M/s Rakshit Jewellery Palace, Kolkata V. Income Tax Officer, Ward-53(3), Kolkata, Kolkata

ITA 2665/KOL/2013

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 74973 (ITAT-KOLKATA)
• Duration Of Justice: 1 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-01-2014
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2009-2010
• Appeal Filed On: 27-11-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: A P RAY SRDR
• Assessee Lawyers: S M SURANA
• Keywords: Unexplained investment
• Section: 133A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCH C KOLKATA BEFORE SHRI, P.K BANSAL, ACCOUNTANT MEMBER AND SHRI MAHAVIR SINGH, JUDICIAL MEMBER ITA NO. 2665 / KOL / 2013 ASSESSMENT YEAR :2009-10 M/S RAKSHIT JEWELLERY PALACE, J-284/A, PAHARPUR ROAD, KOLKATA 700 024 [ PAN NO.AAGFR 0224 D ] V/S . INCOME TAX OFFICER, WARD-53(3), 2,GARIAHAT ROAD, AAYKAR BHAWAN, DHAKSHIN, KOLKATA 700 068 /APPELLANT .. / RESPONDENT /BY APPELLANT SHRI S.M.SURANA, AR /BY RESPONDENT SHRI A.P. RAY, SR-DR /DATE OF HEARING 13-01-2014 /DATE OF PRONOUNCEMENT 17-01-2014 / // / O R D E R PER P.K.BANSAL, ACCOUNTANT MEMBER:- THIS APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST THE ORDER OF COMMISSIONER OF INCOME-TAX (APPEALS)-XXXIII, KOLKAT A DATED 22-10-2013 PERTAINING TO ASSESSMENT YEAR 2009-10 BY TAKING FOL LOWING GROUNDS OF APPEAL. 2. GROUNDS NO. 1, 7 AND 8 ARE GENERAL IN NATURE, TH EREFORE DO NOT REQUIRE ANY ADJUDICATION. 3. GROUNDS NO. 2 AND 3 RELATE TO SUSTAINING OF ADDI TION OF RS.40,81,656/-. ITA NO.2665/KOL/2013 A.Y. 2009- 10 M/S RAKSHIT JEWELLERY PALACE V. ITO WD-53(3) KOL PAGE 2 4. THE BRIEF FACTS RELATING TO THESE GROUNDS ARE TH AT THE ASSESSING OFFICER ON SURVEY U/S. 133A OF THE INCOME TAX ACT, 1961 (HE REINAFTER REFERRED TO AS THE ACT) WAS CARRIED OUT AT THE BUSINESS PREMISES OF THE ASSESSEE ON 05-09- 2008. AT THE TIME OF SURVEY, THE GOLD JEWELLERY FOU ND AT 9408.500 GM. WHILE AS PER THE BOOKS THE ORIGINAL 5818.613 GM THUS SEIZED AT 3589.847GM. IN THE ABSENCE OF ANY EXPLANATION, THE AO MADE THE ADDITIO N OF RS.40,81,656/- AS UNEXPLAINED INVESTMENT U/S. 69D OF THE ACT BY VALUI NG THE EXCESS STOCK AT RS.1,137/- PER GRAM. THE ASSESSEE WENT IN APPEAL BE FORE CIT(A). BEFORE CIT(A), ASSESSEE SUBMITTED THAT ASSESSEE IS MANUFAC TURED AND DEALER IN GOLD JEWELLERY. AS PER USUAL PRACTICE OF THE TRADE, ASSE SSEE HAS TO ACCEPT THE SPECIFIC ORDER FROM THE PARTY ON THE BASIS OF SAMPL E FOR MANUFACTURING OF THE GOLD ORNAMENTS FOR WHICH THE GOLD IS GIVEN BY THE C USTOMER EVEN SOMETIMES THE CASH IS ALSO RECEIVED IN ADVANCE SO THAT THE GO LD COULD BE PURCHASED FOR ON BEHALF OF THE ASSESSEE. IN THIS REGARD, ATTENTIO N WAS DRAWN TO SEIZE PAPERS ARE RJP-1, RJP-2 & RJP-3. THE DETAILS EXPLANATION W AS SUBMITTED AND ON THAT BASIS IT WAS POINTED OUT IF THE GOLD RECEIVED FROM THE CUSTOMERS AND THE QUANTITY OF THE GOLD WHICH COULD HAVE BEEN PURCHASE D OUT OF ADVANCE RECEIVED IS RECONCILED. THERE