Shri Kanhaiya Lal, Pali V. ITO, Sumerpur

ITA 528/JODH/2018

AI Insights

The case involves an appeal by Sh. Kanhaiya Lal against the order of the Learned Commissioner of Income Tax-1, Jodhpur, which confirmed additions made by the AO on account of excess stock and cash found during a survey under section 133A of the Income Tax Act. The assessee contended that the survey was unlawful and the valuations of stock and cash were fabricated. The Tribunal found that the AO and the CIT(A) had not adequately considered the actual stock inventory during the survey and agreed to remand the case for a thorough re-examination.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 122812 (ITAT-JODHPUR)
• Duration Of Justice: 4 year(s) 9 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-09-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 13-07-2023
• Assessment Year: 2014-2015
• Appeal Filed On: 25-11-2018
• Other Referred Cases: ITO, Sirohi Vs. Mahendra Kumar Rawal, Vastimal Vs. ITO, Sumerpur, Kamal & Co. Vs. ACIT, ITO Vs. Jewells Emporium
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: MUKUL MOONDRA C.A
• Keywords: Valuation report; Retraction; Rule 8D
• Section: 142(1); 133A; 234B; 13

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL JODHPUR BENCH, JODHPUR BEFORE: DR. S. SEETHALAKSHMI, JM & SHRI RATHOD KAMLESH JAYANTBHAI, AM ITA Nos. 528/Jodh/2018 (ASSESSMENT YEAR- 2014-15) Sh. Kanhaiya Lal Main Bazar, Ghanerao, Desuri, Pali-306704. Vs Income Tax Officer, Sumerpur. (Appellant) (Respondent) PAN NO. AFSPL 4913 L (Virtual hearing) Assessee By Shri Mukul Moondra –C.A Revenue By Shri Lovish Kumar, CIT-DR Date of hearing 14/07/2023 Date of Pronouncement 11/09/2023 O R D E R PER: Dr. S. Seethalakshmi, JM The assessee has filed an appeal against the order of the Learned Commissioner of Income Tax-1, Jodhpur [herein after “Ld.CIT(A)”] dated 31.08.2018 for the assessment year 2014-15. 2. The assessee has raised the following grounds of appeal:- “1. Ld. CIT (Appeals) - 1 erred in law in confirming an unlawful assessment as it is totally based upon an unlawful, forged and fabricated survey proceedings carried out by unauthorized authorities in which false surrenders were obtained by fabrication, pressure tactics, threatening and 2 ITA Nos. 528/Jodh/2018 Sh. Kanhaiya Lal vs. ITO. maliciousness and therefore, entire assessment and survey proceedings should be quashed holding it unlawful and invalid. 2. Ld. CIT (Appeals) - 1 erred in law in confirming the addition of Rs. 90,58,811/-on account of so called excess stock found during the survey proceeding U/s 133A merely on the basis of a false, fabricated and unlawful valuation report and without considering actual stock inventory prepared during the survey proceedings. 3. Ld. CIT (Appeals) - 1 erred in law in confirming the addition on the basis of alleged false, fabricated and unlawful valuation report managed to be prepared from an unauthorized / un- empowered person. 4. Ld. CIT (Appeals) - 1 erred in law in confirming the addition of Rs. 9,45,000/- on account of so called excess cash found during the survey proceedings U/s 133A by treating zero cash balance in the hands of assessee and without considering the genuine source of income. 5. Ld. CIT(Appeals)- I erred in law in confirming the levy of the excessive interest U/s 234A, B and C and therefore, those should be deleted/reduced. 6. Appellant also reserves his rights to add/ alter any grounds of appeal till the disposal of appeal.” 3. Brief facts of the case are that the assessee is dealing in the business of trading (sale and purchase) of gold and silver ornaments/jewellery as well as manufacturing of jewellery. A survey u/s 133A was conducted at the business premises of the assessee on 18.02.20174 and 19.02.2014 situated at village, Desuri, Distt. Pali. During the course of survey, certain discrepancies regarding valuation 3 ITA Nos. 528/Jodh/2018 Sh. Kanhaiya Lal vs. ITO. of stock and cash were found and the assessee made voluntary disclosure of income of Rs. 90,58,811/- and Rs. 9,45,000/- on account of undeclared stock and cash found, respectively. In this regard, the assessee's statement was recorded during the course of survey, wherein he made total disclosure / surrender of Rs. 1,00,03,811/- and assured to pay due taxes. The assessee also submitted a letter dated 18-02-2014 addressing the ITO, Sumerpur whereby he reiterated his surrender of Rs. 