KAMAL PRASAD PANDEY, Jaipur V. ACIT, Alwar

ITA 305/JPR/2011

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 54169 (ITAT-JAIPUR)
• Duration Of Justice: 5 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-09-2011
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Assessment Year: 2008-2009
• Appeal Filed On: 04-04-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: D K MEENA
• Assessee Lawyers: R K KHUNTETA
• Keywords: Unexplained investment
• Section: 132

Judgement Text

1 ITA 305(2)-11 IN THE INCOME TAX APPELLATE TRIBUNAL JAIPUR BENCH A JAIPUR. ( BEFORE SHRI R.K. GUPTA AND SHRI N.L. KALRA ) ITA NO. 305/JP/2011 ASSTT. YEAR : 2008-09. SHRI KAMAL PRASAD PANDEY, VS. THE ACIT, CENTRAL C IRCLE, PROP. M/S. PANDEY MURTI KALA KENDRA, ALWAR. THROUGH L/H SMT. SHASHI KALA PANDEY, JAIPUR. ITA NO. 310/JP/2011 ASSTT. YEAR : 2008-09. THE ACIT, CENTRAL CIRCLE, VS. SMT. SHASHI KALA P ANDEY, ALWAR. L/H SHRI KAMAL PRASAD PANDEY, PROP.M/S. PANDEY MURTI KALA KENDRA KHEJRO KA RASTA, CHANDPOLE BAZAR, JAIPUR. (APPELLANTS) (RESPONDENTS) ASSESSEE BY : SHRI R.K.KHUNTETA DEPARTMENT BY : SHRI D.K. MEENA DATE OF HEARING : 02 .09.2011 DATE OF PRONOUNCEMENT : 16.09.2011. ORDER DATED : 16/09/2011. PER R.K. GUPTA, J.M. THESE ARE TWO APPEALS BY ASSESSEE AND DEPARTMENT A GAINST THE ORDER OF LD. CIT (A) RELATING TO ASSESSMENT YEAR 2008-09. 2 2. ASSESSEE IN HIS APPEAL IS OBJECTING IN SUSTAININ G THE ADDITION OF RS. 17,75,585/- OUT OF TOTAL ADDITION OF RS. 32,11,650/- MADE BY AO ON ACCOUNT OF UNEXPLAINED INVESTMENT IN THE STOCKS FOUND DURING THE COURSE OF SEARCH. 3. DEPARTMENT IS OBJECTING IN DELETING THE ADDITION OF RS. 14,36,065/- OUT OF TOTAL ADDITION OF RS. 32,11,650/-. DEPARTMENT HAS TAKEN AS MANY AS 7 GROUNDS BUT THEY RELATE TO DELETING THE ADDITION OF RS. 14 LACS OR ODD MENT IONED ABOVE. 4. SINCE GROUNDS IN BOTH THE APPEALS ARE CO-RELATED , THEREFORE, THEY ARE BEING DISPOSED OFF TOGETHER. 5. THE BRIEF FACTS AS RECORDED IN THE ORDER OF LD. CIT (A) IN PARA 2 ARE AS UNDER :- THE APPELLANT IS ENGAGED IN THE BUSINESS OF MANU FACTURING & TRADING OF STATUES MAINLY OF GODS AND GODDESSES MAD E FROM MARBLE STONES. SEARCH OPERATIONS UNDER SECTION 132 OF THE INCOME-T AX ACT, 1961 WAS CARRIED OUT AT THE BUSINESS AND RESIDENTIAL PREMISE S OF PANDEY GROUP ON 10.1.08. DURING THE COURSE OF SEARCH OPERATIONS, I NVENTORY OF STATUES AND MARBLE STONES LYING AT BUSINESS CUM RESIDENTIAL PRE MISES OF THE APPELLANT WAS PREPARED. AS PER THIS INVENTORY, STOCK AMOUNTIN G TO RS. 53,01`,900/- WAS FOUND. THE STOCK OF THE APPELLANT AS PER BOOKS OF ACCOUNT WAS RS. 20,90,250/- ON THE DATE OF SEARCH AS ADMITTED BY TH E APPELLANT IN REPLY TO QUESTION NO. 13 OF HIS STATEMENT DATED 10-11/01/200 8 RECORDED DURING SEARCH. THUS THE EXCESS STOCK OF RS. 32.11.650/- W AS ADMITTED BY THE APPELLANT AS INVESTMENT OF UNDISCLOSED INCOME. HOWE VER, WHILE FILING THE RETURN OF INCOME FOR THE ASSTT. YEAR 2008-09 IN RES PONSE TO NOTICE UNDER SECTION 153A, NIL AMOUNT WAS ACCEPTED AS EXCESS STO CK BY THE APPELLANT OUT RS. 32,11,650/- OF EXCESS STOCK ADMITTED BY HIM DURING SEARCH. DURING THE FAG END OF THE ASSESSMENT PROCEEDINGS, T HE APPELLANT HAD DIED ON 19.11.2009. ASSESSMENT PROCEEDINGS WERE FINALIZE D ON 30.11.2009 BY 3 MAKING ADDITION OF RS. 32,11,650/- ON ACCOUNT OF TH E EXCESS STOCKS AS DISCUSSED IN THE BODY OF THE ASSESSMENT ORDER. 