ITO, Ward-46(1), Kolkata, Kolkata V. Anupam Nandi, Howrah

ITA 2037/KOL/2014

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 1028 (ITAT-KOLKATA)
• Duration Of Justice: 3 year(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-11-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2009-2010
• Appeal Filed On: 07-11-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Gift
• Section: 143(3); 142(1); 133A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH : KOLKATA [BEFORE HONBLE SHRI ABY. T. VARKEY, JM & SHRI M. BALAGANESH, AM ] I.T.A NO. 2037/KOL/20 14 ASSESSMENT YEAR : 2009-1 0 I.T.O., WARD-46(1), KOLKATA -VS- ANUPAM NANDI [PAN: ABIPN 4303 N] (APPELLANT) (RESPONDENT) I.T.A NO. 1985/KOL/20 14 ASSESSMENT YEAR : 2009-1 0 ANUPAM NANDI -VS- I.T.O., WARD-46 (1), KOLKATA [PAN: ABIPN 4303 N] (APPELLANT) (RESPONDEN T) FOR THE APPELLANT : SHRI DAVID Z. CHOW NGTHU, ADDL. CIT DR FOR THE RESPONDENT : SHRI MIRAJ D. SHAH, AR DATE OF HEARING : 03.11.2017 DATE OF PRONOUNCEMENT : 10.11.2017 ORDER PER M.BALAGANESH, AM 1. THESE CROSS APPEALS BY THE REVENUE AND THE ASSE SSEE ARISE OUT OF THE ORDER OF THE COMMISSIONER OF INCOME TAX(APPEALS)- XXX, KOLKATA [ IN SHORT THE LD. CIT(A)] IN APPEAL NO. 255/CIT(A)-XXX/WD-46(1)/2011-12 DATED 12 .09.2014 AGAINST THE ORDER PASSED BY THE ITO, WARD-46(1), KOLKATA [IN SHORT T HE LD. AO] U/S 143(3) OF THE INCOME TAX ACT, 1961 [HEREINAFTER REFERRED TO AS THE ACT ] DATED 29.12.2011 FOR THE ASSESSMENT YEAR 2009-10. BOTH THE APPEALS ARE TAKEN UP TOGETHE R FOR CONVENIENCE. 2. THE ONLY ISSUE INVOLVED IN THESE APPEALS IS AS T O WHETHER ANY ADDITION COULD BE MADE TOWARDS UNEXPLAINED STOCK OF GOLD IN THE FACTS AND CIRCUMSTANCES OF THE CASE. BOTH 2 ITA NOS.2037 & 1985/KOL/2014 ANUPAM NANDI A.YR.2009-10 2 REVENUE AS WELL AS THE ASSESSEE ARE IN APPEALS AGAI NST THIS ADDITION EXCEPT WITH VARIANCE IN THE QUANTUM AGITATED. 3. THE BRIEF FACTS OF THIS ISSUE IS THAT THE ASSESS EE IS AN INDIVIDUAL RUNNING A PROPRIETORY CONCERN UNDER THE NAME AND STYLE OF ABIR JEWELLERS ENGAGED IN THE JEWELLERY AND MONEY LENDING BUSINESS. THE ASSESSEE TRADES IN JEW ELLERY AND ALSO LENDS MONEY AGAINST THE JEWELLERIES TAKEN ON PLEDGE FROM OUTSID ERS. THE RETURN OF INCOME FOR THE ASST YEAR 2009-10 WAS FILED BY THE ASSESSEE ON 30.9 .2009 DECLARING TOTAL INCOME OF RS 2,63,939/- . THERE WAS A SURVEY U/S 133A OF THE AC T IN THE BUSINESS PREMISES OF THE ASSESSEE ON 26.9.2008 . DURING THE COURSE OF SURVE Y OPERATION, ON PHYSICAL VERIFICATION OF STOCK , 8448.820 GRAMS OF GOLD WERE FOUND WHICH WERE VALUED AT RS 1280 PER GRAM AND VALUE THEREON WAS ARRIVED AT RS 1,08,14,490/-. SILVER TO THE EXTENT OF 7 KGS WERE FOUND DURING THE COURSE OF SURVEY WHICH WERE VALUED AT RS 15000 PER KG AND VALUE THEREON WAS ARRIVED AT RS 1,05,000/-. HENCE