS. A25.THESE ARE SLIPS OF EXPENSES INCURRED ON SITES O F M/S. PALACE INFRATECH PVT.LTD. SOME OF THESE EXPENSES HAVE BEEN BOOKED IN THE BOOKS OF ACC OUNTS. THE UNACCOUNTED EXPENSES HAVE BEEN INCURRED FROM THE UNACCOUNTED RECEIPTS MENTION ED ABOVE AND STAND COVERED WITHIN THE DISCLOSURE OF RS. 1.90 CRORES AS MADE BY ME. Q26. I AM ALSO SHOWING YOU A NOTE PAD MARKED AS ANN EXURE 2 IMPOUNDED FROM THE SITE OFFICE OF M/S PALACE INFRATECH (P) LIMITED, RAGHUNATH ENCL AVE, LUDHIANA. PLEASE EXPLAIN THE ENTRIES IN THIS PAD? ITA 247/CHD/2017 & 187/CHD/2017 A.Y. 2013-14 PAGE 38 OF 45 A26. THIS NOTE PAD HAVE BEEN PREPARED BY SOME EMPLO YEE AT THAT SITE AND CONTAINS THE DETAILS OF DAILY PETTY CASH EXPENSES INCURRED AT TH E SITE. I SHALL HAVE TO VERIFY WHETHER ALL THESE EXPENSES HAVE BEEN BOOKED IN THE BOOKS OF ACCOUNTS OF THE COMPANY. I WISH TO SUBMIT THAT IF THERE ARE CERTAIN UNACCOUNTED EXPENS ES, THEY HAVE BEEN MADE OUT OF THE UNACCOUNTED ADVANCES RECEIVED AT THE JAGRAON SITE A ND STAND COVERED WITHIN THE DISCLOSURE OF RS 1.90 CRORES AS MADE BY ME. Q27. NOW I AM SHOWING YOU PAGE NO. 2 OF THE SAME AN NEXURE A-1 SEIZED FROM THE RESIDENCE OF YO.UR BROTHER. PLEASE EXPLAIN THE NATURE OF ENTRIES ON THIS PAPER? A27. THIS PAPER HAS BEEN WRITTEN AND LEFT AT THE OF FICE OF M/S PALACE INFRATRECH (P) LIMITED BY SOME AGENT. THIS PAPER IS ACTUALLY A PAPER BEARI NG ESTIMATES OF PRICES OF CERTAIN LAND. I HAVE ASKED MY SON SORAV WHO HAS TOLD ME THAT THIS A GENT WAS TRYING TO TELL HIM THE RATES OF CERTAIN PLOTS IN LUDHIANA FOR WHICH THESE FIGURES W ERE WRITTEN. THESE ARE ONLY ESTIMATES AND NO ACTUAL TRANSACTIONS HAVE TAKEN PLACE. Q28. DO-YOU WISH TO STATE ANYTHING ELSE. AS PER THE PROVISIONS OF SECTION 132(4) OF THE INCOME TAX ACT. A28. I WISH TO SAY THAT ON ACCOUNT OF THE VARIOUS D ISCREPANCIES AS CONFRONTED TO ME, I HEREBY VOLUNTARILY DISCLOSE UNACCOUNTED INCOME TOTALING RS .8 CRORES AS ADDITIONAL INCOME OVER AND ABOVE THE NORMAL BUSINESS INCOME FOR THE FINANC IAL YEAR 2012-13 RELEVANT TO THE A. Y.2013-14 AS PER THE FOLLOWING DETAILS: I WISH TO CLARIFY THAT THE ENTITY WISE AND HEAD WIS E BREAKUP OF THE DISCLOSURE IS TENTATIVE AND SUBJECT TO REVISION. THIS IS SO BECAUSE THOUGH MOST OF THE SEIZED DOCUMENTS HAVE BEEN CONFRONTED TO ME, IT HAS NOT BEEN POSSIBLE FOR ME T O COMPREHEND AND CO RELATE ALL OF THEM. THE ABOVE DISCLOSURE IS BEING MADE VOLUNTARILY AS PER T HE PROVISIONS OF SECTION 132(4) OF THE INCOME TAX ACT, 1961 AND SUBJECT TO NO PENALTY AND PROSECU TION. A DISCLOSURE LETTER IS BEING SUBMITTED ALONGWITH AN D I .UNDERTAKE TO PAY THE TAXES DUE ON THIS UNDISCLOSED INCOME'. THE ABOVE STATEMENT HAS BEEN GIVEN TRUE TO THE BEST OF MY KNOWLEDGE AND WITHOUT ANY THREAT, COERCION OR FEAR. 7.3.2 IN THE SAID BACKGROUND, THE LD. AR INVITIN G ATTENTION TO CHRONOLOGICAL CHART OF SEQUENCE OF EVENTS, PRE AND POST SEARCH U/S 132 AVA ILABLE AT PAPER BOOK PAGE 2 SUBMITTED THAT SEIZURE OF LOOSE DOCUMENTS AND ONE P EN-DRIVE WAS MADE AT THE TIME OF THE SEARCH. INVITING ATTENTION TO PAPER BOOK PAGE 1, IT WAS SUBMITTED THAT SHRI RAKESH KUMAR JAIN WHO MADE THE FINAL STATEMENT ON 02.11.20 12 WAS THE FATHER OF SAURABH JAIN AND GAURAV JAIN AND THE FATHER AND THE