6. ASSESSEE PREFERRED APPEAL BEFORE LD. CIT (A) WHE RE A LEGAL GROUND TAKEN THAT ASSESSMENT WAS COMPLETED ON DEAD PERSON WHICH IS IL LEGAL AND ADDITION MADE BY THE AO. LEGAL GROUND WAS REJECTED BY THE LD. CIT (A) AND NO SUCH GROUND HAS BEEN TAKEN HERE BEFORE THE TRIBUNAL. 7. REGARDING THE ADDITION OF RS. 32,11,650/-, FOLLO WING SUBMISSIONS WERE MADE BEFORE LD. CIT (A) WHICH ARE RECORDED IN PARA 4.1 O F HIS ORDER :- 4.1. NO CREDIT OF RS. 15,58,535/- WAS ALLOWED IN RESPECT OF THE STOCKS AS OWNED BY SHRI CHANDRA SHEKHAR PANDEY, THE SON OF TH E APPELLANT. IT WAS ARGUED THAT THE STOCKS AS FOUND AVAILABLE AT THE TI ME OF SEARCH OPERATIONS ALSO INCLUDED THE STOCKS OF SHRI CHANDRA SHEKHAR PA NDEY, (WHICH INCLUDES THE STOCKS OF RS. 7 LAC AS INHERITED BY HIM FROM HI S GRAND FATHER, LATE SHRI MANOHAR LAL PANDEY) WHO WAS RESIDING JOINTLY WITH H IS FATHER IN THE SAME PREMISES AND WAS ALSO DOING THE SAME BUSINESS IN TH E SAME PREMISES AND WAS ASSESSED TO TAX. IN THE ASSESSMENT PROCEEDINGS OF THE SHRI CHANDRA SHEKHAR PANDEY ALSO SUCH STOCKS WERE ADMITTED BY TH E LD. AO. IN THE CASE OF CHANDRA SHEKHAR PANDEY, THE STOCKS RELATING TO H IM WERE SEGREGATED OUT OF THE STOCKS AS FOUND AT THE TIME OF SEARCH PR OCEEDINGS AND WERE SUBMITTED ALONG WITH HIS RETURN. THE CHART SO FURNI SHED WITH THE RETURN WAS DULY ADMITTED BY THE LD. AO WHILE FINALIZING HIS AS SESSMENT PROCEEDINGS. FURTHER THE FACT OF INHERITING OF THE STOCKS OF RS. 7 ;AC BY SHRI CHANDRA SHEKHAR FROM HIS GRAND FATHER LATE SHRI MANOHAR LAL PANDEY COULD NOT BE NEGATED BECAUSE SUCH STOCKS OF RS. 7 LAC EACH WERE ALSO INHERITED BY SVS. CHANDRESH PANDEY & HITESH PANDEY (IN WHOSE CASES SU CH INHERITED STOCKS WERE DULY ADMITTED BY THE DEPARTMENT). THUS THE ST OCKS PERTAINING TO SHRI 4 CHANDERSHEKHAR WAS AN UNDISPUTED FACT. IN SUPPORT O F SUCH CONTENTION, THE CHART OF THE STOCKS AS CLAIMED IN THE NAME OF SHRI CHANDRA SHEKHAR WAS PROCURED SHOWING THEREIN ITEMS OF THE STOCKS AS APP EARING IN THE STOCK INVENTORIES AS PREPARED AT THE TIME OF THE SEARCH O PERATIONS. IT WAS FURTHER ARGUED THAT AT THE TIME OF SEARCH OPERATIONS, ALL T HE POINTS & PREMISES PERTAINING TO THE APPELLANT AND HIS SON SHRI CHANDR A SHEKHAR PANDEY WERE THOROUGHLY SEARCHED BUT NO ANY OTHER STOCKS WAS FOU ND PERTAINING TO ANY OF THE FAMILY MEMBER OF THE APPELLANT OR TO SHRI CH ANDRA SHEKHAR AT ANY POINT OR PREMISES EXCEPT THE STOCKS FOR WHICH INVEN TORIES WERE PREPARED DURING THE COURSE OF SEARCH OPERATIONS. THUS IT IS AN INEVITABLE ASSUMPTION THAT EXCEPT THE STOCKS AS FOUND AND INVENTORIED BY THE SEARCH TEAM, THERE EXISTED NO OTHER STOCK WHATSOEVER PERTAINING TO ANY PERSON OR FAMILY MEMBER OF THE APPELLANT INCLUDING SHRI CHANDRA SHEK HAR, THE SON OF THE APPELLANT. LASTLY, IT WAS ALSO CONTENDED THAT SUCH STOCKS WERE ALSO OVER VALUED IN THE SAME MANNER AS OTHERS WHICH WERE POIN TED OUT BY FURNISHING VARIOUS CHARTS. 