THE TO TAL VALUATION OF GOLD AND SILVER ON THE DATE OF SURVEY WAS WORKED OUT AT RS 1,09,19,490/- . THE LD AO OBSERVED THAT THE QUANTITATIVE MEASUREMENT OF STOCK WAS DONE WITH THE HELP OF THE EMPLOYEES OF THE ASSESSEE PRESENT IN THE SHOWROOM. THE SURVEY TEAM DID NOT FIND ANY STOCK REGISTER. IN THIS REGARD, THE FOLLOWING QUESTIONS WERE RAISED TO THE ASSESSEE BY THE SURVEY TEAM :- Q 7. DO YOU MAINTAIN ANY STOCK BOOK ? A 7. NO Q 8. ON THE DAY OF SURVEY I.E ON 26.9.2008 , ON PH YSICAL VERIFICATION OF YOUR STOCK TOTAL VALUE OF STOCK COMES TO RS 1,09,19,490/ - INCLUDING THE VALUE OF SILVER OF RS 1,05,000/-. IN ABSENCE OF STOCK BOOK, A STOC K STATEMENT HAS BEEN DRAWN WHEREFROM IT APPEARS THAT THERE IS A STOCK DIFFEREN CE OF RS 18,50,000/- (APPROX.) . DO YOU AGREE ? A 8. SINCE I AM QUITE IGNORANT ABOUT ACCOUNTING SYS TEM THERE MAY BE DISCREPANCY IN THE STOCK WHICH CAN BE EXPLAINED BY MY C.A. . H OWEVER, IN VIEW OF AVAILABILITY OF RECORDS, I AM SATISFIED WITH THE STOCK STATEMENT DRAWN BY YOU. 3 ITA NOS.2037 & 1985/KOL/2014 ANUPAM NANDI A.YR.2009-10 3 3.1. THE LD AO OBSERVED THAT BASED ON THE ABOVE AND UPON ACCEPTANCE BY THE ASSESSEE, THE STOCK DIFFERENCE WAS QUANTIFIED BY THE SURVEY T EAM AT RS 18,50,000/- AS ON 26.9.2008. LATER IN THE COURSE OF ASSESSMENT PROCE EDINGS, THE LD AO ISSUED NOTICE U/S 142(1) OF THE ACT DATED 28.7.2011 WHEREIN THE ASSES SEE WAS ASKED TO PRODUCE THE QUANTITATIVE DETAILS AND VALUATION THEREOF IN RESPE CT OF OPENING STOCK AS ON 1.4.2008 , STOCK AS ON 26.9.2008 AND CLOSING STOCK AS ON 31.3. 2009. IN RESPONSE TO THE ABOVE QUERY, THE A/R. OF THE ASSESSEE IN PARA 4 OF THE CO VERING LETTER DATED 20.9.2011 SUBMITTED AS UNDER:- (I) THE QUANTITATIVE DETAILS OF THE GOLD AND ORNA MENTS PLEDGED AND LOANS ADVANCED AGAINST THE SAME AND REFUNDED DURING THE YEAR ARE A VAILABLE IN THE PLEDGED REGISTER MAINTAINED BY THE ASSESSEE WHICH SHOWS ALSO THE DE TAILS OF STOCK ON REQUIRED DATES AND THE SAME CAN BE EXAMINED FROM THE XEROX COPY OF THE PLEDGED REGISTER ANNEXED HERETO COMPRISING PAGE NO. 58 TO 90 DULY MARKED WITH ANNEX URE- J. (II) THE PURCHASE AND SALES REGISTER SHOWS THE DETA ILS OF PURCHASES AND SALES AS WELL AS THE STOCK OF GOLD DURING THE YEAR 2008-09 ALONG WIT H PARTICULARS OF THE PARTIES I.E. THEIR NAME & ADDRESS, BILL NO., QUANTITY AND AMOUNT. THE QUANTITATIVE DETAILS OF THE SAME CAN BE EXAMINED FROM THE XEROX COPY OF THE PURCHASE AND SALES REGISTER ANNEXED HERETO COMPRISING PAGE NO. 91 TO 140 DULY MARKED WITH ANNE XURE- K. 3.2. THE LD AO OBSERVED THAT AGAIN ON 17.10.2011 , THE A/R OF THE ASSESSEE APPEARED AND SUBMITTED AS UNDER:- THAT AGAIN IN CONTINUATION TO MY FIRST SUBMISSION DATED 20.09.2011 AND IN REPLY TO QUERY NO. 4 OF YOUR REQUISITION DATED 28.07.2011; I AM FURNISHING A CHART WHICH