Shree Sitaram Jewellers, Ahmedabad V. ACIT, Cent.Cir. 2(1), Ahmedabad

ITA 364/AHD/2022

AI Insights

The case involves Shree Sitaram Jewellers appealing against the order of the CIT(A) which confirmed the addition of Rs.16,11,048 as unexplained money under Section 69A of the Income Tax Act, 1961. The addition was initially made by the Assessing Officer following a search operation where gold intended for job work was intercepted. The assessee argued that the gold was part of their regular business stock and provided documentation to substantiate this claim. The Tribunal, after reviewing the evidence and arguments, concluded that the addition was not justified as the gold was accounted for in the assessee's books and was sent for legitimate business purposes.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 129374 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-01-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 12-12-2022
• Assessment Year: 2018-2019
• Appeal Filed On: 18-09-2022
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Principle of natural justice; Reassessment proceedings
• Section: 132; 139; 143(2); 69A; 153C

Judgement Text

ITA No.364/Ahd/2022 A.Y. 2018-19 Page 1 of 4 IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD “SMC” BENCH, AHMEDABAD BEFORE Ms. SUCHITRA KAMBLE, JUDICIAL MEMBER ITA No.364/Ahd/2022 Assessment Year: 2018-19 Shree Sitaram Jewellers, vs. ACIT, 468/10, Chaturbhuj Complex, Central Circle 2(1), Kandoi Ni Khadki, Ahmedabad. Opp. B.D. College Sankdi Sheri, Manekchowk, Ahmedabad – 380 001 [PAN – ACSFS 3289 F] (Appellant) (Respondent) Assessee by : Shri Sunil Talati, A.R Respondent by : Shri Alpesh Parmar, Sr. DR Date of hearing : 13.12.2022 Date of pronouncement : 04.01.2023 O R D E R This appeal is filed by the Assessee against the order dated 29.08.2022 passed by the CIT(A)-12, Ahmedabad for the Assessment Year 2018-19. 2. The grounds of appeal raised by the assessee are as under :- “1. The Ld. CIT(A) has erred in confirming the addition of Rs.16,11,048/- u/s. 69A of the Income Tax Act, 1961 (“The Act” treating Gold sent by the appellant for job work (exclusively for business purpose) as unexplained. On the facts and circumstances of the case, the addition made of Rs.16,11,048/- u/s. 69A of the Act is incorrect and the same is prayed to be deleted. 2. Without prejudice to the above, Ld. CIT(A) has erred in taking advers view while confirming the addition u/s.69A of the Act by making his own interpretation based on the documents provided without granting an opportunity of being heard to appellant to clarify and justify before CIT(A). Hence the addition so confirmed amounting to Rs.16,11,048/- is unlawful and against principal of natural justice. ITA No.364/Ahd/2022 A.Y. 2018-19 Page 2 of 4 3. The order passed by the Ld. CIT(A) is bad in law and contrary to the provisions of law and facts. It is submitted that the same be held so now.” 3. On 27.10.2017 AIU i.e. Audit Investigation Unit, Rajkot Airport intercepted two persons namely Shri Sureshkumar from Jay Mata Di Air Services and Shri Jagdish Prasad from Bright Courier while they were getting delivery of parcels containing bullions and jewellery. A search action under Section 132 of the Income Tax Act, 1961 was carried out in case of Suresh Kumar and Jagdish Prasad of Rajkot on 28.10.2017. Satisfaction under Section 153C of the Act in case of the assessee was drawn by the Assessing Officer of the search party on 03.09.2019. Thereafter, the assessee filed return of income under Section 139 (1) for A.Y. 2018-19 on 26.10.2018 declaring total income of Rs.1,43,410/-. Notice under Section 143(2) of the Act dated 26.09.2020 was issued. Statement related to search of Suresh Kumar was taken on record by the Assessing Officer and observed that the gold amounting to Rs.16,11,048/- was not explained by the assessee and thus made addition of Rs.16,11,048/- as unexplained money under Section 69A read with Section 115BBE of the Act. 4. Being aggrieved by the assessment order, the assessee filed appeal before the CIT(A). The CIT(A) dismissed the appeal of the assessee. 5. The Ld. AR submitted that the assessee is engaged in the business of gold jewellery and ornaments had sent through its Delhi Branch gold weighing 529.29 grams for job work activity to Rajkot. Gold was sent through parcel/courier on 26.10.2017 through courier company namely Shree Bright Parcel; Service. The entire gold weighing 529.29 which was seized by the AIU is forming part of regular stock of jewellery business of the assessee. To substantiate the same, documents such as copy of account of creditors from whom the assessee purchased the goods along with copy of purchase invoice for gold purchase which was sent through courier along with extract of the day-wise stock register maintained in the books of accounts containing details of inward as well as outward of stock i.e. gold and copy of receipt of courier agency i.e. Shree Bright Parcel Service through which the parcel was also submitted ITA No.364/Ahd/2022 A.Y. 2018-19 Page 3 of 4 before the Assessing Officer. The Ld. AR further submitted that the provisions of Section 69A of the Act is triggered only when assessee has not recorded any money, bullion, jewellery in the books of account but in the present case the same has been given in the books of account of the assessee in detail. Ld. AR further submitted that confirmation from the courier confirming about the fact that declared value was only mentioned in the Memo and the market value is at Rs.6,90,000/- and Rs.9,20,000/-. Ld. AR further submitted that the addition made by the Assessing Officer was not justified and hence the same may be deleted. 6. The Ld. DR relied upon the Assessment Order and the order of the CIT(A). Ld. DR further submitted that nothing was shown during reassessment proceedings. 7. Heard both the parties and perused all the relevant material available on record. The assessee at the appellate stage before the CIT(A) has filed details which reveals that the value mentioned in the parcel bill was actually code word and the actual value has been mentioned in assessee’s date-wise stock register as well as purchase invoices of gold purchase. There was no doubt related to purchase or closing stock raised by the Assessing Officer and the same has been accepted. The fact remains that the Delhi Branch of the assessee had parcelled the said gold to Rajkot for job work activities only and not for any other activity. Therefore, addition made by the Assessing Officer and confirmed by the CIT(A) is not justifiable and hence appeal of the assessee is allowed. 8. In the result, appeal filed by the assessee is allowed. Order pronounced in the open Court on this 4 th day of January, 2023. Sd/- (SUCHITRA KAMBLE) Judicial Member Ahmedabad, the 4 th day of January, 2023 PBN/* ITA No.364/Ahd/2022 A.Y. 2018-19 Page 4 of 4 Copies to: (1) The appellant (2) The respondent (3) CIT (4) CIT(A) (5) Departmental Representative (6) Guard File By order UE COPY Assistant Registrar Income Tax Appellate Tribunal Ahmedabad benches, Ahmedabad