WILL BE A VERY PARTLY DIFFERENCE AND CIT(A) ASKED FOR REMAND REPORT. THE AO IN THE REMAND REPORT IS S TATED THAT ASSESSEE DID NOT SUBMIT ANY EXPLANATION EVEN AT THE TIME OF SURV EY BUT WAS READY TO PAY THE TAX ON THE DIFFERENT AMOUNT AND MENTIONED THAT SUBMISSION OF THE ASSESSEE THAT ASSESSEE RECEIVED THE EXCESS GOLD IS BASELESS. CIT(A) AFTER RECEIVING THE REASONED OF THE ASSESSEE CONFIRMED TH E ADDITION BY OBSERVING AS UNDER:- 5.3 I HAVE CONSIDERED THE FACTS OF THE CASE, THE A PPELLANTS SUBMISSIONS AND THE REMAND REPORT. THE ASSESSING OFFICER MADE T HE ADDITION IN RESPECT OF THE EXCESS STOCK AS NO EXPLANATION WAS P ROVIDED REGARDING THE NATURE AND SOURCE OF THE EXCESS STOCK. THE ASSE SSING OFFICER IN HIS REPORT HAS REPRODUCED THE STATEMENT OF SHRI SOURAV RAKSHIT, PARTNER RECORDED DURING THE SURVEY IN WHICH HE HAD STATED T HAT HE DID NOT HAVE ANY EXPLANATION REGARDING THE EXCESS STOCK AND WAS READY TO PAY TAX ON THE VALUE OF THE UNACCOUNTED STOCK. IT WAS NOT C LAIMED IN THE STATEMENT THAT THE EXCESS STOCK OR PART THEREOF BEL ONGED TO CUSTOMERS WHO MIGHT HAVE GIVEN IT FOR REPAIRING OR AS SAMPLE FOR MAKING JEWELLERY ITA NO.2665/KOL/2013 A.Y. 2009- 10 M/S RAKSHIT JEWELLERY PALACE V. ITO WD-53(3) KOL PAGE 3 AS PER THEIR ORDERS. ACCORDING TO THE ASSESSING OFF ICER, THE APPELLANT NEVER MADE THIS CONTENTION DURING THE ASSESSMENT PR OCEEDINGS ALSO AND IT WAS ONLY BEFORE THE LD. CIT(APPEALS) THAT TH IS EXPLANATION WAS GIVEN. IN THIS REGARD, THE ASSESSING OFFICER HAS AL SO REFERRED TO THE DECISION OF HONBLE ITAT, MUMBAI IN THE CASE OF SYNTHETIC COLOUR CHEMICAL INDUSTRIES VS. DCIT DATED 11.05.2011 IN ITA NO. 5563M/2009 . THE ASSESSING OFFICER HAS ALSO GIVEN A DETAILED A NALYSIS RELATING TO THE APPELLANTS CLAIM THAT THE ORDER ME MOS FOUND AND IMPOUNDED DURING THE SURVEY SHOWED DEPOSIT OF GOLD BY THE CUSTOMERS WITH THE APPELLANT. THE ASSESSING OFFICER IN HIS AN ALYSIS HAS EITHER FOUND THAT THERE WAS NO GOLD DEPOSITED BY THE CUSTO MERS IN RESPECT OF THE SPECIFIC ORDER MEMOS ALTHOUGH CLAIMED TO BE DEP OSITED BY THE CUSTOMERS AS PER THE APPELLANT OR INCOME SOME ISOLA TED CASES WHERE GOLD HAD INDEED BEEN DEPOSITED, THE ORNAMENTS JEWE LLERY HAD ALREADY BEEN DELIVERED TO THE CUSTOMERS BEFORE THE DATE OF SURVEY SHOWING THAT THE APPELLANT DID NOT POSSESS ANY GOLD BELONGING TO CUSTOMERS AS ON THE DATE OF SURVEY. THE APPELLANT HAD MADE ONE MORE CONTENTION THAT CASH ADVANCES AMOUNTING TO RS.1118248/- WERE FOUND TO HAVE BEEN RECEIVED BY THE APPELLANT AS PER THE FINDINGS OF TH E SURVEY AND THIS CASH WOULD HAVE BEEN USED IN THE APPELLANTS BUSINESS TO BUY GOLD FOR THE CUSTOMERS. AT THE PREVAILING RATE OF GOLD, THE ADVA NCES AMOUNTING TO RS.1118248/- WERE EQUIVALENT TO 985 GMS OF GOLD. THIS ARGUMENT HAS NOT BEEN ACCEPTED BY THE ASSESSING OFFICER IN THE R EMAND REPORT BY STATING THAT ALL THE IMP9OUNDED MEMOS ( BARRING SOME MEMOS CONTAINING DETAILS OF ADVANCES AGGREGATING TO RS.26 5947/- ) REPRESENTING