TBZ NIRMAL ZAVERI, MUMBAI V. ASST CIT 16(2), MUMBAI

ITA 3676/MUM/2014

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 8611 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 8 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-02-2017
• Appeal Filed By: Assessee
• Bench Allotted: E
• Assessment Year: 2007-2008
• Appeal Filed On: 23-05-2014
• Court: TRIBUNAL
• Keywords: Principle of natural justice; Additional evidence
• Section: 143(3); 263

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL E BENCH, MUMBAI BEFORE SHRI B.R. BASKARAN (AM) & RAMLAL NEGI (JM) I.T.A. NO. 3676 /MUM/20 14 (ASSESSMENT YEAR 20 07 - 08 ) M/S. TBZ NIRMAL ZAVERI SHOP NO. 2 GROUND FLOOR 62 - 64, ZAVERI HOUSE HUGHES ROAD MUMBAI - 400 007. V S. ACIT 16(2) ROOM NO. 204 MATRU MANDIR TARDEO ROAD MUMBAI - 400 007. ( APPELLANT ) ( RESPONDENT ) I.T.A. NO. 4161/MUM/2014 (ASSESSMENT YEAR 2007 - 08) ACIT 16(2) ROOM NO. 204 MATRU MANDIR TARDEO ROAD MUMBAI - 400 007. VS. M/S. TBZ NIRMAL ZAVERI SHOP NO. 2 GROUND FLOOR 62 - 64, ZAVERI HOUSE HUGHES ROAD MUMBAI - 400 007. ( APPELLANT ) ( RESPONDENT ) I.T.A. NO. 1252/MUM/2014 (ASSESSMENT YEAR 2007 - 08) M/S. TBZ NIRMAL ZAVERI SHOP NO. 2 GROUND FLOOR 62 - 64, ZAVERI HOUSE HUGHES ROAD MUMBAI - 400 007. VS. COMMISSIONE R OF INCOME TAX - 16 MUMBAI. ( APPELLANT ) ( RESPONDENT ) PAN NO . AACFT0496P ASSESSEE BY SHRI SANJAY SANGHVI DEPARTMENT BY S HRI SENTHIL KUMAR DATE OF HEARING 23.12 . 201 6 DATE OF PRONOUNCEMENT 08 .2 . 201 7 O R D E R PER B.R. BASKARAN (AM) : - M/S. TBZ NIRMAL ZAVERI 2 THE CROSS APPEALS FILED BY THE PARTIES ARE DIRECTED AGAINST THE ORDER DATED 12.3.2014 PASSED BY THE LEARNED CIT(A) - 27, MUMBAI AND THEY RELATE TO A.Y. 2007 - 08. THE ASSESSEE HAS ALSO FILED AN APPEAL NUMBERED AS ITA NO. 1252/MUM/2014 CHALLENGING THE REVISION ORDER PASSED BY THE LEARNED CIT - 16, U/S. 263 OF THE I.T. ACT FOR A.Y. 2007 - 08. 2. ASSESSMENT FOR A.Y. 2007 - 08 WAS COMPLETED IN THE HANDS OF THE ASSESSEE BY THE ASSESSING OFFICER ON 28.8.2009 U/S. 143(3) OF THE ACT. THE LEARNED CIT REVISED THE ASSESSMENT ORDER, VIDE ITS ORDER DATED 29.3.2012 PASSED U/S 263 OF THE ACT, WHEREIN HE DIRECTED THE ASSESSING OFFICER TO MAKE A FRESH ASSESSMENT. CONSEQUENT TO THE SAME, THE ASSESSING OFFICER PASSED A FRESH ASSESSMENT ORDER U/S. 143(3) READ WITH SECTION 263 OF THE AC T ON 28.3.2013. THE ASSESSEE CHALLENGED THE ASSESSMENT ORDER SO PASSED BY FILING THE APPEAL BEFORE THE LEARNED CIT(A) AND THE SAME WAS ALLOWED IN PART. AGGRIEVED BY THE ORDER PASSED BY THE LEARNED CIT(A), BOTH THE PARTIES HAVE FILED APPEAL BEFORE US. IN AD DITION TO THE ABOVE, THE ASSESSEE HAS ALSO FILED AN APPEAL CHALLENGING THE REVISION ORDER PASSED U/S. 263 OF THE ACT. ALL THESE APPEALS WERE HEARD TOGETHER AND ARE BEING DISPOSED OF BY THIS COMMON ORDER, FOR THE SAKE OF CONVENIENCE. 