ACIT, CHENNAI V. SRS Thanga Nagai Maligai Pvt. Ltd., CHENNAI

ITA 3087/CHNY/2014

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 8975 (ITAT-CHENNAI)
• Duration Of Justice: 1 year(s) 6 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-06-2016
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: C
• Next Hearing Date: 12-04-2016
• Assessment Year: 2010-2011
• Appeal Filed On: 19-12-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: A V SREEKANTH IRS
• Assessee Lawyers: T BANUSEKARC A
• Keywords: Unexplained investment
• Section: 69C; 133A

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, CHENNAI , . , ! ' BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SHRI G. PAVAN KUMAR, JUDICIAL MEMBER ./ I.T.A. NO.3087/MDS/2014 & CO NO.11/MDS/2015 (IN ITA NO.3087/MDS/2014) ! # $# / ASSESSMENT YEAR : 2010-2011. THE ASSISTANT COMMISSIONER OF INCOME TAX, CORPORATE CIRCLE 6(1) CHENNAI. VS. M/S. SRS THANGA NAGAI MALIGAI PVT. LTD, NO.16, SARDAR PATEL ROAD, ADYAR, CHENNAI 600 020 [PAN AAICS 0604D] ( /APPELLANT) ( /RESPONDENT/CROSS OBJECTOR) DEPARTMENT BY : SHRI. A.V. SREEKANTH, IRS, JCIT. ASSESSEE BY : SHRI. T. BANUSEKAR, C.A. % & / DATE OF HEARING : 12-04-2016 '($ % & / DATE OF PRONOUNCEMENT : 23-06-2016 / O R D E R PER G. PAVAN KUMAR, JUDICIAL MEMBER : THE APPEAL OF THE REVENUE AND CROSS OBJECTION BY THE ASSESSEE ARE DIRECTED AGAINST COMMON ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS)-VI, CHENNAI FOR THE ASSESSMENT YEAR 2010-11 IN ITA NO. 3087/2014 & C.O.NO.11/MDS/2015. :- 2 -: ITA NO.1384/13-14/A-VI, DT 13.10.2014 PASSED U/S.14 3(3) AND 250 OF THE INCOME TAX ACT, 1961 (HEREIN AFTER REFERRED TO AS THE ACT). 2. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS:- 2.1. THE LEARNED CIT(A) ERRED IN DIRECTING THE AO DIRECTED THE AO TO RESTRICT THE ADDITION ON ACCOUNT OF UNEXPLAINED INVESTMENT IN THE STOCK TO 32,34,343/- AS AGAINST THE FIGURE OF .6,14,15,338/-. 2.2 THE CIT(A) HAS FAILED TO NOTE THAT THE ASSESSIN G OFFICER HAD CLEARLY ESTABLISHED WITH DETAILED REASO NING IN THE ASSESSMENT ORDER THAT THE PURCHASE OF BULLIONS FROM M/S SHIVA TRADERS WAS NOT AT ALL REFLECTED IN THE B OOKS OF ACCOUNTS OF THE ASSESSEE. 2.3 THE CIT(A) OUGHT TO HAVE CONSIDERED THE SWORN STATEMENT RECORDED DURING THE COURSE OF SURVEY PROCEEDING U/S 133A ON 26.08.2009 FROM THE DIRECTOR OF THE COMPANY HAD STATED THAT THERE WAS NO BULLION PURCHASED . 