THE ADVANCES CONTAINED A CROSS MARK IN DICATING THAT ALL THE RELEVANT TRANSACTIONS HAD BEEN COMPLETED BEFORE THE DATE OF SURVEY. AS REGARDS THE DECISION OF HONBLE ITAT, MUMBAI IN SYNTHETIC COLOUR CHEMICAL INDUSTRIES (SUPRA), IN MY VIEW, THE FACTS OF THAT CASE WERE DIFFERENT. IN THAT CASE, THE ASSESSEE HAD RAISED TH E ISSUE OF FORCIBLE EXTRACTION OF THE DECLARATION OF INCOME BY THE SURV EY PARTY AND FORCED WRITING OF ALLEGED PAPERS RELATING TO UNACCOUNTED S ALES AND COMMISSION INCOME. IN THE PRESENT CASE, THE ISSUE IS THAT THE APPELLANT COULD NOT / DID NOT OFFER ANY EXPLANATION REGARDING EXCESS STOC K BUT HAS NOW COME UP WITH AN EXPLANATION AND HAS ATTEMPTED TO SUPPORT THE EXPLANATION WITH SOME DOCUMENT AND OTHER FACTS. WHAT IS NECESSA RY TO EXAMINE, HOWEVER, IS WHETHER THE EVIDENCE BEING FURNISHED IN SUPPORT OF THE EXPLANATION IS SATISFACTORY. IN THE REJOINDER TO TH E REMAND REPORT, THE APPELLANT HAS STATED THAT IN SOME OF THE CASES WHER E THE ASSESSING OFFICER HAS REPORTED THAT THERE WAS NO RECEIPT OF G OLD FROM CUSTOMERS, IT IS MENTIONED TO BE MANUFACTURED AS PER SAMPLE PROVIDED . IT IS STATED THAT IN SOME CASES BROKEN GOLD IS PROVIDED BY THE C USTOMERS FOR REPAIRS AND IN OTHER CASES, SAMPLE ARE PROVIDED. THE APPELL ANT HAS ALSO REFERRED TO FOUR ENTRIES IN THE INVENTORY OF GOLD J EWELLERY MADE DURING THE SURVEY WHICH INDICATE BROKEN JEWELLERY TO SUPPORT ITS STAND THAT JEWELLERY FROM CUSTOMERS RECEIVED FROM CUSTOMERS WA S LYING WITH THE ITA NO.2665/KOL/2013 A.Y. 2009- 10 M/S RAKSHIT JEWELLERY PALACE V. ITO WD-53(3) KOL PAGE 4 APPELLANT. HOWEVER, THESE ARGUMENTS DO NOT SUPPORT THE QUANTITATIVE DETAILS OF CUSTOMERS GOLD GIVEN BY THE APPELLANT W HICH HAS BEEN FOUND TO BE INCORRECT AFTER DETAILED VERIFICATION BY THE ASSESSING OFFICER IN THE REMAND REPORT. AS REGARDS THE BROKEN ITEMS LISTED IN THE INVENTORY OF GOLD JEWELLERY, IT IS NOT CLEAR AS TO WHY THE APPEL LANT HAS TO RESORT TO GENERAL ARGUMENTS WHEN IT COULD HAVE IDENTIFIED THE NAMES AND ADDRESSES OF THE RESPECTIVE CUSTOMERS TO SUPPORT IT S CONTENTION. FOR EXAMPLE, THE GROSS WEIGHT OF ONE OF THE BROKEN ITEMS LISTED AT SL. NO. 18 OF THE INVENTORY PREPARED DURING THE SURVEY IS 3 95 GMS WHICH HAS BEEN VALUED AT RS450695/-. SURELY, THE APPELLANT CO ULD HAVE IDENTIFIED THE CUSTOMER WHO HAD DEPOSITED SUCH A VALUABLE ARTI CLE WITH THE APPELLANT FOR REPAIRS. AS REGARDS THE CLAIM REGARDI NG SAMPLE JEWELLERY, WHILE IT CAN BE ACCEPTED THAT SAMPLE JEWELLERY MIGH T HAVE BEEN RECEIVED AT SOME POINTS OF TIME, THE APPELLANT HAS NOT MADE ANY ATTEMPT TO CORROBORATE THE CLAM THAT SUCH SAMPLES W ERE LYING WITH IT ON THE DATE OF SURVEY BY POINT OUT SUCH SAMPLES IN THE INVENTORY PREPARED DURING THE SURVEY. MOREOVER, THE SAMPLES AS MENTION ED IN THE ORDER MEMOS DO NOT INDICATE ANY SPECIFICATIONS INCLUDING WEIGHT. THE APPELLANT HAS EARNED JOB WORK CHARGES AND IT MEAN T HAT JEWELLEY WOULD HAVE BEEN RECEIVED BY THE APPELLANT AT