The ACIT, Circle-2(1), Vijayawada V. Sri Ghisalal, Vijayawada

ITA 402/VIZ/2004

• Counselvise Citation: [2009] 115 COUNSELVISE.COM (IT) 2824 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 5 year(s) 5 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-12-2009
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2001-2002
• Appeal Filed On: 07-06-2004
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B JAYA KUMAR
• Section: 133A

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM BENCH: VISAKHAPATNAM BEFORE: SRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SRI B.R. BASKARAN, ACCOUNTANT MEMBER I.T.A. NO.402/VIZAG/2004 ASSESSMENT YEAR : 2000-01 ACIT, CIRCLE-2(1), VIJAYAWADA VS. SRI GHISALAL, VIJAYAWADA (APPELLANT) (RESPONDENT) PAN NO.ACJPG 0386L APPELLANT BY : SHRI B. JAYA KUMAR, DR RESPONDENT BY : SHRI G.V.N. HARI, CA O R D E R PER B..R. BASKARAN, ACCOUNTANT MEMBER : 1. THE APPEAL FILED BY THE REVENUE IS DIRECTED AGAINST THE ORDER DATED 29-03- 2004 PASSED BY LD CIT(A), VIJAYAWADA AND IT RELATES TO THE ASSESSMENT YEAR 2000-01. 2. ADDITION OF RS.22.62 LAKHS PERTAINING TO THE UNACCOUNTED GOLD, HAVING BEEN DELETED BY LD CIT(A), THE REVENUE IS IN APPEAL BEFO RE US. 3. THE FACTS RELATING TO THE ISSUE ARE SET OUT IN BRIEF. THE ASSESSEE IS CARRYING ON BUSINESS IN GOLD AND SILVER JEWELLERY UNDER THE NAME AND STYLE M/S SAI RAJENDRA JEWELLERS. A SURVEY OPERATION U/S 133A OF THE ACT WAS CONDUCTED IN THE BUSINESS PREMISES OF THE ASSESSEE ON 29-9-2009. AT THE TIME OF SURVEY GOLD JEWELLERY WEIGHING 5.565 KGS WERE FOUND. THE ASSES SEE CLAIMED THAT THEY WERE GIVEN BY HIS CUSTOMERS, NUMBERING 182, FOR REMAKING THE ORNAMENTS. THE ASSESSEE FURNISHED NAMES AND ADDRESSES OF THE SAID CUSTOMERS. THE AO ISSUED SUMMONS TO 16 CUSTOMERS. FOURTEEN LETTERS WERE RET URNED UN-SERVED AS THE GIVEN ADDRESSES COULD NOT BE LOCATED BY THE POSTAL AUTHORITIES. TWO CUSTOMERS 2 APPEARED AND THEIR STATEMENT DID NOT TALLY WITH THE CLAIM OF THE ASSESSEE. THE ASSESSEE THEREAFTER FILED AFFIDAVITS FROM TEN CUSTO MERS. THE AO DID NOT GIVE CREDENCE TO THE AFFIDAVITS AS THEY WERE NOT SUPPORT ED BY THE BILLS/RECEIPTS. ACCORDINGLY THE AO ADDED THE VALUE OF 5.565 KGS TO THE TOTAL INCOME. THE SAID ADDITION WAS DELETED BY LD CIT(A) AND HENCE THE REV ENUE IS IN APPEAL BEFORE US. 4. LD DR SUBMITTED THAT THE VERY FACT THAT THE SU MMONS ISSUED TO THE CUSTOMERS WAS RETURNED UN-SERVED SHOWS THAT THERE IS NO VERAC ITY IN THE CLAIM OF THE ASSESSEE THAT THE IMPUGNED GOLD BELONGS TO THE CUST OMERS. FURTHER ENQUIRY MADE WITH TWO CUSTOMERS ALSO WENT AGAINST THE CLAIM OF THE ASSESSEE. ACCORDINGLY LD DR CONTENDED THAT THE ADDITION MADE BY THE AO SHOULD BE SUSTAINED. 5. ON THE CONTRARY, LD AR SUBMITTED THAT THE A SSESSEE HAS RECEIVED MAKING CHARGES FROM THE CUSTOMERS AND THE SAME HAS BEEN AS SESSED BY THE AO. HENCE, HAVING ACCEPTED AND ASSESSED THE SAID INCOME, THE A O SHOULD NOT HAVE DOUBTED THE GOLD STOCK THROUGH WHICH THE SAID MAKING CHARGE S WERE RECEIVED. LD AR FURTHER SUBMITTED THAT THE ASSESSEE HAS FURNISHED T HE ADDRESSES OF CUSTOMERS FROM HIS RECORD AND THE ASSESSEE SHOULD NOT HAVE BE EN PLACED IN AN ADVERSE POSITION FOR THE FAULT OF THE CUSTOMERS, IF ANY. A CCORDING TO LD AR, SINCE THE ASSESSEE HAS FURNISHED AFFIDAVITS FROM