8. THE LD. CIT (A) AFTER CONSIDERING THE SUBMISSION S AND PERUSING THE MATERIAL ON RECORD, SUSTAINED THE ADDITION OF RS. 15,58,535/- B Y GIVING THE FOLLOWING FINDING AT PARA 4.2 OF HIS ORDER :- 4.2. THE CONTENTION OF THE A/R WAS CONSIDERED AND THE ASSESSMENT ORDER WAS ALSO PERUSED ON THE POINT. IT IS EVIDENT THAT AT THE TIME OF SEARCH OPERATIONS, THE ABOVE POINT WAS NOT BROUGHT TO THE NOTICE OF THE SEARCH PARTY. MOREOVER, ON CAREFUL PERUSAL OF THE STATEME NT OF SH. KAMAL PANDEY, IT IS SEEN THAT ON QUESTION NO. 13, HE WAS ASKED TO EXPLAIN ABOUT THE PHYSICAL STOCK OF THE DIFFERENT FIRMS FOUND DUR ING THE COURSE OF SEARCH. IN ANSWER TO THAT THE APPELLANT HAS HIMSELF STATED THAT ON THE DEATH OF HIS FATHER, LATE SHRI MANOHAR LAL PANDEY ON 28.02.07, T HE STOCK OF FIRM 5 VALUING RS. 21 LAKHS OF HIS FATHER WAS GIVEN TO THR EE PERSONS NAMELY, 1/3 RD TO M/S. PANDEY MOORTIWALA, 1/3 RD TO M/S. RAJASTHAN MOORTI KALA KENDRA AND 1/3 RD TO M/S. PANDEY CRAFT CORPORATION, WHO ARE THE PROP RIETARY CONCERN OF MY SON CHANDRASEKHAR PANDEY, HITESH PAND EY, S/O SH. UMA SHANKER PANDEY AND MY YOUNGER BROTHER SH. CHANDRESH PANDEY RESPECTIVELY. IMMEDIATELY THEREAFTER, IN THE SAME ANSWER IN RESPECT OF HIS FIRM M/S. PANDEY MOORTIWALA, HE HAS HIMSELF STATED THAT THE STOCK AS PER BOOKS IS RS. 2,90,250/- AND AFTER DEDUCTING IT FROM THE PHYSICAL STOCK OF RS. 53,01,900/-, THE EXCESS STOCK COMES TO RS. 32,1 1,650/-. IMMEDIATELY THEREAFTER IN THE SAME ANSWER ABOUT THE PHYSICAL ST OCK OF OTHER TWO FIRM, HE HAS CATEGORICALLY STATED THAT IN CASE OF M/S. PA NDEY CRAFT CORPORATION, OUT OF PHYSICAL STOCK OF RS. 20,10,300/-, BOOK STOC K OF RS. 7 LAKH (RECEIVED FROM HIS FATHER LATE SH. MANOHAR LAL PANDEY) MAY BE DEDUCTED, LEAVING EXCESS STOCK OF RS. 13,10,300/- AND HE SURRENDERED THE SAME IN ABSENCE OF HIS YOUNGER BROTHER. THUS IT IS EVIDENT THAT IF TH E CLAIM NOW MADE ABOUT GIVING DEDUCTION OF BOOK STOCK OF HIS SON OF RS. 7 LAKHS IS ACTUALLY CORRECT THAT HOW AND WHY THE SAME WAS NOT MADE BY THE APPEL LANT IN HIS STATEMENT WHILE EXPLAINING PHYSICAL STOCK OF HIS FIRM, WHEREA S ON THE OTHER HAND, HE HAS MADE SUCH CLAIM OF DEDUCTION OF RS. 7 LAKH FOR THE CONCERN OF HIS YOUNGER BROTHER SHRI CHANDRESH PANDEY I.E. M/S. PAN DEY CRAFT CORPORATION, IN THE SAME ANSWER. THE ONLY ANSWER T O THIS QUESTION IS THAT OBVIOUSLY THERE IS NO ANY ACTUAL CLAIM OF RS. 7 LAK H SOUGHT TO BE DEDUCTED IN HIS FIRMS CASE, WHICH WAS VERY EVIDENT TO THE A PPELLANT SHRI KAMAL PANDEY AT THE TIME OF SEARCH. THAT IS WHY, HE HAS NOT MADE SUCH CLAIM. HENCE THE CLAIM NOW MADE BY THE A.R OF THE APPELLAN T IS NOTHING BUT AN AFTER THOUGHT AND DESERVES TO BE REJECTED. IN THE C IRCUMSTANCES, THE AO HAD CORRECTLY PROCEEDED TO REJECT THE APPELLANT CLAIM I N THIS REGARD. ACCORDINGLY THE CLAIM OF THE APPELLANT THAT STOCKS OF RS. 15,58,535/- PERTAINING TO SHRI CHANDRA SHEKHAR PANDEY WAS INCLU DED IN THE STOCKS AS FOUND AT THE TIME OF SEARCH OPERATION IS NOT MAINTA INABLE AND IS ACCORDINGLY REJECTED. 6 9. REGARDING REMAINING ADDITION OF RS. 17 LACS OR O DD, WHICH WAS ON ACCOUNT OF VALUATION OF STOCK, THE SUBMISSIONS ADVANCED BEFORE LD. CIT (A) HAVE BEEN RECORDED IN PARA 4.3 AND 4.3.1 AS UNDER :- 4.3. THE A/R HAD ALSO DISPUTED THE VALUATION OF T HE STOCKS. IT WAS POINTED OUT THAT THERE WERE NUMBER OF GLARING AND P ATENT INSTANCES WHICH COULD PROVE THIS FACT BEYOND DOUBT. IN SHORT, THE A .R HAD EXPLAINED THAT MOST OF THE AVAILABLE STOCKS WERE CONSISTING OF THE OLD STOCKS AS CARRIED FORWARD FROM THE IMMEDIATE PRECEDING YEAR AND EVIDE NT FROM THE INVENTORY OF THE CLOSING STOCKS SUBMITTED ALONG WIT H RETURN OF THE YEAR. THUS OVER-VALUATION OF THESE STOCKS WAS EVIDENT FRO M SUCH STOCK INVENTORY OF THE CLOSING STOCKS. LIKE-WISE, IN REMAINING ITEM S, OVER VALUATION WAS PROVED WITH THE HELP OF SALE AND PURCHASE BILLS. IN