3. THE APPEAL FILED B Y THE ASSESSEE CHALLENGING THE REVISION ORDER PASSED U/S 263 OF THE ACT IS BARRED BY LIMITATION BY 637 DAYS. THE ONLY REASON SUBMITTED BY THE ASSESSEE FOR DELAY IS THAT THE ASSESSEES ERSTWHILE TAX CONSULTANT DID NOT ADVICE ON FILING THE APPEAL AND ONLY WH EN A NEW LEGAL CONSULTANT WAS POINTED, HE ADVISED THE ASSESSEE TO FIL E APPEAL CHALLENGING THE REVISION ORDER. THE ABOVE SAID REASON IS NOT CONVINCING TO US AND ACCORDINGLY WE DECLINE TO CONDONE THE DELAY. ACCORDINGLY, THE APPEAL OF THE ASSESSEE IN ITA NO. 1252/MUM/2014 IS DISMISSED IN LIMINE . 4. IN THE APPEAL FILED BY THE ASSESSEE CHALLENGING THE ORDER PASSED BY THE LEARNED CIT(A), THE ASSESSEE IS AGGRIEVED BY THE LEARNED CIT(A) IN NOT ADMITTING THE ADDITIONAL EVIDENCES FILED BY THE ASSESSEE IN RESPE CT OF ADDITION OF LEGAL AND M/S. TBZ NIRMAL ZAVERI 3 PROFESSIONAL FEES MADE BY THE ASSESSING OFFICER. IN THE APPEAL FILED BY THE REVENUE, RELIEF GRANTED BY THE LEARNED CIT(A) IN RESPECT OF ADDITIONS RELATING TO UNACCOUNTED SALES AND UNACCOUNTED PURCHASES ARE BEING CHALLENGED BY TH E REVENUE. 5. FACTS RELATING TO THE ABOVE SAID ISSUES ARE DISCUSSED IN BRIEF. THE ASSESSEE IS ENGAGED IN BUSINESS OF MANUFACTURE AND SALE OF GOLD JEWELLERY, DIAMOND AND COLOUR STONE STUDDED JEWELLERY. PRESENT ASSESSMENT ORDER WAS PASSED BY THE ASSESSING OFFICER TO GIVE EFFECT TO THE REVISION ORDER PASSED BY THE LEARNED CIT U/S. 263 OF THE ACT. FROM THE QUANTITY DETAILS OF RAW MATERIALS FURNISHED BY THE ASSESSEE, IT WAS NOTICED THAT CONSUMPTION OF GOLD WAS SHOWN AT 172782.86 GRAMS. HOWEVER, THE ACTUAL QU ANTITY OF FINISHED GOODS MANUFACTURED OUT OF THE ABOVE SAID GOLD WORK ED OUT TO 142578.36 GRAMS ONLY AND THE SAME RESULTED IN DIFFERENCE OF 30240.50 GRAMS (172782.86 - 142578.36). THE ASSESSING OFFICER INITIALLY TOOK THE VIEW THAT THE ABOVE SAID DIFFERENCE REPRESENTS GO L D SOLD OUTSIDE THE BOOKS OR IT MAY BE A CASE OF INFLATION OF PURCHASES. WHEN QUESTIONED, THE ASSESSEE SUBMITTED THAT THERE WAS TYPOGRAPHICAL ERROR IN FURNISHING THE QUANTITY DETAILS OF FINISHED GOODS, I.E. IN CASE OF 18 CARAT S TONE STUDDED JE WELLERY , THE QUANTITY DETAILS PERTAIN ING TO THE