TWO SONS WER E ALSO DIRECTORS IN THE SAID COMPANY. THUS, THE FATHER DEFINITELY KNEW IN WHAT B ACKGROUND THE SURRENDER WAS MADE. THE COPY OF THE VALUATION REPORT FOUND AT THE BUSINESS PREMISES AS ON 31.10.2012 IS AVAILABLE AT PAGES 23 TO 32 OF THE PA PER BOOK INDEXED AS SR.NO. 8. COPY PALACE JEWELLERS PVT. LTD. 3,61,00,000/- (INCLUDIN G RS. 6,00,000 OUT OF SEIZED CASH) PALACE INFRATECH PVT. LTD. 1,90,00,000/- MISCELLANEOUS INCLUDING RENOVATION OF RESIDENCE 10, 00,000/- OTHERS 39,00,000/- AJAR AMAR STEELS 30,00,000/- SORAV JAIN 85,00,000/- AJAY JAIN 85,00,000/- TOTAL 8,00,00,000/- ITA 247/CHD/2017 & 187/CHD/2017 A.Y. 2013-14 PAGE 39 OF 45 OF THE VALUATION REPORT OF THE JEWELLERY FOUND FROM THE RESIDENCE OF THE DIRECTORS WHO WERE ALL LIVING TOGETHER IN THE SAME HOUSE, IT WAS SUBMITTED IS AT PAGES 35 TO 37. THE COPY OF THE STOCK SUMMARY FROM 01.04.2012 TO 31.10. 2012 IS AVAILABLE AT PAGES 38 AND 39. STOCK MANAGEMENT SUMMARY I.E. THE EXTRACT FR OM THE PEN-DRIVE, THE PRINT OUT OF WHICH HAS BEEN EXTRACTED AT PAGE 8-9 OF THE ASSESSM ENT ORDER IS AVAILABLE AT PAGES 40- 41 OF THE PAPER BOOK. WHEN THESE ARE READ ALONGWIT H THE CHART AS PER THE VALUATION REPORT OF THE VALUER VIS--VIS THE STOCKS AS RECORD ED ON 31.10.2012, IT WAS SUBMITTED THAT THE POSITION HAS BEEN ADDRESSED AT PAPER BOOK PAGE 42 AND THE POSITION IS ALSO EMANATING FROM THE ASSESSMENT ORDER AND WELL ACCEPT ED BY THE AO THAT ACTUAL PHYSICAL STOCK FOUND WAS IN EXCESS TO THE EXTENT OF 7973.72 GMS. ( WHEN CONVERTED TO 24K) VIS-- VIS THE STOCK SUMMARY AS ON 31.10.2012. 7.3.3 THIS AMOUNT OF 7973.72 GRAMS, IT WAS SUBMIT TED, HAS ALSO BEEN CONSIDERED BY THE AO AND IS AN ADMITTED FACT ON WHICH THERE IS NO CONFLICT AMONGST THE PARTIES. TO RECAPITULATE, IT WAS SUBMITTED THAT SOME OF IT CONS ISTS OF JEWELLERY OWNED BY THE DIRECTORS FAMILY MEMBERS AND THE OWNERSHIP IS SUPP ORTED BY WEALTH TAX RETURNS FILED BY THE FAMILY MEMBERS WHICH HAVE BEEN COMPILED AND TOTALED AND ARE AVAILABLE AT PAGES 50 TO 52 AND THESE HAVE BEEN MADE AVAILABLE T O THE TAX AUTHORITIES CONSISTENTLY AND HAVE NOT BEEN FAULTED WITH. THE SURRENDER MADE BY THE DIRECTOR OF RS. 3.61 CR FINALLY REVISED TO RS. 4 CRORES ON 11.01.2013, COPI ES ARE AVAILABLE AT PAGES 50 AND 51 AND WHEN THESE ARE READ ALONGWITH THE FINAL STATEME NT RECORDED OF SHRI RAKESH JAIN, THE DIRECTOR ON 02.11.2012 AVAILABLE AT PAGES 43-49 , IT WAS SUBMITTED, THAT WHEN THESE ARE READ ALONGWITH THE RECONCILIATION CHART VIS--V IS THE AMOUNTS SURRENDERED AT PAPER BOOK PAGE 92 WHICH IS COMPUTATION CHART OF ASSESSAB LE INCOME READ ALONGWITH THE REPLY DATED 28.02.2015 ADDRESSED TO THE AO DURING T HE ASSESSMENT PROCEEDINGS QUA THE QUESTIONNAIRE DATED 25.02.2015 (AVAILABLE AT PA GES 98 TO 105) IT WAS HIS SUBMISSION THAT THE RECONCILIATION STATEMENT OF STOCK AS PER STOCK MANAGEMENT SUMMARY VIS-- VIS STOCK AS VALUED BY THE APPROVED VALUER ON THE D ATE OF THE SEARCH AS PER THE VALUATION REPORT, WOULD SHOW THAT WHEN THIS IS READ ALONGWITH PAGE 9 OF THE ASSESSMENT ORDER AND PAGE 39 OF THE PAPER BOOK, IT WOULD BE EVIDENT THAT INFACT NO ADDITION ON FACTS WAS WARRANTED AND EVEN IF THERE A RE MINOR DIFFERENCES, THEN THE SAME CAN BE SAID TO BE WELL ADDRESSED