SUPPORT OF SUCH CLAIM, TWO CHARTS WERE SUBMITTED BY THE APPELLANT BEFORE T HE A.O. AND ALSO PRODUCED BEFORE THIS OFFICE INDICATING THEREIN SUCH GLARING INSTANCES OF OVER VALUATION. IT WAS FURTHER CLARIFIED THAT THEY DID NOT DISPUTE THE QUANTITATIVE DETAILS OF THE STOCKS. THE POINT OF D ISPUTE WAS ONLY VALUATION OF SUCH QUANTITIES OF THE STOCKS AND THAT TOO NOT A LL THE ITEMS BUT FEW ITEMS. THE LEARNED AO HAD HOWEVER TURNED DOWN THE ABOVE CO NTENTIONS OF THE APPELLANT BY REFERRING TO THE CONFESSIONAL S TATEMENT OF THE APPELLANT VIDE REPLY TO QUESTION NO. 13 AND RELYING ON THE JU DICIAL CITATION OF HONORABLE SUPREME COURT IN THE CASE OF K.K. PAVUNNY VS. ASSTT. CCE 1997 (90) ELT 241 (SC). 4.3.1. IN APPEAL PROCEEDINGS, THE A/R OF THE APPELL ANT HAD REITERATED THAT THE LEARNED AO HAD RELIED UPON THE CONFESSIONAL STATEMENT HEAVILY WHILE ARRIVING AT ILLOGICAL CONCLUSIONS. I N SUPPORT OF SUCH CLAIM, IT WAS ARGUED THAT SUCH OVER VALUATION WAS DULY PROVED WITH THE HELP OF THE 7 CHART OF OPENING STOCKS, THE SALE AND PURCHASE BILL S. IT WAS POINTED OUT THAT THE EXISTENCE AND THE VALUATION OF THE OPENING STOC KS CAN NOT BE OVER LOOKED AS HELD BY HONORABLE SUPREME COURT IN THE CA SE OF V.K.J. BUILDERS & CONSTRUCTION (P) LTD. VS. CIT (2010) 228 CTR (SC) 143. THE FACTS OF THIS CASE HAVE DIRECT BEARING ON THE FACTS OF THE P RESENT CASE. LIKE-WISE, THE VALUE SHOWN IN THE SALE AND PURCHASE BILLS COUL D ALSO NOT BE IGNORED ON SURMISES. IN SUPPORT OF THE CONTENTION REGARDING O VER VALUATION THE APPELLANT HAD ALSO PRODUCED THE COPIES OF SALE BILL S, PURCHASE BILL AND COPY OF THE RELEVANT LEDGER A/C OF THE PARTIES ETC. WHIC H WAS OTHERWISE ALSO PRODUCED BEFORE THE AO. THE APPELLANT HAS GIVEN SP ECIFIC INSTANCES OF OVER VALUATION BY COMPARING THE RATE TAKEN BY THE S EARCH PARTY WITH THE SALE BILL OF SAME MOORTY AND IT WAS ARGUED THAT THE OVER VALUATION IS QUITE EVIDENT FROM EVEN THE CURSORY PERUSAL AND COMPARISO N OF RATE AS PER SALE BILL AND RATE TAKEN BY SEARCH PARTY. IN BRIEF, THE APPELLANT HAS STATED AS FOLLOWS :- DURGA AT S. NO. 184 SIZE 60 VALUED BY THE SEARCH TEAM AT RS. 2,50,000/- WHICH HAS BEEN SOLD FOR RS. 1,51,000/-S VIDE BILL NO. 83 DATED 04.02.08, GANESH AT S. NO. 115 SIZE 30 VALUED BY THE SEARCH TEAM A T RS. 2,00,000/- WHICH HAS BEEN SOLD FOR RS. 28,000 VIDE BILL NO. 83 DATED 04.02.08, SHANKAR SIZE 69 VALUED BY THE SEARCH TEAM AT RS. 5,00,000/ - WHICH HAS BEEN SOLD FOR RS. 3,51,000/- VIDE BILL NO . 207 DATED 16.05.08, SARSWATI AT S. NO. 89 SIZE 48 VALUED BY THE SEARCH TEAM AT RS. 2,00,000/- WHICH HAS BEEN SOLD FOR RS. 1,00,000/- VIDE BILL NO . 145 DATED 08.02.08, SAI BABA AT S. NO. 187 SIZE 72 VALUED BY THE SEARCH TEAM A T RS. 6,50,000/- WHICH HAS BEEN SOLD FOR RS. 4,21,000/-. LIKE WISE OVER VALUATION OF OTHER MOORTIES WAS COMPARED WITH THE S AME SIZE/MINOR DIFFERENT SIZE OF MOORTIES AND FOUND THAT DURGA AT S.NO. 55 & 100 SIZE 48 & 45 VALUED BY THE SEARCH TEAM AT RS. 1,50,000/- A ND RS. 50,000/- RESPECTIVELY WHEREAS PAINTED DURGA AT S.NO. 88 & 98 SIZE 54 & 39 VALUED BY THE SEARCH TEAM AT RS. 80,000/- AND 35,00 0/- RESPECTIVELY, KRISHNA BLACK AT S. NO. 83 SIZE 54 WAS VALUED BY SEARCH TEAM AT RS. 8 85,000/- WHEREAS KRISHNA WHITE AT S. NO. 175 SIZE 6 1 WAS VALUED BY SEARCH TEAM AT RS. 45,000/-, LAXMI AT S. NO. 116 SIZE 27 WAS VALUED BY SEARCH TEAM AT RS. 2,00,000/- WHEREAS LAXMI PAINTED AT S.NO. 68, 71, 108 SIZE 30, 54, 57 WAS VALUED BY SEARCH TEAM AT RS. 8,000/-, 20,000/- & 35,000/- RESPECTIVELY. IT WAS ARGUED THAT THE VALUATION NEEDS TO BE MODIFI ED IN THESE CASES SO AS TO ARRIVE AT THE CORRECT VALUATION AND THEREB Y AVOIDING HEAVILY EXCESSIVE ADDITION. 