Asstt.C.I.T., Gwalior V. Sh. Ajay Kumar Jain, Gwalior

ITA 261/AGR/2010

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 60127 (ITAT-AGRA)
• Duration Of Justice: 42 year(s) 4 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-05-2012
• Appeal Filed By: Department
• Assessment Year: misc
• Appeal Filed On: 01-01-1970
• Court: TRIBUNAL
• Assessee Lawyers: V BAPNA
• Keywords: Assessment record

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, AGRA BENCH, AGRA BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND SHRI A.L. GEHLOT, ACCOUNTANT MEMBER ITA NO.261/AGRA/2010 ASSESSMENT YEAR: 2005-06 ASSTT. COMMISSIONER OF INCOME TAX, VS. SHRI A JAY KUMAR JAIN, CIRCLE 1, GWALIOR. VS. SARAFA BAZAR, LASHKAR, GWALIOR. (PAN : ABWPJ 4307 J) (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI WASEEM ARSHAD, SR. D.R. RESPONDENT BY : SHRI V. BAPNA, C.A. DATE OF HEARING : 28.03.2012 DATE OF PRONOUNCEMENT : 04.05.2012 ORDER PER A.L. GEHLOT, ACCOUNTANT MEMBER: THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER DATED 08.03.2010 PASSED BY THE LD. CIT(A), GWALIOR FOR THE ASSESSMEN T YEAR 2005-06 ON THE FOLLOWING GROUNDS :- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE THE LD. CIT (APPEALS) HAS ERRED IN DELETING THE ADDITION OF ` 3,162/- MADE ON ACCOUNT OF UNEXPLAINED DALALI AS MENTIONED IN LOOSE PAPER. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E THE LD. CIT (APPEALS) HAS ERRED IN DELETING THE ADDITION OF ` 8,55,254/- AND ITA NO.261/AGR/2010 A.Y. 2005-06 2 ` 85,560/- MADE ON ACCOUNT OF DIFFERENCE OF STOCK OF GOLD AND SILVER ORNAMENTS RESPECTIVELY. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E THE LD. CIT (APPEALS) WAS NOT CORRECT IN ENTERTAINING THE FRESH EVIDENCE. THE APPELLANT RESERVES HIS RIGHT TO ADD, AMEND OR ALTER THE GROUNDS OF APPEAL ON OR BEFORE THE DATE, THE APPEAL IS FINALLY HEARD FOR DISPOSAL. CERTIFIED THAT THE COPY OF THE CIT(A)S ORDER FOR THE A.Y. 2005- 06 IN THE CASE OF ABOVE MENTIONED ASSESSEE WAS COMM UNICATED TO ME ON 13.04.2010. 2. THE BRIEF FACTS OF FIRST GROUND OF REVENUES APP EAL ARE THAT THE ASSESSING OFFICER MADE ADDITION OF ` 3,162/- ON ACCOUNT OF LOOSE PAPER FOUND AT THE TIME OF SEARCH. THE CIT(A) DELETED THE SAID ADDITION AS UN DER :- (CIT(A) PARA 5.2) APPELLANTS SUBMISSIONS ALONGWITH ASSESSMENT ORDE R HAVE BEEN CONSIDERED CAREFULLY. THE SAID LOOSE PAPER HA S ALSO BEEN EXAMINED. ON PERUSAL OF THE SAME IT IS SEEN THAT T HE CONTENTION OF THE APPELLANT IS CORRECT AS THE SAID LOOSE PAPER PERTAI NING TO ACCOUNT OF NAVNEET CATEGORICALLY MENTIONS THE AMOUNT OF DALALI OF ` 3162/- TO SHRI HEM KUMAR JAIN OUT OF WHICH ` 2372/- HAS BEEN ALREADY PAID AND TDS OF ` 332/- DEDUCTED. ON THE BASIS OF THE SAME AND CONSIDERING THE FACT THAT THE AMOUNT HAS ALREADY BE EN DECLARED IN THE NAME OF SHRI HEM KUMAR JAIN ADDITION OF ` 3162/- IS DELETED. 