SMT DEEPALI HALDIA, Jaipur V. DCIT, Jaipur

ITA 29/JPR/2011

• Counselvise Citation: 2923114 RSA 2011
• Duration Of Justice: 11 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-12-2011
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 20-10-2011
• Assessment Year: 2008-2009
• Appeal Filed On: 07-01-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SUBHASH CHANDRA
• Assessee Lawyers: NEERAJ BORAD; M L BORAD MANISH BORAD
• Keywords: Unexplained investment; Loose papers; Document seized; Opportunity of being heard; Fair market value; Valuation report; Retraction; Documents seized
• Section: 143(3); 133A; 153A

Judgement Text

1 ITA 29(7)-11 IN THE INCOME TAX APPELLATE TRIBUNAL JAIPUR BENCH B JAIPUR BEFORE SHRI R.K. GUPTA AND SHRI N.L. KALRA ITA NO. 29, 710, 643 & 642/JP/2011, 1295/JP/10 ASSTT. YEAR : 2008-09, 06-07, 05-06, 04-05 & 03 -04. SMT. DEEPALI HALDIA, VS. THE DCIT, CENTRAL CIRCL E-3, W/O DINESH HALDIA, JAIPUR. C-18, JYOTI MARG, BAPU NAGAR, JAIPUR. ITA NO. 102/JP/2011 & 1388/JP/2010 ASSTT. YEARS : 2008-09 & 2004-05. THE DCIT, CENTRAL CIRCLE-3, VS. SMT. DEEPALI HALD IA, JAIPUR. JAIPUR. (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI M.L. BORAD, MANISH BORAD & NEERAJ BORAD DEPARTMENT BY : SHRI SUBHASH CHANDRA DATE OF HEARING : 20.10.2011. DATE OF PRONOUNCEMENT : 19.12.2011. ORDER DATE OF ORDER : 19/12/2011. PER BENCH : THESE ARE SEVEN APPEALS BY ASSESSEE AND DEPARTMENT RELATING TO ASSESSMENT YEARS 2003-04 TO 06-07 AND 2008-09. 2. SIMILAR ISSUES ARE INVOLVED IN ALL THESE APPEALS , THEREFORE, THEY ARE BEING DISPOSED OFF TOGETHER. 2. THE ASSESSEE BELONGS TO RAVI HALDIA GROUP AND IN CASE OF RAVI HALDIA GROUP, THE ADDITION WAS MADE ON SUBSTANTIVE BASIS AND IN THE H ANDS OF THE ASSESSEE THE ADDITION WAS 2 MADE ON PROTECTIVE BASIS IN RESPECT OF UNDISCLOSED INCOME ON ACCOUNT OF OVER VALUATION OF STOCK. 3. WE WILL TAKE FIRST APPEAL FOR ASSESSMENT YEAR 20 08-09 WHICH IS LEADING ORDER AND THEREAFTER WILL TAKE THE APPEALS OF REMAINING YEARS . 4. ASSESSMENT IN THIS CASE WAS COMPLETED UNDER SECT ION 153A READ WITH SECTION 153B/143(3) OF THE I.T. ACT. CERTAIN ADDITIONS WER E MADE BY THE AO. THE LD. CIT (A) HAS ALLOWED THE APPEAL OF THE ASSESSEE IN PART. WH ERE ADDITIONS ARE DELETED, THE DEPARTMENT IS IN APPEAL AND WHERE ADDITIONS ARE CON FIRMED, THE ASSESSEE IS IN APPEAL. 5. THE ASSESSEE IN GROUND NO. 1 IS CHALLENGING IN S USTAINING THE ACTION OF SURVEY UNDER SECTION 133A AND SEARCH UNDER SECTION 132(1) OF THE IT ACT AND THEREBY MAINTAINING THE ASSESSMENT ORDER PASSED BY THE AO U NDER SECTION 143(3) READ WITH SECTION 153B, WAS NOT PRESSED. THEREFORE, THE SAME IS DISMISSED AS NOT PRESSED. 6. THROUGH GROUND NOS. 2, 3 & 4, THE ASSESSEE IS OB JECTING IN SUSTAINING THE ADDITION OF RS. 21,26,288/- OUT OF TOTAL ADDITION OF RS. 40, 87,000/- MADE BY AO ON ACCOUNT OF UNEXPLAINED INVESTMENT IN EXCESS STOCK FOUND DURING THE COURSE OF SURVEY. 6.1. THE ONLY ISSUE IN THE APPEAL OF THE DEPARTMENT IS AGAINST DELETION OF ADDITION OF RS. 19,60,712/- OUT OF TOTAL ADDITION OF RS. 40,87, 000/-. 6.2. SINCE THESE GROUNDS ARE INTER RELATED, THEREFO RE, THEY ARE DISPOSED OFF TOGETHER. 7. BRIEF FACTS OF THE CASE DISCUSSED BY LD. CIT (A) IN PARA 4.1 TO 4.4 OF HIS ORDER ARE AS UNDER :- 4.1 THESE GROUNDS RELATE TO ADDITION OF UNEXPLAINED EXCESS STOCK FOUND DURING THE COURSE OF SEARCH AND TOTAL AMOUNT BEING ADDED IN THE CASE OF SH. RAVI HALDIA IN A.Y. 2008-09 WHEREAS PROPORTI ONATE SHARE IS ADDED 3 ON PROTECTIVE BASIS IN THE HANDS OF SMT. DEEPALI HA LDIA, SMT. MAMTA HALDIA AND SH. DINESH HALDIA . FACTS STATED BRIEFLY ARE THAT DURING THE COU RSE OF SEARCH, STOCK OF SEMI PRECIOUS AND PRECIOUS STONES WERE FOUND AT THE DIFF ERENT PREMISES OF THE APPELLANT GROUP , WHICH WAS INVENTORISED AND BOTH V ALUED BY THE REGISTERED VALUER . THE DETAILS OF STOCK FOUND AT VARIOUS PREM ISES ARE NOTED BY THE A.O. ON PAGE 6 OF THE ASSESSMENT ORDER , WHICH IS AS BELOW :- (I) C-18 , BAPU NAGAR , RESIDENCE RS 1,02,600/- (II) HALDIA BHAWAN OFFICE RS . 12,14,72,143/- (III) CHOURA RASTA OFFICE RS . 7,22,44,657/- (IV) LOCKER NO. 203 IN CHORDIA SAFE DEPOSIT VAULTS RS. 1,51,722/- (V) LOCKER NO. 1022 IN BIRANI SAFE DEPOSIT VAULTS RS. 35,254/- (VI) LOCKER NO. 1026 IN BIRANI SAFE DEPOSIT VAULTS RS. 1,24,250/- TOTAL RS. 19,41,30,676/ - SH. RAVI HALDIA , MAIN PERSON OF THE GROUP, IN HIS STATEMENT RECORDED AT HIS CHAURA RASTA OFFICE ON 20.4.07 ADMITTED THAT S TOCK OF ALL THE CONCERNED HAVE BEEN KEPT MIXED AND IT IS NOT POSSIBLE TO IDEN TIFY THE STOCK OF EACH CONCERNS SEPARATELY .THIS POSITION WAS ALSO NOTICED DURING THE COURSE OF SEARCH . 4.2 REGARDING THE BOOK POSITION OF THE STOCK, IT WA S NOTICED AND WAS ALSO ADMITTED THAT NO BOOKS OF ACCOUNTS HAVE BEEN W RITTEN/MAINTAINED OR EVEN STARTED SO FAR FOR F.Y. 2006-07 AND F.Y. 2007- 08. ACCORDINGLY, ON THE BASIS OF CLOSING STOCK OF F.Y. 2005-06 AND SUBSEQUE NT PURCHASE AND SALES MADE/SHOWN DURING F.Y. 2006-07 AND 2007-08 THE STOC K OF VARIOUS CONCERNS AS ON THE DATE OF SEARCH WAS WORKED OUT AS BELOW: 4 (I) M/S. R.H. EXPORTS RS.5,01,94,222/- (II) M/S. D.H. EXPORTS RS.2,42,81,620/- (III) M/S. VIDHI GEMS RS.1,25,20,131/- (IV) M/S. RIDHI SIDHI INTERNATIONAL RS. 50,96,98 5/- --------------------- TOTAL RS.9,20,92,958/- -------------------- 4.3 THUS EXCESS STOCK OF RS.10,20,37,718/- OF THE GROUP WAS FOUND AND THE APPELLANT SHRI RAVI HALDIA IN HIS STATEMENT REC ORDED ON 22.4.07 HAS ADMITTED THE EXCESS STOCK POSITION AND SURRENDERED THE SAME FOR TAXATION. THIS STATEMENT OF SHRI RAVI HALDIA WAS ALSO AGREED UPON BY SHRI DINESH HALDIA AND SMT. MAMTA HALDIA AND SMT. DEEPALI HALDI A. DURING THE COURSE OF ASSESSMENT PROCEEDING, SH. RAVI HALDIA AL ONG WITH OTHER FAMILY MEMBERS OF THE GROUP OBJECTED TO THE VALUATION OF T HE STOCK OF PRECIOUS AND SEMI PRECIOUS STONE DONE AT THE TIME OF SEARCH AND ALSO POINTED OUT CERTAIN TOTALING ERROR. THE A.O. HAS RECTIFIED THE TOTALING ERROR. AS REGARDS CLAIM OF OVER VALUATION IS CONCERNED, THE A.O. HAS DEALT WITH THE ISSUE FROM PAGE 8 TO PAGE 14 OF THE ASSESSMENT ORDER OF S H. RAVI HALDIA, AS HE IS MAIN AND CONTROLLING PERSON OF THE GROUP. THE A.O. HAS REFERRED TO THE STATEMENT OF THE SH. RAVI HALDIA RECORDED ON 20.4.0 7 WHEREIN THE EXCESS STOCK IN F.Y. 2004-05 WAS ALSO NOTICED, WHICH WAS A DMITTED BY SH. RAVI HALDIA. THE A.O. FURTHER REFERRED AND REPRODUCED TH E RELEVANT EXTRACT OF THE STATEMENT DATED 224.07 ON PAGE 9 AND 10 OF THE ASSESSMENT ORDER OF SH. RAVI HALDIA. THE A.O. HAS MENTIONED THAT THE VA LUATION OF THE STOCK WAS DONE BY THE REGISTERED VALUER. SH. RAVI HALDIA HIMSELF HAS ADMITTED TO HAVE SEEN THE DETAILS MENTIONED IN THE VALUATION SH EET AND AGREED WITH THE QUANTITY, QUALITY AND THE VALUE AND HAS ADMITTED TH E STOCK FOUND AT HALDIA BHAWAN, BEING OF RS.,12,14,72,143/-[IN ANSWER TO QU ESTION NO.3]. FURTHER IN ANSWER TO QUESTION NO.4 HE HAS ADMITTED THE VALU E OF CLOSING STOCK AT CHAURA RASTA OFFICE SO DONE BY THE REGISTERED VALUE R AT RS.7,22,44,657/- A.O. HAS DEALT WITH THE OBJECTION OF SH. RAVI HALDI A BY MENTIONING THAT : 5 I) THE VALUATION WAS MADE IN THE PRESENCE OF ASSESS EE AND HIS STAFF MEMBERS IN TERMS OF QUALITY, QUANTITY AND VALUE AND ASSESSEE AND HIS EMPLOYEE HAD PUT THEIR SIGNATURE ON THE VALUATION S HEET CERTIFYING ITS CORRECTNESS. II) LATER ON IN THE STATEMENT RECORDED ON 22.7.07 A LSO, THE ASSESSEE AGREED AND ADMITTED ABOUT THE VALUATION OF HIS STOC K SO DONE BY THE SEPARATE VALUER. III) THE ALLEGED OVER VALUATION IS NOT SUPPORTED BY THE DETAILS OF THE CONTENDED PURCHASE MADE BY THE APPELLANT I.E. BILL NO., DATE, COPIES OF BILL ETC. IV) THE GEMS AND STONES ARE OF DIFFERENT VARIETY SI ZE, COLOUR AND QUALITY ETC AND NATURALLY THE PRICES OF THESE ITEMS WOULD BE DIFFERENT IN RESPECT OF EACH AND EVERY ITEM. V) THE A.O. GIVE EXAMPLE OF THE VARYING AND HIGH RA TE OF PURCHASE OF TURMOLIN ROUGH, SAPPHIRE ROUGH AND EMERALD ROUGH AT THE RATE OF RS.45,000/-, RS.15,000/- AND RS.1,75,000/-PER KG. F ROM M/S. ESDIRE INTERNATIONAL JAIPUR VIDE BILL NO.48 DATED 1.5.04. 