2.4. THE CIT(A) OUGHT TO HAVE CONSIDERED TILE REMAN D REPORT DATED 22.09.2014 WHEREIN THE FACTS WERE CLEA RLY ANALYZED WHICH LEADS TO THE CONCLUSION THAT THE ASSESSEE'S CONTENTIONS WERE NOT ACCEPTABLE. 3. THE BRIEF FACTS OF THE CASE IS THAT THE ASSESSEE CO MPANY IS ENGAGED IN THE BUSINESS OF TRADING IN GOLD, SILVER, PLATINUM JEWELLERY, PRECIOUS STONES AND READYMADE GARMENTS. THERE WAS A SURVEY OPERATION U/S.133A OF THE ACT AT THE PREMISES OF T HE ASSESSEE COMPANY ON 26.08.2009 AND SUBSEQUENTLY THE ASSESSEE COMPANY FILED RETURN OF INCOME ON 07.10.2010 DECLARING TOTAL INCO ME OF ?64,76,425/- AND THE CASE WAS SELECTED FOR SCRUTINY AND NOTICE U /S.143(2) OF THE ACT ITA NO. 3087/2014 & C.O.NO.11/MDS/2015. :- 3 -: WAS ISSUED. IN COMPLIANCE TO THE NOTICE, THE LD. AU THORISED REPRESENTATIVE OF ASSESSEE APPEARED FROM TIME TO TI ME AND FURNISHED DETAILS. IN THE SURVEY OPERATIONS, THE LD. ASSESSI NG OFFICER COLLECTED INCRIMINATING EVIDENCE AND STATEMENT WAS RECORDED FROM THE DIRECTOR OF THE COMPANY WERE EXCESS STOCK OF ?10,99,90,293/ - REPRESENTING PURCHASE OF STOCKS BEING UNACCOUNTED. SUBSEQUENT T O SURVEY THE DIRECTOR OF THE COMPANY APPEARED BEFORE LD. ASSESSI NG OFFICER AND FILED RECONCILIATION STATEMENT AS PER BOOKS OF ACCO UNTS BEING THE DIFFERENCE OF ?15,67,647/- ONLY AND SUPPORTED THE CLAIM AND EXPLAINED THAT MAJOR PURCHASES WERE NOT UPDATED OR ENTERED IN THE TALLY AS ON THE DATE OF SURVEY. IN ORDER TO VERIFY THE STATEMENTS AND THE CLAIM OF THE ASSESSEE, THE REVENUE CONDUCTED CO NSEQUENTIAL SURVEY ON 15.09.2009 WERE LD. ASSESSING OFFICER FOU ND ON THE SAID DATE OF THE SURVEY ALSO ENTRIES WERE NOT UPDATED IN THE TALLY AND STATEMENT WAS RECORDED FROM DIRECTOR AGAIN SHRI. R AVIRATHINAM AS THE DIFFERENCE IN STOCK COULD BE RECONCILED AND AGR EED FOR PAYMENT OF TAXES. THE LD. ASSESSING OFFICER RELIED ON THE EXC ERPTS OF SWORN STATEMENT FROM THE DIRECTOR OF THE ASSESSEE COMPANY ON 26.08.2009 AND REFERRED THE QUESTION AND ANSWER FROM SL.NOS. 8 TO 24 AT PAGE 2 TO 4 OF HIS ORDER WERE THE DIRECTOR HAS EXPLAINED T HE REASONS FOR DIFFERENCE AND RECONCILIATION. THE LD. ASSESSING OFFICER HAS PROVIDED ADEQUATE OPPORTUNITY TO THE DIRECTOR OF THE COMPANY TO GIVE ITA NO. 3087/2014 & C.O.NO.11/MDS/2015. :- 4 -: CLARIFICATIONS AND PRODUCE EVIDENCE. FURTHER, STAT EMENT WAS RECORDED ON 01.09.2009 OF ACCOUNTANT MS. JERU SHA WERE SHE HAS EXPLAINED THE SYSTEM OF RECORDING OF ENTRIES FOR