10. AFTER CONSIDERING THE SUBMISSIONS AND PERUSING THE MATERIAL ON RECORD, THE LD. CIT (A) ALLOWED THIS ISSUE IN FAVOUR OF THE ASSESSEE BY DELETING THE ADDITION OF RS. 14,36,065/- OUT OF ADDITION OF RS. 17 LACS OR ODD MADE BY THE A O. THE FINDING OF LD. CIT (A) HAVE BEEN RECORDED IN PARA 4.4. TO 4.4.3 AT PAGES 8 TO 1 0 OF HIS ORDER ARE AS UNDER :- 4.4. I HAVE CONSIDERED THE SUBMISSION OF THE LD. A/R AND HAVE PERUSED THE MATERIAL ON RECORD. ON PERUSAL OF THE CHART AND THE AFORESAID DETAILS, IT IS NOTICED THAT THE SPECIFIC MOORTI E.G. SHIV PARVA TI SEATED AT SR. NO. 62 WAS VALUED AT RS. 50,000/- WHEREAS SAME WAS SOLD VIDE B ILL NO. 145 DATED 8.2.08 FOR RS. 38,000/-. CONSIDERING THE G.P. RATE OF 20%, THE COST VALUE WILL COME TO RS. 30,400/-. SIMILARLY SARASVATI MOOR TI AT SR. NO. 89 HAVE BEEN SOLD BY THE APPELLANT FOR RS. 1 LAKH VIDE BILL NO. 145 DATED 8.2.08, WHEREAS THE SEARCH PARTY HAD VALUED IT FOR RS. 2 LA KH WHICH IS OBVIOUSLY INCORRECT AND EXCESSIVE. SIMILARLY DURGA AT SR. NO. 100 SOLD FOR RS. 50,000/- WAS VALUED BY THE DEPARTMENT AT RS. 55,000 /-. THE A.R OF THE APPELLANT HAS FURTHER STATED THAT ORDER FOR THESE M OORTIES RECEIVED BEFORE THE SEARCH AND THE PRICES WERE ALSO FINALIZED PRIOR TO SEARCH. THESE ITEMS WERE SENT TO RADHA KRISHAN MANDIR, PRITAMPURA, NEW DELHI. SIMILAR IS THE POSITION IN RESPECT OF OTHER ITEMS. IN VIEW OF THE ABOVE, IT IS QUITE EVIDENT THAT THE VALUE SO TAKEN BY SEARCH PARTY IN RESPECT OF SOME OF THE ITEMS WAS QUITE HIGH AND IT NEEDS TO BE MODIFIED, I N VIEW OF THE 9 AVAILABILITY OF DIRECT EVIDENCE BY WAY OF SALE BILL . THEREFORE, IT WILL BE FAIR AND REASONABLE TO ADOPT THE COST VALUE BY TAKING SA LE VALUE AS PER THE SALE BILL MINUS G.P. ACCORDINGLY, THE COST PRICE OF ITE M AT SR. NO. 89 AND 100, NAMELY SARASVATI 48 AND DURGA 45 HAS BEEN RIGHTLY CLAIMED BY THE APPELLANT AT RS. 80,000/- AND RS. 40,000/- RESPECTI VELY. HOWEVER IN THE CASE OF ITEM NO. 62 NAMELY SHIV PARVATI SEATED THE COST WOULD COME TO RS. 30,400/- AS AGAINST RS. 30,000/- CLAIMED BY APPELLA NT AND SIMILARLY FOR ITEM AT SR. NO. 184, NAMELY DURGA COLOUR, THE COST VALUE COME TO RS. 1,20,800/- AS AGAINST RS. 1 LAKH CLAIMED BY THE APP ELLANT. IN RESPECT OF ITEM AT SR. NO. 114, 185, 186 AND 187, THE VALUE CL AIMED BY THE APPELLANT BEING FOUND TO BE SOME WHAT MORE THAN THE COST AS D ETERMINED FROM THE SALE BILL, THE VALUE SHOWN BY THE APPELLANT FOR THE SE ITEMS ARE ACCEPTED. 4.4.1. WHERE SALES INSTANCES ARE NOT AVAILABLE, IT WILL BE REASONABLE TO COMPARE THE VALUE WITH THE OTHER ITEMS OF SAME/MINO R DIFFERENT SIZE AS VALUED BY THE SEARCH TEAM ITSELF AND TO TAKE THAT I NTO CONSIDERATION TO ARRIVE AT THE FAIR AND REASONABLE AMOUNT OF THE OVE R VALUED STOCK. THE SEARCH TEAM HAS VALUED KRISHNA WHITE OF 61 (SR. NO . 