4.4 ACCORDINGLY, A.O. REJECTED THE CLAIM OF ALLEGED OVER VALUATION BY THE REGISTERED VALUER AND AFTER GIVING CREDIT OF TO TALING MISTAKE, THE VALUE OF THE PHYSICAL STOCK FOUND WAS HELD AT RS.18,64,44 ,294/-, OUT OF WHICH G.P., AT THE RATE OF 11% WAS DEDUCTED TO ARRIVE AT THE COST PRICE OF THE STOCK AT RS.16,59,35,425/-. AS THE TOTAL STOCK AS P ER BOOKS OF THE WHOLE GROUP WAS RS.9,20,92,958/-, EXCESS OF RS.7,38,42,46 7/- WAS ADDED AS UNEXPLAINED INVESTMENT IN THE HANDS OF SH. RAVI HAL DIA ON SUBSTANTIVE BASIS. AS THE STOCK OF OTHER THREE FIRMS WAS ALSO M IXED UP AND TOTAL POSITION OF THE GROUP WAS DETERMINED. THE A.O. ADDE D THE PROPORTIONATE EXCESS STOCK IN THE HANDS OF OTHER THREE CASES NAME LY SH. DINESH HALDIA, SMT. DEEPALI HALDIA, SMT. MAMTA HALDIA AS PER TABLE GIVEN ON PAGE 15 OF THE ASSESSMENT ORDER OF SH. RAVI HALDIA AND ALSO IN THE ASSESSMENT ORDER OF THE APPELLANT, WHICH IS AS BELOW: S.NO. NAME OF THE ASSESSEE AMOUNT OF STOCK AMOUNT OF ADDITION 1 D.H. EXPORT, PROP. SHRI DINESH HALDIA RS.2,42,81,620/- RS.1,94,70,518/- 2 M/S. RIDHI SIDHI RS.50,96,985/- RS.40,87,000/- 6 INTERNATIONAL PROP. SMT. DEEPALI HALDIA 3 M/S. VIDHI GEMS, PROP. SMT. MAMTA HALDIA RS.1,25,20,131/- RS.1,00,39,000/- 8. DETAILED SUBMISSIONS WERE FILED BEFORE LD. CIT ( A) WHICH HAS BEEN DISCUSSED IN PARA 4.5 AT PAGES 7 TO 13 ARE AS UNDER :- 4.5. BEFORE ME, FOLLOWING SUBMISSIONS WERE FILED. THAT ADDITION OF RS.40,87,000/- ON PROTECTIVE BASIS TO THE TOTAL INCOME OF SMT.MAMTA HALDIA AS UNEXPLAINED EXCESS STOCK ALLEGE DLY FOUND AT THE TIME OF SURVEY/SEARCH ON 20.4.2007 IS HIGHLY UNJUST IFIED, UNTENABLE AND BAD IN FACT AND IN LAW AND IN THE ALTERNATIVE IT IS HIGHLY EXCESSIVE. IN THIS REGARD THE ASSESSEES RESPECTFUL SUBMISSIONS ARE AS UNDER: FIRST OF ALL THE ASSESSEE WOULD LIKE TO PUT IN BRIE F THE BASIC FACTS OF CASE. THE FACTS ARE THAT THE ASSESSEE IS PROPRIETOR OF M/ S RIDHI SIDHI INTERNATIONAL, A CONCERN DEALING IN GEMS & STONES F ROM LAST ABOUT SIX YEARS. FROM THE VERY BEGINNING THE ASSESSEE HAS MAI NTAINED REGULAR BOOKS OF ACCOUNTS TILL DATE. AS PER BOOKS OF ACCOUNTS THE ASSESSEE WAS HOLDING STOCK OF RS 54,11,735/- AS ON 31.3.2007 THIS STOCK WAS AVAILABLE AT BUSINESS PREMISES OF ASSESSEE AT THE TIME OF SURVEY / SEARCH. WHAT HAPPENED THAT FOR THE PURPOSE OF PHYSICAL STOCK TAK ING AT THE TIME OF SURVEY/ SEARCH THE INCOME TAX OFFICIALS MIXED THIS STOCK OF ASSESSEE WITH THE STOCK OF OTHER SISTER CONCERNS CARRYING ON THE SAME BUSINESS OF GEMS & STONES AND VALUED THE STOCK OF ALL THE FOUR CONCE RNS AT ONE PLACE. ON THE BASIS OF THIS CONSOLIDATED STOCK THE I T OFFICIALS GOT A SURRENDER OF AROUND RS TEN CRORES FROM SH RAVI HALDIA, A SENIOR MEMBER OF THE FAMILY THAT IN THIS RESPECT IT IS SUBMITTED THAT FINDING GIVEN BY AN ASSESSING AUTHORITY IN THE CASE OF THIRD PARTY (IN THIS CASE IT IS RAVI HALDIA) IS NOT AT ALL BINDING TO THE ASSESSEE. ACCORDINGLY THE ALLEGE D FINDING GIVEN ON THE BASIS OF ALLEGED SURRENDER BY RAVI HALDIA, THAT STO CK FOUND DURING SEARCH INCLUDED RS.40,87,000/- PERTAINING TO M/S. VIDHI GE MS (A SOLE PROPRIETORY CONCERN OF MAMTA HALDIA) CAN NOT BE IMPUTED IN THE CASE OF THE ASSESSEE. THAT THOUGH RAVI HALDIA IS ASSESSEES BROTHER IN LA W YET FOR ALL PURPOSES INCLUDING INCOME TAX THE ASSESSEE IS AN INDEPENDENT AND SEPARATE ENTITY. MOREOVER THE RIGHTS AND DUTIES AS ENSHRINED IN THE INDIAN CONSTITUTION VERY CLEARLY AND UNAMBIGUOUSLY RECOGNIZES THIS. IN SUCH A SITUATION WHEN 7 SMT. DEEPALI HALDIA IS SETTLED WITH ALL POWERS TO T AKE HER OWN DECISIONS SHRI RAVI HALDIA HAD NO AUTHORITY TO MAKE ANY SURRE NDER FOR AND ON BEHALF OF HIS BROTHERS WIFE, THE ASSESSEE, SMT. DEEPALI H ALDIA AND ACCORDINGLY THE SURRENDER, IF ANY, MADE BEFORE ANY INCOME TAX A UTHORITY BY RAVI IS NULL AND VOID AND ULTRA VIRUS. THAT VIDE THE LETTER DATED 16.12.2009 FILED BY THE ASSESSEE BEFORE THE A.O. IN THE COURSE OF ASSESSMENT PROCEEDINGS THE ASSESSE E HAD STRONGLY REPRESENTED BEFORE THE A.O. THAT SHE HAS MADE NO SU RRENDER IN THE COURSE OF SURVEY/SEARCH OF ANY EXCESS STOCK OF RS.40,87,00 0/-. THE ASSESSEE HAD ALSO REPRESENTED VIDE THIS LETTER THAT SHE HAD GIVE N NO AUTHORITY TO HER HUSBAND RAVI HALDIA TO MAKE ANY SURRENDER ON HER BE HALF. THAT VIDE ASSESSEES ABOVE REFERRED LETTER DATED 16 .12.2009 THE ASSESSEE HAD VERY CLEARLY REQUESTED TO THE A.O. THAT BEFORE PASSING ANY ADVERSE ORDER AGAINST HER OR MAKING UNCALLED FOR ADDITIONS THE ASSESSEE SHOULD BE GIVEN OPPORTUNITY OF BEING HEARD ON EACH AND EVERY POINT BUT THE A.O. DID NOT PROVIDE THE ASSESSEE ANY SPECIFIC OPPORTUNITY O F BEING HEARD ON THIS ISSUE. ACCORDINGLY, THE ENTIRE ASSESSMENT ORDER PAS SED BY THE A.O. IS VOID AB-INITIO. THAT DURING THE COURSE OF SURVEY/SEARCH OPERATIONS STARTED ON 20.4.2007 THE ASSESSEES STATEMENTS WERE RECORDED BY THE DEPA RTMENTAL AUTHORITIES AND FROM THE PERUSAL OF THESE STATEMENTS YOUR HONOU R WILL OBSERVE THAT THE ASSESSEE DID NOT MAKE ANY SURRENDER OF ALLEGED EXCE SS STOCK. THAT IN THE COURSE OF ASSESSMENT PROCEEDINGS BEFORE THE A.O. THE ASSESSEE HAD CONFIRMED THAT SHE HAS MADE NO SURRENDER. SHE H AD ALSO REPRESENTED THAT NO COGNIZANCE SHOULD BE TAKEN OF THE ALLEGED S URRENDER MADE BY RAVI HALDIA. THAT WITHOUT PREJUDICE TO ABOVE IT IS SUBMITTED THA T THE ASSESSEE HAS MAINTAINED COMPLETE AND PERFECT QUANTITATIVE DETAIL S OF THE GOODS IN STOCK AS ON THE OPENING OF A FINANCIAL YEAR, GOODS PURCHA SED AND/OR MANUFACTURED, GOODS SOLD AND GOODS REMAINING IN STO CK AS ON THE CLOSE OF THE FINANCIAL YEAR I.E. ACCOUNTING YEAR. THE ASSESS EE IS ENCLOSING HEREWITH FULL QUANTITATIVE DETAILS OF GOODS DEALT WITH. THAT THE ASSESSEE IS ALSO ENCLOSING HEREWITH COMPAR ATIVE DETAILS IN TERMS OF QUANTITY OF STOCK AS ON THE DATE OF SURVEY/SEARC H AS PER BOOKS OF ACCOUNTS AND AS PER PHYSICAL VERIFICATION MADE BY I NCOME TAX AUTHORITIES. FROM THE PERUSAL OF THIS COMPARATIVE CHART YOUR HON OUR WILL OBSERVE THAT THE QUANTITIES AS PER BOOKS OF ACCOUNTS IS ALMOST I N PAR WITH THE STOCK FOUND AT THE TIME OF SURVEY/SEARCH. 8 THAT WITHOUT PREJUDICE TO ABOVE SUBMISSIONS THE ASS ESSEE CRAVES LEAVE TO RELY ON THE FOLLOWING SUBMISSIONS WHICH INTER ALIA INCLUDE QUANTUM ISSUE ALSO: (A) AT THE TIME OF SEARCH OPERATIONS WHEN I.T.OFFI CIALS COULD NOT BRING ON RECORD A SINGLE INSTANCE OF UNDISCLOSED INVESTMENT IN IMMOVEABLE PROPERTIES ,JEWELLARY, SHARES AND SECURITIES AND OT HER BUSINESSES, THE ONLY OPTION LEFT WITH THE DEPARTMENTAL AUTHORITIES TO MA KE THE SEARCH A SUCCESS WAS TO OVERVALUE THE STOCK IN HAND AND THIS IMPOSSI BLE GOAL WAS ACHIEVED BY THEM WITH THE CONNIVANCE AND SUPPORT OF APPROVE D VALUER. SOME SUCH INSTANCES OF ADOPTION OF UNREALISTIC RATES OF STOCK IN HAND TAKEN BY THE VALUER KAMAL KUMAR KASLIWAL AND CONSEQUENTLY BY THE AO ARE DULY EXPLAINED IN THE ANNEXURE NO.1 TO THIS LETTER. (B) IT IS FURTHER SUBMITTED THAT YOUR HONOUR WILL FIND FROM THE PERUSAL OF THE VALUATION REPORT THAT MR KAMAL KUMAR KASLIWA L HAS EVEN VALUED A VERY LOW QUALITY OF TOURMALINE ROUGH IN NAME OF TOU RMALINE ROUGH REJECTION (WHICH HARDLY HAS ANY VALUE IN THE MARKET ) HAS BEEN VALUED AT AROUND 3.5 CRORES. FOLLOWING ARE THE FEW INSTANCES WHICH SHOWS THAT THE DEPARTMENTAL AUTHORITIES PRESSURIZED THE APPROVED V ALUER TO ADOPT IMAGINARY AND WHIMSICAL RATES FOR EXCESS VALUATION OF STOCK BY VALUER MR KAMAL KUMAR KASLIWAL UNDER DIRECT SUPERVISION OF I T DEPARTMENT OFFICERS. KINDLY REFER TO ANNEXURE J & J1 . A. CITRINE ROUGH (ANN. J1) BOOK STOCK 17KG @ 11586/- PER KG RS.196963/- ( THIS