TIME FOR REP AIR BUT THIS FACT DOES NOT ESTABLISH THAT THE APPELLANT HAD ANY SPECIFIC Q UANTITY OF CUSTOMERS GOLD IN ITS POSSESSION AT THE TIME OF THE SURVEY, E SPECIALLY IN VIEW OF THE ARGUMENTS GIVEN BY THE ASSESSING OFFICER AGAINST TH E SPECIFIC QUANTITATIVE CLAIMS MADE BY THE APPELLANT. THE ONUS ON THE APPELLANT TO ADDUCE CLINCHING EVIDENCE TO ESTABLISH SPECIFIC QUA NTITY OF CUSTOMERS GOLD AT THE TIME OF THE SURVEY WAS PARTICULARLY HEA VY IN VIEW OF THE ABSENCE OF ANY EXPLANATION FROM THE APPELLANT OR CL AIM REGARDING SUCH CUSTOMERS GOLD BEING A PART OF THE EXCESS STOCK AT THE TIME OF THE SURVEY OR THE ASSESSMENT PROCEEDINGS. AS THE APPELL ANT HAS BEEN UNABLE TO GIVE ANY CONCRETE EVIDENCE, THE EXPLANATI ON OF THE APPELLANT CANNOT BE ACCEPTED. THERE IS ONE MORE CLAIM OF THE APPELLANT TO BE EXAMINED I.E. PART OF THE EXCESS STOCK HAVING BEEN ACQUIRED OUT OF THE ADVANCES IN CASH OF RS.11,18,248/- RECEIVED FROM C USTOMERS. THE ADDITION ON ACCOUNT OF CUSTOMERS ADVANCES IS BEING DISCUSSED LATER IN THIS ORDER. NO RELIEFS GRANTED AGAINST THE ADDITION ON ACCOUNT OF EXCESS STOCK FOR REASONS GIVEN IN THE SEPARATE DISCUSSION ON THAT ISSUE. HENCE, THE ADDITION OF RS.40,81,656/- ON ACCOUNT OF UNEXPL AINED INVESTMENT IN THE EXCESS STOCK OF GOLD IS CONFIRMED . 5. BEFORE US LD. AR REITERATED SAME SUBMISSION MADE IN THE REJOINDER BEFORE CIT(A). OUR ATTENTION WAS DRAWN TOWARDS THE IMPUGNED MATERIAL AT RJP-1, RJP-2 & RJP-3 WHICH ARE AVAILABLE AT PAGES 1 7 TO 256 OF THE PAPER BOOK. ATTENTION WAS ALSO DRAWN TOWARDS THE REMAND R EPORT AS WELL AS REJOINDER THE COPY OF JEWELLERY AVAILABLE FROM PAGE S 5A TO 5F. ATTENTION WAS ITA NO.2665/KOL/2013 A.Y. 2009- 10 M/S RAKSHIT JEWELLERY PALACE V. ITO WD-53(3) KOL PAGE 5 DRAWN TO THE AUDIT REPORT OF PROFIT AND LOSS ACCOUN T FROM THE IMPUGNED ASSESSMENT IN WHICH JOB CHARGES WERE MADE AS THE IN COME OF THE ASSESSEE AND TO BE ACCEPTED BY THE AO ON THE BASIS OF RJP-1 AND RJP-2, A CONSOLIDATED DETAILS WERE FILED AND ON THE BASIS OF THAT IT WAS CLAIMED THAT ASSESSEE HAS RECEIVED ADVANCE FOR PURCHASING GOLD F OR MAKING JEWELLERY ON THE BASIS OF THE SAMPLE AS SUPPLIED BY THE ASSESSEE . IT WAS ALSO STATED THAT THE ASSESSEE HAS RECEIVED GOLD ORNAMENTS FROM THE C USTOMERS AND THUS IT WAS CONTENDED THAT ASSESSEE HAS RECEIVED THE GOLD O N BEHALF OF THE CUSTOMERS TO THE EXTENT OF 3447 GMS. NO DOUBT THERE WAS EXCESS TO THE EXTENT OF 9589.84 GMS IF THE SAID GOLD 3447 GMS IS REDUCED FROM 358.8407 GMS. THERE WILL BE REMAINED OF MINOR DIFFERENCE OF 142.8 47 GMS. IT WAS CONTENDED THAT CLEARLY MAKING TIME WAS FROM 40 TO 45 DAYS (AV ERAGE 45 DAYS) THE TOTAL JOB CHARGES RECEIVED WERE AT RS.8,27,279/- ON THE B ASIS THE ASSESSEE WAS RECEIVING JOB CHARGES @ RS.30/- PER/GMS AND ON THAT BASIS THE ASSESSEE WAS HAVING 3447 GMS. THUS, IT WAS CONTENDED THAT THE AD DITION MADE SHOULD NOT BE SUSTAINED 6. THE LD. SR-DR ON THE OTHER HAND RELIED ON THE OR DERS OF AUTHORITIES BELOW AS WELL AS STATEMENT RECORDED FROM THE ASSESS EE DURING THE COURSE OF SURVEY. 