175) AT RS. 45,000/- AND ACCORDINGLY, THE VALUE TAKEN BY THE A.R OF 54 KRISHNA BLACK AT RS. 45,000/- LIS REASONABLE. IN RESPECT OF GANESHJI SPE CIAL 30 (SR. NO. 115), THE A.R HAS CLAIMED THE VALUE OF RS. 50,000/- BEING REA SONABLE CONSIDERING THAT GANESHJI COLOUR OF 42 (SR. NO. 185) (HAVING H IGHER HEIGHT) HAS BEEN SOLD FOR RS. 70,000/-. SIMILARLY VALUE OF LAXMI SP ECIAL 27 HAS BEEN CLAIMED TO BE REASONABLE AT RS. 50,000/- CONSIDERIN G THE LAXMI PRINTED AT SR. NO. 68, 71` AND 1`08 OF SIZES OF 30, 54 AND 5 7 BEING VALUED AT RS. 8,000/-, RS. 20,000/- AND RS. 35,000/-. THE CLAIM O F THE APPELLANT IS ACCEPTABLE CONSIDERING THE HUGE DIFFERENCE IN VALUE TAKEN BY THE SEARCH TEAM IN RESPECT OF THESE COMPARABLE ITEMS. HOWEVER, THE SAME IS NOT FULLY ACCEPTABLE IN VIEW OF THE FACT THAT THESE TWO ITEMS ARE GANESHJI SPECIAL AND LAXMI SPECIAL, WHICH WILL OBVIOUSLY HAVE MORE V ALUE THAN THE NORMAL MOORTIES. THEREFORE, CONSIDERING THE VALUATION OF O THER MOORTIES OF LAXMI AND GANESHJI AND ALSO CONSIDERING THESE TWO MOORTIE S BEING SPECIAL, IT WILL 10 BE REASONABLE TO TAKE THEIR VALUE AT RS. 1,00,000/- EACH INSTEAD OF RS. 50,000/- EACH CLAIMED BY THE APPELLANT. 4.4.2. HOWEVER, THERE IS NO OTHER MOORTI OF NATRAJ (AT S.NO. 117) SIZE 27 AND GAYATRI (SR. NO. 55) IS AVAILABLE FOR COMPARISO N AND MOREOVER THESE HAVE ALSO NOT BEEN SOLD IMMEDIATELY AFTERWARD AND H ENCE, THE CLAIM OF THE APPELLANT FOR THE SAID MOORTIES IS NOT ACCEPTED DUE TO NON AVAILABILITY OF COMPARABLE OTHER MOORTI. ACCORDINGLY, THE VALUE OF THE STOCKS IS MODIFIED ITEM-WISE AS INDICATED IN THE CHART A ANNEXED WIT H THE ORDER. TO THIS EXTENT THE APPELLANT GETS RELIEF ON ACCOUNT OF OVER -VALUATION OF THE STOCKS. 4.4.3. AS REGARDS THE VALUE OF THE RAW MATERIAL FOU ND IN THE FORM OF MARBLE BLOCKS VALUED AT RS. 3,61,200/- VIDE ENTRY N O. 188 OF THE STOCK INVENTORY IS CONCERNED, THE APPELLANT HAD PRODUCED PURCHASE BILLS INDICATING THEREIN THAT THESE BLOCKS WERE PURCHASED IN RECENT DAYS FOR RS. 1,73,935/-. AS THESE GOODS WERE PURCHASED ON 7.01. 2008 ONLY (AND RECEIVED BY THE APPELLANT ON 8.01.2008 ONLY) I.E. A BOUT 2 DAYS BEFORE THE DATE OF SEARCH. ACCORDINGLY IT WILL BE FAIR AND REA SONABLE TO TAKE THE VALUE OF THESE STOCKS OF MARBLE BLOCK AS PER THESE PURCHA SE BILLS TOTALING TO RS. 1,73,935/-. 4.4.5. WITH THESE REMARKS, THE VALUE OF AVAILABLE S TOCKS IS MODIFIED AT RS. 38,65,835/- AS AGAINST RS. 53,01,900/- SHOWN IN THE STOCK INVENTORY PREPARED AT THE TIME OF SEARCH PROCEEDINGS. THUS TH E APPELLANT WOULD GET RELIEF OF RS. 14,36,065/- ON ACCOUNT OF SUCH OVER-V ALUATION OF THE STOCKS. (RS. 12,48,800/- ON ACCOUNT OF OVER-VALUATION OF TH E MOORTIES AND RS. 1,87,265/- ON ACCOUNT OF MARBLE BLOCKS). THE VALUE AS PER CHART A IS ANNEXED WITH THIS ORDER. 11. NOW BOTH THE PARTIES ARE IN APPEAL HERE BEFORE THE TRIBUNAL. 12. THE LD. A/R FILED WRITTEN SUBMISSIONS WHICH ARE PLACED ON RECORD. 13. ON THE OTHER HAND, THE LD. D/R PLACED RELIANCE ON THE ORDER OF AO AND HAS PLACED RELIANCE ON THE ORDER OF THE LD. CIT (A) TO THE EXT ENT TO WHICH THE ADDITION HAS BEEN 11 SUSTAINED. SOME PORTIONS OF THE ORDER OF BOTH THE AUTHORITIES BELOW WAS READ ALSO BY LD. D/R. IT WAS FURTHER SUBMITTED THAT THE ADDITION MA DE BY AO IS ON THE BASIS OF MATERIAL FOUND DURING THE COURSE OF SEARCH AND ADMITTED BY T HE ASSESSEE IN HIS STATEMENT RECORDED DURING SEARCH PERIOD. NO PLAUSIBLE REASONING HAS B EEN GIVEN BY ASSESSEE IN NOT DECLARING THE INCOME ON ACCOUNT OF UNDISCLOSED STOCK FOUND DU RING THE COURSE OF SEARCH WHILE FILING THE RETURN OF INCOME. 