PURCHASE AND SAL E IN QUANTITY WISE AND VALUE IN THREE PRODUCT SOFTWARES NAMELY CADM IUM (JILABHA), TALLY AND SHOPPERS SOFTWARE WERE SHOPPERS SOFTWARE IS USED EXCLUSIVELY FOR BILLING OF TEXTILES, CADMIUM WAS US ED FOR ALL THE TRANSACTION RELATING TO GOLD, SILVER, DIAMOND AND G IFT ARTICLES AND TALLY WAS USED FOR THE PREPARATION OF ACCOUNTS. THE LD. ASSESSING OFFICER REFERRED TO THE RELEVANT PORTION OF STATEMENT OF A CCOUNTANT RECORDED ON 01.09.2009 WITH QUESTION AND ANSWER FROM SL. NO. 5 TO 23. THE ACCOUNTANT HAS EXPLAINED THE METHODOLOGY OF ISSUE O F GOLD ARTICLES AND GAVE THE EXPLANATIONS AND SALE ENTRIES WERE UPDATED UPTO 31.03.2009. FURTHER ENTRIES IN RESPECT OF SALES AR E IN REGULAR BOOKS OF ACCOUNTS FROM 01.04.2009 TO THE DATE OF SURVEY ON 2 6.08.2009. THE ACCOUNTANT PROVIDED THE NAMES OF THE SUPPLIERS AND PROCEDURE OF ENTRY OF PURCHASE OF GOODS IN THE CADMIUM SOFTWARE. THE LD. ASSESSING OFFICER OBSERVED THAT THE ACCOUNTANT IS D EPENDED ON THE DIRECTOR OF THE COMPANY WHO HAS VITAL INFORMATION O N PURCHASE AND SALES AND WEREAS THE ACCOUNTANT DISCLOSES SALES AND PURCHASES BASED ON TALLY SOFTWARE AND WITH THE RECONCILIATION STAT EMENT FILED ON 04.09.2009 WERE THE PURCHASES RECORDED INCLUDES WOR NOUT PURCHASES AND PARTY WISE PURCHASES AGGREGATING TO ?13,27,36,4 60/-. CONSIDERING ITA NO. 3087/2014 & C.O.NO.11/MDS/2015. :- 5 -: THE MONTHWISE PURCHASE IN AUGUST, THE LD. ASSESSING OFFICER FOUND THAT THERE IS EXCESS PURCHASE OF ?1,90,25,958/- IN THE MONTH OF AUGUST AND HAS NOT ENTERED IN TALLY SOFTWARE. THE LD. ASS ESSING OFFICER CONDUCTED CONSEQUENTIAL SURVEY ON 15.09.2009 AND A GAIN STATEMENT WAS RECORDED FROM THE DIRECTOR OF THE COMPANY SHRI. RAVI RATHINAM REGARDING PURCHASE OF BULLION FROM M/S. SIVA TRADER S WEIGHING 6000 GRAMS FOR ?88,74,000/- AND VAT RS.88,740/- AS ON 10 .08.2009. THE LD. ASSESSING OFFICER BASED ON THE SWORN STATEMENT AND STOCK REGISTRAR VERIFIED THE DETAILS OF GOLDSMITH TO WHOM GOLDBARS WERE ISSUED AND QUERIES WERE RAISED ON PURCHASE OF BULLION FROM M/ S. SIVA TRADERS AND SAME IS REFERRED WITH THE DATES OF ISSUE OF BULLIO N TO THE GOLDSMITH AND RECEIVED BACK. FURTHER, THE LD. ASSESSING OFFIC ER AFTER DEEP SCRUTINY OF MATERIALS, ISSUED NOTICE U/S.133(6) O F THE ACT TO M/S. SIVA TRADERS AND IN COMPLIANCE THEY CONFIRMED THAT THER E IS NO BUSINESS TRANSACTION WITH THE ASSESSEE COMPANY DURING THE FI NANCIAL YEARS 2004-05 TO 2008-09 