STOCK IS OF RIDHI SIDHI INTERNAT ION (SISTER CONCERN) IT IS PURCHASED FROM M/S S P JEWELLERS VIDE BILL NO 10 DT 15.5.2004) DEPTT VALUATION16.8KG @ 800000/- PER KG RS 13440 000 /- OVER VALUATION DONE RS 13243037/- REMARKS : IN THE INTERNATIONAL MARKET THE RATES HAV E NAVER GONE BEYOND RS 20000/- PER KG FOR THE BEST QUALITY OF ROUGH EVER P RODUCED. B. OPEL ROUGH ( ANNEXURE-J ITEM 38 , 39 ) BOOK STOCK 6.370 KG @ 3685/- PER KG RS 23 473/- DEPTT VALUATION 6.370 KG @ 1161695/- PER KG RS 7400000/- OVER VALUATION DONE RS 7376527/- 9 C. OPEL ROUGH BOOK STOCK 125 KG @ 3685/- PER KG RS 46062 5/- (BOTH THESE STOCKS ARE OF R H EXPORTS( PROP RAVI ` HALDIA) GOODS PURCHASED @ 3695/- PER KG VIDE BILL NO 181 DT 5.5.2004 OF LAXMI JEWELLERS AND GOODS PURCHASED @ 3675/- PER KG VIDE BILL NO 58 DT 11.4.2004 OF RAJ SHREE GEMS) DEPTT VALUATION 125 KG @ 43289/- PER KG RS 5410850/- OVER VALUATION DONE RS 4950225/- D. OPEL FINISHED BOOK STOCK 4200 GM @ 135/- PER GM RS 567000 /- DEPTT VALUATION 4200 GM @ 900/- PER GM RS 3780000/- OVER VALUATION DONE RS 3213000/- E. TOURMALINE ROUGH REJECTION ANNEXURE J PG. 15 257.560 KG @ 5620/- PER KG RS 567000/- ANNEXURE J PG. 16 965.688 KG @ 7723/- PER KG RS 74 60950/- ANNEXURE J PG. 17 1009.730 KG @ 24769/- PER KG RS 24992853/- GOODS PURCHASED IN D H EXPORTS (ASSESSEES GROUP C ONCERN) FROM FOLLOWING PARTIES :- BILL NO 08/2004-05 DT 7.6.2004 OF GIRISH DIAM @ 46 25/- PER KG BILL NO 18/2004-05 DT 20.5.2004 OF GIRISH DIAM @ 47 50/- PER KG BILL NO 17/2004-05 DT 20.5.2004 OF ABHAY INTERNATIO NAL @ 7750 BILL NO 06/2004-05 DT 7.6.2004 OF ABHAY INTERNATIO NAL @ 4600 GOODS PURCHASED IN VIDHI GEMS(ASSESSEES GROUP CONC ERN) FROM FOLLOWING BILL NO 487 DT 13.10.2004 OF PRAKASH CHAND & SONS H UF @ 385 BILL NO 488 DT 13.10.2004 OF PRAKASH CHAND & SONS H UF @ 175 1. FURTHER MORE SOME OTHER EXAMPLES OF OVERVALUATION O F STOCK IS ENUMERATED AS UNDER 10 A). AS PER ANNEXURE J-1 PAGE NO.1, S.NO.1 , ONE LOT OF CITRINE ROUGH OF 17.265 KG HAS BEEN VALUED @ RS. 7,78,453/- PER KG A T RS.1,34,40,000/- AND ON THE VERY SAME PAGE AT S.NO.17 FINISHED STOCK OF CITRINE BEADS OF 0.950KG HAS BEEN VALUED AT RS.47,368/- PER KG. IT I S NEEDLESS TO MENTION HERE THAT YIELD OF FINISHED GOODS FROM THIS ROUGH I S APPROXIMATELY 20% OF THE TOTAL QUANTITY OF ROUGH PUT TO MANUFACTURING A ND AS SUCH THE RATE OF ROUGH SHOULD BE LESS THAN 1/5 TH OF THE RATE OF FINISHED GOODS I.E. IT SHOULD BE AROUND 9474/- PER KG. AS AGAINST THE RATE OF RS. 9474/- PER KG, THE VALUER HAS TAKEN THE RATE OF RS.7,78,453/- PER KG A ND AS PER OUR BOOKS OF ACCOUNTS THE COST PRICE PAID BY US IS RS.11586/- PE R KG [HIGHER THAN THE VALUATION DONE AT S.NO.17]. IT SEEMS THAT WHILE MAK ING THE VALUATION OF ITEM AT S.NO.1 THE AUTHORIZED VALUE HAS INADVERTENT LY PUT THE VALUE OF 1,34,40,000/- AT THE PLACE OF CORRECT VALUE OF 1,34 ,400/- AND JUST DUE TO WRONGLY ADDING OF TWO ZEROS IN THE VALUE, THE VALUA TION HAS INCREASED BY 1,33,05,600/-. B) TOURMALINE ROUGH REJECTION HAS BEEN VALUED AT VERY HIGH RATES IN THE LAST SEVEN SHEETS OF THE VALUATION REPORT AT ANNEU XRE J-1. IT IS VERY WELL EVIDENT THAT IN THIS ANNEXURE J-1 AT S.NO.2 TO S.NO .10 THE AVERAGE RATE OF STOCK IS TAKEN IN THE RANGE OF RS.1500-2000 PER KG WHERE AS IN THE LAST TWO PAGES OF THIS ANNEXURE THE AVERAGE RATE TAKEN FOR T HE SAME TYPE OF GOODS I.E. TOURMALINE ROUGH REJECTION IS TAKEN IN THE RAN GE OF RS.28000 PER KG TO RS.35000/- PER KG .I.E. ALMOST ABOUT 20 TIMES OF TH E RATES TAKEN BY THE SAME VALUER. THIS CLEARLY SHOWS THE ILL INTENTION O F THE VALUER TO VALUE THE STOCK AT HIGHER PRICE AS DESIRED BY INCOME TAX AUTH ORITIES PRESENT DURING SURVEY/SEARCH. THIS SINGLE INSTANCE OF INCREASE IN RATES IN TOURMALINE ROUGH REJECTION HAS INCREASED THE VALUATION BY AROUND 2.5 0 CRORES. WE ARE TO FURTHER MENTION THAT VALUER IS HIMSELF WRITING TOUR MALINE ROUGH REJECTION [ WHICH MEANS THE BYE PRODUCT OF THE MANUFACTURING PR OCESS OF TOURMALINE ROUGH TO TOURMALINE FINISHED GOODS] AND THIS STOCK HAS HARDLY ANY VALUE IN THE MARKET. SO MUCH SO THIS STOCK WAS KEPT IN BIG B ARDANAS IN OPEN SPACE OUTSIDE MAIN BUILDING WHICH WAS EASILY ACCESSIBLE T O THE STAFF AT HALDIA HOUSE. WE ARE TO FURTHER MENTION THAT MAIN OFFICE O F THE ASSESSEE WAS RUNNING AT CHAURA RASTA AND ONLY FEW STAFF WERE WOR KING AT HALDIA HOUSE. NORMALLY A PRUDENT BUSINESSMAN WILL NOT KEEP VALUAB LE STOCK IN OPEN PLACE AND OUT OF HIS CONTROL AREA. C) ABOVE ARE THE ONLY TWO EXAMPLES OF OVERVALUATIO N. THERE ARE MANY SUCH INSTANCES IN THE COMPLETE LIST OF STOCK WHICH RUNS IN ALMOST 34 PAGES . D) SOME OF THE DISCREPANCIES WERE ALSO BROUGHT INT O NOTICE OF THE AO AS WELL AS OTHER HIGHER AUTHORITIES DURING ASSESSMENT PROCEEDINGS WHICH ARE ENCLOSED HEREWITH FOR YOUR KIND PERUSAL AND CONSIDE RATION. 11 E) THE ASSESSEE HAS KEPT AND MAINTAINED FULL RECOR D IN TERMS OF WEIGHT OF THE ROUGH PURCHASED, ROUGH PUT TO MANUFACTURING, FI NISHED GOODS MANUFACTURED OUT OF MANUFACTURING OPERATIONS, WASTA GE OCCURRED DURING MANUFACTURING, YIELD, LABOUR CHARGES PAID TO VARIOU S KARIGARS, GOODS REMAINING IN STOCK AS ON THE CLOSE OF THE FINANCIAL YEAR I.E. ACCOUNTING YEAR. THE ASSESSEE IS ENCLOSING HEREWITH FULL QUANT ITATIVE DETAILS OF GOODS DEALT WITH AND ALL THIS RECORD WAS PRODUCED BEFORE THE A.O. MORE THAN ONCE. F) THAT BASIS ADOPTED BY THE APPROVED VALUER AS WE LL AS THE LEARNED A.O. OF VALUATION OF STOCK IS TO VALUE THE STOCK AT FAIR MARKET VALUE AS ON THE DATE OF SEARCH ON 20.4.2007 IT IS UNJUSTIFIED AND N OT ACCORDING TO THE METHOD OF VALUATION OF STOCK REGULARLY FOLLOWED BY THE ASSESSEE. AS THE METHOD OF VALUATION OF STOCK BEING FOLLOWED BY THE ASSESSEE IS AT COST OR MARKET VALUE, WHICHEVER IS LOWER THE VALUE OF STOCK TAKEN BY THE LEARNED A.O. AT FAIR MARKET VALUE IS ERRONEOUS AND IN THE A LTERNATIVE VERY EXCESSIVE. THE LEARNED A.O. SHOULD HAVE VALUED THE STOCK AT COST OR MARKET PRICE WHICHEVER IS LOW AND TO SUPPORT THIS S UBMISSION THE ASSESSEE CRAVES LEAVE TO REFER TO AND RELY ON THE FOLLOWING JUDGMENTS: A) THAT THE QUESTION WHETHER THE CLOSING STOCK COULD BE VALUED AT COST PRICE OR MARKET PRICE WAS CONCLUSIVELY SETTLED BY T HE DECISION OF HONBLE SUPREME COURT IN THE CASE OF SAKTHI TRADING CO. VS. CIT [2001] 250 ITR 871(SC) : IN THIS CASE THE HONBLE SUPREME COURT HELD THAT IT IS ESTABLISHED RULE OF COMMERCIAL PRACTICE ACCOUNTANCY THAT WHERE THERE IS NO DISCONTINUATION OF BUSINESS, THE STOCK IS TO BE VAL UED AT COST OR MARKET PRICE, WHICHEVER IS LOW. B) THE DEPARTMENT IS NOT ENTITLED BY PUTTING ON THE STOCK THE MARKET VALUE WHERE IT EXCEED COST, TO BRING IN AND CHARGE THE UNREALIZED NOTIONAL PROFIT: M/S.CHAINRUP SAMPATLAL VS. CIT 24 ITR 481,485 (SC) AND CIT VS. CHARI & RAM 17 ITR 1,7 C) THAT THE BASIS ON WHICH STOCK IN HAND IS VALUE D IS PART OF THE METHOD OF ACCOUNTING : RAM SWARUP VS. CIT 25 ITR 17, 25 (I I) TRIVENI VS. CIT 167 ITR 742 D) THE COST HAS BEEN DEFINED AS EITHER THE ACTUAL COST OF THE STOCK OR THE AVERAGE COST OF THE STOCK PURCHASED : MINISTER OF N ATIONAL REVENUE VS. ANACONDA 30 ITR 84(PC) AND CONCORDIA VS. CIT 22 ITR 344. E) IF THERE IS NO DEMAND IN LOCAL OR FOREIGN MARKE TS FOR CERTAIN GOODS THE ASSESSEE MAY BE JUSTIFIED IN VALUING THEM AT NIL: 12 MOHAMMED ADAM VS. CIT 56 ITR 360 AND INDIA MOTOR PARTS VS. CIT 60 ITR 531 F) IN A.L.A. FIRM VS. CIT [1991] 189 ITR 285 HON BLE SUPREME COURT HELD THAT ON NO PRINCIPLE CAN ONE JUSTIFY THE VALUA TION OF CLOSING STOCK AT A MARKET VALUE HIGHER THAN COST AS THAT WILL RESULT I N THE TAXATION OF NOTIONAL PROFIT WHICH THE ASSESSEE HAS NOT REALIZED. 