3. AFTER HEARING THE LD. REPRESENTATIVES OF THE PAR TIES, WE NOTICE THAT THE CIT(A) HAS DELETED THE SAID ADDITION ON THE BASIS T HAT THIS AMOUNT HAS ALREADY BEEN DECLARED IN THE NAME OF HEM KUMAR JAIN. THE REVENU E HAS FAILED TO POINT OUT ANY ITA NO.261/AGR/2010 A.Y. 2005-06 3 CONTRARY FACT TO THE FACT RECORDED BY THE CIT(A). IN THE LIGHT OF THE FACT, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF CIT(A) AS THE SA ME AMOUNT HAS BEEN DECLARED IN THE NAME OF HEM KUMAR JAIN. THUS, GROUND NO.1 OF T HE REVENUE IS DISMISSED. 4. THE BRIEF FACTS IN RESPECT OF SECOND GROUND OF R EVENUES APPEAL NOTED BY THE CIT(A) FROM THE ORDER OF ASSESSING OFFICER ARE AS U NDER :- (CIT(A) PARA NO.7) 7. IN THE FIRM M/S PEERCHAND AMIT KUMAR A SURVEY W AS CONDUCTED BUT DURING THE COURSE OF SURVEY BOOKS WERE NOT FOUN D AND DESPITE BEING GIVEN SUFFICIENT OPPORTUNITY IT WAS NOT PRODU CED EITHER BEFORE THE SURVEY PARTY OR BEFORE ME AT THE TIME OF ASSESS MENT. HOWEVER, ASSESSEE HAS SUBMITTED HIS OWN ACCOUNT DIFFERENTIAT ING GOLD ORNAMENTS ON THE DATE OF SURVEY WHICH POINT OUT OPE NING BALANCE ON 06.01.2005 OF TAXABLE GOLD 80.722 GRAMS, TAX PAID G OLD ORNAMENTS 1528.587 GRAMS, GOLD GINNY 40 GRAMS. THE STOCK OF GOLD ORNAMENTS TAX PAID AND GOLD ORNAMENTS TAXABLE AS ON 01/04/200 4 WAS 80.722 GRAMS AND 2268.077 GRAMS RESPECTIVELY. THERE WAS N O OPENING BALANCE OF GOLD GINNY. NO PURCHASE VOUCHERS WERE P RESENTED BEFORE ME NOR ANY OTHER VERIFICATION COULD BE DONE. IN AB SENCE OF VERIFICATION OF PURCHASES STOCK AS PER BOOKS REMAIN S AS ON 01.04.2004. BY COMPARING THE TWO ACCOUNTS DIFFEREN CE OF EXCESS GOLD IN TAX PAID ACCOUNT COMES TO 1528.587 80.722 GRAM S = 1447.865 GRAMS. THE RATE OF GOLD ON THE DATE WAS ` 616.4 PER GRAM PER 23 CT. AND CONSIDERING THE PURITY OF JEWELLERY AT 23 CT TH E RATE COMES TO ` 590.7 PER GRAM. BY APPLYING THE RATE OF 590.7 PER GRAM THE VALUE OF EXCESS GOLD OF 1447.865 GRAMS IN TAX PAID ACCOUNT C OMES TO ` 8,55,254/-. SINCE THERE WAS NO PURCHASE OR OPENI NG STOCK OF GOLD GINNY, THE DIFFERENCE OF 40 GRAMS OF GOLD GINNY IS VALUED AT ` 616.4 PER GRAM WHICH COMES TO ` 24,656/- AND TREATED AS UNEXPLAINED AND OUT OF BOOKS. SIMILARLY IN SILVER ORNAMENTS ACCOUN T THERE WAS NO OPENING STOCK OF OLD SILVER ORNAMENTS AND SILVER CO INS. THE WEIGHT OF STOCK OF OLD SILVER ORNAMENTS AND SILVER COINS FOUN D IS 3.630 KG & 4.385 KG. RESPECTIVELY. IN ABSENCE OF ANY PURCHASE VOUCHER THE TOTAL ITA NO.261/AGR/2010 A.Y. 2005-06 4 SILVER OF 8.015 KG IS FOUND TO BE UNACCOUNTED AND V ALUE OF IT BY APPLYING THE PREVAILING RATE OF SILVER AT ` 10,675/- PER KG. ON THE CORRESPONDING VALUATION DATE THE VALUE OF TOTAL SIL VER OF 8.015 KG. COMES TO ` 85,560/-. SIMILARLY IN SILVER TAX FREE ACCOUNT THE RE WAS NO SILVER WHEREAS ON THE DATE OF SURVEY 4.490 KG SILVE R WAS ALSO FOUND. THE TOTAL VALUE OF SILVER COMES TO ` 85,560/- + ` 47,931/- = ` 1,33,491/-. BEING FOUND UNACCOUNTED THE INVESTMENT IN STOCK OF SILVER AND GOLD TOTALING TO ` 1,33,491/- + ` 8,55,254/- + ` 24,656/- = ` 10,13,401/- IS ADDED TO THE INCOME OF THE ASSESSEE. 