EXCEPT THE TRANSACTION REFLECTED IN ASSESSMENT YEAR 2011-2012. THE LD. ASSESSING OFFICER CONSIDERI NG THE SUBMISSIONS OF THE DIRECTOR OF THE COMPANY AND THE MARKET COND ITIONS OF THE BULLION AND THE BOOKS OF ACCOUNTS AND ACCOUNTANT S TATEMENT ON USAGE OF SOFTWARE FURTHER SUMMONED THE VICE PRESIDE NT OF THE COMPANY WHICH HAS SUPPLIED THE SOFTWARE AND BASED O N THE STATEMENT EXTRACTED FROM THE CADMUIM SOFTWARE THE ASSESSEE CO MPANY PHYSICAL ITA NO. 3087/2014 & C.O.NO.11/MDS/2015. :- 6 -: STOCK AS ON THE DATE OF SURVEY 74703.342 GRAMS AS A GAINST CADMIUM SOFTWARE INFORMATION 60316.73 GRAMS. THE LD. ASSES SING OFFICER TEST CHECKED THE DISCREPANCIES WITH MANAGEMENT AND NO CONVINCING EXPLAINATION WERE SUBMITTED. FURTHER, THE LD. ASS ESSING OFFICER CONSIDERING THE BOOKS OF ACCOUNT, STOCK BOOK AND T HE BILLS SUBSEQUENT TO SURVEY NOT ENTERED IN THE SOFTWARE AND DIRECTOR STATEMENTS IS OF THE OPINION THAT ASSESSEE COMPANY HAS FABRICATED THE PU RCHASE BILLS WITH PARTIES AND RELIED ON THE STATEMENTS RECORDED AND OTHERS CALCULATED EXCESS STOCK AT PARA 3.22 OF HIS ORDER AS UNDER:- PHYSICAL STOCK ON THE DATE OF SURVEY ?11,98,00,116/- (A) STOCK AS PER BOOK CLOSING STOCK AS ON 31.08.2008 ?7,27,56,927/- ADD PURCHASE FROM 1.4.08 TO 26.08.09 (-)?9,42 ,38,454/- AS EXTRACTED FROM TALLY ---------------------- ?16,69,95,381/ LESS SALES FROM 1.4.08 TO 26.8.09 (-) ?13,19,85,17 8/- AS EXTRACTED FROM TALLY LESS GROSS PROFIT AT 17.71% (-) ?2,33,74, 575/- -------------------- ?10,86,10,603/- ------------------- ?5,83,84,778/-(B) EXCESS STOCK (A) - (B) ?6,14,15,338/- MADE ADDITION ALONGWITH OTHER ADDITIONS AND ASSESSE D TOTAL INCOME AND RAISED DEMAND. AGGRIEVED BY THE ORDER, THE ASSE SSEE FILED AN APPEAL BEFORE COMMISSIONER OF INCOME TAX (APPEALS). ITA NO. 3087/2014 & C.O.NO.11/MDS/2015. :- 7 -: 4. IN THE APPELLATE PROCEEDINGS, THE LD. AUTHORISED REPRESENTATIVE ARGUED THE GROUNDS AND GAVE EXPLANAT IONS IN RESPECT OF SOFTWARE STATEMENT AND THE CALCULATIONS OF THE LD. ASSESSING OFFICER RELIED ON THE STOCK ON THE DATE OF SURVEY INCLUDES FAMILY JEWELLERY IN THE STOCK AND FAMILY MEMBERS HAS DISCLOSED JEWELLE RY IN VDIS AND THE SAME CANNOT BE TAXED. FURTHER, THE LD. AUTHORISED REPRESENTATIVE FILED WRITTEN SUBMISSIONS ON 14.03.2014 AND 29.09.2014 RE FERRED BY THE LD. COMMISSIONER OF INCOME TAX (APPEALS) AT PAGE 5 TO 8 OF HIS ORDER DISCUSSED AT PARA 6.2(I) THE WRITTEN SUBMISSIONS AN