2. THAT VALUATION OF CLOSING STOCK SHOWN BY THE ASSESS EE IN ITS BOOKS OF ACCOUNTS FOR THE FINANCIAL YEARS ENDED ON 31.3.2007 AS WELL AS 31.3.2008 HAS BEEN DULY ACCEPTED BY THE COMMERCIAL TAXES DEPARTMENT OF THE STATE OF RAJASTHAN AND JUSTICE RE QUIRES THAT THE INCOME TAX AUTHORITIES SHOULD ACCEPT THE VALUATION OF STOCK ON COST OR MARKET RATE, WHICHEVER IS LOW. 3. THAT THE ASSESSEE IS ENCLOSING HEREWITH THE DETAILE D CHART OF ALL THE FOUR CONCERNS OF THE ASSESSEE GROUP DEALING IN GEMS AND STONES GIVING THE FIGURES OF STOCK IN HAND AS ON THE DATE OF SEARCH A ND STOCK FOUND AT THE TIME OF SEARCH IN TERMS OF WEIGHT AND ALSO THE DIFF ERENCE, IF ANY, BETWEEN THE TWO. FROM THIS CHART YOUR HONOUR WILL FIND THAT THERE IS A LITTLE VARIATION IN TERMS OF QUANTITY. IT CLEARLY S UGGESTS THAT THE AGGREGATE EXCESS STOCK OF THE ENTIRE GROUP CASES WO RKED OUT BY THE A.O. AT RS.7,07,91,578/- IS ON ACCOUNT OF NOT IN DI FFERENCE IN QUANTITY BUT ON ACCOUNT OF ADOPTION OF HIGHER RATE OF VALUE AS COMPARED TO THE PURCHASED VALUE IN THE HANDS OF THE ASSESSEE. 4. THAT ON ONE SIDE WHILE MAKING TRADING ADDITIONS FOR ALLEGED LOW G.P. RATE THE LEARNED AO HAS UNIVERSALLY APPLIED GP RATE OF 30% IN ALL THE GROUP CASES AS AGAINST DECLARED AVERAGE GP RATES OF 10% IN ASSESSMENT YEARS 05-06, 06-07 AND 07-08 AND DECLARED G.P. RATE OF 13.5% IN ASSESSMENT YEAR 08-09 I.E. YEAR UNDER APPEAL AND ON THE OTHER HAND WHILE WORKING ALLEGED EXCESS STOCK IT HAS TAKEN G.P . RATE AS 11%, WHICH IS QUITE UNJUSTIFIED. IT IS SUBMITTED THAT WH ILE WORKING OUT THE VALUE OF EXCESS STOCK THE LEARNED AO SHOULD HAVE GI VEN DEDUCTION OF 30% [ I.E. G.P. RATE APPLIED BY THE A.O. FOR MAKING TRADING ADDITIONS] INSTEAD OF DEDUCTION OF 13.5% ALLOWED BY THE A.O. W HILE PASSING ASSESSMENT ORDER. IT IS FURTHER SUBMITTED THAT EITH ER THE GP RATE OF 11% OR THE HIGHER RATE DECLARED BY THE ASSESSEE AND GRO UP CASES SHOULD BE TAKEN INTO CONSIDERATION WHILE WORKING EXCESS STOCK OR IF IN ANY CASE OR FOR ANY REASON THE GP RATE OF 30% IS UPHELD THEN THE JUSTICE REQUIRES THAT DEDUCTION OF 30% SHOULD BE ALLOWED FROM THE F AIR MARKET RATE ADOPTED BY THE APPROVED VALUER WHILE WORKING THE FI GURES OF ALLEGED EXCESS STOCK. 13 5. THAT WHILE MAKING ADDITION OF ALLEGED EXCESS STOCK OF RS.7,07,91,578/-IN THE CASE OF MR. RAVI HALDIA THE LEARNED A.O. HAS PLACED RELIANCE ON REVOKED/RETRACTED STATEMENT OF SURRENDER MADE BY RAVI HALDIA ON 22.4.2007. THE ASSESSEES RESPECTFUL SUBMISSION IN THIS REGARD ARE AS UNDER: A. THE SURRENDER OF EXCESS STOCK WAS OBTAINED BY INCOM E TAX AUTHORITIES FROM RAVI HALDIA IN EARLY ODD HOURS[ARO UND 2 A.M. OF 22.4.2007] OF 22.4.2007 AND IT WAS NOT VOLUNTARY B UT OBTAINED UNDER COERCION, DURESS, UNDUE INFLUENCE AND MIS-REPRESENT ATION OF FACTS AND LAW AND AS SUCH IT SHOULD NOT BE RELIED UPON. RELIA NCE IS PLACED ON PAGE 34 OF NOV 2009 ISSUE OF JOURNAL OF GEM & JEWEL LERY INDUSTRIES (COPY ENCLOSED) B. THE INVOLUNTARY SURRENDER WAS FURTHER REVOKED/RETRA CTED BY SHRI RAVI HALDIA BY FILING A LETTER OF REVOCATION ACCOMP ANIED WITH AN AFFIDAVIT FILED WITH THE ASSESSING OFFICER ON 9.2.2 009 [COPY OF REVOCATION LETTER AND AFFIDAVIT ENCLOSED HEREWITH]. C. THE ASSESSEE CRAVES LEAVE TO REFER TO AND RELY ON T HE JUDGMENT OF SMT. RANJANA BEN MANSUKHLAL SHAH VS. ACIT [2004] 83 TTJ RAJKOT 369 WHEREIN IT WAS HELD THAT ADDITION MADE ONLY ON THE BASIS OF DISCLOSURE STATEMENT WHICH IS SUBSEQUENTLY RETRACTE D NORMALLY SHOULD NOT BE CONFIRMED IN THE ABSENCE OF CORROBORATION. D URING THE ASSESSMENT PROCEEDINGS THE ASSESSEE RETRACTED FROM THE SURRENDER MADE BY HIM UNDER DURESS OF THE DEPARTMENTAL OFFICE RS DURING SEARCH. IN THE COURSE OF ASSESSMENT PROCEEDINGS THE A.O. COULD NOT COLLECT A SINGLE EVIDENCE AGAINST THE ASSESSEE WHIC H COULD CORROBORATE THE EXCESS STOCK FOR WHICH SURRENDER WA S OBTAINED IN THE COURSE OF SEARCH. AS SUCH NO ADDITION OF ALLEGED EX CESS STOCK SHOULD BE UPHELD. IN THIS REGARD ASSESSEE CRAVES LEAVE TO RELY ON FOLLOWING JUDGMENTS : PULLANGODE RUBBER PRODUCE COMPANY LIMITED V/S STATE OF KERELA AND ANOTHER REPORTED IN 91 ITR 18 ACIT V/S SUNIL KUMAR JAIN ( ITAT JPR BENCH ) REPORT ED IN XXXVII TAX WORLD PG. 20 CIT V/S DHARMENDRA SHARMA ( RAJ. HIGH COURT ) REPOR TED IN XXXIX TAX WORLD PG. 58 14 D. THAT IT IS HIGHLY INCORRECT AND FAR FROM TRUTH THAT THE ASSESSEE SMT. MAMTA HALDIA EVER AGREED WITH THE SURRENDER MADE B Y ASSESSEES HUSBAND SHRI RAVI HALDIA. THE ALLEGED SURRENDER OF RAVI HALDIA WAS OF HIS OWN AND IT NO WAY RELATED TO THE ASSESSEE. 9. AFTER CONSIDERING THE SUBMISSIONS AND TAKING INT O CONSIDERATION VARIOUS ASPECTS, THE LD. CIT (A) GAVE HIS FINDINGS RECORDED IN PARA 4.6 AT PAGES 13 TO 23 OF HIS ORDER ARE AS UNDER :- 4.6 I HAVE CONSIDERED THE SUBMISSION OF A. R AND HAVE PERUSED THE ASSESSMENT ORDER AND RELEVANT RECORD. THE MAIN ARGU MENT OF THE APPELLANT IS REGARDING ALLEGED OVER VALUATION OF THE STOCK BY THE APPROVED VALUER. FIRSTLY IT IS MENTIONED THAT THE APPROVED VALUER IS AN EXPERIENCED PERSONS AND HAS BEEN VALUING THE GEMS AND JEWELLERY OVER TH E YEARS. NO SUCH INSTANCE OF ALLEGED OVER VALUATION BY THE APPROVED VALUER AS COME TO THE NOTICE OR HAS BEEN BROUGHT ON RECORD BY THE A.R OF THE APPELLANT. WITHOUT PREJUDICE TO ABOVE, IT IS SEEN THAT THE STATEMENT O F SH. RAVI HALDIA, WHO IS THE MAIN AND CONTROLLING PERSON OF THE BUSINESS OF HALDIA GROUP INCLUDING THE APPELLANT, WAS RECORDED DURING THE COURSE OF SE ARCH ON 22.4.07 AND THIS QUESTION OF VALUATION WAS SPECIFICALLY PUT TO HIM. IN QUESTION NO.3 HE WAS ASKED ABOUT THE VALUATION OF THE STOCK KEPT AT HALD IA BHAWAN OFFICE AND IN QUESTION NO.4 HE WAS ASKED ABOUT THE VALUATION O F STOCK KEPT IN THE CHAURA RASTA OFFICE, WHERE THE STATEMENT AT THAT TI ME WAS RECORDED. HE HAS UNEQUIVOCALLY ACCEPTED THE VALUATION AND HE HAS FUR THER ADMITTED THAT VALUATION WAS DONE IN HIS OWN PRESENCE. THE RELEVAN T EXTRACT OF STATEMENT IS REPRODUCED BELOW:- IZ-3- VKIDS MDR LHKH QEKSZA DS GFYN;K HKOU ESA J[KS STOCK DK EWY;KADU DKKZ }KJK CKJG DJKSM+ PKSNG YK[K CGKJ GTKJ ,D LKS FR;KYHL :- VKADK X;K GSAA D;K VKI BLLS LGER GSAA M- ;G STOCK GEKJH FOFHKUU QEKSZA DK FEFJR STOCK GS FTLDK VALUATION ESJH MIFLFKFR ESA VKSJ ESJS DEZPKFJ;KSA DH MIFLFKFR ESA FD;K X;KA VALUATION SHEET DK ESAUS DETAIL ESA NS[K FY;K GS BLESA YH XBZ QUANTITY, QUALITY RFKK VALUE LS ESA LGER GWA ESA ;G LOHDKJ DJRK GW FD ;G STOCK 12, 14, 72, 143/ - :- DK GS (CKJG DJKSM+ PKSNG YK[K CGKJ GTKJ ,D LKS RS;KFYL EK=) 15 IZ-4- VKIDS PKSM+K JKLRK FLFKR DK;KZY; FTLESA GE CS BS GS] ESA VKIDKS LHKH QEKSZA DS LVKWD DK EWY;KADU] JFTLVMZ EWY;KADUDKKZ }KJK DQY EWY;KAD U 7]22]44]657@& :I;S FD;K X;KA D;K VKI BLLS LGER GSA M- GK ESA LVKD DS DHER ,OA OTU LS RFKK IK, X, DQY L VKWD 7]22]44]657@& DS EWY;KADU LS IW.KZR% LURQ'V GW] D;KSAFD ;G ESJH LO; .A DH MIFLFKFR ESA FD;K X;K GSA 4.7.LATER ON IN QUESTION NO. 5 HE WAS ASKED EXPLANA TION ABOUT THE TOTAL STOCK PHYSICALLY FOUND, FOR WHICH HE ADMITTED THAT CONSIDERING THE PHYSICAL STOCK OF RS. 19,41,30,676/- AND BOOK STOCK OF RS. 9,20,00,000/- THERE IS EXCESS STOCK OF RS. 10 CRORE 21 LAKH AND SAME WAS ADMITTED TO BE ACQUIRED OUT OF UNDISCLOSED SOUR CES AND HE OFFERED IT FOR TAXATION. THE RELEVANT QUESTION AND ANSWER 5 ARE REPRODUCED BELOW:- IZ-5- VKIDS FOFHKUU IFJLJKSA LS IK, X, LVKWD DH FMV SY FUEU IZDKJ LS GSA%& 1-PKSM+K JKLRK FLFKR VKWFQL :- 7]22]44]657@& 2-GFYN;K HKOU FLFKR VKWFQL :- 12]14]72]143@& 3-PKSJFM;K LSQ FMIKFV ESA YKDJ UA- 203 :- 1]51]772 @& 4-FCJKUH LSQ FMIKFTV OKYV YKDJ UA- 1022 :- 35]254@ & 5-FCJKUH LSQ FMIKFTV OKYV YKDJ UA- 1026 :- 1]24]25 0@& 6-LH&18] T;KSFR EKXZ CKIW UXJ (FUOKL) :- 1]02]600@ & DQY 19]41]30]676@& TCFD VKIUS ,OA VKIDS VDKMUVSUV DS }KJK 20&04&2007 D KS BL FNUKAD RD FUDKYK LVKD UKS DJKSM+ CHL YK[K :I;S GSA BLLS ;G LI'V FD V KIDS ;GKA DQY DJHCU 10 DJKSM+ 21 YK[K :- DK LVKD VF/KD IK;K X;K GSA BLDS CKJS ESA VKIDK D;K DGUK GSA M- ESA ;G LOHDKJ DJRK GW FD ESJS ;GKA DQY 10 DJKSM+ 21 YK[K :- DK LVKD VF/KD IK;K X;K GSA VF/KD