7. WE HEARD RIVAL CONTENTION AND CAREFULLY CONSIDER ED ALONG WITH THE ORDER OF REMAND REPORT. WE NOTED THAT AT THE TIME OF SURV EY THE TOTAL GOLD JEWELLERY FOUND FROM THE POSSESSION OF ASSESSEE AT 9408.500 G MS AND GOLD JEWELLERY AS PER THE BOOKS OF THE ASSESSEE WHICH RELATED TO ASSE SSEES EXCESS GOLD 2342.638 GMS. THUS, THE DIFFERENCE OF 3589.613 GMS AND REMAINING GOLD JEWELLERY FOUND. THIS IS ALSO A FACT THAT THE ASSES SEE HAS CREDITED JOB CHARGES TO THE EXTENT OF RS.8,27,279/-. OUR ATTENTION WAS D RAWN TOWARDS THE IMPOUNDED MATERIAL AT RJP-1, RJP-2 & RJP-3 WHICH WE PURSUED AND FROM THE MATERIAL WHICH VALUED THAT ASSESSEE HAS RECEIVED TH E GOLD FROM THE CUSTOMERS FOR MAKING THE GOLD ORNAMENTS ON THE BASIS OF THE S AMPLE EVEN THE ASSESSEE ITA NO.2665/KOL/2013 A.Y. 2009- 10 M/S RAKSHIT JEWELLERY PALACE V. ITO WD-53(3) KOL PAGE 6 HAD ALSO RECEIVED THE CASH ADVANCE FROM THE CUSTOME RS FOR BUYING THE GOLD. THE GOLD MAKING CHARGES IS AROUND RS.30-35 PER/GRM. THE ASSESSEE CLAIMED THAT AVERAGE GOLD ORNAMENTS MAKING TIME IS AROUND 4 5 DAYS IF THE AVERAGE TIME OF 45 DAYS AND JOB CHARGES @ RS.30/- PER/GRM I S TAKING INTO ACCOUNT THE ASSESSEE MIGHT HAVE RECEIVED THE GOLD FOR MAKING TH E ORNAMENTS FROM THE CUSTOMERS OR PURCHASED IT ON BEHALF OF ASSESSEE TO THE EXTENT OF 3447 GMS. THIS FACTS HAS NOT BEEN DISPUTED BY LD. SR-DR IF TH E ASSESSEE IS ALLOWED THE CREDIT 3447 GMS. WE FOUND STILL THERE WILL BE AN EX CESS OF 142.847 GMS AND OUR OPINION, IF EXCESS STOCK WE FOUND THE ONUS IS O N THE ASSESSEE TO EXPLAIN AND SATISFY THE REVENUE HOW THIS EXCESS HAS ARISEN. NO DOUBT THE SEIZED MATERIALS AND THE JOB CHARGES RECEIVED BY THE ASSES SEE PROVED THAT ASSESSEE HAS RECEIVED THE GOLD FROM THE CUSTOMERS AND ALSO R ECEIVED THE ADVANCE FROM THE CUSTOMERS FOR THE PURCHASE OF GOLD FOR MAKING T HE GOLD JEWELLERY FOR THE CUSTOMERS. THE ASSESSEE HAS NOT GIVEN THE DETAILS I N RESPECT OF EACH AND EVERY GOLD MAKING AS HAD BEEN RECEIVED TO PROVE THE DIFFERENCE OF 142.847 GMS. WE ALSO NOTED THAT ASSESSEE HAS NOT DISPUTED T HE RATE ADOPTED BY THE REVENUE FOR THE PURPOSE OF VALUING THE EXCESS STOCK . THIS IS ALSO IN PRACTICE THAT THE CUSTOMERS GIVEN THE JEWELLERY AND ALSO MAK ING THE PAYMENT THUS FOR MAKING THE JEWELLERY IN DESIGN AND SAMPLE AS IS APP ROVED BY THEM. IT CANNOT BE SAID THAT ASSESSEE WAS NOT RECEIVED HAVING THE J EWELLERY AND THE GOLD ON BEHALF OF THE CUSTOMERS. UNDER THE CIRCUMSTANCES OF THE FACTS OF THE CASE, WE FOUND THAT EXPLANATION GIVEN BY THE ASSESSEE IS PAR PLAUSIBLE ONE AND IS BASED ON THE BASIS OF THE MATERIAL SEIZED DURING TH E COURSE OF SEARCHED. WE, THEREFORE ACCEPT THAT OUT OF EXCESS GOLD JEWELLERY FOUND MEASURING 3589.847 GMS THE GOLD ORNAMENTS TO THE EXTENT 3447 GMS ARE T O BE EXPLAINED AND ACCORDINGLY WE DELETE THE ADDITION IN RESPECT OF 34 47 GMS OF JEWELLERY. SINCE THE ASSESSEE COULD