D THE REASONING OF STOCK CALCULATIONS AND ALSO CALLED FOR THE REMAND R EPORT FROM THE LD. ASSESSING OFFICER. IN COMPLIANCE THE LD. ASSESSING OFFICER GAVE HIS COMMENTS ON STOCK PURCHASE FROM M/S. SIVA TRADERS, OLD GOLD PURCHASES AND ALSO DUPLICATION ENTRIES IN PHYSICAL STOCK. THE LD. COMMISSIONER OF INCOME TAX (APPEALS) CONSIDERED THE FINDINGS OF REMAND REPORT AND REPLY OF THE DIRECTOR IN SURVEY OPERATIONS ON 26.08.2009 WERE EXCESS STOCK WAS DECLARED. THE LD. ASSESSING OFFICER HAS IGNORED THE FACTS IN MAKING ADDITION OF ?6,14,1 5,338/- WHEREAS THE LD. COMMISSIONER OF INCOME TAX (APPEALS) DEALT ON T HE METHOD OF VALUATION AND HYPOTHETICAL CALCULATIONS WORKED OUT THE DIFFERENCE OF 14386.613 GRAMS. THE LD. ASSESSING OFFICER HAS WRO NGLY ADOPTED VALUATION BASED ON GROSS PROFIT METHOD IGNORING THE CONSISTENT ITA NO. 3087/2014 & C.O.NO.11/MDS/2015. :- 8 -: METHOD FOLLOWED BY THE ASSESSEE AS IN EARLIER ASSES SMENT YEARS. IN RESPECT OF PURCHASE FROM M/S. SIVA TRADERS, THE LD. COMMISSIONER OF INCOME TAX (APPEALS) DEALT ON THE ADDITIONAL MATERI AL AND THE STATEMENT RECORDED BY LD. ASSESSING OFFICER AND ISS UE OF BULLION TO THE GOLDSMITH AND RETURN INWARD WITH LEDGER ACCOUNTS C OPIES AND ALSO FOUND FROM THE RECORDS THAT M/S SIVA TRADER IS NOT A REGULAR SUPPLIER OF GOODS TO THE ASSESSEE COMPANY AND EXCEPT THE DISPU TED SOLE TRANSACTION. ON THE OBJECTIONS OF THE LD. ASSESSIN G OFFICER IN REMAND REPORT AND THE RELIANCE ON THE ACCOUNTING SOFTWARE, THE LD. COMMISSIONER OF INCOME TAX (APPEALS) IS OF THE OPIN ION THAT PURCHASES PRIOR TO DATE OF SURVEY ARE GENUINE AND T HE SAME ARE TO BE CONSIDERED FOR THE PURPOSE OF COMPUTATION OF BOOK S TOCKS. FURTHER ON THE CLAIM OF THE ASSESSEE OF OLD GOLD PURCHASE OF 3 219 GRAMS AND THE VDIS DEDUCTION OF JEWELLERY 1600 GRAMS, THE LD. CO MMISSIONER OF INCOME TAX (APPEALS) CONSIDERED THE REMAND REPORT A ND DUE TO NON AVAILABILITY OF AUTHENTIC PROPER EVIDENCE HAS NOT ALLOWED THE CLAIM OF THE ASSESSEE BUT ON THE DUPLICATION OF STOCK INVEN TORY BY THE SURVEY OFFICIALS BEING 1027.583 GRAMS, LD. COMMISSIONER O F INCOME TAX (APPEALS) FOUND ON VERIFICATION OF STOCK SHEET PREP ARED BY THE DEPARTMENT THERE EXIST DISCREPANCIES AND CONVINCED THAT THERE ARE MISSING LINKS OF STOCKS AND ACCEPTS THE DIFFERENTI AL STOCK SHOULD BE REDUCED FOR THE PURPOSE OF CALCULATION OF BOOK STO CKS. WITH THIS ITA NO. 3087/2014 & C.O.NO.11/MDS/2015. :- 9 -: OBSERVATIONS CALCULATED UNDISCLOSED STOCK AT PAGE 16 PARA 6.2(V) OR ORDER AS UNDER:- WITH THE ABOVE OBSERVATIONS AND FINDINGS, THE UNE XPLAINED DISCREPANCY IN THE STOCK IN GRAMS AND ITS VALUE WOU LD OUT AS UNDER:- GMS FROM 1.4.09 TO 26.08.09 OPENING STOCK 61,863 ADD:- PURCHASES FROM SIVA TRADERS 11,000 ADD:- PURCHASES 33,409 ----------- 106,272 LESS: SALES 35,212 ----------- BOOK STOCK 71,060 LESS: STOCK TAKEN BY DEPT ON 74703 26.08.09 LESS: MISTAKE IN STOCK TAKING AS PER SUB PARA (IV) ABOVE 1027.253 -------------- 73,675 ---------------- DIFFERENCE IN STOCK (2,615) ---------------- VALUATION OF THE ABOVE STOCK SHOULD BE AS FOLLOWS: DIFFERENCE IN STOCK (A) 2,615 RATE OF GOLD PER GRAM AS ON 31.03.2009 (91.6%) B 1,237 A X B 3,234,343 THE VALUE OF UNDISCLOSED STOCK 32,34,343/- UNDER THE ABOVE FACTS AND CIRCUMSTANCES OF THE CASE , THE LD. ASSESSING OFFICER IS DIRECTED TO RESTRICT THE ADDIT ION ON ACCOUNT OF UNEXPLAINED INVESTMENT IN THE STOCK TO 32,34,343/- AS AGAINST THE FIGURE OF 6,14,15,338/- COMPUTED BY THE LD. ASSESSING OFFICER IN THE ORDER OF ASSESSMENT. FURTHER, THE UNEXPLAIN ED INVESTMENT ITA NO. 3087/2014 & C.O.NO.11/MDS/2015. :- 10 -: OF 32,34,343/- SHOULD BE CONSIDERED AS INCOME OF THE A PPELLANT U/S.69B OF THE I.T.ACT INSTEAD OF 69C OF THE I.T. A CT ADOPTED BY THE LD. ASSESSING OFFICER. AND PARTLY ALLOWED THE APPEAL. AGGRIEVED BY THE COM MISSIONER OF INCOME TAX (APPEALS)ORDER, THE REVENUE ASSAILED AN APPEAL BEFORE TRIBUNAL. 5. BEFORE US, THE LD. DEPARTMENTAL REPRESENTATIVE ARG UED THE GROUNDS AND SUBMITTED THAT THE LD. COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN RESTRICTING THE UNEXPLAINED INVE STMENTS FROM THE ORIGINAL CALCULATIONS OF THE LD. ASSESSING OFFICER ?6,14,15,338/- TO ?32,34,343/-. THE LD. COMMISSIONER OF INCOME TAX ( APPEALS) HAS NOT CONSIDERED THE REASONS ENVISAGED BY THE LD. ASSESS ING OFFICER THAT PURCHASES IN TALLY SOFTWARE ARE NOT REFLECTED IN T HE BOOKS OF ACCOUNTS. FURTHER, STATEMENT WAS RECORDED ON 26.08.2009, FR OM THE DIRECTOR THAT NO BULLION WAS PURCHASED WHICH ARE THE CONTRAD ICTORY SUBMISSIONS. THE LD. COMMISSIONER OF INCOME TAX (A PPEALS) SHOULD HAVE EMPHASIZED ON THE MATHEMATICAL CALCULATIONS AN D ALSO DEEP ANALYTICAL FINDINGS OF THE LD. ASSESSING OFFICER TH AT THE STATEMENTS ARE NOT EASY ACCEPTABLE THOUGH MADE ON DIFFERENT OCCASI ONS AND PRAYED FOR SET ASIDE THE ORDER OF COMMISSIONER OF INCOME T AX (APPEALS) AND ALLOW THE APPEAL. ITA NO. 3087/2014 & C.O.NO.11/MDS/2015. :- 11 -: 6. CONTRA, THE LD. AUTHORISED REPRESENTATIVE RELIED O N THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) AND FIL ED PAPER BOOK EXPLAINING THE PURCHASES AND SUPPORTED THE CLAIM. 