STONE ALONE WERE GIVEN AND THE QUANTITY DETAILS PERTAINING TO GOLD W ERE INADVERTENTLY OMITTED TO BE GIVEN. THE ASSESSEE FURNISHED CORRECT VERS ION OF STONE STUDDED JEWELLERY AS GIVEN BELOW : ITEM OPENING STOCK PURCHASE MANUFACTURED SALES CLOSING STOCK SHORTAGE /EXCESS 18 KT (IN CTS) (IN GMS) 3011.49 30738.27 1444.28 7892.66 1783.10 42055.76 3465.93 60598.95 2772.94 20087.74 0.00 0.00 THE ASSESSING OFFICER DID NOT EXAMINE THE DETAILS SO FURNISHED BY TH E ASSESSEE AND INSTEAD HE PROCEEDED TO COMPUTE THE RATIO OF STONES TO GOLD IN RESPECT OF OPENING STOCK, PURCHASE MANUFACTURE ETC. AS DETAILED BELOW: ITEM OPENING STOCK PURCHASE MANUFACTURED SALES CLOSING STOCK SHORTAGE /E XCESS 18 KT (IN CTS) 3011.49 1444.28 1783.10 3465.93 2772.94 0.00 M/S. TBZ NIRMAL ZAVERI 4 (IN GMS) 30738.27 7892.66 42055.76 60598.95 20087.74 0.00 MULTIPLE OF WEIGHT OF 18 KT GOLD (IN GMS) TO WEIGHT OF DIAMONDS (IN CTS) 10.21 TIMES 5.46 TIMES 23.59 TIMES 17.48 TIMES 7.24 TIMES 6. THE ASSESS ING OFFICER NOTICED THAT T HE RATIO OF STONES TO GOLD WORKED OUT TO 23. 59 TIMES IN CASE OF MANUFACTURED GOODS AND ACCORDINGLY TOOK THE VIEW THAT THE SAME CANNOT BE ACCEPTED. ACCORDINGLY, THE ASSESSING OFFICER TOOK THE VIEW THAT THE ASSESSEE HAS MANIPULATED THE DETAILS TO SUIT ITS CONVENIENCE. THE ASSESSING OFFICER PARTICULARLY REFERRED TO FOLLOWING STATEMENT RELATING TO SALES FURNISHED BY THE ASSESSEE : PARTICULARS GROSS WEIGHT OF GOLD (IN GMS) NET WEIGHT OF GOLD (IN GMS) DIAMOND (IN CARATS) COLOR STONE ( IN CARATS) NET AMOUNT (IN ` ) GROSS AMOUNT (IN ` ) SALE TO VARIOUS PARTIES 22390.89 19648.29 3007.54 10607.44 11.93 CRORES 12.03 CRORES ISSUE TO KARIGAR/BREAKING/REMAKING/ MELTING/SETTING 41509.59 40950.66 458.39 2287.71 TOTAL 63900.47 60598.95 3465.93 12895.15 11.93 CRORES 12.03 CRORES THE ASSESSING OFFICER NOTICED THAT THE QUANTITY OF 40950. 66 GRAMS OF GOLD ISSUED TO THE K ARIGAR S H AS NOT BEEN SHOWN ANY VALUE. ACCORDINGLY, HE REJECTED VARIOUS QUANTITY DETAILS FURNISHED BY THE ASSESSEE. THE ASSESSING O FFICER TOOK THE VIEW THAT THE RATIO OF STONES TO GOLD SHOULD BE IN THE RANGE OF 5 TO 10 TIMES ONLY. SINCE THE ASSESSEE HAS USED 1783.10 CARAT OF STONES IN MANUFACTURE OF JEWELLERY, THE ASSESSING OFFICER TOOK THE VIEW THAT CORRESPONDING GOLD SHOULD BE APPRO XIMATELY 12000 GRAMS ONLY. SINCE THE ASSESSEE HAS SHOWN CONSUMPTION OF GOLD OF 42055 . 76 GRAMS, THE ASSESSING OFFICER TOOK THE VIEW THAT THE ASSESSEE HAS SHOWN UNEXPLAINED SALES OF APPROX. 