IK;K LVKWD DK ESJS IKL LI'VHDJ.K UGHA GSA RFKK ;G GEKJH PKJKSA QEKSZ ;KUH R.H. EXPORT, D.H. EXPORT, RIDHI SIDHI GEMS, VIDHI G EMS S KAK V?KKSF'KR LVKWD GS TKS BU PKJKSA QEKSZA DH V?KKSF'KR VK; LS V FTZR FD;K X;K GSA BL V?KKSF'KR LVKWD ESA OG LVKWD MSM DJKSM DK HKH 'KKFEY GS TKS ESAUS DY LJ S.MJ FD;K FKKA GEKJS ;GKA IK, X, V?KKSF'KR LVKWD DK EWY; NL DJKSM+ BDDHL YK[K TKS PK JKSA QEKSZA DH V?KKSF'KR VK; LS VFTZR FD;K X;K GS IJ FU;EKUQLKJ VK;DJ PQDK NSAXS RFKK D;K SAFD VK;DJ PQDKUS DH ?KKS'K.KK GE LOSPNK LS DJ JGS GS BLFY, GE FOHKKX LS IZKFKZUK DJS AXS FD GE IJ VSDL PKSJH DH ,OA VK; 16 NQIKUS DH DKSBZ ISUYVH UGHA YXKBZ TK,A ;G ?KKSF'KR VK; GEUS GEKJH PKJKSA QEKSZA DS TOKGKJKR BR;KFN DS V?KKSF'KR [KJHN CSPKU LS VFTZR DH GSA 4.8 FROM THE PERUSAL OF THE AFORESAID ANSWERS GIVEN BY THE APPELLANT, IT CAN NOT BE SAID THAT THERE WAS COERCION OR PRESSURE ON HIM. FURTHER, THE FACT OF EXCESS STOCK AND THE UNACCOUNTED PURCHASES MADE BY THE APPELLANT WAS EARLIER ALSO ADMITTED BUT THE APPELLANT IN HIS STATEMENT RECORDED ON 20.04.07 ON 20.04.07 HE WAS CONFRONTED WITH THE NOT ING IN THE DIARY PAGE WHEREIN HE ADMITTED TO HAVE MADE PURCHASE OF RS. 10 .41 CRORE IN CASH WHICH WAS NOT RECORDED IN THE BOOKS OF ACCOUNTS AND IN TURN HE HAS OBTAINED BILL FOR THE PURCHASES SHOWN IN F.Y. 2004- 05 TO THE EXTENT OF RS. 8.50 CRORE. THUS INVESTMENT IN EXCESS STOCK WAS EAR LIER ALSO ADMITTED ON 20.04.07 AND SAME WAS ALSO BASED ON THE JOTTINGS IN THE DIARY. THUS THE CLAIM OF THE APPELLANT THE STATEMENT DATED 22.04.07 ADMITTING UNEXPLAINED INVESTMENT IN EXCESS STOCK WAS UNDER DURESS IS LACK ING ANY MERIT AND IS LIABLE TO BE REJECTED. 4.9 THE FACT THAT THE APPELLANT GROUP IS ENGAGED IN UNACCOUNTED PURCHASES AND SALES AND THEREBY EXCESS STOCK BEING FOUND, IS FURTHER PROVED FROM THE PERUSAL OF THE STATEMENT OF THE APP ELLANT, WHEN HE WAS CONFRONTED WITH VARIOUS DOCUMENT SEIZED DURING THE COURSE OF SEARCH, WHICH IS AS BELOW: IZ-6- ESA VKIDKS VKIDS O;KOLKF;D IZFR'BKU ESA IK, X , YWT ISIJ VUSDLJ ,,&1 FTLESA IST 113 GS FN[KK JGK GW BUGSA NS[KDJ CRK,SA FD ;S VKIDH YS[K IQFLRDKVKSA ESA DGKA IJ NTZ GSAA M- ESAUS VUSDLJ ,,&1 NS[K FY;K GS BLESA TKS DKXTKR G SA MULS GEKJS IFJOKJ DS O;KOLKF;D IZFR'BKUKSA LS LCA/KH EKY DH [KJHN] FCH DKJHXJ LS DJK, X, DKE DK FOFHKUU FNUKAD DKS MIYC/K LVKWD RFKK [KPKSZA DS FCY GSAA BU ESA LHKH DK LR;KIU YS[K IQFLRDKVKSA LS DJKUK LAHKO UGHA GSA BU DKXTKSA ESA DQN ISIJ IJ YS[ K IQFLRDKVKSA ESA NTZ FD, FCUK HKH [KJHN FCH RFKK EKY DH CUKBZ LCA/KH DKXTKR GSA BL I ZDKJ DS DKXTKRKSA LS VFTZR V?KKSF'KR VK; GEKJS FOFHKUU QEKSZA DS LVKD ESA FOFU ;KSFTR DH GQBZ GSA FTLESA VK;DJ DS FY, LEFIZR DJ PQDK GW TKS JKF'K NL DJKSM+ BDDHL YK[K : I;S GSA IZ-7- ESA VKIDKS VUSDLJ ,,&2] ,,&3] ,,&4] ,,&5 ,OA ,,&6 FN[KK JGK GWA BUGSA NS[KDJ CRK, FD BUESA NTZ O;OGKJKSA DKS YS[K IQLRDKS A ESA FDL IZDKJ LS N'KKZ;K X;K GS RFKK BUDH D;K IZD`FR GSA 17 M- VUSDLJ ,,&2 ESA VU& FJDKSZMSM FCH LS LCAF/KR O;O GKJ] VUSDLJ ,,&3 ESA HKH VUFJDKSMSZM FCH] VUSDLJ,,&4 ESA MIYC/K LVKD] VUSDL J ,,&5 ESA HKH MIYC/K LVKWD ,OA VUSDLJJ ,,&6 ESA GSA RFKK LVKWD DS CKCR FY[KH XBZ T KUDKJH YS[K IQLRDKSA ESA NTZ LVKWD LS ESY UGHA [KKRH GSA MIJKSDR LAYXUDKSA ESA NTZ [KJHN FCH RFKK LVKWD DS VURJ LS VFTZR V?KKSF'KR VK; ESA GH LOHDKJ DJ PWDK GWA FTLDH JKF' K NL DJKSM+ BDDHL YK[K :I;S GSA ;G JKF'K MLDK GH HKKX GS] BLDS VYKOK EQ>S ;G HKH DG UK GS FD GEKJS ;GKA TKS VU; CGH[KKRS] MK;FJ;KA] DKXTKR BR;KFN IK, X, GS VKSJ MU ESA GEKJS O;OLK; DH DKSBZ V?KKSF'KR VK; DH ?KKS'K.KK ESA 'KKFEY GS D;KSAFD GEUS VC RD T KS V?KKSF'KR YSUNSU FD;K GS VKT DH RKJH[K ESA MLDK USV FJTYV GEKJS ;GK IK;K X;K MIJKSD R V?KKSF'KR LVKWD GH GS] FTLS GEUS VSDL NSUS DS FY, LJS.MJ DJ FN;K GSA (EMPHASIS SUPPLIED) 4.10. FROM THE AFORESAID STATEMENT IT IS EVIDENT TH AT THE PURCHASE AND SALES SHOWN IN THE VARIOUS LOOSE PAPERS ARE NOT REC ORDED IN THE BOOKS OF ACCOUNTS AND THE STOCK POSITION RECORDED IN ANN. AA -4, AA-5, AND AA-6 IS ALSO NOT MATCHING WITH THE STOCK SHOWN IN THE BO OKS OF ACCOUNT. IN VIEW OF THESE FACTS THE APPELLANT HIMSELF ADMITTED THAT INCOME SO EARNED AS REFLECTED IN THESE LOOSE PAPERS AND STOCK DIFFERENC E REFLECTED IN THESE LOOSE PAPERS IS COVERED WITHIN THE DISCLOSOURE OF EXCESS STOCK RS. 10 CRORE 21 LAKH MADE BY HIM. 4.11 THUS THE CLAIM OF OVER VALUATION SO MADE BY TH E A.R. OF THE APPELLANT HAS BEEN RIGHTLY REJECTED BY THE A.O. IN VIEW OF THE FACTS MENTIONED BY THE A.O. IN THE ASSESSMENT ORDER OF SH . RAVI HALDIA AND APPELLANT FURTHER FACTS AND DETAILS DISCUSSED IN TH E EARLIER PARAGRAPHS BY THE UNDERSIGNED. 4.12. AS REGARDS CLAIM OF THE APPELLANT THAT HE HAS NOT SURRENDERED THE EXCESS STOCK IN HIS STATEMENT, IT IS UNDISPUTED FAC T THAT SH. RAVI HALDIA IS THE MAIN AND CONTROLLING PERSON OF THE HALDIA GROUP , WHERE THE BUSINESS IS CARRIED OUT IN THE PROPRIETARY SHIP FIRM OF SH. RAV I HALDIA HIMSELF, HIS YOUNGER BROTHER SH. DINESH HALDIA, HIS WIFE MAMTA H ALDIA AND BROTHERS WIFE SMT. DEEPALI HALDIA. MORE PARTICULARLY THE BUS INESS OF SEMI-PRECIOUS AND PRECIOUS STONE OF THE ENTIRE GROUP IS HANDLED A ND CONTROLLED BY SH. RAVI HALDIA.EVEN OTHERWISE IT WAS ADMITTED THAT STO CK OF ALL THESE FIRMS ARE MIXED UP AND IT IS NOT POSSIBLE TO SEPARATE THE STOCK FIRM WISE. SH. RAVI HALDIA IN HIS STATEMENT RECORDED ON 20.4.07 AN D ALSO ON 22.4.07 HAS BEEN GIVING REPLIES TO ALL THE VARIOUS QUESTIONS PU T UP NOT ONLY ABOUT HIS FIRM BUT ALSO ABOUT THE PROPRIETORY FIRM OF GEMS AN D JEWELLERY OF HIS 18 BROTHER SH. DINESH HALDIA, HIS WIFE SMT. MAMTA HALD IA AND HIS BROTHERS WIFE SMT. DEEPALI HALDIA. HE IS THE PERSON WHO DEAL S IN THE PURCHASES AS WELL AS SALES, INTERACTS WITH THE SELLER AND AS WEL L AS THE BUYERS AND ALSO THE BROKERS ON BEHALF OF ENTIRE GROUP. ALL THE VARI OUS ANSWERS RELATED TO ALL THE CONCERNS OF THE GROUP WERE GIVEN BY SH. RAVI HA LDIA . MOREOVER, THE STATEMENT OF SH. RAVI HALDIA DATED 22 .4.07 ARE ALSO SIGNED BY SH. DINESH HALDIA. IN THAT STATEMENT, SH. DINESH HALDIA IN HIS OWN HANDWRITING HAS MENTIONED THAT I HAVE READ THE AFORESAID STATEMENT. I AM IN AGREEMENT WITH THESE STATEMENTS AND VERIFIE D THE CORRECTNESS OF THE FACTS MENTIONED IN THESE STATEMENTS(OF SH. RAVI HA LDIA). MOREOVER, SH. DINESH HALDIA HAS SIGNED ON EACH OF THE FIVE PAGES OF THIS STATEMENT DATED 22.4.07 OF SH.RAVIHALDIA, AS A PROOF FOR ADMITTING AND AGREEING OF THE CONTENTS OF THE STATEMENT OF SH. RAVI HALDIA. IN TH E AFORESAID STATEMENT, SH. RAVI HALDIA HAS ADMITTED UNDISCLOSED INVESTMENT IN EXCESS STOCK OF RS. 10 CRORE 21 LAKHS. ANOTHER STATEMENT DATED 22.4.07 OF SH. RAVI HALDIA HAVING QUESTIONS ABOUT JEWELLERY FOUND DURING THE COURSE O F SEARCH, FDR FOUND AND EXCESS STOCK FOUND, WHICH WAS ADMITTED AND ALSO OFFERED FOR TAXATION AMOUNTING TO RS. 10.21 CRORE IN THE FOUR CONCERNS H AS ALSO BEEN SIGNED BY SMT. MAMTA HALDIA, SMT. DEEPALI HALDIA AND ALSO SH. DINESH HALDIA, APART FROM SH. RAVI HALDIA. IN THIS STATEMENT, SH. RAVI HALDIA IN HIS OWN HANDW RITING HAS MENTIONED THAT AFORESAID STATEMENT HAS BEEN GIVE N IN FULL SENSES AND WITHOUT ANY PRESSURE. I HAVE READ THESE STATEMENTS. WHATEVER HAS BEEN TOLD BY ME, SOME HAS BEEN WRITTEN. I HAVE GIVEN THE AFOR ESAID STATEMENT AFTER TAKING THE ADVICE AND APPROVAL OF THE FAMILY MEMBER S PARTICULARLY THE ADVICE AND APPROVAL OF MY YOUNGER BROTHER SH. DINES H HALDIA. 4.13 IN VIEW OF THESE FACTS, ALL THE THREE CLAIM S OF THE APPELLANT THAT HAS NOT ADMITTED THE EXCESS STOCK AND NOT SURRENDERED T HE SAME AND THERE BEING THIRD PARTY SURRENDER, ARE FOUND TOTALLY INCO RRECT AND ARE REJECTED. 