7. WE HEARD THE RIVAL SUBMISSIONS, PERUSED THE MATERIA L ON RECORD AND MATERIAL FILED. THE LD. DEPARTMENTAL REP RESENTATIVE HAS RAISED SUBSTANTIAL GROUNDS WERE THE COMMISSIONER OF INCOME TAX (APPEALS) HAS REDUCED THE ADDITION DRASTICALLY WITH OUT CONSIDERING APPROPRIATE FINDINGS BY THE LD. ASSESSING OFFICER A ND REMAND REPORT WHICH ARE SPECIFIC IN RESPECT OF PURCHASE OF GOLD F ROM M/S. SIVA TRADERS, PURCHASE OF OLD GOLD, VDIS DECLARATION AN D DUPLICATION OF JEWELLERY ENTRIES. THE LD. COMMISSIONER OF INCOME TAX (APPEALS) BASED ON THE WRITTEN SUBMISSIONS AND THE MATERIAL E VIDENCE HELD THAT THE TRANSACTIONS WITH M/S. SIVA TRADERS ARE GENUINE AND TO BE CONSIDERED FOR COMPUTATION OF BOOK STOCKS AND RE-CA LCULATED THE STOCK EXCLUDING DUPLICATION OF ENTRIES BY THE DEPARTMENT OFFICIALS IN SURVEY OPERATION. THE LD. AUTHORISED REPRESENTATIVE ARGUE D ON THE SEQUENCE OF EVENTS WITH RESPECT TO PURCHASE OF GOLD FROM SIV A TRADER FROM 07.08.2009 TILL THE DATE OF SURVEY AND STATEMENT O F GOLD ISSUED TO THE JEWELLERIES AND PRODUCED THE ACCOUNTS OF SIVA TRA DERS WERE THE ASSESSEES TRANSACTIONS ARE REFLECTED AT PAGE 1 & 2 OF SUBMISSIONS FILED AND ALSO DEMONSTRATED THAT THE TRANSACTIONS OF RECEIPTS AND THE ITA NO. 3087/2014 & C.O.NO.11/MDS/2015. :- 12 -: PROCEDURE ADOPTED FOR PURCHASE AND ISSUE OF GOLD BA RS. THE LD. DEPARTMENTAL REPRESENTATIVE CONTENTION BEING THERE ARE UNACCOUNTED STOCKS WHICH ARE NOT UPDATED IN TALLY SOFTWARE THE LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS RELIED ON DOCUMENTS OF THE ASSESSEE WHICH ARE DOUBTFUL AND THE TRANSACTIONS OF PURCHASE OF BU LLION FROM SIVA TRADERS IS ALSO SUSPICIOUS AS THE SIVA TRADERS SUBM ITTED TO HAVE NOT DONE ANY BUSINESS EARLIER WITH THE ASSESSEE COMPANY . THE LD. AUTHORISED REPRESENTATIVE PRODUCED PAPER BOOK WITH COPIES OF INVENTORY OF GOLD AND SILVER RECORDED IN THE SURVEY OPERATIONS TO PROVE THAT ASSESSEE HAS SUBSTANTIAL CREDITABILITY IN THE MARKET AND ALSO REFERRED TO THE LIST OF OWN JEWELLERY FOUND IN THE STORE ROOM ALONGWITH OLD JEWELLERY STORED AND EXPLAINED THAT THE JEWELLE RY WAS INCLUDED IN THE STOCK AND THE SAME SHOULD BE ADJUSTED ALONGWITH