30,000 GRAMS. IN THE REVISION ORDER PASSED U/S 263 OF THE ACT, THE LD CIT HAD QUANTIFIED THE UNEXPLAINED SALES AT 30,204.50 GRAMS AND HENCE THE AO ADOPTED THE SAME FOR M/S. TBZ NIRMAL ZAVERI 5 THE PURPOSE OF ASSESSMENT ALSO. ACCORDINGLY, HE COMPUTED THE VALUE OF UNEXPLAINED SALE OF GOLD AT 2,55,87,625 AND ADDED THE SAME. 7 . THE ASSESSING OFFICE R ALSO CALLED FOR THE STOCK STATEMENT FURNISHED BY THE ASSESSEE TO THE BANK. THE ASSESSING OFFICER WORKED THE AVERAGE COST OF DIAMOND, COLOUR STONES, GOLD AND SILVER DECLARED TO THE BANK AND APPLIED THE SAME TO THE QUANTITY OF RAW MATERIALS (STONES, DIAMON D, GOLD AND SILVER) PURCHASED BY THE ASSESSEE DURING THE YEAR. THE VALUE OF PURCHASES WORKED OUT TO ` 24.11 CRORES. THE ASSESSING OFFICER NOTICED THAT THE ASSESSEE HAS DECLARED PURCHASES AT ` 24.10 CRORES IN THE PROFIT AND LOSS ACCOUNT. IN THE QUANTITY STA TEMENT, THE ASSESSEE HAD ALSO SHOWN PURCHASE OF FINISHED GOODS. SINCE THE VALUE OF PURCHASES SHOWN IN THE PROFIT AND LOSS ACCOUNT WAS EQUIVALENT TO THE VALUE OF PURCHASE OF RAW MATERIALS WORKED OUT BY THE ASSESSING OFFICER AS DISCUSSED ABOVE, THE ASSESSING OFFICER TOOK THE VIEW THAT THE ASSESSEE HAS SUPPRESSED PURCHASE S OF FINISHED GOODS. ACCORDINGLY, THE ASSESSING OFFICER WORKED OUT THE SUPPRESSED VALUE OF PURCHASE OF FINISHED GOODS AT ` 65,01,324/ - AND TREATED THE SAME AS UNDISCLOSED PURCHASES. ACCORDING LY, HE ADDED THE SAME TO THE TOTAL INCOME OF THE ASSESSEE. 8 . THE ASSESSING OFFICER ALSO NOTICED THAT THE ASSESSEE INCURRED A SUM OF ` 20,77,576/ - AS LEGAL AND PROFESSIONAL FEES PAID TO M/S. QUARDANT COMMUNICATIONS LTD. SINCE THE ASSESSEE DID NOT FURNISHE D CERTAIN DETAILS CALLED FOR BY HIM, THE ASSESSING OFFICER DISALLOWED THE ABOVE SAID EXPENSES . 9 . IN THE APPELLATE PROCEEDINGS, THE LEARNED CIT(A) DELETED THE ADDITIONS RELATING TO UNDISCLOSED SALES AND UNDISCLOSED PURCHASES. THE LEARNED CIT(A) , HOWEVER , DECLINED TO ADMIT THE ADDITIONAL EVIDENCE WITH REGARD TO LEGAL EXPENSES AND ACCORDINGLY CONFIRMED THE ADDITION MADE BY THE ASSESSING OFFICER. AGGRIEVED BY THE ORDER PASSED BY THE LEARNED CIT(A), BOTH THE PARTIES HAVE FILED THE APPEAL CHALLENGING THE ORDE R PASSED BY THE LEARNED CIT(A) ON THE ISSUES DECIDED AGAINST EACH OF THEM. M/S. TBZ NIRMAL ZAVERI 6 10. WE SHALL FIRST TAKE UP THE APPEAL FILED BY THE ASSESSEE. AS STATED EARLIER, THE AO DISALLOWED LEGAL AND PROFESSIONAL FEE ONLY FOR WANT OF CERTAIN EVIDENCES. WE NOTICE THA T THE ASSESSEE FILED THOSE EVIDENCES BEFORE LD CIT(A), BUT THE FIRST