Shri Mahendra Kumar Jain, V. The ACIT 5 (1),

ITA 499/IND/2008

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 2954 (ITAT-INDORE)
• Duration Of Justice: 1 year(s) 4 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-05-2010
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 23-04-2010
• Assessment Year: 2006-2007
• Appeal Filed On: 10-12-2008
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: K K SINGH
• Keywords: Valuation report

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL, INDORE BENCH, INDORE BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER AND SHRI V.K. GUPTA, ACCOUNTANT MEMBER ITA NO.499/IND/2008 A.YS. 2006-07 SHRI MAHENDRA KUMAR JAIN INDORE PAN ABTPJ-1503-F APPELLANT VS ASSISTANT COMMISSIONER OF INCOME TAX 4(1) INDORE RESPONDENT APPELLANT BY : SHRI HIRESH JAIN RESPONDENT BY : SHRI K.K. SINGH O R D E R PER BENCH THIS APPEAL IS BY THE ASSESSEE AGAINST THE ORDER OF THE LEARNED CIT(A) DATED 14.8.2008. THE ONLY GROUND TAKEN BY TH E ASSESSEE IS THAT CONFIRMATION BY THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) OF ADDITION OF RS.5,59,030/- ON ACCOUNT OF DIFFERENCE IN STOCK VALUATION IS, ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, QUITE UNJUSTIFIED, IMPROPER, ARBITRARY, VERY EXCESSIVE AND BAD IN LAW. 2 2. DURING HEARING OF THIS APPEAL, THE ASSESSEE FILE D WRITTEN SUBMISSIONS WHEREIN IT HAS BEEN SUBMITTED THAT THE ASSESSEE DERIVES INCOME FROM DEALING IN SILVER ORNAMENTS. A SEARCH WAS CONDUCTED ON 19.5.2005 WHEREIN SILVER WEIGHING 667.200 KG. WAS F OUND. THE DEPARTMENT APPOINTED ONE SHRI JGN SONI FOR VALUATI ON OF SILVER ORNAMENTS WHICH WERE VALUED AT RS.34,07,225/- VIDE REPORT DATED 19.5.2005. AS PER THE BOOKS OF ACCOUNTS AND STOCK REGISTER MAINTAINED BY THE ASSESSEE, THE STOCK OF SILVER ORNAMENTS WAS 295.275 KG., THEREFORE, THE ASSESSEE SURRENDERED EXCESSIVE STOCK OF 371.925 KGS (667.200 (-) 295.275). THE ASSESSEE DECLARED STOCK OF RS. 34,07,225/-, AS PER TRADING ACCOUNT, AND SURRENDERED EXCESS STOC K TO THE TUNE OF RS.18,99,325/- (371.925 KGS). THE ADDITION OF RS.5 ,59,030/- WAS MADE BY THE ASSESSING OFFICER. ON APPEAL, THE ASSESSMENT ORDER WAS AFFIRMED WHICH HAS BEEN CHALLENGED BY THE ASSESSEE BEFORE TH E TRIBUNAL. ON THE OTHER HAND, LEARNED SENIOR DEPARTMENTAL REP RESENTATIVE STRONGLY DEFENDED THE IMPUGNED ADDITION BY CONTENDI NG THAT NO EVIDENCE WAS FURNISHED BY THE ASSESSEE AT ANY STAGE IN SUPPO RT OF ITS CLAIM AND EVEN NO EVIDENCE OF ANY PURCHASE WAS EVER SUBMITTED . 3. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS OF LD. REPRESENTATIVES OF BOTH SIDES AND PERUSED THE MATER IAL AVAILABLE ON RECORD. IN ADDITION TO THE FACTS CLAIMED BY THE AS SESSEE AS MENTIONED 3 ABOVE IN PARA 2 THE VALUATION OF CLOSING STOCK WAS WORKED OUT BY THE ASSESSEE AS UNDER :- DESCRIPTION QUANTIFY OF STOCK VALUE PER KG AMOUNT (IN RS.) STOCK AS PER BOOKS 295.275 KG 5106.75 15,07,900 EXCESS STOCK 371.925 KG 5106.75 18,99,325 TOTAL 34,07,225 THE WORKING OF CLOSING STOCK BY THE REVENUE IS AS U NDER :- DESCRIPTION QUANTIFY OF STOCK VALUE PER KG AMOUNT (IN RS.) STOCK AS PER BOOKS 295.275 KG 7000 20,66,925 EXCESS STOCK 371.925 KG 5106.75 18,99,325 TOTAL 39,66,250 THUS, THE DIFFERENCE OF RS.5,59,030/- (39,66,250 MI NUS 34,07,225) WAS ADDED TO THE INCOME OF THE ASSESSEE. IT WAS AL SO SUBMITTED BY THE ASSESSEE THE VALUATION OF THE SILVER ORNAMENTS DEPE NDS ON THE PURITY OF SILVER BY FURTHER CONTENDING THAT THE PURITY OF THE SILVER VARIES FROM 25% TO 60% FINENESS AND THE EXCESS SILVER SURRENDERED W AS OF LOWER PURITY. A PLEA WAS ALSO RAISED THAT THE DEPARTMENT VALUED THE EXCESS SILVER BY ADOPTING UNIFORM RATE OF SILVER WHICH WAS OF BETTER PURITY. IF THE TOTALITY OF FACTS IS ANALYSED, ONE FACT IS CLEARLY OOZING OUT T HAT AT ANY STAGE THE ASSESSEE DID NOT FURNISH ANY EVIDENCE THAT THE EXCE SS SILVER WAS OF 4 LOWER PURITY AND EVEN NO EVIDENCE WAS FURNISHED THA T THE ASSESSEE PURCHASED THE SILVER AT THE LOWER RATES, BEING OF L OWER PURITY, THEREFORE, MERE CLAIM WILL NOT BE ENOUGH. IT IS PURELY AN AFT ER-THOUGHT. EVEN WHEN THE VALUATION WAS DONE BY THE REGISTERED VALUER, TH E ASSESSEE NEVER POINTED OUT THAT THE EXCESS STOCK OF SILVER IS OF L OWER PURITY. THE STOCK OF SILVER ITEMS WAS VALUED CONSIDERING THE PURITY OF E ACH ITEM. THE STOCK OF 25% PURITY WAS FOUND TO BE OF 24.84 KGS ONLY (ITEM NO. 65 AND 66 OF VALUATION REPORT) AND REST OF THE ITEMS WERE MORE T HAN 25% PURITY. EVEN OTHERWISE, DURING VALUATION OF UNEXPLAINED STOCK IT WAS THE DUTY OF THE ASSESSEE TO POINT OUT THE PURITY OF THE SILVER IF I T WAS OF LOWER PURITY BUT NO SUCH OBJECTION WAS RAISED BY THE ASSESSEE. IN VI EW OF THESE FACTS, THERE IS NO INFIRMITY IN THE IMPUGNED ORDER, THEREF ORE, IT IS UPHELD. FINALLY, THE APPEAL OF THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON 4TH M AY, 2010. SD SD (V.K. GUPTA) (JOGINDER SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER MAY 4 TH , 2010 COPY TO: APPELLANT, RESPONDENT, CIT, CIT(A), DR, G UARD FILE *DBN/ 5