SHOWS DETAILS OF STOCK OF GOLD IN HAND DURING THE FINANCI AL YEAR 2008-09. THE SAID CHART SHOWS THE COMPLETE MOVEMENT AND THE QUANTITATIVE DETAILS OF THE GOLD PURCHASE/ NEW PLEDGE AS WELL AS SELL/RELEASE INCLUDING STOCK IN SAFE VAULT BEGINNING FROM OPENING STOCK AS ON 01.04.2008 TO THE CLOSING STOCK AS ON 31.03.2009. T HIS CHART CAN BE VERIFIED TO THE BEST OF YOUR SATISFACTION FROM THE DETAILS OF PLEDGED ST OCK OF GOLD VIDE ANNEXURE _J COMPRISING PAGE NO. 58 TO 90 AS WELL AS TRADING STO CK OF GOLD VIDE ANNEXURE-K COMPRISING PAGE NO. 91 TO 140 OF MY PREVIOUS SUBMIS SION DATED 20.09.2011. THE SAID CHART IS ANNEXED HERETO COMPRISING PAGE NO. 43 DULY MARKED WITH ANNEXURE-I THE ANNEXURE-I IS REPRODUCED HEREUNDER:- 4 ITA NOS.2037 & 1985/KOL/2014 ANUPAM NANDI A.YR.2009-10 4 5 ITA NOS.2037 & 1985/KOL/2014 ANUPAM NANDI A.YR.2009-10 5 6 ITA NOS.2037 & 1985/KOL/2014 ANUPAM NANDI A.YR.2009-10 6 2.2) FROM THE ABOVE CHART, IT BECOMES CLEAR THAT:- (I) THE ASSESSEE IS BIFURCATING HIS STOCK OF GOLD INTO TWO CATEGORY NAMELY, PLEDGE STOCK OF GOLD AND TRADING STOCK OF GOLD. (II) ACCORDING TO THE ASSESSEE, OUT OF TOTAL STOCK AT TH E END OF THE MONTH OF SEPTEMBER, 2008, PLEDGE STOCK OF GOLD WAS 6120.618 GMS AND TRADING STOCK OF GOLD WAS 2304.102 GMS. WHICH MORE OR LESS CORROBORATES THE FINDING OF THE SURVEY TEAM REGARDING QUANTITATIVE D ETAILS OF STOCK OF 8448.820 GMS (THERE IS DIFFERENCE OF 24.1 GMS.). (III) THE ASSESSEE ARRIVED AT THE FIGURE OF STOCK OF PLED GE GOLD (AS ON THE END OF THE MONTH OF SEPTEMBER, 2008) BY DEDUCTING 23,35 9.072 GMS AS GOLD IN SAFE VAULT FROM HIS OPENING STOCK OF PLEDGED GOL D. (IV) THE STOCK THAT HAVE BEEN CLAIMED TO HAVE BEEN PLACE D IN SAFE VAULT HAS BEEN ADDED BACK, BY THE IDENTICAL FIGURE, AT THE EN D OF THE F.Y. TO DERIVE AT THE STOCK OF PLEDGE GOLD AS AT 31.03.2009. (V) THAT NO TRANSACTION HAS TAKEN PLACE, DURING THE YEA R, WITH GOLD WHICH IS CLAIMED TO HAVE BEEN KEPT AT SAFE VAULT OF 23359.07 2 GMS AS THE TOTAL PLEDGED STOCK AS ON 01.04.2008 WAS REDUCED BY THAT FIGURE AND THAT IDENTICAL FIGURE WAS ADDED BACK AT THE END OF F.Y. IT ALSO MEANS THAT ITEMS PLEDGED DURING THE YEAR HAD MOVEMENTS (IN AND OUT) BUT THERE WAS NO MOVEMENT OF ITEMS AT SAFE VAULT. 3.3. THE LD AO OBSERVED THAT THE STOCK OF GOLD AS S HOWN IN THE BOOKS OF ACCOUNTS AS BUSINESS STOCK ON THE DATE OF SURVEY WAS ONLY 2304. 102 GRAMS AND THE EXISTENCE OF THE PLEDGED STOCK OF GOLD WAS COMPLETELY DISBELIEVED BY THE LD AO AS THE ASSESSEE DID NOT MENTION ABOUT THE SAME AT THE TIME OF RECORDING THE PRELIMINARY STATEMENT OR IN THE FINAL STATEMENT RECORDED AT THE TIME OF SURVEY. ACCORDIN GLY THE LD AO TREATED THE ENTIRE STOCK FOUND ON THE DATE OF SURVEY OF 8448.820 GRAMS AS TH E TRADING STOCK OF THE ASSESSEE. OUT OF THIS, 2304.102 GRAMS OF GOLD HAD ALREADY BEEN DI SCLOSED IN THE BOOKS BY THE ASSESSEE. THE LD AO BROUGHT THE REMAINING STOCK OF 6144.718 G RAMS AS UNDISCLOSED STOCK IN BUSINESS WHICH WAS VALUED AT RS 1280 PER GRAM AND A DDITION TO THE TUNE OF RS 78,65,239/- WAS MADE TOWARDS UNEXPLAINED STOCK OF G OLD IN THE ASSESSMENT. 