THE TEN CUST OMERS TO WHOM SUMMONS WERE ISSUED, THERE IS NO GROUND TO SUSPECT THE RECO RDS AND CLAIM OF THE ASSESSEE. LD AR ALSO INVITED OUR ATTENTION TO THE DECISION DATED 20-07-2009 RENDERED BY THIS BENCH IN THE CASE OF M/S BOMBAY JE WELLERS IN ITA NO.389/VIZAG/2004 AND SUBMITTED THAT ON IDENTICAL F ACTS, THIS BENCH HAD DELETED THE ADDITION MADE BY THE AO. 6. WE HAVE HEARD THE RIVAL CONTENTIONS AND CARE FULLY PERUSED THE RECORD. THE IMPUGNED GOLD STOCK OF 5.565 KGS BELONGS TO 182 CUS TOMERS. ACCORDING TO THE ASSESSEE, HE HAS FURNISHED FOLLOWING EVIDENCES TO P ROVE THAT THE IMPUGNED GOLD 3 HAVE BEEN RECEIVED FROM THE CUSTOMERS FOR RE-MAKING OF ORNAMENTS. (1) DETAILS OF CUSTOMERS (2) CUSTOMER LETTERS OBTAINED FROM THE CUSTOMERS. (3) CUSTOMERS GOLD ORDER DULY SINGED BY THE CUSTOM ERS. (4) DELIVERY OF THE GOLD JEWELLERY, DULY ACKNOWLED GED BY THE CUSTOMERS. (5) INVOICES DULY ACKNOWLEDGED BY THE CUSTOMERS. (6) WORK SHOP BOOKS NUMBERING SIX. ACCORDING TO THE ASSESSEE, THE WORK UNDER TAKEN BY THE WORKERS EXACTLY TALLIED WITH THE ORDER BOOK. THE MAKING CHARGES RECEIVED BY THE ASSESSEE WAS ALSO ACCEPTED AND ASSESSED BY THE AO. THE ASSESSING OFFI CER HAS RANDOMLY SELECTED THE NAMES OF 16 CUSTOMERS OUT OF THE 182 CUSTOMERS AND ISSUED SUMMONS TO THEM. IT IS QUIET NATURAL THAT THE ASSESSEE DID NO T INSIST FOR CORRECT ADDRESS FROM THE CUSTOMERS, AS THE ASSESSEE IS IN POSSESSION OF VALUABLE GOODS AND IT IS THE RESPONSIBILITY OF THE CUSTOMERS TO GET IT BACK FROM THE CUSTOMERS AFTER PAYING THE MONEY DUE TO THE ASSESSEE. HENCE, IN OUR OPINION, THE ASSESSEE COULD NOT BE BLAMED FOR THE INCOMPLETE ADDRESSES GIVEN BY THE CU STOMERS. THE ASSESSEE, ON THE OTHER HAND, HAS FURNISHED AFFIDAVITS FROM 10 CU STOMERS, WHO HAVE CONFIRMED THAT THEY HAVE GIVEN THE ORNAMENTS FOR RE-MAKING TO THE ASSESSEE. WE ALSO NOTICE THAT THE ASSESSEE IS MAINTAINING THE DETAILE D RECORD FOR THE RECEIPT AND DELIVERY OF GOLD AND THE CONCERNED ORDER FORM AND D ELIVERY CHALLAN HAVE BEEN SIGNED BY THE CUSTOMERS, WE ALSO NOTICE THAT THE A O HAS ENQUIRED ONLY ABOUT 10% OF THE TOTAL CUSTOMERS AND HAS DRAWN ADVERSE CO NCLUSIONS ON THE ENTIRE LOT OF CUSTOMERS, WHICH IS NOT WARRANTED. AS STATED EA RLIER, THE ASSESSEE HAS FILED AFFIDAVITS FROM 10 CUSTOMERS OUT OF THE 16 CUSTOMER S TO WHOM SUMMONS WERE ISSUED. EVEN WITH REGARD TO THE TWO CUSTOMERS FROM WHOM STATEMENTS WERE RECORDED, THE AO COULD NOT AFFORD PROPER OPPORTUNIT Y TO THE ASSESSEE FOR CROSS EXAMINATION. IN VIEW OF THE ABOVE, WE DO NOT FIND ANY JUSTIFICATION IN MAKING THE IMPUGNED ADDITION SINCE THE ADVERSE CONCLUSIONS DRA WN BY THE AO IS NOT BASED ON PROPER EVIDENCES. HENCE WE DO NOT FIND ANY INFI RMITY IN THE ORDER OF THE LD CIT(A). 4 7. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMISSED. PRONOUNCED ACCORDINGLY ON 4.12.09 . SD/- SD/- (SUNIL KUMAR YADAV) (B.R. BASKARAN) JUDICIAL MEMBER ACCOUNTANT MEMBER VISAKHAPATNAM DATE : 4 TH DECEMBER, 2009 A COPY OF THIS ORDER IS FORWARDED TO : 01 THE ACIT, CIRCLE-2(1), REVENUE BUILDINGS, BANDAR ROAD, VIJAYAWADA 02 SRI GHISALAL, SRI RAJENDRA JEWELLERS, SWARNALOK COMPLEX, GOVERNORPET, VIJAYAWADA 03 CIT (A), VIJAYAWADA 04 CIT, VIJAYAWADA 05 DR, ITAT, VISAKHAPAATNAM 06 GUARD FILE. BY ORDER SENIOR PRIVATE SECRETARY ITAT, VISAKHAPATNAM BENCH