APPELLATE AUTHORITY DECLINED TO ADMIT THEM. WE NOTICE THAT THE AO HAD ASKED FOR IT RETURN COPY AND FINANCIAL STATEMENTS OF M/S QUARDANT COMMUNICATION, TO WHOM THE ASSESSEE HAD PAID THE L EGAL AND PROFESSIONAL FEE. IT IS QUITE NATURAL THAT IT MAY TAKE SOME TIME, SINCE THE ASSESSEE HEREIN HAD TO OBTAIN THOSE DETAILS FROM THE ABOVE SAID PARTY. HENCE, IN THE INTEREST OF NATURAL JUSTICE, WE ARE OF THE VIEW THAT THE ADDITIONAL EVIDENCES SHOULD BE ADMITTED AND THIS ISSUE NEEDS TO BE RE - EXAMINED. ACCORDINGLY, WE SET ASIDE THE ORDER PASSED BY LD CIT(A) ON THIS ISSUE AND RESTORE THE SAME TO THE FILE OF THE AO WITH THE DIRECTION TO EXAMINE THIS ISSUE AFRESH BY DULY CONSIDERING THE ADDITIONAL EVIDEN CES AND SUCH OTHER INFORMATION AND EXPLANATIONS THAT MAY BE FURNISHED BY THE ASSESSEE BEFORE HIM. THEREAFTER, THE AO MAY TAKE APPROPRIATE DECISION IN ACCORDANCE WITH THE LAW. 11. WE SHALL NOW TAKE UP THE APPEAL FILED BY THE REVENUE. THE FIRST ISSUE R ELATES TO UNDISCLOSED SALES. AT THE TIME OF HEARING, THE LD A.R REITERATED THAT THE DIFFERENCE HAS ARISEN ON ACCOUNT OF TYPOGRAPHICAL ERROR OCCURRED IN NOT ENTERING THE QUANTITY DETAILS OF GOLD RELATING TO STONE STUDDED JEWELLERY. IN THIS CONNECTION, WE PREFER TO EXTRACT FOLLOWING OBSERVATIONS MADE BY THE AO AT PAGE 7 OF THE ASSESSMENT ORDER: - FROM THE AFORESAID DETAILS SUBMITTED BY THE ASSESSEE, IT IS CLEAR THAT THE ACTUAL SALES OF ASSESSEE ARE JUST 19648.29 GRAMS OF 18KT GOLD, WHICH GIVES A MULTIPLE OF 6.53 TIMES TO THE WEIGHT OF DIAMOND AT 3007.54 CTS, HENCE WITHIN THE RANGE OF 5 TO 10 TIMES AS DISCUSSED ABOVE. HOWEVER, THE ASSESSEE HAS INCLUDED 40950.66 GRAMS OF 18KT GOLD IN ITS SALES QUANTITY IN THE NATURE OF ISSUE TO K ARIGAR/BREAKING/REMAKING/MELT ING/ SETTING WITHOUT ASSIGNING ANY VALUE THERETO, WHICH QUANTITY IS COMPLETELY UNEXPLAINED, AS THE ASSESSEE HAS CLAIMED 100% YIELD OF FINISHED GOODS IN ITS TAX AUDIT REPORT. EVEN ASSUMING THAT SOME SHORTAGE COULD BE THERE IN THE MANUFACTURING PROCESS, T HE QUANTITY OF SUCH SHORTAGE OF 40950.66 GMS AGAINST THE TOTAL MANUFACTURED QUANTITY OF JUST 42055.76 GMS AS PER ASSESSEES OWN SUBMISSIONS IS CLEARLY A FABRICATION OF WHOLE FACTS, JUST TO MATCH THE QUANTITIES. M/S. TBZ NIRMAL ZAVERI 7 III) IN VIEW OF THE ABOVE, WHILE NOT DENYING THAT THERE COULD HAVE BEEN A TYPOGRAPHICAL MISTAKE AS CLAIMED BY THE ASSESSEE, THE ACTUAL WEIGHT OF 18K GOLD IN THE DIAMOND JEWELLERY WITH DIAMOND WEIGHT OF 1783.10 GMS SHOULD BE APPROX. 