7 ITA NOS.2037 & 1985/KOL/2014 ANUPAM NANDI A.YR.2009-10 7 4. THE LD CITA ACCEPTED THE EXISTENCE OF PLEDGED ST OCK MAINTAINED BY THE ASSESSEE WHICH HAS BEEN USED BY THE ASSESSEE FOR HIS MONEY L ENDING BUSINESS. INFACT HE OBSERVED THAT THE ASSESSEE HAD ACTUALLY MAINTAINED REGISTER OF PLEDGED STOCK WHICH FINDS MENTION IN THE LIST OF DOCUMENTS FOUND AND INSPECTED BY THE SURVEY TEAM IN PAGE 52 OF SURVEY FOLDER. THE LD CITA FOUND FROM PAGE 42 OF SURVEY FOLDER AS UNDER:- OPENING STOCK AS ON 1.4.08 1,21,28,921.60 ADD: PURCHASES DURING THE PERIOD 1.4.08 26.9.08 9,99,223.00 ------------------- 1,31,28,144.60 LESS: SALES DURING THE PERIOD 1.4.08 26.9.08 23,13,655.00 ------------------- CLOSING STOCK AS ON 26.9.08 REPRESENTING STOCK FOUN D AND INVENTORISED (8448.820 GMS * RS 1280 PER GM) 1, 08,14,489.60 ADD: STOCK OF SILVER (7 KGS * RS 15000 PER KG) 1,05,000.00 -------------------- 1,09,19,489.60 LESS: CLOSING STOCK AS ON 26.9.08 AS PER BOOKS 90,69,489.60 ------------------- EXCESS STOCK FOUND AND VALUED 18,50,000.00 -------------------- 4.1. THE LD CITA OBSERVED THAT BASED ON THIS WORKIN GS, QUESTION NO. 8 WAS PUT TO THE ASSESSEE AT THE TIME OF SURVEY AND REPLY THEREON AR E REPRODUCED HEREINABOVE. THE ASSESSEE ALSO AGREED TO PAY A SUM OF RS 5.50 LACS A S ADVANCE TAX FOR THE SAME AND FURTHER AGREED TO PAY THE SAME IN THREE INSTALMENTS AS UNDER:- CHQ DATED 10.10.08 3,00,000 CHQ DATED 10.11.08 1,50,000 CHQ DATED 10.12.08 1,00,000 -------------- 5,50,000 4.2. THE LD CITA OBSERVED THAT THE SURVEY OFFICIALS HAD NOT PURSUED THIS MATTER OF THE DIFFERENCE IN PHYSICAL STOCK AND BOOK STOCK ANY FUR THER. IN THE PRELIMINARY SURVEY 8 ITA NOS.2037 & 1985/KOL/2014 ANUPAM NANDI A.YR.2009-10 8 REPORT, THE LD AO HAS NOTED AT ITEM 7, THAT THE ASS ESSEE HANDED OVER CHEQUES OF RS 5.50 LACS TO THE SURVEY OFFICIALS . IN A FINAL REPORT, A COPY OF WHICH IS SEEN ON PAGE 116 OF SURVEY FOLDER AND APPEARING AS ENCLOSURE TO LETTER TO JCIT DATED 18.11.2008, IT WAS SEEN THAT THE LD AO HAD RECORDED IN PARA 3 THAT THE DIFF ERENCE OF STOCK OF RS 18.50 LACS WAS ACCEPTED BY THE ASSESSEE IN HIS STATEMENT THOUGH TH E ASSESSEE CLAIMED THAT THE DISCREPANCY IN STOCK MAY BE EXPLAINED BY HIS C.A. B UT THE LD AO REPORTED THAT THE ASSESSEE FAILED TO EXPLAIN THE SAID DISCREPANCY. THE LD CITA FURTHER OBSERVED THAT THE SURVEY TEAM HAD NOT GIVEN ANY FINDING ON THE JEWELL ERY / GOLD CLAIMED AS PLEDGED AND CLAIMED TO HAVE BEEN PASSED ON FROM GRANDFATHER OF THE ASSESSEE. IN FACT