14. WE HAVE HEARD RIVAL SUBMISSIONS AND CONSIDERED THEM CAREFULLY. WE WILL TAKE FIRST ISSUE INVOLVED IN THE APPEAL OF THE DEPARTMEN T. THE LD. CIT (A) HAS TAKEN INTO CONSIDERATION ALL THE MATERIAL FACTS ON RECORD. HE HAS CONSIDERED THE PURCHASE VALUE BY EXAMINING THE PURCHASE VOUCHERS AND THE SALE VALUE OF THE SAME ITEMS SOLD AFTER SEARCH, AND THEN ARRIVED AT A CONCLUSION THAT THE VALUE ADO PTED BY SEARCH PARTY WAS NOT CORRECT. REASONING GIVEN BY LD. CIT (A) HAS BEEN REPRODUCED SOMEWHERE ABOVE IN THIS ORDER, WHICH IS SELF EXPLANATORY. FINDINGS OF LD. CIT (A) ARE FINDING OF FACT WHICH REMAINED UNCONTROVERTED. THEREFORE, WE SEE NO REASON TO INTE RFERE WITH THE FINDING OF LD. CIT (A) IN RESPECT TO ADDITION DELETED BY LD. CIT (A). THE LD . A/R HAS ALSO NOT BROUGHT ANY MATERIAL TO CONVERT THE FINDING OF LD. CIT (A) WHILE CONFIRM ING THE PART ADDITION IN RESPECT OF VALUATION OF STOCK FOUND DURING THE COURSE OF SEARC H. THEREFORE, THE PART ADDITION SUSTAINED BY LD. CIT (A) IN RESPECT TO VALUATION OF STOCK IS CONFIRMED AND THE ADDITION DELETED BY LD. CIT (A) IS ALSO JUSTIFIED. ACCORDING LY, THE ORDER OF LD. CIT (A) ON THIS ISSUE IS CONFIRMED. 15. NOW WE WILL TAKE UP THE ISSUE INVOLVED IN THE A PPEAL OF THE ASSESSEE. 16. THE ONLY ISSUE INVOLVED IN THE APPEAL OF THE AS SESSEE IS THAT STOCK OF RS. 15 LACS OR ODD WHICH RELATES TO THE SON OF THE ASSESSEE I.E. S HRI CHANDRA SHEKHAR PANDEY. WE HAVE 12 SEEN THE COPY OF PROFIT & LOSS ACCOUNT IN CASE OF S HRI CHANDRA SHEKHAR PANDEY AND AS PER PROFIT & LOSS ACCOUNT, THERE IS A CLOSING STOCK OF RS. 15,58,575/-. SHRI CHANDRA SHEKHAR PANDEY IS A REGULAR ASSESSEE AND HAS FILED THE RETURN FOR THE YEAR UNDER CONSIDERATION ALSO AND CLOSING STOCK SHOWN BY SHRI CHANDRA SHEKHAR PANDEY HAS BEEN ACCEPTED BY THE DEPARTMENT. IT IS ALSO WORTH NOTIN G THAT THE BUSINESS PREMISES OF THE ASSESSEE AS WELL AS SHRI CHANDRA SHEKHAR PANDEY IS THE SAME. THE STOCKS PERTAINING TO SHRI CHANDRA SHEKHAR PANDEY WAS ALSO LYING IN THE S AME PREMISE WHICH WAS ACCOUNTED FOR BY THE SEARCH PARTY AND THE STOCKS RELATING TO SHRI CHANDRA SHEKHAR PANDEY WAS ALSO TREATED AS STOCK RELATING TO THE ASSESSEE. INVENTO RY OF STOCK WAS PREPARED AND AS PER INVENTORY OF STOCK, THE EXCESS STOCK WAS FOUND AT R S. 32,11,650/-. TOTAL STOCK FOUND DURING THE COURSE OF SEARCH WAS AT RS. 53,01,900/- AND AS PER BOOKS OF ACCOUNT OF ASSESSEE, THE STOCK WAS OF RS. 20,90,250/-. THEREF ORE, A QUESTION WAS RAISED DURING THE RECORDING OF STATEMENT AND IT WAS ADMITTED BY ASSES SEE THAT THE EXCESS STOCK OF RS. 32,11,650/- PERTAINS TO HIM AND THE SAME WILL BE OF FERED FOR TAXATION WHILE FILING THE RETURN OF INCOME. HOWEVER, AS STATED IN EARLIER P ARA, NO EXCESS STOCK WAS OFFERED FOR TAXATION. REASON FOR THE SAME WAS GIVEN DURING THE ASSESSMENT PROCEEDINGS THAT THERE IS A DIFFERENCE OF VALUATION AND THE STOCK OF SHRI CHA NDRA SHEKHAR PANDEY INADVERTENTLY WAS TREATED AS THE STOCK OF THE ASSESSEE. HOWEVER, THE AO WAS NOT SATISFIED. ACCORDINGLY HE MADE THE IMPUGNED ADDITION. THE LD. CIT (A) WAS SATISFIED IN RESPECT TO VALUATION OF STOCK, THEREFORE, HE DELETED THE ADDITION OF RS. 14 LACS OR ODD. THE DEPARTMENTAL APPEAL IN THIS RESPECT HAS ALREADY BEEN DISPOSED OFF ABOVE. 