12000 KT (WITHIN THE MULTIPLE OF 5 TO 10 TIMES) AND ACCOR DINGLY THE ASSESSEE HAS SHOWN UNEXPLAINED MANUFACTURING/SALES OF APPROX 30000 GMS. INCIDENTALLY, THE SAID QUANTITY IS SIMILAR TO THE UNEXPLAINED SALES OF 30,204.50 GMS, REPORTED IN THE ORDER OF HONBLE CIT - 16 AT 30204.50 GMS. HENCE, I HAVE NO DOUBTS TO C ONCLUDE THAT THERE IS UNEXPLAINED SALES OF 30,204.50 GMS OF 18KT GOLD, VALUED AT RS.2,55,87,625/ - APPROX AS REPORTED IN THE SAID ORDER. IN OUR VIEW, THE AO APPEARS TO HAVE ACCEPTED THE TYPOGRAPHICAL ERROR POINTED OUT BY THE ASSESSEE AND HE WAS CONC ERNED WITH THE QUANTITY OF 40950.66 GRAMS OF GOLD SHOWN AS ISSUED TO KARIGARS/BREAKING ETC, I.E., THE ASSESSEE HAS INCLUDED THE ABOVE SAID QUANTITY IN THE SALES WITH ZERO VALUE. IN OUR VIEW, THE QUANTIFICATION OF ` 2.55 CRORES DISCUSSED IN THE SECOND PARAGRAPH IS THE METHODOLOGY ADOPTED BY THE AO TO COMPUTE THE ADDITION. 12. HENCE, IN OUR VIEW, WHAT IS REQUIRED TO BE EXPLAINED BY THE ASSESSEE IS THE DETAILS RELATING TO 40950.66 GMS OF GOLD ISSUED TO KARIGARS ETC, WHICH WAS SHOWN AT ZERO VALUE. IN THE QUANTITY DETAILS RELATING TO FINISHED GOODS, THE SALES QUANTITY IS SHOWN AT 60598.95 GRAMS, WHICH CONSIST OF FOLLOWING ITEMS: - SALES MADE TO VARIOUS PARTIES 19648.29 GMS ISSUED TO KARIGARS ETC. 40950.66 GMS ------------- 605 98.95 GMS ======== BEFORE LD CIT(A), THE ASSESSEE HAS OFFERED FOLLOWING EXPLANATIONS: - THE APPELLANT SUBMITS THAT THE GOLD, DIAMONDS AND COLOUR STONES ISSUED TO KARIGARS/BREAKING/REMAKING/MELTING/SETTING INCLUDED IN SALES WITH NO VALUE WHICH HAVE RECEIVED BACK AS MANUFACTURED GOLD JEWELLERY AND DIAMOND STUDDED JEWELLERY WITH NO VALUE. IT IS THE NORMAL PRACTICE FOLLOWED BY THE APPELLANT OF SHOWING ISSUES TO KARIGARS FOR PROCESSING AS SALES WITH NO VALUE. THERE WAS NO SHORTAGE WHATSOEVER IN MANUFAC TURING PROCESS OF 40950.66 GRAM AS ALLEGED BY THE LEARNED. AO. WE NOTICE THAT THE ASSESSEE HAS NOT FURNISHED THE BREAK - UP DETAILS OF MANUFACTURED JEWELLERY TO SUBSTANTIATE ITS CONTENTIONS THAT THE 40950.66 GRAMS OF GOLD WAS INCLUDED IN MANUFACTURED ITEM AT NIL VALUE. M/S. TBZ NIRMAL ZAVERI 8 13. HENCE, WHAT IS REQUIRED TO BE PROVED BY THE ASSESSEE IS THAT IT HAS INCLUDED 40950.66 GRAMS OF GOLD AT NIL VALUE IN THE MANUFACTURED ITEMS OF JEWELLERY ALSO . IF THE ASSESSEE IS ABLE TO SHOW THE SAME TO THE SATISFACTION OF THE AO, IN OUR VIEW, NO ADDITION IS CALLED FOR AS PRESUMED BY THE AO. SINCE THIS FACT REQUIRES VERIFICATION, WE ARE OF THE VIEW THAT THE SAME NEEDS TO BE SET ASIDE TO THE FILE OF THE