THE LD CITA REFERRED TO THE ASSESSMENT ORDER FRAMED FOR ASST YE AR 2007-08 WHEREIN PARA 2.5 THEREON, THERE IS A MENTION ABOUT THE PLEDGED STOCK OF 27909 GRAMS OF GOLD VALUED AT RS 1,52,00,082/-. THE LD AO HAD MADE NO ATTEMPTS TO C ORRELATE THE STOCK FOUND ON DATE OF SURVEY OF 8448.820 GRAMS WITH THE PLEDGED STOCK CLA IMED AS RECEIVED FROM GRANDFATHER OF ASSESSEE AND HOW THE BOOK STOCK OF 2304.102 GRAM S WAS ARRIVED AT. 4.3. THE LD CITA ALSO OBSERVED THAT FROM THE BALANC E SHEET OF THE ASSESSEE AS ON 31.3.2009, THE ASSESSEE HAD REFLECTED THE STOCK UND ER PLEDGED ITEMS AS STOCK IN TRADE. HE OBSERVED IN HIS ORDER AS UNDER:- THE AO HAS SIMPLY REJECTED ALL THE PLEDGED STOCK A S TRADING STOCK. IN ASSESSMENT YEAR 2007-08 IF SOME STOCK WAS TREATED AS TRADING STOCK (WEIGHT ABOUT 27 KGS. AND VALUED ABOUT RS. 1.52 CRORES), IT IS INTRIGUING AS TO WHY THE SURVEY REPORT IS SILENT ON THE PLEDGED STOCK SO TREATED AS TRADING STOCK AND THE I MPACT OF THE SAME TREATMENT ON THE BOOK STOCK QUANTITY AND VALUE. THE AO HAS FAILED TO SHOW LINKAGE FROM THE ALLEGED PLEDGED STOCK OF 27 KGS. TREATED AS BUSINESS STOCK AND THEREFORE HIS FINDING THAT THE STOCK HAS TO BE TREATED AS BUSINESS STOCK WITHOUT A LLOWING CREDIT OR CONSIDERATION FOR THE HUGE STOCK OF EARLIER YEAR, IS WITHOUT ANY BASI S. IT IS SEEN THAT THE SALES AND PURCHASES DURING THE YEAR IS ONLY OF RS. 43,00,651/ - / RS. 29,13,517/- RESPECTIVELY. THEREFORE, EVEN IF ALL THE STOCKS OF JEWELLERY/GOLD IS TREATED BUSINESS STOCK, AOS FINDING ON DIFFERENCES GOES AGAINST THE OBSERVATION OF THE SURVEY TEAM WHICH STARTS WITH THE FIGURE OF OPENING STOCK OF RS. 1,21,28,921/- [PAGE- 42 OF SURVEY FOLDER]. THE PURCHASE AND SALES FIGURE OF ONLY FEW LACS HAVING BEEN SHOWN IN THE AUDIT REPORT AND THE SURVEY WORKING ALSO INDICATES THAT THE AOS DECISION TO TR EAT ALL THE STOCKS OVER THE FIGURE OF RS. 23 LACS. AS UNDISCLOSED IS ARBITRARY AND WITHOU T ANY BASIS. EVEN IF, FOR THE TIME BEING, THE AOS ARGUMENT THAT THE PLEDGED STOCK HAS TO BE TREATED AS TRADING STOCK IS 9 ITA NOS.2037 & 1985/KOL/2014 ANUPAM NANDI A.YR.2009-10 9 ACCEPTED, THE TREATMENT OF THE DIFFERENCE OF STOCK AS UNDISCLOSED STOCK CANNOT BE SUSTAINED. EVEN IF, THE AOS OBSERVATION THAT THE PLEDGED STOCK ARE TRADING STOCK ARE FOR THE TIME BEING ACCEPTED, THE AO HAS NO BASIS TO TREAT THE EXCESS STOCK AS UNDISCLOSED. THE EXCESS STOCK HAS BEEN CLEARLY SHOW N AS OPENING STOCK EXCEPT FOR RS. 18.5 LACS WORTH OF STOCK IN RESPECT OF WHICH APP ELLANTS DEPOSITION HAS BEEN RECORDED BY THE SURVEY TEAM. THUS, THE AO IS WRONG IN TREATI NG RS. 78,65,239/- WORTH OF JEWELLERY/GOLD AS UNDISCLOSED STOCK. B(II) THE APPELLANT IN THE COURSE OF SURVEY HAS BRO ADLY ACCEPTED THE FINDING OF THE SURVEY TEAM ON THE DIFFERENCE STOCK OF RS. 18.50 LA CS, AS DESCRIBED