NOT EXPLAIN THE REMAINING DIFFER ENCE OF 142.847 GMS WE SUSTAIN THE ADDITION TO THAT EXTENT AND DIRECT THE ASSESSING OFFICER TO WORK OUT THE RE-VALUE OF 142.847 GMS OF GOLD ORNAMENTS AND W HATEVER VALUE MAY WORK OUT THE ADDITION AT RS.40,81,656/- BE REDUCED TO TH AT AMOUNT. THUS, GROUNDS NO. 2 AND 3 ARE PARTLY ALLOWED. ITA NO.2665/KOL/2013 A.Y. 2009- 10 M/S RAKSHIT JEWELLERY PALACE V. ITO WD-53(3) KOL PAGE 7 8. GROUND NO.4 RELATES TO SUSTAIN OF RS.45,067/-. 9. THE BRIEF FACTS RELATING TO THIS GROUND ARE THAT THE ASSESSING OFFICER NOTED AS PER THE ENTRY IN THE CASH BOOK BETWEEN 22- 08-2008 TO 26-08-2008 THAT THERE WAS A NEGATIVE CASH BALANCE TO THE EXTEN T OF RS.3,11,104/- THEREFORE HE ADDED THE SAME IN THE INCOME OF THE AS SESSEE. WHEN THE MATTER WENT BEFORE CIT(A), THE CIT(A) ON THE BASIS OF THE CONTENTION OF THE ASSESSEE THAT ASSESSEE RECEIVED THE ADVANCE FROM THE CUSTOME RS FOR PURCHASING THE GOLD FOR MAKING GOLD ORNAMENTS AND OUT OF WHICH THE ASSESSEE PURCHASED THE GOLD FOR THE CUSTOMERS I.E., SOMETIMES GOLD IS TO B E PURCHASED 3/4 DAYS LATER. THUS, THERE WAS NO CASH DEFICIT. IT WAS ALSO STATED THAT AN ADVANCE OF RS.2,65,947/- WAS AVAILABLE WITH THE ASSESSEE AS ON THE DATE OF SURVEY HAS BEEN ACCEPTED BY THE AO IN THE REMAND REPORT. THE C IT(A) DELETED THE SUM OF RS.2,65,947/- OUT OF RS.3,11,104/- AND CONFIRMED TH E ADDITION OF RS.45,067/-. 10. WE HEARD RIVAL SUBMISSION AND CAREFULLY CONSIDE RED THE SAME. BEFORE US THE AR REITERATED THE SAME SUBMISSION THAT ASSES SEE HAS RECEIVED A CASH ADVANCE FOR PURCHASE OF GOLD OF RS.11,18,248/- WHIC H WAS AVAILABLE WITH THE ASSESSEE TO PURCHASE THE GOLD AND GOLD HAS BEEN PUR CHASED SUBSEQUENTLY THE CASH WAS NOT BEING ACCOUNTED FOR AND IN THIS RE GARD ATTENTION WAS DRAWN TO RJP-1, RJP-2 & RJP-3.ON A QUERY FROM THE BENCH, WHY THIS AMOUNT WAS NOT ENTERED INTO THE BOOKS OF ASSESSEE. IT WAS STAT ED THAT SINCE CASH HAS KEPT ON BEHALF OF THE CUSTOMERS AS IN CASH MONEY GETTING THEM GOLD JEWELLERY MADE. THEREFORE, ASSESSEE HAS NOT ENTERED THE CASH INTO ITS BOOKS OF ACCOUNT. WE NOTED THAT THE AO HAD MADE AN ADDITION OF RS.3,11,014/- ON THE BASIS OF NEGATIVE CASH AND CIT(A) DELETED THE ADDIT ION OF RS.2,65,947/- ON THE BASIS OF THE PLEA WHICH HAS BEEN TAKEN BY ASSESSEE BEFORE US AS WELL AS BEFORE CIT(A). IF THE ASSESSEE HAS RECEIVED ADVANCE TO THE EXTENT OF RS.11,18,248/- A SUM OF RS.45,067/-, IN OUR OPINION , WILL ALSO BE AVAILABLE WITH THE ASSESSEE THE REVENUE HAS NOT FILED ANY APPEAL A GAINST THE DELETION OF RS.2,65,947/-, IN OUR OPINION, THE CONTENTION OF TH E ASSESSEE BEFORE CIT(A) ITA NO.2665/KOL/2013 A.Y. 2009- 10 M/S RAKSHIT JEWELLERY PALACE V. ITO WD-53(3) KOL PAGE 8 HAD NOT ACCEPTED BY THE REVENUE ON THE SAME ANALOGY WE DELETE THE ADDITION OF RS.45,067/-. THIS GROUND OF ASSESSEES APPEAL IS ALLOWED. 11. GROUND NO.5 RELATES TO ADDITION OF RS.2,65,947/ - OUT OF CASH RECEIPT FROM THE CUSTOMERS. 