BY THE SURRENDER M ADE. 7.4 THE LD. CIT-DR HEAVILY RELIED UPON THE CONSIS TENT FINDINGS OF THE TAX AUTHORITIES SUBMITTED THAT IN THE FACTS OF THE PRESENT CASE, TH E PRESENT ADDITION DESERVES TO BE CONFIRMED. IT WAS HIS SUBMISSION THAT IT IS AN ACC EPTED POSITION THAT THE ASSESSEE WAS INDULGING IN RECORDED AND UNRECORDED SALES. IT WAS ALSO HIS SUBMISSION THAT THE ITA 247/CHD/2017 & 187/CHD/2017 A.Y. 2013-14 PAGE 40 OF 45 SURRENDER HAS BEEN MADE VIS--VIS SPECIFIC QUESTION S PUT TO THE ASSESSEE AND AT NO POINT OF TIME, THE ASSESSEE WAS REQUIRED TO ADDRESS THE CONTENTS OF THE PEN-DRIVE FOUND FROM THE DIRECTOR OF THE ASSESSEE COMPANY DESCRIBED AS STOCK MANAGEMENT SUMMARY. IT WAS HIS SUBMISSION THAT ADMITTEDLY TH E ASSESSEE HAS ALSO ACCEPTED THAT BY WAY OF ENTRIES RECORDED IN THIS PEN-DRIVE, ASSES SEE WAS ATTEMPTING TO KEEP A LEVEL OF CONTROL AND MANAGEMENT OF HIS BUSINESS WHICH CONSIS TED OF DISCLOSED AND UNDISCLOSED INCOME. THUS, IN THESE CIRCUMSTANCES, THE ARGUMENT THAT ADDITION ON THE BASIS OF THIS PEN-DRIVE WAS NOT WARRANTED, HAS TO BE OUTRIGHTLY R EJECTED. IT WAS ALSO HIS SUBMISSION THAT THE ATTEMPTS OF THE ASSESSEE TO ARGUE THAT RE- CONCILIATION ADDRESSES THIS ASPECT, CANNOT BE ACCEPTED. THE SURRENDER IS MADE ON THE B ASIS OF WHAT WAS CONFRONTED TO THE ASSESSEE I.E. LOOSE PAPERS ALSO RECORDING UNDECLARE D TRANSACTIONS. 7.4.1 INVITING ATTENTION TO THE RECORD, IT WAS H IS SUBMISSION THAT COPY OF THE PEN- DRIVE WAS GIVEN TO THE ASSESSEE ON 10.02.2015 WHERE AS THE SEARCH TOOK PLACE ON 31.10.2012 AND THE LAST STATEMENT RECORDED ON WHICH HEAVY RELIANCE HAS BEEN PLACED BY THE ASSESSEE WAS ON 02.11.2012. IT WAS SUBMITTED THAT THE CONTENTS OF THE PEN DRIVE THEREAFTER BY SHOW CAUSE NOTICE WERE CONFRONTED ON 23.03.2015. ACCORDINGLY, TO ARGUE THAT THE SURRENDER MADE ON 11.01.2013 ADDRESSES THE CONTENTS OF THE PEN-DRIVE BY WHICH THE ASSESSEE REVISED THE SURRENDER FROM RS. 3 .61 CR TO RS. 4 CR, CANNOT BE ACCEPTED. IN SUPPORT OF THE ADDITIONS MADE, IT WAS HIS FURTHER SUBMISSION THAT ALL ALONG, THE ASSESSEE HAS BEEN SAYING THAT VIS--VIS THE PHY SICAL STOCK FOUND WHEN COMPARED TO THE BOOKS OF ACCOUNT THERE WAS A SHORTAGE NOT ONLY ON THE SO CALLED ARGUMENT OF JEWELLERY OF FAMILY MEMBERS LYING IN THE STRONG ROO M WHICH WOULD FURTHER GO DOWN TO DEPLETE THE AVAILABLE STOCK BUT ALSO THAT IT WAS LY ING WITH THE LABOUR. IT WAS HIS SUBMISSION THAT PRESUMABLY THE STOCK MANAGEMENT SUM MARY WAS QUA THE JEWELLERY WHICH WAS WITH THE LABOUR. IT WAS ALSO HIS SUBMISS ION THAT FOR THE LABOUR TO MAKE NEW JEWELLERY, ASSESSEE'S RECORD SHOULD HAVE SHOWN BULL ION OF 24 CARAT WHEREAS IN THE FACTS OF THE PRESENT CASE, THERE IS ALMOST NO BULLION OF 24 CARAT. ACCORDINGLY IT WAS HIS SUBMISSION THAT THE ADDITION WAS WARRANTED. QUA TH E ARGUMENT THAT THE VALUATION HAS BEEN ATTEMPTED BY THE AO WHO WAS NOT AN EXPERT, HE PLACED RELIANCE UPON THE ORDERS OF THE AUTHORITIES BELOW. 