ABOVE. THE APPELLANT HAS ALSO COMMITTED TO PAY ADVANCE TAX OF RS. 5.5 LACS ON THE SAID AMOUNT OF STOCK FOUND IN EXCESS OF THE BOOK FIGURES AS WORKED OUT BY THE SURVEY TEAM. THE APPELLANT NEVER RETRACTED FROM THE STATEMENT OR ADM ISSION OF PAYMENT OF ADVANCE TAX TILL THE FILING OF RETURN, IN WHICH A REFUND OF RS. 2,87,150/- ON RETURNED INCOME OF RS. 2,63,939/- HAS BEEN CLAIMED AND NO EXPLANATION FOR ADDITIONAL STOCK CORRESPONDING TO THE DIFFERENCE OF RS. 18.5 LACS OF STOCK , AS POINT ED OUT BY THE SURVEY TEAM WAS OFFERED BY THE APPELLANT. IN THE ASSESSMENT PROCEEDING THE APPELLANT HAS FAILED TO SHOW HOW THE OMISSION OF THE DIFFERENCE STOCK OF RS. 18.5 LACS F ROM THE TRADING / P&L A/C. SHOULD BE ACCEPTED BY THE ASSESSING OFFICER. IN MY VIEW, THE EXCESS STOCK OF RS. 18.5 LACS OVER BOOK VALUE AS DETERMINED BY THE SURVEY TEAM REMAINE D TO BE EXPLAINED BY THE APPELLANT, WHO HAS NOT BEEN ABLE TO OFFER SATISFACT ORY EXPLANATION EVEN AFTER THE SURVEY DATE OR IN THE COURSE OF ASSESSMENT PROCEEDING. EVE N IN THE APPEAL PROCEEDING, IT HAS NOT BEEN ABLE TO EXPLAIN HOW THE DIFFERENCE POINTED OUT ON SURVEY DATE BY SURVEY OFFICERS CAN BE SHOWN AS WRONG. THEREFORE, I HOLD THE VIEW THAT THE SAID AMOUNT OF RS. 18.5 LACS CAN BE RIGHTLY TAKEN AS UNDISCLOSED INCOM E CORRESPONDING TO THE EXCESS STOCK DESCRIBED ABOVE. THEREFORE, I CONFIRM THIS ADDITION TO THE TOTAL INCOME BY THE AO UP TO THE AMOUNT OF RS. 18.5 LACS AND THE BALANCE AMOUNT OF RS. 78,65,239/- (-) RS. 18,50,000/- = RS. 60,15,239/- IS DELETED. 4.4. AGGRIEVED, BOTH THE ASSESSEE AS WELL AS THE RE VENUE ARE IN APPEAL BEFORE US ON THE FOLLOWING GROUNDS:- I.T.A NO. 2037/KOL/2014 FOR THE ASSESSMENT YEAR 200 9-10 1. THAT THE LD. CIT(A)-XXX, KOLKATA HAS ERRED IN FACTS AND CIRCUMSTANCES OF THE CASE BY GIVING RELIEF TO THE TUNE OF RS. 60,15,239/ - FROM TOTAL ADDITION OF RS. 78,65,231/- MADE BY THE AO ON ACCOUNT OF UNDISCLOSE D STOCK. 2. THAT LD. CIT(A) HAS FAILED TO CONSIDER THE FACTS AN D CIRCUMSTANCES OF THE CASE THAT THE ASSESSEE HAS RESORTED TWO WAYS TO MISLEAD THE AO AND ALSO THE APPELLATE AUTHORITY BY CAMOUFLAGING THE TRADING STO CK AS PLEDGED STOCK OF THE BUSINESS. 3. THE APPELLANT CRAVES LEAVE TO ADD, SUPPLEMENT, AMEN D OR ALTER BEFORE OR AT THE TIME OF HEARING OF THIS APPEAL PETITION. 10 ITA NOS.2037 & 1985/KOL/2014 ANUPAM NANDI A.YR.2009-10 10 I.T.A NO. 1985/KOL/2014 FOR THE ASSESSMENT YEAR 200 9-10 1. FOR THAT THE LD. COMMISSIONER OF INCOME TAX (APPEAL S)-XXX, KOLKATA WRONGLY PLACED MUCH WEIGHTAGE AND RELIANCE UPON THE STATEMENT RECORDED AT THE TIME OF SURVEY BY THE SURVEY TEAM AND WRONGLY U PHELD ADDITION TO THE TUNE OF RS. 18,50,000/- MERELY ON THE BASIS OF ALLEGED S URRENDER OF STOCK DISCREPANCY WITHOUT BRINGING ANY CORROBORATIVE MATE RIAL ON RECORD. 