4.14 THOUGH THE CLAIM OF OVER VALUATION HAS AL READY BEEN REJECTED BUT EVEN THEN IT IS SEEN THAT THE APPELLANT IS TRYING T O JUSTIFY THE RATE OF `CITRINE ROUGH BY SUPPORTING HIS CLAIM FROM BILL NO.M/S. S. P. JEWELLERS DATED 15.5.04. THE `OPAL ROUGH IS BEING JUSTIFIED BY PUR CHASE BILL DATED 5.5.04 AND 11.4.04 OF M/S. LAXMI JEWELLERS AND M/S. RAJSHR EE GEMS. SIMILARLY TURMOLIN ROUGH HAS BEEN TRIED TO JUSTIFY BY PURCHAS E BILLS DATED 20.5.04 AND 7.6.04 OF M/S. GIRISH DIAM AND M/S. ABHAYA INTE RNATIONAL. FIRSTLY THERE IS NO EVIDENCE THAT GOODS PURCHASED AS BACK A S IN APRIL, MAY AND JUNE, 2004 HAS STILL REMAINED WITH THE APPELLANT IN APRIL, 2007 AT THE TIME OF SEARCH, MORE PARTICULARLY WHEN SH. RAVI HALDIA H AS ADMITTED TO BE ENGAGED IN UNACCOUNTED PURCHASE AND SALES OF GOODS AND SAME IS ALSO 19 REFLECTED IN THE SEIZED DOCUMENTS. SECONDLY, SH. RA VI HALDIA IN HIS STATEMENT RECORDED ON 20.4.07 HAS VERY CATEGORICALL Y ADMITTED PARTICULARLY IN RELATION TO PURCHASE MADE IN F.Y. 2004-05 THAT T HE PURCHASES WERE MADE IN CASH AND BILLS WERE OBTAINED FROM SOME OTHER PAR TIES AND OBVIOUSLY THESE BILLS ARE BOGUS/UNVERIFIABLE. ACCORDINGLY, TH E RELIANCE PLACED BY THE APPELLANT ON THESE BILLS FOR SUPPORTING HIS CLAIM O F ALLEGED OVER VALUATION OF THE STOCK BY THE APPROVED VALUER, IS TOTALLY MIS PLACED. 4.15 ANOTHER ARGUMENT OF THE APPELLANT THAT THE DIS CLOSURE MERELY BASED ON STATEMENT WHICH IS SUBSEQUENTLY RETRACTED, NORMA LLY SHOULD NOT BE CONFIRMED IN ABSENCE OF CORROBORATION, HAS BEEN CON SIDERED BY ME. FIRSTLY IN THE INSTANT CASE, THE ADDITION HAS NOT BEEN MADE ONLY ON THE BASIS OF STATEMENT OF THE APPELLANT. IN FACT THE VALUATION O F THE PHYSICAL STOCK GOT DONE BY THE APPROVED VALUER AND THEN AFTER COMPARIS ON WITH THE BOOK STOCK, THE EXCESS PHYSICAL STOCK WAS FOUND WHICH HA S BEEN MADE AS A BASIS FOR ADDITION OF UNACCOUNTED STOCK. SECONDLY THE FAC T OF UNACCOUNTED STOCK BEING AVAILABLE WITH THE APPELLANT GROUP WAS ALSO A DMITTED ON 20.4.07 BY THE APPELLANT AND ON THAT DATE, NO ALLEGATION OF CO ERCION OR UNDUE PRESSURE HAS BEEN MADE BY THE APPELLANT. THIRDLY THE LOOSE P APERS AND DOCUMENTS ITSELF INDICATE UNACCOUNTED PURCHASES AND SALES MAD E BY THE APPELLANT GROUP. FOURTHLY THE APPELLANT HAS COMPLETELY FAILED TO IMMEDIATELY RETRACT HIS STATEMENT, IF HE WAS OF THE FIRM BELIEF THAT HI S STATEMENT WAS UNDER COERCION. FIFTHLY THE APPELLANT HAS COMPLETELY FAIL ED TO DISPUTE THE VALUATION EITHER DURING THE COURSE OF SEARCH OR IMM EDIATELY THEREAFTER. THE APPELLANT AS WELL AS HIS LD. A.R. COULD HAVE IMMEDI ATELY FILED THEIR OBJECTION TO THE VALUATION AND AFFIDAVIT OR OTHER D OCUMENT IN SUPPORT OF RETRACTION OF THE STATEMENT GIVEN DURING THE COURSE OF SEARCH. THE APPELLANT REMAINED SILENT FOR THE REASONS BEST KNOWN TO HIM. THEREAFTER THE RETURN OF INCOME WAS FILED IN RESPONSE TO NOTICE U/S.153A WIT HOUT DECLARING THE COMPLETE INVESTMENT IN EXCESS STOCK FOUND DURING TH E COURSE OF SEARCH WHICH WAS ALSO ADMITTED DURING THE COURSE OF SEARCH . IT WAS ONLY WHEN THE A.O. CONFRONTED THE APPELLANT AND ISSUED SHOW CAUSE NOTICE THAT APPELLANT CAME UP WITH THE REPLY OF ALLEGED OVER VALUATION OF THE STOCK. SH. RAVI HALDIA HAS CLAIMED TO HAVE FILED LETTER DATED 9.2.2 009 ALONGWITH AFFIDAVIT DATED 9.2.09 BEFORE THE A.O. RETRACTING THE SURREND ER BUT SAME IS NOT EMANATING FROM THE ASSESSMENT ORDER OR THE OTHER DE TAILS/RECORDS AVAILABLE BEFORE THE UNDERSIGNED. HOWEVER, EVEN IF THE DATE O R THE MONTH OF FILING OF THE LETTER RETRACTING THE SURRENDER BEING FEBRUARY, 2009 IS CONSIDERED CORRECT, THEN ALSO THIS RETRACTION IS FILED AFTER A GAP OF AS MUCH AS MORE THAN 21 MONTHS AFTER THE SEARCH. ALL THESE FACTS AN D CIRCUMSTANCES ARE GOING AGAINST THE APPELLANT AND FORCE ME TO LEAD TO THE CONCLUSION THAT THESE CONTENTIONS ARE AFTERTHOUGHT AND ACCORDINGLY HAVE BEEN RIGHTLY REJECTED BY THE A.O. 5. NOW COMING TO THE ISSUE OF DETERMINING THE COST PRICE OF THE STOCK FROM THE MARKET PRICE/VALUE TAKEN BY THE APPROVED V ALUER, THE APPELLANT 20 HAS CLAIMED THAT THE A.O. HAS HELD THE G.P. @ 30% A ND ACCORDINGLY SAME G.P. SHOULD BE APPLIED WHILE WORKING OUT THE COST O F STOCK FOUND DURING THE COURSE OF SEARCH. THE UNDERSIGNED HAS UPHELD TH E G.P. RATE OF 30% IN THE CASE OF APPELLANT IN A.Y. 2005-06 AND A.Y. 2007 -08 AND ALSO IN THE PRESENT APPEAL ORDER IN A.Y. 2008-09 (THE APPEAL OF A.Y. 2006-07 IS NOT YET DECIDED, BUT THE A.O. HAS APPLIED THE G.P. RATE OF 30%). CONSIDERING THE FACT THAT G.P. @ 30% HAS BEEN TAKEN BY THE A.O. NOT ONLY IN THE CASE OF APPELLANT BUT IN THE CASE OF OTHER ASSESSEES OF THIS GROUP, FOR ALL THE YEARS UNDER ASSESSMENT U/S.153A ON THE BASIS OF HON BLE ITAT DECISION IN THE CASE OF APPELLANT SH. RAVI HALDIA AND HIS BROTH ER SH. DINESH HALDIA IN THE REGULAR ASSESSMENT FOR A.Y. 2004-05 AND THE UND ERSIGNED HAS UPHELD THE SAME ON THE BASIS AFORESAID DECISION OF THE HON BLE ITAT AND FURTHER NOTICING THAT FACTS REVEALED AFTER THE SEARCH ARE M AKING THE CASE OF THE APPELLANT AND OTHER MEMBERS OF THE GROUP MORE ADVER SE ON THIS ISSUE. IT WAS FAIRLY ADMITTED BY THE A.R. OF THE APPELLANT TH AT FACTS OF THE CASE OF OTHER YEARS OF THE APPELLANT AND OTHER GROUP MEMBER S ARE MORE OR LESS SAME, FOR WHICH APPEALS ARE YET TO BE DECIDED. CONS IDERING THESE FACTS, IT IS HELD APPROPRIATE IN THE CASE OF SH. RAVI HALDIA AND ALSO SIMILARLY IN THE CASE OF OTHER MEMBERS OF THE APPELLANT GROUP TO T AKE THE G.P. @ 30% WHILE WORKING OUT THE COST PRICE OF THE STOCK, INST EAD OF 11% TAKEN BY THE A.O. IT IS TO PUT ON RECORD THAT IF BY ANY CHANCE, G.P. RATE SO UPHELD BY THE UNDERSIGNED IS REDUCED BY HIGHER JUDICIAL AUTHORITI ES, THEN SAME REDUCED G.P. RATE HAS TO BE TAKEN INSTEAD OF 30%, WHILE WOR KING OUT THE COST. THE EXCESS STOCK IS REWORKED OUT AS UNDER: (AS DONE IN THE APPEAL ORDER OF SH. RAVI HALDIA IN A.Y. 08-09) STOCK FOUND DURING SEARCH AFTER CORRECTING TOTALING MISTAKE RS.18,64,44,297/- (AS TAKEN BY A.O.) LESS: G.P. @ 30% AS DISCUSSED ABOVE RS. 5,59,33,8 89/- ------------------------ RS.13,05,11,008/- LESS: STOCK AS PER BOOKS OF ALL THE FIRMS (AS TAKEN BY A.O.) RS. 9,20,92,958/- DIFFERENCE RS. 3,84,18,050/- LESS:CASH PURCHASES OFFERED BY SH. RAVI HALDIA, SH. DINESH HALDIA (AS TAKEN BY A.O.) RS. 34,05,407/- EXCESS STOCK RS.3,50,12,643/- 21 5.1 IN VIEW OF THE FACTS AND CIRCUMSTANCES AND THE LEGAL POSITION ON THE ISSUE UNDER CONSIDERATION THE ADDITION ON ACCOUNT O F EXCESS STOCK FOUND DURING THE COURSE OF SEARCH IS UPHELD TO THE EXTENT OF RS.3,50,12,643/- IN THE APPEAL ORDER IN THE CASE OF SH .RAVI HALDIA IN A.Y.08-09 AND REMAINING AMOUNT OF ADDITION ON THIS ISSUE IS DELET ED. 5.2 AS THE STOCK OF ALL THE FOUR FIRMS INCLUDING T HAT OF APPELLANT WAS MIXED UP AND ACCORDINGLY THE A.O. IS JUSTIFIED IN M AKING ADDITION ON PROTECTIVE BASIS IN THE HANDS OF OTHER THREE BUSINE SS CONCERNS OF THE GROUP. PROTECTIVE ADDITION IN THE CASE OF OTHER THREE PROP RIETARY CONCERNS WILL ALSO GET MODIFIED AS PER THE FINDING GIVEN BY THE UNDERS IGNED IN THE APPEAL OF SH. RAVI HALDIA AND ALSO IN THE PRESENT APPEAL AND TAKEN ON THE BASIS OF EXCESS STOCK OF RS.3,84,18,050/- (AS PER THE BASIS TAKEN BY THE A.O.). S.NO. NAME OF ASSESSEE AMOUNT OF STOCK AMOUNT OF ADDITION 1. M/S.D.H. E XPORT, PROP. SH. DINESH HALDIA RS.2,42,81,620/- RS.1,01,29,466/- 2 M/S.RIDHI SIDHI INTERNATIONAL, PROP. SMT. DEEPALI HALDIA RS. 50,96,985/- RS.21,26,288/- 3 M/S. VIDHI GEMS PROP. SMT. MAMTA HALDIA RS.1,25,20,131/- RS.52,22,973/- AS SH. DINESH HALDIA HAS ALREADY OFFERED RS.3,54,51 8/- AS EXCESS STOCK, THE BALANCE AMOUNT OF RS.97,74,948/- IS HELD TO BE CONFIRMED ON PROTECTIVE BASIS IN THE CASE OF SH. DINESH HALDIA. IN THE CASE OF SM T. DEEPALI HALDIA AND SMT. MAMTA HALDIA, THE AFORESAID AMOUNT MENTIONED IN COL UMN NO.4 ARE HELD TO BE CONFIRMED ON PROTECTIVE BASIS. 10. NOW ASSESSEE AND DEPARTMENT ARE IN APPEAL HERE BEFORE THE TRIBUNAL. 