5. THE CIT(A) DECIDED THE ISSUE AS UNDER :- (CIT(A) PARA NOS.6.2 TO 6.5) 6.2 APPELLANTS SUBMISSIONS ALONGWITH ASSESSMENT O RDER HAVE BEEN CONSIDERED CAREFULLY. ASSESSMENT RECORDS OF THE AP PELLANT FOR EARLIER YEARS HAVE ALSO BEEN PERUSED. AS PER THE ASSESSMEN T ORDER THE ASSESSING OFFICER HAS WORKED OUT THE EXCESS OF STOC K OF GOLD AT 1447.865 GMS VALUED AT ` 855254/-. THE SAID EXCESS HAS BEEN CALCULATED BY TAKING THE DIFFERENCE OF STOCK FOUND ON DATE OF SEARCH AT 1528.587 GMS AND AS ON 01/04/2004 (80.722 GMS). TH US, THE ASSESSING OFFICER HAS INADVERTENTLY REDUCED TAXABLE GOLD (80.722 GM) ALSO FOUND DURING COURSE OF SEARCH. THE FACT IS TH AT THE TOTAL GOLD AVAILABLE AS PER BOOKS IS 1528.587 GM WHICH TALLIES WITH THE GOLD FOUND DURING THE COURSE OF SEARCH. THE DETAILS AS PRODUCED DURING THE COURSE OF ASSESSMENT AND APPEAL PROCEEDINGS AND ENC LOSED WITH THE RETURN ARE AS UNDER :- PARTICULARS OPENING STOCK (+) PURCHASE (-) SALE C LOSING STOCK AS ON 1.04.2004 UPTO 6.1.05 UPTO 6.1.05 AS ON 6.1. 05 ------------- ------------------ --------------- - ------------ --------------- GOLD ORNAMENTS TAX PAID 80.722 GM -- -- 80.722 GOLD ORNAMENTS TAXABLE 2268.77 GMS 1306 GM 2045.490 1528.587 GM ACCORDINGLY ADDITION OF ` 8,55,254/- IS DELETED. ITA NO.261/AGR/2010 A.Y. 2005-06 5 6.3 THE APPELLANT HAS NOT BEEN ABLE TO GIVE SATISFA CTORY EXPLANATION REGARDING GOLD GINNY OF 40 GMS FOUND AT BUSINESS PR EMISES AS NO DETAILS OF PURCHASE OR OPENING STOCK IN RESPECT OF GOLD GINNY IS FOUND AVAILABLE ON RECORD. ADDITION OF ` 24656/- IS CONFIRMED. 6.4 IN RESPECT OF STOCK OF SILVER, THE ASSESSING OF FICER HAS MADE THE ADDITION OF ` 85,560/- (8.015 KG) FOR SILVER ORNAMENTS AND COINS IN THE ABSENCE OF DETAILS OF PURCHASE FROM THE APPELLANT. SIMILARLY, AMOUNT OF ` 47,931/- HAS BEEN ADDED IN SILVER TAX FREE ACCOUNT (4.490 KG). FROM THE PERUSAL OF EARLIER YEARS BALANCE SHEET, IT IS SEEN THAT THE OPENING STOCK OF SILVER ORNAMENTS AND COINS AT 8.01 5 KG HAS BEEN DECLARED. NO FRESH PURCHASES HAVE BEEN MADE BY THE APPELLANT IN RESPECT OF THESE ITEMS DURING THE YEAR. ASSESSING OFFICER WAS NOT JUSTIFIED IN MAKING THE ADDITION OF ` 85,560/- AND THE SAME IS DELETED. HOWEVER, THE APPELLANT HAS NOT BEEN ABLE TO GIVE AN Y EXPLANATION REGARDING SILVER TAX FREE ACCOUNT WHERE SILVER OF 4 .490 KG HAS BEEN FOUND. ADDITION OF ` 47,931/- IS CONFIRMED. 