2. FOR THAT AS THE ASSESSING AUTHORITY HIMSELF BRUSHE D ASIDE THE SURVEY FINDINGS WHILE FRAMING THE ASSESSMENT ORDER IT WAS NOT OPEN TO THE APPELLATE AUTHORITY TO SUSTAIN ADDITION MERELY ON ALLEGED CONFESSION ON STOCK DISCREPANCY OR DISCLOSURE MADE ON SURVEY SPOT WITHOUT AT ALL VERIF YING AND RELYING UPON ANY CORROBORATIVE MATERIALS AVAILABLE ON RECORD. 3. FOR THAT THE LD. COMMISSIONER OF INCOME TAX (APPEAL S) SIMPLY HARPED UPON THE REPLY OF THE ASSESSEE VIDE WHICH THE ALLEGED DI SCLOSURE WAS MADE AND THE MOMENT THE STATEMENT OF ASSESSEE IS EXCLUDED FROM R ECORD THEN NOTING IS LEFT THE APPELLATE AUTHORITY TO SUPPORT HIS CONCLUSION. 4. FOR THAT THE LAW HAS BEEN SETTLED BY APEX COURT THA T SECTION 133A DOES NOT EMPOWER ANY ITO TO EXAMINE ANY PERSON ON OATH; SO S TATEMENT RECORDED UNDER SECTION 133A HAS NO EVIDENTIARY VALUE AND ANY ADMISSION MADE DURING SUCH STATEMENT CANNOT BE MADE BASIS OF ADDITION. 5. FOR THAT THE VALUATION OF ALLEGED INVENTORIES OF JE WELLERY MADE BY THE SURVEY TEAM ON THE DATE OF SURVEY IS NOT BACKED BY ANY CRE DENTIAL AS NO JEWELLERY VALUER WAS PRESENT AT SURVEY SPOT AND ACCORDINGLY S UCH VALUATION COULD NOT BE RELIED UPON FOR FRAMING APPELLATE ORDER. 5. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. WE FIND THAT THE ASSESSEE HAD FILED A RECONCILIATIO N STATEMENT FOR THE STOCK OF GOLD FOUND AT THE TIME OF SURVEY AS UNDER:- 11 ITA NOS.2037 & 1985/KOL/2014 ANUPAM NANDI A.YR.2009-10 11 WE FIND THAT THE ABOVE TABLE INCLUDES PLEDGED STOCK AVAILABLE WITH THE ASSESSEE. WE FIND THAT THE LD AO HAD ALREADY CONSIDERED IN ASST YEAR 2007-08 THAT ASSESSEE WAS IN RECEIPT OF GOLD FROM HIS GRANDFATHER TO THE EXTENT OF 27909 GRAMS VALUED AT RS 1.52 CRORES AND ADDED THE SAME TO THE TOTAL INCOME OF TH E ASSESSEE IN THAT YEAR. WHEN THE MATTER REACHED THE TRIBUNAL, THIS TRIBUNAL HAD APPR ECIATED THE PLEDGED STOCK REGISTER MAINTAINED BY THE ASSESSEE FROM THE EARLIER YEARS W HICH WAS ALSO PLACED ON RECORD AND THIS TRIBUNAL HAD APPRECIATED THE FACT THAT THE ASS ESSEE WAS INDEED CARRYING ON MONEY LENDING BUSINESS THEREON. WE ALSO FIND THAT PLEDGE D STOCK REGISTER MAINTAINED BY THE ASSESSEE IS PART OF THE RECORDS WHICH WERE FOUND AN D INSPECTED BY THE SURVEY TEAM AT THE TIME OF SURVEY WHICH HAS BEEN NOTICED BY THE LD CIT A ALSO IN HIS ORDER. THIS HAS NOT BEEN CONTROVERTED BY THE REVENUE BEFORE US. WE FI ND THAT THE LD CITA HAD DULY APPRECIATED THE EXISTENCE OF MONEY LENDING BUSINESS BASED ON PLEDGED STOCK OF GOLD 12 ITA NOS.2037 & 1985/KOL/2014 ANUPAM NANDI A.YR.2009-10 12 BELONGING TO OUTSIDERS AND THE ASSESSEE HAD DULY EX PLAINED THAT 6120.618 GRAMS OF GOLD PERTAIN TO THE PLEDGED STOCK WHICH WERE KEPT IN SHO WROOM AND 23359.072 GRAMS OF PLEDGED STOCK OF GOLD WERE KEPT IN SAFE VAULT AS CO ULD BE SEEN FROM THE ABOVE