7.5 THE LD. AR IN REPLY SUBMITTED THAT HE WOULD N OT REITERATE THE SUBMISSIONS ONCE AGAIN. THE FACT REMAINS THAT PHYSICAL STOCK OF THE JEWELLERY WAS FOUND LESS THAN THE RECORDED JEWELLERY IN THE BOOKS OF ACCOUNT OF THE A SSESSEE. THE REASON FOR NOT ADDRESSING THE CORRECT AMOUNTS QUA THE JEWELLERY SO LD, IT WAS SUBMITTED, HAS BEEN ADDRESSED AS BEING LARGELY DICTATED BY THE NEEDS OF ITS CUSTOMERS. THE STOCK AVAILABLE ITA 247/CHD/2017 & 187/CHD/2017 A.Y. 2013-14 PAGE 41 OF 45 WITH THE ASSESSEE CONSISTED OF JEWELLERY ON CREDIT TAKEN FROM JEWELLERS OUT STATION OR IN-STATION AND THE FINAL STATEMENT OF SHRI RAKESH J AIN, THE DIRECTOR KNOWING HIS BUSINESS IN AND OUT ON 02.11.2012 IN THE VARIOUS QUESTIONS A SKED TO HIM HAS STATED THAT THE SURRENDER IS MADE ON ACCOUNT OF LOOSE DOCUMENTS ETC . AND STOCK AS WELL AS PROFIT FROM SALE OF JEWELLERY NOT RECORDED. THUS SINCE THE LOOS E PAPERS CONFRONTED TO THE ASSESSEE WHICH WERE BEING MAINTAINED TO ENSURE A LEVEL OF CO NTROL ON THE BUSINESS WERE ALSO DIGITALLY RECORDED BY WAY OF SUCH AN ATTEMPT, SURRE NDER HAVING BEEN MADE DID NOT DESERVE A SEPARATE ADDITION AS IT WOULD BE DOUBLE A DDITION FOR WANT OF A BETTER WORD. THUS, ADDITION ON THE BASIS OF THE VERY SAME FACTS CANNOT BE MADE. ADDRESSING THE ARGUMENTS OF THE LD. CIT DR THAT THERE WAS NO BULL ION FOUND, IT WAS HIS SUBMISSION THAT THE ASSESSEE AS PER THE DVOS REPORT QUA THE STOCK FOUND IN THE COURSE OF THE SEARCH AT THE BUSINESS PREMISES RECORDS THAT THERE WERE COINS AS WELL AS IMAGES WHICH WERE IN 24 K AND THE ASSESSEE'S WORK WITH THE LABOUR LARGEL Y CONSISTED OF REPAIRS ETC. AS THIS WAS THE FIRST YEAR OF ASSESSEE'S BUSINESS AND THE RECOR D WOULD DEMONSTRATE THAT THE ASSESSEE WAS NOT IN DESIGNING JEWELLERY AND WAS TAK ING JEWELLERY ON CREDIT FROM DIFFERENT JEWELLERS. THE COINS, GOD IMAGES ETC. IT WAS SUBMITTED, BEING IN 24K ARE RECORDED AS BULLION AT TIMES AND EVEN IF THE DEPART MENT WANTS TO INSIST THAT THERE WAS JEWELLERY WITH THE LABOUR, THEN THE DISCREPANCIES, IF ANY, WITHOUT CONCEDING CAN BE SAID TO BE COVERED BY THE SURRENDER. THE SURRENDER MADE IN GOOD FAITH ON THE BASIS OF THE ENTIRE FACTUAL POSITION WOULD MORE THAN SUFFICIENTL Y ADDRESS THE SHORT-COMINGS IN THE ASSESSEE'S ACCOUNTS. ACCORDINGLY, IT WAS HIS PRAYE R THAT NO FURTHER ADDITION ON FACTS WAS WARRANTED. 7.6 WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSE D THE MATERIAL AVAILABLE ON RECORD. THE ADDITION UNDER CHALLENGE BY THE ASSESSEE IN THE PRESENT APPEAL HAS BEEN MADE BY THE ASSESSING OFFICER ON THE BASIS OF THE CONTENTS OF T HE PEN DRIVE FOUND IN THE COURSE OF THE SEARCH FROM THE RESIDENCE OF THE DIRECTOR DESCRIBED AS R 1. THE CONTENT OF THIS PEN DRIVE HAVE BEEN EXTRACTED AND ARE DESCRIBED AS ANNEXURE A 22 AND FURTHER DESCRIBED AS STOCK MANAGEMENT SYSTEMS SUMMARY. ADMITTEDLY THE CONTENT S OF THE PEN DRIVE WERE CONFRONTED BY THE ASSESSING OFFICER IN THE COURSE O F THE ASSESSMENT PROCEEDINGS WHEREIN THE ASSESSING OFFICER REQUIRED THE ASSESSEE TO EXPL AIN WHY ON THE BASIS OF THE CONTENTS THEREOF, SEPARATE ADDITION ON THE BASIS OF THE SAME SHOULD NOT BE MADE IN THE HANDS OF THE ASSESSEE. THE ASSESSING OFFICER TOOK NOTE OF THE FA CT THAT AS PER THE BOOKS OF ACCOUNTS OF THE ASSESSEE THE STOCK WAS MUCH LESS IN WEIGHT WHEN COMPARED WITH WHAT HAS BEEN RECORDED IN THE STOCK MANAGEMENT SUMMARY. THE ASSES SEE AS PER REPLIES ON RECORD IS FOUND TO HAVE STATED THAT NO ADDITIONS ON THE BASIS OF THE PEN DRIVE ON FACTS WAS ITA 247/CHD/2017 & 187/CHD/2017 A.Y. 2013-14 PAGE 42 OF 45 WARRANTED. THE RELEVANT EXTRACT FROM THE REPLY OF T HE ASSESSEE DATED 27/03/2015 EXTRACTED IN THE ASSESSMENT ORDER SHOWS THAT THE ASSESSEE APA RT FROM OTHER SUBMISSIONS PLEADED THAT A SEARCH OPERATION HAS BEEN CARRIED OUT AT THE BU SINESS PREMISES OF THE ASSESSEE THAT COMPANY I.E. M/S PALACE JEWELLERS (P) LTD ON 31/10/ 2012. STOCK SUMMARY HAS BEEN DRAWN AS PER PHYSICAL AS WELL AS PER BOOKS OF ACCOUNTS. W HATEVER STOCKS WERE FOUND HAVE DULY BEEN EXPLAINED DURING THE COURSE OF ASSESSMENT PROC EEDINGS. . IT HAS BEEN ARGUED BEFORE THE AO THAT ADMITTEDLY PHYSICAL STOCK FOUND AT THE TIME OF THE SEARCH WAS WEIGHING 43,581.66 GRAMS AND WHEN CONVERTED TO 24K AND THUS IT WAS MUCH MORE THAN WHAT IS MENTIONED IN THE STOCK MANAGEMENT SUMMERY SYSTEM. T HE ASSESSEE HAS REFERRED BEFORE THE AO TO THE DVOS REPORT AT PAPER BOOK PAGE 32 AN D ARGUED FOR DELETION OF THE ADDITION. WE NOTE THAT IT HAD ALSO BEEN ARGUED THAT SOME OF T HE STOCK WAS ALSO LYING WITH THE LABOUR WHO TOOK ORNAMENTS FOR REPAIRS ETC. OR HAD BEEN SEN T TO THEM FOR MINOR ALTERATIONS ETC. APART FROM THIS DIAMONDS WERE ALSO FOUND WHICH HAVE ALSO BEEN WEIGHED AND VALUED BY THE DVO . THE DIFFERENCE HAS BEEN EXPLAINED TO THE ASSESSING OFFICER IN RESPONSE TO SHOW CAUSE NOTICE DATED 23/03/2015 THAT EVEN THOUGH THE ASSESSEE IS NOT DENYING THAT THERE WERE SALES WHICH WERE NOT RECORDED, HOWEVER, THE SU RRENDER MADE AND HONOURED, IT HAS BEEN ARGUED, FULLY ADDRESSED THE DISCREPANCIES, IF ANY. A PERUSAL OF THIS REPLY DATED 27/03/2015 RECORDED IN THE ASSESSMENT ORDER ITSELF WOULD SHOW THAT THE ASSESSEE HAS ALSO ARGUED, WHATEVER DIFFERENCE WAS THERE IN THE STOCKS AS PER BOOKS OF ACCOUNTS AND PHYSICAL VERIFICATION, HAS DULY BEEN EXPLAINED VIDE REPLY TO YOUR HONOUR SHOW CAUSE NOTICE DATED 24/12/2014 IN THE DETAILED REPLY WITH RESPECT TO TH E NATURE OF BUSINESS AND SYSTEM OF WORKING AS WELL AS ACCOUNTING WERE ALSO SUBMITTED. IT HAS NEVER BEEN DENIED THAT THE ASSESSEE COMPANY HAS NOT BEEN INDULGED IN PURCHASE/ SALES WITHOUT RECORDING THE SAME IN THE BOOKS OF ACCOUNTS. THEREFORE, THE SHORTAGE/EXCE SS OF STOCK HAS BEEN COVERED BY THE PURCHASES/SALES MADE BY THE ASSESSEE COMPANY WITHOU T RECORDING INTO THE BOOKS OF ACCOUNTS. FINALLY AS ON THE DATE OF THE SEARCH THAT IS ON 31/10/2012, WHEN THE ENTIRE STOCK HAS BEEN PHYSICALLY VERIFIED BY THE LD. ASSESSING O FFICERS AND WHATEVER DIFFERENCE WAS THERE HAS DULY BEEN EXPLAINED AND ADEQUATE SURRENDER OF ADDIT IONAL INCOME WAS ALSO OFFERED ON ACCOUNT OF DIFFERENCE BOTH IN THE STOCK AS WELL AS ON ACCOUNT OF PURCHASES AND SALES MADE OUT OF BOOKS OF ACCOUNTS AND PROFIT ELEMENT THEREON. NOTHING IS LEF T FOR CONSIDERATION IN RESPECT OF THE STOCK SUMMARY. FURTHER, THIS IS A SUMMARY WHICH IS IN BET WEEN DATE OF START OF THE YEAR AS WELL AS THE DATE OF SEARCH AND DULY COVERED BY THE STOCK PHYSIC ALLY VERIFIED AND AS PER BOOKS. IN VIEW OF THE SUBMISSION MADE, NO ADVERSE INFERENCE IS DRAWN ABLE ON THIS COUNT. WE FIND THAT THE ASSESSING OFFICER HAVING EXTRACTED THE SUBMISSIONS SUMMED IT UP AS IN THE FOLLOWING WORDS.. ASSESSEES AFORESAID ARGUMENTS HAVE BEEN CONSIDERE D AS DISCUSSED HEREINAFTER. ASSESSEES MAIN