12. BRIEF FACTS IS RELATING TO THE GROUND ARE THAT THE ASSESSING OFFICER NOTED THAT ASSESSEE HAS RECEIVED THE ADVANCE FROM THE CUS TOMERS TO THE EXTENT OF RS.11,18,248/- ON THE BASIS OF THE IMPOUNDED PAPERS AND THIS ADVANCE HAS NOT BEEN ACCOUNTED FOR IN ASSESSEES BOOK. THEREFOR E, THE AO MADE THE ADDITION OF RS.11,18,248/- WHEN THE MATTER WENT BEF ORE CIT(A) THE ASSESSEE CONTENDED THAT THE ADVANCE IS RECEIVED HAS DULY BEE N ADJUSTED IN THE SELL BILLS RELATING TO THE SALES WHICH HAS PROPERLY BEEN ACCOU NTED FOR. AFTER CONSIDERING THE REMAND REPORT AS WELL AS THE SUBMISSION OF ASSE SSEE AND THE SEIZED PAPER, CIT(A) DELETED THE ADDITION OF RS.8,52,301/- BUT SUSTAINED THE ADDITION OF RS.2,65,947/- BY OBSERVING AS UNDER:- 8.3 I HAVE CONFIRMED THE FACTS OF THE CASE, THE A PPELLANTS SUBMISSIONS AND THE REMAND REPORT. THE APPELLANT HAS NOT DISPUT ED THAT ADVANCES AGGREGATING TO RS.11,18,248/- WERE RECEIVED IN CASH AND WERE NOT ACCOUNTED FOR. IN THE REMAND REPORT, IT HAS BEEN RE PORTED THAT NOT A SINGLE INSTANCE OF ANY ADVANCE BEING ADJUSTED AGAIN ST ANY ACCOUNTED SALES OR BEING ACCOUNTED FOR A SALES HAS BEEN NOTED . IN THE COUNTER COMMENTS THE APPELLANT HAS MADE A DIFFERENT CLAIM I .E., SOME OF THE ADVANCES WERE ACCOUNTED FOR AS JOB CHARGES. HOWEVER , NO SPECIFIC DETAILS HAVE BEEN PROVIDED. HENCE, IT IS CLEAR THAT THE PROFIT EARNED BY THE APPELLANT ON THE ADVANCES HAS NOT BEEN ACCOUNTE D FOR. ACCORDING TO THE ASSESSING OFFICER, THE ENTIRE AMOUNT OF THE ADV ANCES IS TO BE ASSESSED AS INCOME AS THE PROPORTION OF THE ADVANCE S TO THE SALES IS MORE OR LESS SIMILAR TO THE GROSS PROFIT MARGIN I.E ., 19.20%. WHILE THE EXACT AMOUNT OF PROFIT ATTRIBUTABLE TO THE ADVANCES IS DEBATABLE, IT CANNOT BE DENIED THAT INCOME RELATABLE TO THE ADVAN CES HAS NOT BEEN PROPERLY ACCOUNTED FOR BY THE APPELLANT AND THE ADV ANCES HAD BEEN RECEIVED BEFORE THE DATE OF SURVEY AND THE TRANSACT IONS RELATING THERETO HAVE BEEN COMPLETED BEFORE THE DATE OF SURVEY AS PE R THE REMAND REPORT BARRING ADVANCES TOTALING TO RS.265947( AS DISCUSSED IN PARA 6 TO 6.3 ABOVE ).SINCE THE SALES PROCEEDS /JOB WORK CHARGES RELATI NG TO ADVANCES OF RS.852301/- (I.E. RS.11,18,248 2,65,9 47) AND THE PROFIT THEREON HAD BEEN RECEIVED PRIOR TO THE DATE OF SURV EY AND NO CASH OR ITA NO.2665/KOL/2013 A.Y. 2009- 10 M/S RAKSHIT JEWELLERY PALACE V. ITO WD-53(3) KOL PAGE 9 OTHER ASSET WHICH WAS NOT ACCOUNTED FOR WAS FOUND O N THE DATE OF SURVEY, THE PROFIT ON SALES PROCEEDS / JOB WORK CHA RGES RELATABLE TO THE ADVANCES OF RS.852301/- HAVE TO BE CONSIDERED AS HA VING BEEN USED FOR ACQUISITION OF EXCESS STOCK OF RS.4081651/- CON FIRMED AS UNEXPLAINED INVESTMENT IN PARA 5.3 ABOVE. HENCE, NO ADDITION CAN BE MADE IN RESPECT OF ADVANCES OF RS.852301/-. AS REGA RDS THE BALANCE ADVANCES OF RS.265947/- THE SAME HAVE BEEN ALREADY TELESCOPED AGAINST THE CASH DEFICIT OF 311014 IN PARA 6.3. HEN CE, ADDITION OF RS.265947/- THE SAME HAVE BEEN ALREADY TELESCOPED A GAINST THE