11. THE LD. COUNSEL OF THE ASSESSEE INVITED ATTENTI ON TO THE WRITTEN SUBMISSIONS PLACED ON RECORD. IT WAS FURTHER SUBMITTED THAT THE ARGUM ENTS ADVANCED IN CASE OF SHRI RAVI HALDIA MAY BE TAKEN FOR THIS CASE ALSO AS FACTS INV OLVED ARE SAME. IT WAS FURTHER SUBMITTED THAT THE SUBSTANTIVE ADDITION WAS MADE IN THE HANDS OF SHRI RAVI HALDIA WHICH HAS BEEN AGITATED AND PROTECTIVE ADDITION HAS BEEN MADE IN THE HANDS OF REMAINING PERSONS INCLUDING THE ASSESSEE SMT. DEEPALI HALDIA. 22 12. ON THE OTHER HAND, THE LD. D/R ALSO SUBMITTED T HAT THE ARGUMENTS ADVANCED WHILE ARGUING THE APPEAL IN CASE OF SHRI RAVI HALDIA MAY BE TAKEN AS ARGUMENTS FOR THIS CASE ALSO AS THE FACTS ARE IDENTICAL. HE HAS ALSO SUBMI TTED THAT SUBSTANTIVE ADDITION HAS BEEN MADE IN THE CASE OF SHRI RAVI HALDIA AND PROTECTIVE ADDITION HAS BEEN MADE IN THE HANDS OF THE ASSESSEE IN THE PROPORTIONATE OF THE UNEXPLA INED STOCK INVESTMENT RELATING TO THE ASSESSEE. 13. AFTER CONSIDERING THE SUBMISSIONS AND PERUSING THE MATERIAL ON RECORD, WE FIND THAT ASSESSEE DESERVES TO SUCCEED ON THE ISSUE, WHE REAS THE DEPARTMENTS GROUND IS LIABLE TO BE REJECTED. 14. THE SUBSTANTIVE ADDITION HAS BEEN MADE IN THE C ASE OF SHRI RAVI HALDIA WHICH WE HAVE ALREADY DISPOSED OFF. WE HAVE GIVEN A DETAILE D REASONING THAT THERE WAS NO EXCESS STOCK AND WHATEVER THE STOCK WAS FOUND WAS ALREADY RECORDED IN THE BOOKS OF ACCOUNT. THERE WAS ONLY DIFFERENCE OF VALUATION. THE ASSESS EE HAS MAINTAINED BOOKS OF ACCOUNT AND HAS VALUED THE STOCK AS PER PURCHASE PRICE OR M ARKET PRICE WHICHEVER IS LESS. WHEREAS THE AO HAS MADE ADDITION ON THE BASIS OF VALUERS R EPORT OBTAINED FROM ONE SHRI KASLIWAL, THE GOVERNMENT APPROVED REGISTERED VALUER . THE CONTENTION OF THE ASSESSEE WAS NOT ACCEPTED BY THE AO AS WELL AS BY THE LD. CI T (A) THAT EXCESS STOCK WAS NOT THERE. THIS BASED ON THE STATEMENT RECORDED DURING THE COU RSE OF SURVEY WHEREIN SHRI RAVI HALDIA HAS ADMITTED THAT THEY ARE INDULGING IN TRAN SACTIONS OUTSIDE BOOKS OF ACCOUNT. SOMEWHERE IN THE STATEMENT IT WAS STATED THAT THEY HAVE INVESTED AROUND RS. 10 CRORES IN THE UNDISCLOSED STOCK. THIS ASPECT HAS ALREADY BEEN EXAMINED AND WAS FOUND THAT THOUGH SHRI RAVI HALDIA HAD ADMITTED THAT HE HAS INVESTED UNDISCLOSED MONEY IN THE STOCK BUT 23 NEITHER STOCK WAS FOUND IN EXCESS NOR OTHER ASSETS WERE FOUND WHICH WERE NOT DISCLOSED. WHATEVER THE UNRECORDED PURCHASES WERE FOUND THEY W ERE SURRENDERED BY SHRI RAVI HALDIA TO THE TUNE OF RS. 34 LACS OR ODD AND ON THA T AMOUNT THE TAX WAS PAID IN THE HANDS OF SHRI RAVI HALDIA. 14.1. WHILE DISPOSING THE APPEAL IN CASE OF SHRI RA VI HALDIA, WE HAVE EXAMINED THE ITEMS RECORDED IN THE BOOKS OF ACCOUNT AND HAVE ALS O EXAMINED THE ITEMS FOUND DURING THE COURSE OF SEARCH. ENTIRE STOCK WAS MIXED UP AN D, THEREFORE, THE TOTAL OF INVENTORY OF STOCK RELATING TO FOUR CONCERNS WERE PREPARED BY TH E SEARCH PARTY AND SINCE ALL THE CONCERNS RELATE TO RAVI HALDIA GROUP, THEREFORE, SU BSTANTIVE ADDITION WAS MADE IN CASE OF SHRI RAVI HALDIA AND PROPORTIONATE ADDITION AS PER STOCK OF RESPECTIVE CONCERN WAS ADDED IN THE HANDS OF RESPECTIVE PARTY ON PROTECTIVE BASI S. SINCE WE HAVE EXAMINED THE ISSUE IN DETAIL IN THE CASE OF SHRI RAVI HALDIA AND THEN ONL Y HAVE DELETED THE ADDITION BY HOLDING THAT THERE WAS NO EXCESS STOCK. THE APPEAL IN CASE OF SHRI RAVI HALDIA HAS BEEN DECIDED IN ITA NO. 14/JP/2011 & OTHERS RELATING TO ASSESSME NT YEAR 2008-09 AND OTHERS VIDE ORDER OF EVEN DATE. THEREFORE, ON THE SAME REASONI NG THE PROTECTIVE ADDITION IN THE HANDS OF ASSESSEE STANDS DELETED. GROUNDS OF THE ASSESS EE ARE ALLOWED AND GROUND OF THE DEPARTMENT IS DISMISSED. 14.2. THERE IS NO OTHER GROUND IN THE APPEAL OF THE DEPARTMENT. 15. NOW WE WILL TAKE UP THE REMAINING GROUNDS IN TH E APPEAL OF THE ASSESSEE. 16. GROUND NO. 5 IS AGAINST SETTING OFF THE ADDITIO N AGAINST ADDITION SUSTAINED IN THE HANDS OF HUSBAND OF THE ASSESSEE SHRI RAVI HALDIA A T RS. 3.5 CRORE OR ODD. 24 17. WE HAVE ALREADY DELETED THE ENTIRE ADDITION. TH EREFORE, THERE IS NO QUESTION OF GIVING SETTING OFF OF ANY INCOME. THEREFORE, THIS GROUND OF THE ASSESSEE DOES NOT REQUIRE ANY ADJUDICATION SEPARATELY. 18. GROUND NO. 6 IS AGAINST APPLICATION OF SECTION 145(3) OF I.T. ACT. 19. SIMILAR ISSUE WAS INVOLVED IN CASE OF SHRI RAVI HALDIA AND WE HAVE UPHELD THE APPLICATION OF SECTION 145(3). THEREFORE, FOR THE S AME REASONING, THE PROVISIONS OF SECTION 145(3) APPLIED BY AO AND SUSTAINED BY LD. CIT (A) A RE CONFIRMED. 20. GROUND NO. 7 IS AGAINST SUSTAINING THE TRADING ADDITION OF RS. 86,461/- BY MAINTAINING THE APPLICATION OF HIGHER GP RATE OF 30 % AGAINST GP DECLARED BY ASSESSEE AT 13.59%. 21. THE AO APPLIED GP RATE OF 30% ON THE BASIS OF T RIBUNALS ORDER FOR ASSESSMENT YEAR 2004-05 DECIDED IN CASE OF SHRI DINESH HALDIA. THE LD. CIT (A) ALSO CONFIRMED THE ACTION OF THE AO. 22. AFTER CONSIDERING THE SUBMISSIONS, WE FEEL THAT ASSESSEE DESERVES TO SUCCEED IN THIS GROUND IN PART. WE NOTED THAT FOR THE ASSESSM ENT YEAR 2004-05 IN CASE OF SHRI DINESH HALDIA, THE GP RATE OF 30% WAS APPLIED BY THE TRIBU NAL AGAINST GP RATE OF 27% DECLARED IN THAT CASE. IN THE PRESENT CASE GP RATE DECLARED IS 13.59%. THEREFORE, WE FEEL THAT IF A GP RATE OF 17% IS APPLIED ON THE DECLARED SALES THE N IT WILL MEET THE ENDS OF JUSTICE. WE ORDER ACCORDINGLY. THE AO IS DIRECTED TO RECALCULA TE THE TRADING ADDITION. 23. GROUND NO. 8 IS AGAINST SUSTAINING THE ADDITION @ 25% OF UNVERIFIABLE PURCHASES. 24. THE BENCHES OF THE TRIBUNAL ARE TAKING A CONSIS TENT VIEW HERE AT JAIPUR THAT WHERE ADDITION @ 25% OF UNVERIFIABLE PURCHASES IS NOT JUS TIFIED, ADDITION CAN BE MADE ON THE BASIS OF PAST HISTORY. WE HAVE ALREADY SUSTAINED A N ADDITION ON ACCOUNT OF APPLICATION OF 25 GP RATE AT 17% AGAINST 13.59%. THEREFORE, THE SAME WILL TAKE CARE OF ANY LEAKAGE, IF ANY AND ACCORDINGLY WE DELETE THE ADDITION MADE @ 25% O F UNVERIFIABLE PURCHASES. THIS GROUND OF ASSESSEE IS ALLOWED. 25. REMAINING GROUND IS AGAINST SUSTAINING THE DISA LLOWANCE OF RS. 5,275/- TO THE EXTENT OF 10% OF LEGAL AND PROFESSIONAL EXPENSES. 26. THIS IS REASONABLE DISALLOWANCE. SIMILAR DISALL OWANCE WAS MADE IN CASE OF SHRI RAVI HALDIA WHERE WE HAVE SUSTAINED SIMILAR ADDITIO N. THEREFORE, ON THE SAME REASONING, THE ADDITION SUSTAINED BY LD. CIT (A) IS CONFIRMED. THIS GROUND OF THE ASSESSEE FAILS. 27. NOW WE WILL TAKE UP APPEAL FOR ASSESSMENT YEAR 2006-07 LISTED AS ITA NO. 710/JP/2011. 28. GROUND NO. 1 IS AGAINST SUSTAINING THE APPLICAT ION OF PROVISIONS OF SECTION 145(3) IS REJECTED AS SIMILAR GROUND HAS BEEN REJECTED IN ASSESSMENT YEAR 2008-09. 29. GROUND NO. 2 IS AGAINST SUSTAINING THE TRADING ADDITION OF RS. 11,14,681/- BY MAINTAINING GP RATE OF 30% AGAINST GP RATE OF 13.25 % ON DECLARED SALES. SIMILAR ISSUE WAS INVOLVED IN ASSESSMENT YEAR 2008-09 WHEREIN WE HAVE DIRECTED TO APPLY GP RATE OF 17%. THEREFORE, ON THE SAME REASONING HERE ALSO WE DIRECT TO APPLY 17% GP AGAINST 30% AND THE AO IS DIRECTED TO RECALCULATE THE TRADING A DDITION. 30. GROUND NO. 3 RELATES TO CONFIRMING THE DISALLOW ANCE MADE @ 25% OF UNVERIFIABLE PURCHASES. 31. SIMILAR ADDITION MADE IN THE YEAR 2008-09 HAS B EEN DELETED BY US ABOVE. THEREFORE, ON THE SAME REASONING, THIS ADDITION IS ALSO DELETED. 32. NEXT ISSUE RELATES TO CONFIRMING THE DISALLOWAN CE OF EXPENSES @ 10% ON ACCOUNT OF VARIOUS PURCHASES. 26 33. SIMILAR ISSUE WAS INVOLVED IN THE ASSESSMENT YE AR 2008-09 AND WE HAVE REJECTED THE SIMILAR GROUND. THEREFORE, ON THE SAME REASONI NG THIS GROUND OF ASSESSEE IS REJECTED. 34. NOW WE WILL TAKE UP THE APPEAL FOR ASSESSMENT Y EAR 2005-06. 35. GROUND NO. 1 WHICH IS AGAINST SUSTAINING THE AC TION OF SURVEY UNDER SECTION133A AND SEARCH UNDER SECTION 132(1) AND THEREBY MAINTAI NING THE ASSESSMENT ORDER PASSED BY AO UNDER SECTION 153A READ WITH SECTION 153B/143(3) WAS NOT PRESSED. THEREFORE, THE SAME IS DISMISSED AS NOT PRESSED. 