TABLE. HENCE WE ARE CONVINCED THAT THE ASSESSEE HAD DULY E XPLAINED THE DIFFERENCE IN THE STOCK OF GOLD FOUND AT THE TIME OF SURVEY AND THERE IS NO REASON TO DISBELIEVE THE VERSION OF THE ASSESSEE. EVEN IN ASST YEAR 2007-08, THIS TRIBUNAL IN ITA NO. 774/KOL/2012 DATED 23.12.2016 HAD ACCEPTED THE PLEDGED STOCK OF GOLD R ECEIVED AS GIFT BY THE ASSESSEE FROM HIS GRAND FATHER AS GENUINE TRANSACTION. THE RELEV ANT OPERATIVE PORTION OF THE SAID ORDER IS NOT REPRODUCED HEREIN FOR THE SAKE OF BREVITY. WE ALSO FIND THAT THE LD CITA HAVING ACCEPTED THE STAND OF THE ASSESSEE FOR HAVING PLEDG ED STOCK OF GOLD IN THE SHOWROOM, OUGHT NOT TO HAVE SUSTAINED THE ADDITION TO THE TUN E OF RS 18,50,000/- MERELY BASED ON THE STATEMENT RECORDED AT THE TIME OF SURVEY. IN F ACT FROM THE PERUSAL OF REPLY TO QUESTION NO. 8 GIVEN BY THE ASSESSEE AT THE TIME OF SURVEY, WE FIND THAT THE ASSESSEE NO WHERE ACCEPTED TO OFFER THE DIFFERENCE IN STOCK AS UNEXPLAINED . HE ONLY SAID THAT HE IS NOT CONVERSANT WITH THE ACCOUNTING PRACTICES AND HI S C.A. WOULD BE ABLE TO EXPLAIN THE SAME BETTER. HE ONLY ADMITTED THAT THE BASIS OF WO RKINGS DONE BY THE SURVEY TEAM WAS IN ORDER WHICH ALONE WAS ACCEPTED BY HIM IN THE STA TEMENT. IN ANY CASE, IT IS NOW WELL SETTLED BY THE DECISION OF THE HONBLE SUPREME COUR T IN THE CASE OF CIT VS S KHADER KHAN SON REPORTED IN (2012) 25 TAXMANN.COM 413 (SC) / 210 TAXMAN 248 (SC) THAT NO ADDITION COULD BE MADE BASED ON STATEMENT RECORDED DURING SURVEY AS THE SURVEY POWERS U/S 133A OF THE ACT DOES NOT EMPOWER THE ITO TO EXA MINE ANY PERSON ON OATH AND HENCE THE STATEMENT RECORDED THEREON HAS GOT NO EVI DENTIARY VALUE. WE FIND THAT THE ASSESSEE HAD DULY RECONCILED THE ENTIRE STOCK OF GO LD FOUND IN THE SHOWROOM AT THE TIME OF SURVEY WITH PROPER FACTS AND RECORDS. HENCE WE HAVE NO HESITATION IN DELETING THE ADDITION SUSTAINED BY LD CITA TO THE TUNE OF RS 18, 50,000/- AND THE REMAINING PORTION DELETED BY THE LD CITA ALSO DOES NOT REQUIRE ANY IN TERFERENCE. ACCORDINGLY THE GROUNDS RAISED BY THE ASSESSEE ARE ALLOWED AND THAT OF THE REVENUE ARE DISMISSED. 13 ITA NOS.2037 & 1985/KOL/2014 ANUPAM NANDI A.YR.2009-10 13 6. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED AND THE APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE COURT ON 10.11.2017 SD/- SD/- [A.T. VARKEY] [ M.BALAGANESH ] JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 10.11.2017 SB, SR. PS COPY OF THE ORDER FORWARDED TO: 1. ITO, WARD-46(1), 2 ND FLOOR, 3, GOVT. PLACE (WEST), KOLKATA-1. 2. ANUPAM NANDI, (PROP. OF M/S ABIR JEWELLERS), BAG NAN STATION ROAD (N), HOWRAH- 711303. 3. C.I.T(A)- , KOLKATA 4. C.I.T .- KOLKATA. 5. CIT(DR), KOLKATA BENCHES, KOLKATA. TRUE COPY BY ORDER SENIOR PRIVAT E SECRETARY HEAD OF OFFICE/D.D.O., ITAT, KOLKATA BENCHE S