CASH DEFICIT OF 311014 IN PARA 6.3 HENCE, ADDITION OF RS .265947/- IS CONFIRMED AND THE BALANCE ADDITION OF RS.852301/- IS DELETED . SINCE THE ENTIRE AMOUNT OF ADVANCES FROM CUSTOMERS HAS BE EN TELESCOPED AGAINST THE EXCESS STOCK AND CASH DEFICIT AS ABOVE, THE ADDITION ON ACCOUNT OF UNEXPLAINED INVESTMENT IN EXCESS STOCK O F RS.4081651/- CONFIRMED IN PARA 6.3 ABOVE DOES NOT NEED TO BE REDUCED FURTHER BY ANY AMOUNT OF GOLD WHICH MIGHT HAVE BEEN ACQUIRED OUT O F THE CASH AVAILABLE FROM THE CUSTOMERS ADVANCES. 13. WE HEARD RIVAL SUBMISSION AND CAREFULLY CONSIDE RED THE SAME AND IT IS NOT DENIED THAT ASSESSEE HAS RECEIVED JOB CHARGE TO THE EXTENT OF RS.8,52,301/- WHICH HAS DULY BEEN ACCOUNTED FOR IN THE BOOKS OF ASSESSEE AND ADVANCE WAS RECEIVED BY ASSESSEE TO THE EXTENT OF RS.11,18,248/-. IN OUR OPINION, NO DIFFERENCE IS CALLED FOR IN THE ORDER O F CIT(A) AND CIT(A) HAS RIGHTLY UPHELD THE ADDITION AS AGAINST THE ADVANCE RECEIVED BY THE ASSESSEE AND JOB CHARGES RECEIVED COULD HAVE ADJUSTED. THERE IS NO E VIDENCE OR PROOF THAT ASSESSEE HAS RETAINED THE ADVANCE TO THE CUSTOMERS. WE, THEREFORE CONFIRMED THE ADDITION OF RS.2,65,947/- AND THIS GROUND OF AS SESSEES APPEAL IS DISMISSED AS INDICATED ABOVE. 14. LAST GROUND OF ASSESSEES APPEAL RELATES TO THE ADDITION OF RS.1.02 LAKH IN STOCK OF SILVER ARTICLES BEING IDOLS OF THE GOD KEPT FOR PUJA PURPOSES. 15. THE BRIEF FACTS OF THE CASE THAT DURING THE COU RSE OF SURVEY THE IDOLS OF THE GOD WERE FOUND AND ASSESSING OFFICER VALUED THE STOCK OF THE SALE AT RS.1.02 LAKH. WHEN THE MATTER WENT BEFORE CIT(A) TH E EXPLANATION OF THE ASSESSEE THAT THE SILVER MADE IDOLS OF THE GOD AND PUJA UTENSILS FOR DAY-TO- DAY PUJA AND THEY ARE NOT BEING HELD FOR THE PURPOS E OF SALE. ITA NO.2665/KOL/2013 A.Y. 2009- 10 M/S RAKSHIT JEWELLERY PALACE V. ITO WD-53(3) KOL PAGE 10 16. WE HEARD RIVAL SUBMISSION AND CAREFULLY CONSIDE RED THE SAME. THE LD. AR BEFORE US REITERATED THE SAME AS MADE BEFORE AUT HORITIES BELOW BUT DID NOT SUBMIT THAT THE SILVER BELONGED TO PARTICULAR PARTN ER AND THE PARTNERSHIP FIRM IS FORMED FOR THE PURPOSE OF BUSINESS EVEN NECESSARY O F THE FIRM. IT HAS TO BE INCORPORATED IN THE BALANCE-SHEET OF THE FIRM. IN O UR OPINION, NO INTERFERENCE IS CALLED FOR IN THE ORDER OF CIT(A) AND THE ORDER OF CIT(A) IS UPHELD. THIS GROUND OF ASSESSEES APPEAL IS DISMISSED. 17. IN THE RESULT, APPEAL OF ASSESSEE IS PARTLY ALLOWED . ORDER PRONOUNCED IN THE OPEN COURT 17/ 01/2014 SD/- SD/- (MAHAVIR SINGH) (P.K.BANSAL) (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) KOLKATA, *DKP !- 17/01/2014 , , , , -, -, -, -, / COPY OF ORDER FORWARDED TO:- 1. / APPELLANT, M/S RAKSHIT JEWELLERY PALACE, J-284/A, PAHARPUR ROAD, KOLKATA 700 024 2. / RESPONDENT, INCOME TAX OFFICER, WARD-53(3), 2,GARIAHAT ROAD, AAYKAR BHAWAN, DHAKSHIN, KOLKATA 700 068 3. 2 / CONCERNED CIT 4. 2- / CIT (A) 5. , , , / DR, ITAT, KOLKATA 6. 9 / GUARD FILE. BY ORDER/ , /TRUE COPY/ / ,