17. REGARDING THE STOCK RELATING TO SHRI CHANDRA SH EKHAR PANDEY AS DISCUSSED ABOVE THAT AS PER PROFIT & LOSS ACCOUNT THERE IS A STOCK OF RS. 15 LACS OR ODD WHICH HAS BEEN 13 ACCEPTED BY THE DEPARTMENT. IT IS ALSO WORTH MENTIO NING THAT OUT OF STOCK OF RS. 15 LACS OR ODD, STOCKS WORTH RS. 7 LACS WAS GIVEN BY HIS GRAND FATHER SHRI MANOHAR LAL PANDEY. IT IS ALSO WORTH MENTIONING THAT THERE WERE STOCKS WORTH RS. 21 LACS RELATING TO GRANDFATHER SHRI MANOHAR LAL PANDEY. STOCKS WORTH RS. 7 LACS EA CH WAS GIVEN TO SHRI CHANDRA SHEKHAR PANDEY, SHRI HITESH PANDEY AND SHRI CHANDER ESH PANDEY. IN CASE OF SHRI HITESH PANDEY AND SHRI CHANDERESH PANDEY, STOCKS GIVEN BY HIS GRANDFATHER HAS BEEN ACCEPTED BY THE DEPARTMENT IN THEIR ASSESSMENT. IN CASE OF SHRI CHANDRA SHEKHAR PANDEY ALSO, THE CLOSING STOCK SHOWN BY HIM HAS BEEN ACCEPTED BY THE DEPARTMENT. HOWEVER, NO BENEFIT HAS BEEN GIVEN WHILE MAKING THE ASSESSMENT OF ASSES SEE. 18. CLOSING STOCK INVENTORY PREPARED BY SEARCH PART Y IS PLACED AT PAPER BOOK AT PAGES 28 TO 35. THE STOCK INVENTORY IN CASE OF SHRI CHAN DERESH PANDEY IS PLACED AT PAGES 8 & 9 OF PAPER BOOK AND THE ITEMS OF STOCK PERTAINING TO SHRI CHANDRA SHEKHAR PANDEY ARE ALSO INCLUDED IN THE CLOSING STOCK INVENTORY PREPARED BY THE SEARCH PARTY IN CASE OF ASSESSEE. 18.1. WE HAVE GONE THROUGH BOTH THE STOCK INVENTORY RELATING TO SHRI CHANDRA SHEKHAR PANDEY AND THE ASSESSEE AND AFTER TALLYING THE STOC K INVENTORY, IT IS SEEN THAT ALL THE STOCK ITEMS RELATING TO SHRI CHANDRA SHEKHAR PANDEY ARE A LSO INCLUDED IN THE STOCK INVENTORY OF THE ASSESSEE PREPARED BY SEARCH PARTY. FROM THE ST OCK INVENTORY RELATING TO ASSESSEE AND SHRI CHANDRA SHEKHAR PANDEY, IT IS AMPLY PROVED THA T STOCK RELATING TO SHRI CHANDRA SHEKHAR PANDEY WAS INCLUDED IN THE STOCK OF ASSESSE E. DUE TO ILL HEALTH OF THE ASSESSEE WHO DIED ULTIMATELY BEFORE COMPLETION OF ASSESSMENT COULD NOT TELL THE SEARCH PARTY THAT STOCK WORTH RS. 15 LACS OR ODD RELATE TO HIS SON S HRI CHANDRA SHEKHAR PANDEY. HOWEVER, WHEN RECONCILIATION STATEMENT WAS PREPARED, THEN IT WAS FOUND THAT DUE TO MISTAKE STOCK RELATING TO SHRI CHANDRA SHEKHAR PANDEY WHICH HAS B EEN MIXED WITH THE STOCK OF THE 14 ASSESSEE COULD NOT EXPLAIN BEFORE THE SEARCH PARTY. THEREFORE, EXPLANATION WAS FILED BEFORE AO WHICH WAS NOT ACCEPTED AND THE LD. CIT (A ) HAS ALSO NOT ACCEPTED THE SAME FOR THE REASON THAT ASSESSEE COULD NOT LEAD ANY COGENT EVIDENCE. IN OUR VIEW, BOTH THE LOWER AUTHORITIES WERE NOT JUSTIFIED IN NOT TAKING INTO C ONSIDERATION THE STOCK INVENTORY PREPARED IN CASE OF SHRI CHANDRA SHEKHAR PANDEY AND PROFIT & LOSS ACCOUNT RELATING TO SHRI CHANDRA SHEKHAR PANDEY WHICH HAS BEEN DISCLOSED IN HIS RETURN OF INCOME AND THE SAME HAS BEEN ACCEPTED BY THE DEPARTMENT ALSO. THEREFOR E, IF THE CREDIT OF STOCK RELATING TO SHRI CHANDRA SHEKHAR PANDEY IS NOT GIVEN THEN IT WI LL AMOUNT TO DOUBLE TAXATION AS THE STOCK OF RS. 15 LACS OR ODD HAS BEEN SHOWN IN THE H ANDS OF SHRI CHANDRA SHEKHAR PANDEY. ACCORDINGLY WE HOLD THAT LD. CIT (A) WAS NOT JUSTIF IED IN CONFIRMING THE ADDITION OF RS. 15,58,535/-. THE SAME IS DELETED. 19. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS AL LOWED IN PART AND THE APPEAL OF THE DEPARTMENT IS DISMISSED. 20. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 16 .9.2011. SD/- SD/- ( N.L. KALRA ) ( R.K. GUPTA ) ACCOUNTANT MEMBER JUDICIAL MEMBER JAIPUR, D/ COPY FORWARDED TO :- SHRI KAMAL PRASAD PANDEY, THROUGH L/H SMT. SHASHI K ALA PANDEY, JAIPUR. THE ACIT, CENTRAL CIRCLE, JAIPUR. THE CIT (A) THE CIT THE D/R GUARD FILE (ITA NO. 305(2)/JP/2011) BY ORDER, AR ITAT JAIPUR. 15