6.5 THEREFORE OUT OF ADDITION OF ` 10,13,401/- MADE BY THE ASSESSING OFFICER, AMOUNT OF ` 72,587/- IS CONFIRMED. THE APPELLANT GETS A RELIEF OF ` 9,40,814/- ON THIS GROUND. 6. AFTER HEARING THE LD. REPRESENTATIVES OF THE PAR TIES, WE FIND THAT THE CIT(A) HAS APPRECIATED THE FACT OF THE ISSUE AND CORRECTLY NOTED THAT INSTEAD OF BIFURCATING TAXABLE AND SALES TAX PAID CLOSING STOCK, IT SHOULD BE CONSIDERED IN TOTAL AND IF TOTAL IS CONSIDERED, THEN THERE IS NO DIFFERENCE IN THE C LOSING STOCK AS NOTED BY THE ASSESSING OFFICER. WHEN THERE IS NO DIFFERENCE IN THE TOTAL CLOSING STOCK, THEN THE QUESTION OF MAKING ADDITION DOES NOT ARISE. WE, TH EREFORE, FIND THAT THE CIT(A) HAS RIGHTLY DELETED THE ADDITION OF ` 8,55,254/-. ITA NO.261/AGR/2010 A.Y. 2005-06 6 7. AS REGARDS DELETION OF ADDITION OF ` 85,560/- WHICH WAS MADE BY THE ASSESSING OFFICER ON ACCOUNT OF SILVER ORNAMENTS AN D COINS, THE CIT(A) NOTED THAT THE ASSESSEE HAS SHOWN THESE ORNAMENTS AND COINS IN THE BALANCE SHEET. WHEN THE ASSESSEE SHOWN SILVER ORNAMENTS AND COINS IN THE BA LANCE SHEET AS OPENING STOCK, THE QUESTION OF ADDITION DOES NOT ARISE. IN THE LI GHT OF THE FACT, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF CIT(A) IN DELETING THE AD DITION OF ` 85,560/- ON ACCOUNT OF SILVER ORNAMENTS AND COINS. ORDER OF THE CIT(A) IS CONFIRMED ON THE ISSUE. THUS, GROUND NO.2 OF THE REVENUE IS DISMISSED. 8. AS REGARDS GROUND NO.3 WHEREIN THE REVENUE HAS R AISED THE GROUND THAT THE CIT(A) CONSIDERED FRESH EVIDENCE BUT ON PERUSAL OF RECORDS AND AFTER CONSIDERING THE SUBMISSIONS OF THE PARTIES, CERTIFICATES ON PAP ER BOOK BY THE ASSESSEE, PRESENCE OF THE ASSESSING OFFICER BEFORE THE CIT(A) AND AT T HE TIME OF HEARING BEFORE US THE REVENUE DID NOT POINT OUT ANY SPECIFIC FRESH EVIDEN CE IN THIS REGARD. THERE IS NO VIOLATION OF RULE 46-A OF THE I.T. RULES, 1962 WHEN THE ASSESSEE FURNISHES THE RELEVANT DETAILS OF FACTS BEFORE THE ASSESSING OFFI CER AND THE ASSESSING OFFICER FAILS TO APPRECIATE THE SAME. IF THE CIT(A) APPREC IATES THE SAME FACTS IN PRESENCE OF THE ASSESSING OFFICER THAT DOES NOT AMOUNT TO VI OLATION OF RULE 46-A OF THE RULE. IN THE LIGHT OF THE FACTS, WE DO NOT FIND AN Y SUBSTANCE IN THE GROUND OF THE REVENUE. THEREFORE, THIS GROUND OF APPEAL OF THE R EVENUE IS DISMISSED. ITA NO.261/AGR/2010 A.Y. 2005-06 7 9. IN THE RESULT, APPEAL FILED BY THE REVENUE IS DI SMISSED. (ORDER PRONOUNCED IN THE OPEN COURT ON 04.05.2012) SD/- SD/- (BHAVNESH SAINI) (A.L. GEHLOT) JUDICIAL MEMBER ACCOUNTANT MEMBER DATE: 4 TH MAY, 2012 PBN/* COPY OF THE ORDER FORWARDED TO: APPELLANT RESPONDENT CIT CONCERNED CIT (APPEALS) CONCERNED D.R., ITAT AGRA BENCH, AGRA GUARD FILE. BY ORDER SR. PRIVATE SECRETARY INCOME-TAX APPELLATE TRIBUNAL, AGRA TRUE COPY