ARGUMENT IS THAT THE AFORESAID EXCESS STOCK SH OWN IN THE STOCK SUMMARY STATEMENT ITA 247/CHD/2017 & 187/CHD/2017 A.Y. 2013-14 PAGE 43 OF 45 HAS BEEN EXPLAINED AND IS OTHERWISE ALSO COVERED IN THE EXCESS STOCK FOUND AT THE TIME OF SEARCH IN THE BUSINESS PREMISES OF THE ASSESSEE. MO REOVER THE SAME IS ALSO COVERED IN THE DISCLOSURE/ADDITIONAL INCOME OFFERED ON ACCOUNT OF DIFFERENCE OF BOTH IN THE STOCK AS WELL AS ON ACCOUNT OF PURCHASES AND SALES MADE OUT OF BOOKS OF ACCOUNTS AND PROFIT ELEMENT THEREON. AFORESAID ARGUMENTS OF THE ASSESSEE HAVE C AREFULLY BEEN CONSIDERED BUT NOT ACCEPTABLE. THESE ARGUMENTS OF THE ASSESSEE HAVE NOT BEEN ACC EPTED BY THE CIT(A) ALSO. THE RELEVANT EXTRACT OF THE CIT(A)S FINDING HAS AL READY BEEN REPRODUCED BY US IN THE EARLIER PART OF THIS ORDER. THE CIT(A) IT IS SEEN IN THE F IRST TABLE CAPTURED AT PAGE 21 OF HIS ORDER ADDRESSED THE POSITION AS PER STOCK SUMMARY POSITIO N AS ON 01/04/2012 TO 27/10/2012 WHEREIN THOUGH IN ONE COLUMN HE SEEKS TO ADDRESS TH E QUANTITY, HOWEVER, IN QUITE A FEW OF THE INSTANCES, HE FAILS TO MENTION EITHER THE WEIGH T OF THE ARTICLES IN GRAMS AND/OR THE CARATAGE. FURTHER, IT IS ALSO UNCLEAR WHETHER SOME OF THE ITEMS ARE ARTICLES OR PERSONS MENTIONED. AS AN ILLUSTRATION, IT MAY BE SEEN THAT AT UNNUMBERED SL. NO 3 HE MENTIONS PIECES OF GOD IMAGES AND THEIR QUANTITY IS MENTIONE D AS 5 PIECES, HOWEVER, THEIR WEIGHT AND EVEN CARATAGE IS LEFT UNADDRESSED. THERE IS NO MENTION EITHER OF THEIR TOTAL OR INDIVIDUAL WEIGHT, NOTHING HAS BEEN MENTIONED. SIM ILARLY, HE DESCRIBES AT UNNUMBERED SL NO. 6 AN ARTICLE OR A PERSON AS HAPPY AND IN THE QUANTITY, HE MENTIONS 1 PIECE AND FAILS TO ASSIGN ANY WEIGHT OF CORRESPONDING GOLD LET ALON G WHETHER IT WAS 24K OR 18K OR 12K QUA THE DESCRIPTION OF HAPPY. THUS, IT IS NOT KNOWN WHETHER ONE PIECE WAS HANDED OVER TO A PERSON CALLED HAPPY FOR REPAIRS OR ALTERATION OR WHETHER ONE ARTICLE HAPPY WAS AVAILABLE FOR SALE OF UNKNOWN WEIGHT AND CARAT. TH US, THE DISCARDING OF ASSESSEE'S EXPLANATION BY PICKING UP SOME EXTRACT FROM SOMEWHE RE ON RECORD WITHOUT CARING TO ESTABLISH HOW EITHER IT BOLSTERS THE CASE OF THE RE VENUE OR DEMOLISHES THE CASE OF THE ASSESSEE THE CONCLUSION OF THE CIT(A) BECOMES A MEA NINGLESS EXERCISE LEFT COMPLETELY UNADDRESSED BY THE REVENUE . SAME IS THE POSITION F OR THE ARTICLES OR PERSONS MENTIONED AT UNNUMBERED SL NO. 9, 12 AND 13 OF TABLE-1 AT PAGE 2 1 OF THE CIT(A)S ORDER WHERE THE RESPECTIVE DESCRIPTION IS MANORANJAN GOLD PANKA J AND SANJEEV RESPECTIVELY. IT IS NOT KNOWN WHETHER THESE ARE NAMES OF PEOPLE TO WHOM GOL D HAS BEEN HANDED OVER AND WHAT IS THE WEIGHT HANDED OVER OR RECEIVED. CURIOUSLY, T HE VALUE OF RS. 1.00 ONLY HAS BEEN ASCRIBED TO PANKAJ, HOW AND FOR WHAT PURPOSE, IT IS LEFT UNEXPLAINED AN D UNADDRESSED IN THE ORDER. WE FIND ON GOING THROUGH THE SAME THAT IT CA NNOT BE UPHELD AS AFTER SUMMING UP THE REASONING OF THE AO, REFERENCE IS MADE TO GOD IMAGES ; HAPPY ; MANO RANJAN GOLD; PANKAJ; SANJEEV ETC. IN WHAT CONTEXT IS NOT UNDERSTOOD. ACCORDINGLY, THE CASE W AS RE-FIXED FOR CLARIFICATION AND THE PARTIES WERE REQUIRED TO ADDRESS THE ISSUES . THE LD. CIT-DR WAS ALSO UNABLE TO ADDRESS THE REFERENCE