AO. ACCORDINGLY WE SET ASIDE THE ORDER PASSED BY LD CIT(A) ON THIS ISSUE AND RE STORE THE SAME TO THE FILE OF THE AO FOR THE PURPOSE OF VERIFYING THE CONTENTIONS OF THE ASSESSEE THAT THE 40950.656 GRAMS OF GOLD, WHICH WAS SHOWN AT NIL VALUE IN SALES WAS INCLUDED IN THE MANUFACTURED ITEMS ALSO AT NIL VALUE. IF THE CONTENTIONS OF THE A SSESSEE WERE FOUND TO BE CORRECT, WE DIRECT THE AO NOT TO MAKE ANY ADDITION ON ACCOUNT OF UNACCOUNTED SALES. IF IT IS FOUND OTHERWISE, THE AO MAY MAKE APPROPRIATE DECISION IN ACCORDANCE WITH THE LAW. THE ASSESSEE IS ALSO DIRECTED TO FURNISH NECESSARY DET AILS TO THE AO IN THIS REGARD. 14. THE NEXT ISSUE CONTESTED BY THE REVENUE RELATES TO THE UNACCOUNTED PURCHASE OF FINISHED GOODS. WE NOTICE THAT THE ASSESSING OFFICER HAS MADE HIS OWN COMPUTATION ON THE BASIS OF STATEMENT OF STOCK GIVEN TO THE BANK A ND ACCORDINGLY CAME TO THE CONCLUSION THAT THERE IS UNACCOUNTED PURCHASE OF FINISHED GOODS. WE NOTICE THAT THE ASSESSING OFFICER DID NOT EXAMINE THE QUANTITY DETAILS OF RAW MATERIALS AND FINISHED GOODS FURNISHED BY THE ASSESSEE BY REFERRING THE BOOKS OF A CCOUNTS. THE QUESTION OF MAKING OWN ESTIMATE, IN OUR VIEW, WOULD ARISE ONLY IF THE AO FINDS FAULTS AND DEFICIENCIES IN THE BOOKS OF ACCOUNT AND CONSEQUENTLY COME TO THE CONCLUSION THAT THE QUANTITY DETAILS FURNISHED BY THE ASSESSEE IS NOT RELIABLE. BEFOR E THE AO, THE ASSESSEE HAS SUBMITTED THAT THE STOCK STATEMENT FURNISHED TO THE BANK IS A PROVISIONAL ONE AND THE VALUE SHOWN THEREIN WAS AVERAGE VALUE. WE NOTICE THAT THE AO DID NOT EXAMINE THE SAID EXPLANATION AT ALL. UNDER THESE SET OF FACTS, WE ARE OF THE VIEW THAT THE LD CIT(A) WAS JUSTIFIED IN COMING TO THE CONCLUSION THAT THE AO HAS COMPUTED THE VALUE OF UNDISCLOSED PURCHASES ON SURMISES AND CONJECTURES. ACCORDINGLY WE ARE OF THE VIEW THAT THE LD CIT(A) WAS JUSTIFIED IN M/S. TBZ NIRMAL ZAVERI 9 DELETING THE IMPUGNED ADDITI ON RELATING TO UNDISCLOSED PURCHASES AND ACCORDINGLY WE UPHOLD THE SAME. 15. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IN ITA NO.1252/M/14 IS DISMISSED. THE APPEAL OF THE ASSESSEE IN ITA NO.3676/M/2014 IS TREATED AS ALLOWED. THE APPEAL OF THE REVENUE IS TREATED AS PARTLY ALLOWED. ORDER HAS BE EN PRONOUNCED IN THE COURT ON 8 . 2 .201 7. SD/ - SD/ - (RAMLAL NEGI ) (B.R.BASKARAN) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; DATED : 8 / 2 / 20 1 7 COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. BY ORDER, //TRUE COPY// ( DY./ASSTT. REGISTRAR) PS ITAT, MUMBAI