36. GROUND NO. 2 IS AGAINST SUSTAINING THE APPLICAT ION OF PROVISIONS OF SECTION 145(3) IS ALSO REJECTED AS SIMILAR GROUND HAS BEEN REJECTE D FOR ASSESSMENT YEAR 2008-09 AS MENTIONED. 37. GROUND NOS. 3 & 4 ARE AGAINST CONFIRMING AND EN HANCING THE ADDITION OF RS.1,91,611/- TO RS. 11,78,153/- BEING 25% OF ALLEG ED UNVERIFIABLE PURCHASES OF RS. 47,12,611/-. 38. WE HAVE ALREADY DISPOSED OFF SIMILAR GROUND WHI LE DISPOSING THE GROUND FOR ASSESSMENT YEAR 2008-09 AND 2007-08 AND WE HAVE HEL D THAT ADDITION CANNOT BE MADE @ 25% OF UNVERIFIABLE PURCHASES AS ADDITION CAN BE MA DE ON THE BASIS OF PAST HISTORY. THEREFORE, THE ADDITION @ 25% OF UNVERIFIABLE PURCH ASES IS CANCELLED. HOWEVER, WE WILL TAKE CARE OF LEAKAGE OF REVENUE, IF ANY, WHILE DISP OSING THE GROUND WHERE LD. CIT (A) HAS CONFIRMATION APPLICATION OF 30% GP AGAINST GP RATE DECLARED AT 9.28% ON DECLARED SALES. 39. GROUND NO. 5 RELATES TO CONFIRMING THE TRADING ADDITION OF RS. 12,47,717/- BY APPLYING HIGHER GP RATE OF 30% AGAINST GP RATE OF 9 .28%. 40. SIMILAR ISSUE WAS INVOLVED FOR ASSESSMENT YEARS 2007-08 AND 08-09 WHERE WE HAVE DIRECTED TO APPLY GP RATE OF 17% AGAINST GP RA TE OF 13% OR ODD. HERE GP RATE 27 DECLARED IS 9.82%, THEREFORE, WE FEEL THAT IF GP RA TE OF 14% IS APPLIED FOR THE YEAR UNDER CONSIDERATION, THAT WILL MEET THE ENDS OF JUSTICE. ACCORDINGLY WE DIRECT THE AO TO RECALCULATE THE TRADING ADDITION. THIS WILL TAKE C ARE OF ANY LEAKAGE ON ACCOUNT OF UNVERIFIABLE PURCHASES MADE BY ASSESSEE. 41. NEXT GROUND RELATES TO CONFIRMING DISALLOWANCE OF RS. 19,020/- BEING 10% OF VARIOUS EXPENSES. 42. WE HAVE ALREADY DISPOSED OFF SIMILAR GROUND FOR ASSESSMENT YEARS 2008-09 AND 07-08 WHERE WE HAVE CONFIRMED THE DISALLOWANCE. ON THE SAME REASONING, THIS GROUND OF THE ASSESSEE IS REJECTED. 43. NOW WE WILL TAKE UP THE APPEALS OF THE ASSESSEE AND DEPARTMENT FOR THE ASSESSMENT YEAR 2004-05. 44. GROUND NO. 1 IN THE APPEAL OF THE ASSESSEE IS S IMILAR TO GROUND NO. 1 FOR ASSESSMENT YEAR 2008-09 AGAINST CONFIRMING THE ASSE SSMENT COMPLETED UNDER SECTION 153A READ WITH SECTION 153B/143(3) OF THE I.T. ACT. 45. THIS GROUND WAS NOT PRESSED, THEREFORE, THE SAM E IS DISMISSED AS NOT PRESSED. 46. GROUND NO. 2 IN THE APPEAL OF THE ASSESSEE IS A GAINST CONFIRMING THE APPLICATION OF PROVISIONS OF SECTION 145(3) OF THE IT ACT. 47. SIMILAR GROUND WE HAVE DISPOSED FOR THE ASSESSM ENT YEAR 2008-09 WHERE WE HAVE REJECTED THE GROUND OF THE ASSESSEE. FOR THE SAME R EASONING AS GIVEN IN ASSESSMENT YEAR 2008-09, WE REJECT THIS GROUND OF THE ASSESSEE HERE ALSO. 48. GROUND NOS. 3 & 4 ARE AGAINST CONFIRMING AND EN HANCING THE ADDITION @ 25% OF UNVERIFIABLE PURCHASES. 28 49. THESE ARE SIMILAR GROUNDS AS RAISED IN THE ASSE SSMENT YEAR 2005-06. WE HAVE ALREADY ALLOWED THE GROUNDS OF THE ASSESSEE. ON TH E SAME BASIS THESE GROUNDS OF THE ASSESSEE ARE ALLOWED. 50. GROUND NO. 5 IS AGAINST SUSTAINING TRADING ADDI TION OF RS. 9,28,732/- BY APPLYING GP RATE OF 30% AS AGAINST 10.44% DECLARED BY ASSESS EE. 51. SIMILAR GROUND WAS INVOLVED FOR ASSESSMENT YEAR 2005-06 WHERE WE HAVE APPLIED GP RATE OF 14% AGAINST 9.82% GP DECLARED BY ASSESSE E. HERE GP RATE DECLARED BY ASSESSEE IS 10.44%. THEREFORE, WE FEEL THAT IF A G P RATE OF 15% IS APPLIED ON THE DECLARED SALES THEN IT WILL MEET THE ENDS OF JUSTICE. ACCOR DINGLY, WE DIRECT THE AO TO RECALCULATE THE TRADING ADDITION. 52. GROUND NO. 6 IS AGAINST CONFIRMING THE DISALLOW ANCE @ 10% OF VARIOUS EXPENSES. 53. SIMILAR DISALLOWANCE WAS CONFIRMED FOR THE ASSE SSMENT YEAR 2005-06 AND OTHERS, WHERE WE HAVE REJECTED THIS GROUND. ON THE SAME RE ASONING, THIS GROUND OF THE ASSESSEE IS REJECTED HERE ALSO. 54. NOW WE WILL TAKE UP THE APPEAL OF THE DEPARTMEN T. 55. GROUND NOS. 1 TO 3 IS AGAINST DELETING THE ADDI TION OF RS. 9,00,275/- OUT OF TOTAL ADDITION OF RS. 20,36,119/- WHICH WAS MADE BY AO ON ACCOUNT OF CASH PURCHASES BY APPLYING PROVISIONS OF SECTION 145(3) AND PLACING R ELIANCE ON THE DECISION IN CASE OF M/S. VIJAY PROTEINS, 58 ITD 428 (ITAT AHMEDABAD). 56. ALL THE GROUNDS RELATE TO SAME ISSUE IN THE APP EAL OF THE DEPARTMENT. IN FACT, AO MADE ADDITION OF THE ENTIRE UNVERIFIABLE CASH PURCH ASES. HOWEVER, THE LD. CIT (A) RESTRICTED THE ADDITION TO THE EXTENT OF 25% OF UNV ERIFIABLE PURCHASES AND CASH PURCHASES. 29 WE HAVE ALREADY DISPOSED OFF THESE GROUNDS IN THE A PPEAL OF THE ASSESSEE WHEREBY WE HAVE DELETED THE ENTIRE ADDITION AS WE HAVE SUSTAIN ED TRADING ADDITION, WHICH WILL TAKE CARE OF LEAKAGE, IF ANY. THEREFORE, THE APPEAL OF THE DEPARTMENT DOES NOT REQUIRE SEPARATE ADJUDICATION UPON. 56.1. ONE OF THE GROUNDS I.E. GROUND NO. 4 IS THAT IN CASE OF SHRI DINESH HALDIA AND SHRI RAVI HALDIA FOR THE ASSESSMENT YEAR 2004-05, T HE TRIBUNAL HAS CONFIRMED THE APPLICATION OF GP RATE @ 30%. FOR THE SAKE OF CLAR IFICATION, THE RATE OF 30% WAS SUSTAINED BY THE TRIBUNAL LOOKING TO THE FACT THAT ASSESSEE HAS DECLARED GP RATE OF 27% IN ASSESSMENT YEAR 2004-05 IN CASE OF SHRI DINESH HALD IA AND SHRI RAVI HALDIA DECIDED IN ITA NOS. 320-21/JP/2008 DATED 31.07.2008. WE HAVE ALREADY TAKEN INTO CONSIDERATION THIS ASPECT AND WE HAVE SUSTAINED THE TRADING ADDIT ION @ 15% AGAINST GP RATE OF 10.44% DECLARED BY ASSESSEE. ACCORDINGLY THESE GROUNDS OF THE DEPARTMENT ARE DISMISSED. 57. NOW WE WILL TAKE UP THE APPEAL OF THE ASSESSEE FOR THE ASSESSMENT YEAR 2003-04 LISTED AS ITA NO. 642/JP/2011. 58. GROUND NO. 1 WHICH IS AGAINST SUSTAINING THE AC TION OF SURVEY UNDER SECTION133A AND SEARCH UNDER SECTION 132(1) AND THEREBY MAINTAI NING THE ASSESSMENT ORDER PASSED BY AO UNDER SECTION 153A READ WITH SECTION 153B/143(3) WAS NOT PRESSED. THEREFORE, THE SAME IS DISMISSED AS NOT PRESSED. 59. GROUND NO. 2 IS AGAINST SUSTAINING APPLICATION OF PROVISIONS OF SECTION 145(3). 60. WE HAVE ALREADY UPHELD THE APPLICATION OF PROVI SIONS OF SECTION 145(3). THEREFORE, FOR THE SAME REASONING, HERE ALSO WE CON FIRM THE APPLICATION OF PROVISIONS OF SECTION 145(3). THUS THE GROUND IS DISMISSED. 30 61. GROUND NO. 3 IS AGAINST SUSTAINING TRADING ADDI TION OF RS. 1,87,140/- MADE @ 30% AGAINST GP RATE OF 12.33% DECLARED BY THE ASSES SEE. 62. SIMILAR ISSUE WAS INVOLVED IN THE APPEAL OF THE ASSESSEE FOR OTHER YEARS WHERE WE HAVE DIRECTED TO APPLY GP RATE OF 14 TO 17% LOOKING TO THE GP RATIO DECLARED BY ASSESSEE. HERE GP RATE DECLARED IS 12.33%, THEREFORE, WE FEEL THAT IF A GP RATE @ 16%, THAT WILL MEET THE ENDS OF JUSTICE. ACCORDINGLY, WE DIRECT T HE AO TO RECALCULATE THE ADDITION BY APPLYING GP RATE AT 16% ON THE DECLARED SALES. 63. GROUND NOS. 4 & 5 IN THE APPEAL OF THE ASSESSEE RELATE TO CONFIRMING ADDITION OF RS. 2,32,224/- SUSTAINED BY LD. CIT (A) BY APPLYING 25% RATIO OF UNVERIFIABLE PURCHASES. 64. SINCE WE HAVE ALREADY SUSTAINED TRADING ADDITIO N BY APPLYING GP RATE OF 16%, THEREFORE, NO SEPARATE ADDITION IS REQUIRED TO BE M ADE @ 25% OF UNVERIFIABLE PURCHASES AS HELD BY US WHILE DECIDING THE APPEALS OF SUBSEQUENT YEARS. ACCORDINGLY THESE GROUNDS OF THE ASSESSEE ARE ALLOWED. 65. GROUND NO. 6 IS AGAINST CONFIRMING DISALLOWANCE @ 10% OF VARIOUS EXPENSES. 66. SIMILAR GROUND WAS INVOLVED IN OTHER APPEALS WH ERE WE HAVE REJECTED THE SIMILAR GROUND. THEREFORE, ON THE SAME REASONING, THIS GROU ND OF THE ASSESSEE IS ALSO REJECTED FOR THE YEAR UNDER CONSIDERATION. 67. IN THE RESULT, APPEALS OF THE ASSESSEE ARE ALLO WED IN PART AND APPEALS OF THE DEPARTMENT ARE DISMISSED. 68. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 19 .12.2011. SD/- SD/- ( N.L. KALRA ) ( R.K. GUPTA ) ACCOUNTANT MEMBER JUDICIAL MEMBER 31 JAIPUR, D/- COPY FORWARDED TO :- SMT. DEEPALI HALDIA, JAIPUR. THE DCIT, CENTRAL CIRCLE-3, JAIPUR. THE CIT (A) THE CIT THE D/R GUARD FILE (ITA NO. 29(7)/JP/2011) BY ORDER, AR ITAT JAIPUR.