MADE TO HAPPY; PANKAJ; SANJEEV ETC. AND S TATED THAT IT APPEARS NO VALUE HAS BEEN ASSIGNED TO THESE. FOR GOD IMAGES, IT WAS NOTICED , NO WEIGHT IS GIVEN BUT VALUE IS ASSIGNED. ITA 247/CHD/2017 & 187/CHD/2017 A.Y. 2013-14 PAGE 44 OF 45 HOWEVER, THE RELEVANCE OF THE FINDING FOR REJECTING THE CLAIM COULD NOT BE ELABORATED. IN THE CIRCUMSTANCES, THE LD. AR IN THE COURSE OF THE HEARING VEHEMENTLY CONTENDED THAT THIS WAS THE FIRST YEAR OF THE ASSESSEE'S BUSINESS AND W HATEVER WAS CONFRONTED TO THE ASSESSEE WAS CONSIDERED AND A SURRENDER HAS BEEN MADE AND IN THE FACTS OF THE PRESENT CASE, THE SURRENDER HAS BEEN ABIDED BY THE ASSESSEE. IT WAS HIS SUBMISSION THAT THE CONTENTS OF THE PEN-DRIVE WERE MORE OR LESS UPDATED ON EVERY SECOND OR THIRD DAY EXCEPT FOR THE LAST UPDATION. THE ASSESSEE BEING NEW IN THIS LINE OF B USINESS, IT WAS SUBMITTED, ATTEMPTED ALSO TO MAINTAIN A RECORD IN THE PEN-DRIVE OF THE AVAILA BILITY OF STOCK SO AS TO KEEP CONTROL OF WHAT WAS AVAILABLE WITH THE ASSESSEE IN ITS STOCK. IT WAS HIS SUBMISSION THAT THE CONTENTS OF THE PEN-DRIVE MORE OR LESS REFLECT WHAT WAS FOUND I N THE COURSE OF THE SEARCH AND HAVING CARRIED OUT SEARCH, MERELY BECAUSE THERE WAS A REPE TITION IN THE PEN-DRIVE BY ITSELF CANNOT BE A GROUND FOR A SEPARATE ADDITION ALL TOGETHER SI NCE ADMITTEDLY THERE WERE NO LOCKERS MAINTAINED BY THE FAMILY MEMBERS AND THE FAMILY JEW ELLERY WAS ALSO MAINTAINED IN THE BUSINESS PREMISES STRONG-ROOM. IT WAS EMPHASIZED TH AT THE PREMISES HAVE BEEN SEARCHED, ARTICLES FOUND AND OWNED UP THUS IT WAS ARGUED THAT NOTHING FURTHER REMAINS. HOWEVER, WE ARE OF THE VIEW THAT IN ORDER TO ACCEPT THE ASSE SSEE'S SUBMISSIONS, THERE SHOULD BE A SEMBLANCE OF MATCHING THE ARTICLES. NO DOUBT GENER AL ARGUMENTS ARE ALSO MADE THAT THE AO WAS NO EXPERT AT VALUATION, THE EXERCISE WAS ARB ITRARY. WE HAVE NOTED THAT THE CIT(A) HAS FAILED TO ADDRESS THE ARGUMENT AND ACCEPTED THA T THE ASSESSING OFFICER IS JUSTIFIED AND CORRECT. HOWEVER WHAT WAS THE BASIS FOR CONCLUDING THAT THE AO WAS JUSTIFIED, HAS BEEN COMPLETELY LEFT UNADDRESSED IN THE ORDER. APART FRO M THAT IT IS NOTICED IT HAD ALSO BEEN ARGUED THAT THE OVERALL TOTAL WEIGHT OF GOLD ORNAME NTS ACTUALLY FOUND AND FOUND RECORDED IN THE BOOKS/PEN-DRIVE ETC. WHEN CONSIDERED ALONGWI TH THE SURRENDER, NO ADDITION WOULD BE WARRANTED. HOWEVER SINCE BEFORE US THE LD. AR A LSO ADVANCED WITHOUT PREJUDICE ARGUMENT THAT THE CONTENTS OF THE PEN DRIVE WERE A DIGITAL RECORD OF THE ACTUAL STOCK POSITION, WE FIND THAT IN ORDER TO CONSIDER THE SAI D ARGUMENT THAT THE CONTENTS OF THE PEN- DRIVE MATCH WITH THE ARTICLES FOUND AT THE TIME OF THE SEARCH AND NOTICED IN THE VALUERS REPORT, A REASONABLE ATTEMPT TO MATCH THE SAME FIRS T NEEDS TO BE DEMONSTRATED. SINCE THE LD. CIT-DR ALSO COULD NOT SHOW HOW THE ISSUE CAN BE SAID TO HAVE BEEN CONSIDERED ON FACTS BY THE CIT(A), THE PARTIES WERE REQUIRED TO ELABORA TE AND ADDRESS THE RE-CONCILIATION FOR WHICH PURPOSES THE APPEALS WERE RE-FIXED. THE LD. AR SOUGHT PERMISSION TO EXPLAIN THE RE- CONCILIATION WITH THE HELP OF THE ASSESSEE CONCERN S MANAGING DIRECTOR/DIRECTOR STATING THAT HE WAS FULLY CONVERSANT WITH THE FACTS AND WAS IN A BETTER POSITION