VDIS DECLARATION ON GOLD AND DREW OUR ATTENTION TO THE DUPLICATION OF ENTRIES STATEMENT AND EMPHASIZED THAT THE COMMISSIO NER OF INCOME TAX (APPEALS) HAS RIGHTLY CONSIDERED THE DUPLICATIO N ENTRIES IN HIS ORDER. WE CONSIDERING THE APPARENT FACTS AND METH ODOLOGY ADOPTED IN THE GOLD BUSINESS AND THE FINDINGS OF THE LD. CO MMISSIONER OF INCOME TAX (APPEALS) WHO HAS EXHAUSTIVELY OBSERVED AND DEALT ON DISPUTED ISSUED. THE LD. AUTHORISED REPRESENTATIVE NOW SUBMITTED GOLD ACCOUNTS TO SUBSTANTIATE THE CLAIM OF M/S. SIV A TRADERS WHICH THE LD. DEPARTMENTAL REPRESENTATIVE VEHEMENTLY ARG UED THE PURCHASE ITA NO. 3087/2014 & C.O.NO.11/MDS/2015. :- 13 -: FROM M/S. SIVA TRADERS ARE NOT REFLECTED AND ALSO C ONTRADICTORY STATEMENTS ARE RECORDED AND RAISED DOUBTS ON ENTRIE S IN THE BOOKS OF ACCOUNT. THE LD. COMMISSIONER OF INCOME TAX (APPEAL S) HAS RELIED ON TRANSACTION OF PURCHASE ENTERED WITH SIVA TRADERS B EING MATERIAL EVIDENCE NOT AVAILABLE IN THE ASSESSMENT AND GRANTE D RELIEF. SO, WE ARE OF THE OPINION THAT THE MATTER HAS TO BE CONSI DERED AFRESH AS THE COMMISSIONER OF INCOME TAX (APPEALS) MADE CALCULATI ON IN HIS APPELLATE ORDER RESTRICTING THE CLAIM TO ?32,34,343 /- AS AGAINST THE ADDITION OF ?6,14,15,338/-. THE ASSESSING OFFICER S HALL REWORK AND TEST CHECK THE GENUINENESS OF THE TRANSACTIONS ON THE QU ANTIFICATION OF STOCK DEALT BY COMMISSIONER OF INCOME TAX (APPEALS) IN CALCULATING THE DIFFERENCE IN STOCK. THE ASSESSEE SHOULD BE PR OVIDED WITH ADEQUATE OPPORTUNITY OF HEARING AND SHALL CO-OPERAT E IN SUBMITTING VALUABLE INFORMATION BEFORE PASSING THE ORDER ON M ERITS. THE APPEAL OF THE REVENUE ASSESSEE IS ALLOWED FOR STATISTICAL PU RPOSE. 8. THE ASSESSEE HAS FILED CROSS OBJECTION NO.11/MDS/20 15:- SINCE THE ENTIRE ISSUE IS REMITTED BACK TO THE FIL E OF ASSESSING OFFICER FOR FRESH CONSIDERATION. THE CROSS-OBJECTIONS FILED BY THE ASSESSEE IS DISMISSED AS INFRUCTUOUS. ITA NO. 3087/2014 & C.O.NO.11/MDS/2015. :- 14 -: 9. IN THE RESULT, THE APPEAL OF THE REVENUE IS ALLOWE D FOR STATISTICAL PURPOSE AND C.O. OF THE ASSESSEE IS DIS MISSED. ORDER PRONOUNCED ON THURSDAY, THE 23 RD DAY OF JUNE, 2016, AT CHENNAI. SD/- SD/- ( ) (CHANDRA POOJARI) / ACCOUNTANT MEMBER ( . ) (G. PAVAN KUMAR) / JUDICIAL MEMBER / CHENNAI + / DATED:23.06.2016 KV , % -!&./ 0/$& / COPY TO: 1 . 12 / APPELLANT 3. 3& () / CIT(A) 5. /67 -!&! / DR 2. -812 / RESPONDENT 4. 3& / CIT 6. 79# : / GF