TO DEMONSTRATE AN ITEM TO ITEM MATCH WITH THE ITEMS FOUND AND NOTICED IN THE DVOS REPORT AVAILABLE AT PAPER BOOK PAGES 23 TO 32 WITH THE CONTENTS OF THE PEN-DR IVE EXTRACTED IN PAGES 8 & 9 OF THE ASSESSMENT ORDER FOR WHICH PURPOSES THE LD. AR FILE D RECONCILIATION STATEMENT OF STOCKS ITA 247/CHD/2017 & 187/CHD/2017 A.Y. 2013-14 PAGE 45 OF 45 AS FOUND AND VALUED BY THE APPROVED VALUER AS PER V ALUER REPORT DATE 31 OCTOBER , 2012-13 ( ON THE DATE OF SEARCH) AT THE BUSINESS PREMISES. VIS- A-VIS STOCKS AS PER PENDRIVE AT PAGES 40-41 OF THE PAPER BOOK/ AS REFERED TO IN THE ASSESSMENT ORD ER.( AT PARA 9 PAGE 5 TO 8 AND 9). TIME WAS GIVEN TO THE CIT-DR TO GO THROUGH THE SAME. TH E LD. AR ON THE NEXT DATE ELABORATING THE SAID CHART WITH THE HELP OF THE M.D./DIRECTOR O F ASSESSEE CONCERN SUBMITTED THAT AS PER THE VALUERS REPORT, THE TOTAL RINGS FOUND WERE NUM BERING 409 NOTICED AT SR.NO. 33; 34; 35; 60; 102; 103 AND 112 AND IN THE PEN-DRIVE TH E TOTAL NUMBER OF RINGS NOTICED WERE 429. IT WAS SUBMITTED THAT AS PER THE GROSS WEIGHT NOTIC ED BY THE VALUER, IT WAS 1692.870 AND AS PER THE PEN-DRIVE IT WAS 1772.890. SIMILAR WAS THE POSITION FOR EAR-RINGS; BRACELETS, PENDANTS, DIAMOND BRACELET, DIAMOND RINGS, DIAMOND TOPS, DIAMOND SET ETC. AS AN ILLUSTRATION, ATTENTION WAS INVITED TO TOTAL CHAINS NOTICED IN THE VALUERS REPORT AS BEING 226 IN NUMBER AND IN THE PEN-DRIVE 228. THE GROSS WEIG HT WAS 2153.180 AND 1966.580 RESPECTIVELY. SIMILARLY FOR THE DIAMOND BRACELETS, IT WAS SUBMITTED THAT THEY WERE 316 AND IN THE PEN-DRIVE, THEY WERE 320. THE GROSS WEIGHT WAS 9629.240 AND 9913.420 RESPECTIVELY. IT WAS HIS SUBMISSION THAT THERE WAS A MINOR DIFFERENCE IN DATES ON WHICH THE FINAL RECORDING WAS MADE IN THE PEN-DRIVE AND THESE MINOR DISCREPANCIES, IF ANY, CAN BE ADDRESSED IN THE REMAND. THE LD. CIT-DR WAS HEARD. IT WAS HIS SUBMISSION THAT THOUGH HE WOULD PLACE RELIANCE UPON THE ORDER, HOWEVER, IT WA S FAIRLY CONCEDED THAT THE ASSESSEE MAY HAVE A CASE BUT SINCE THE RE-CONCILIATION HAS N OT BEEN CONSIDERED BY THE AO, IT WAS SUBMITTED, IT MAY BE SET ASIDE TO THE AO FOR EXAMIN ATION AS AT THIS STAGE HE WOULD NOT BE IN A POSITION TO ADDRESS THE SAME. THE SAID SUBMISSION WAS NOT OPPOSED BY THE LD. AR WHO AGREED THAT HE WAS IN A POSITION TO DEMONSTRATE THA T RE-CONCILIATION STATEMENT ADDRESSED THE CLAIM. IN THE LIGHT OF THE SUBMISSIONS OF THE PARTIES BEFORE THE BENCH WITHOUT ADDRESSING THE OTHER ISSUES, WE DEEM IT APPROPRIATE TO SET ASIDE THE ASSESSEE'S GROUND BACK TO THE FILE OF THE AO WITH A DIRECTION TO CONS IDER THE RE-CONCILIATION STATEMENT PLACED BY THE ASSESSEE ON RECORD AND PASS A SPEAKING ORDER IN ACCORDANCE WITH LAW AFTER GIVING THE ASSESSEE A REASONABLE OPPORTUNITY OF BEING HEARD. 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED FOR STATISTICAL PURPOSES. 9. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSE D AND APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 04.09.2018. SD/- SD/- (ANNAPURNA GUPTA) (DIVA SINGH) ACCOUNTANT MEMBER JUDICIAL MEMB ER POONAM/AG/POONAM COPY TO: 1. THE APPELLANT 2.THE RESPONDENT 3.THE CIT 4.THE CIT( A)5.THE DR ASSTT. REGISTRAR
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