1,00,03,811/- and submitted two cheques of Rs. 5,30,000/- each. Subsequently, the assessee started filing letters with the AO, letters of retractions and withdrawing the letters already filed, detailed discussion in this regard is made in the assessment order. Meanwhile, the assessee filed return of income for AY 2014-15 on 26-09-2015, declaring the total income of Rs. 4,79,280/-. The AO noted that the assessee failed to offer income in this ITR as per his admission made during the course of survey. The AO issued notice u/s 142(1) requiring the assessee to explain as to why amount of Rs. 1,00,03,811/- i.e. income surrendered during the course of survey may not be treated as undisclosed income apart from income of Rs. 4,79,280/- declared by him. In response, the ARS of the assessee appeared before the AO and filed a letter on 27-05-2016, requesting 4 ITA Nos. 528/Jodh/2018 Sh. Kanhaiya Lal vs. ITO. for certified copies of documents related to survey. The AO provided all the documents related to survey and all correspondence to and from assessee. The AO made addition of Rs. 90,58,811/- on account of so called excess stock found during the survey proceedings u/s 133A merely on the basis of a false, fabricated and unlawful valuation report and without considering actual stock inventory prepared during the survey proceedings and also addition of Rs. 9,45,000/- on account of so called excess cash found during the survey proceedings u/s 133A by treating zero cash balance in the hands of assessee and without considering the genuine source of income. 4. Aggrieved, from the said order of assessment the assessee has filed an appeal before the ld. CIT(A). The ld. CIT(A) after hearing the contention of the assessee dismissed the appeal of the assessee by giving following findings on the issue:- “5.5.1 The Hon’ble Apex Court held very clearly that science has not yet invented any instrument to test the reliability of the evidences placed before a Court or Tribunal, therefore, the Courts and Tribunals have to judge the evidence before them by applying the test of human probabilities. The evidence adduced by the assessee and collected by the AO has to be examined not superficially but in depth and having regard to the test of human probabilities and normal course of human conduct. In the instance case, applying the test of human probabilities, it is not difficult to establish beyond doubt that the excess stock of gold and silver (jewellery/ornaments) and excess cash found at the business premises of 5 ITA Nos. 528/Jodh/2018 Sh. Kanhaiya Lal vs. ITO. appellant represent his undisclosed business income only, which were not offered to tax in the return of income filed by him for the AY 2014-15. 5.6. From the facts discussed above and legal precedents cited above, it is held that the appellant was legally required to include the additional income of Rs 9,45,000/- and Rs. 90,58,811/- on account of excess cash and excess stock. respectively in the return. Accordingly Rs. 9,45,000/- and Rs. 90,58,811/- on account of excess cash and excess stock respectively made by the AO are sustained. The grounds raised regarding these issues are dismissed. 6. The ground No.5 raised by the appellant is regarding charging of interest u/s. 234A, 234B and 234C of the Act. This being consequential in nature, the AO is directed to allow relief as per this order and charge interest u/s 234A, 234B and 234C of the Act as per law. This ground is treated as dismissed. 7. Last ground of appeal is general in nature and does not require any adjudication. 8. In the result, the appeal is dismissed.” .” 5. As the assessee not received any favour from the appeal filed before ld. CIT(A). The present appeal filed against the said order of the ld. CIT(A) dated 27.01.2017 before this tribunal on the grounds as reiterated in para 2 above. To support the grounds so raised the ld. AR appearing on behalf of the assessee has placed their written submission which is extracted in below:- “May it please your honours, The above said appeal has been fixed for hearing for 14.07.2023 and therefore, appellant submits ground-wise as under in support of grounds of appeal :- A. UNLAWFUL AND FABRICATED SURVEY PROCEEDINGS On the basis of following facts and circumstances, appellant submits that entire survey proceeding u/s 133A was fabricated, forged, unlawful, illegal and invalid :- 1. Survey was not conducted by the empowered A.O. :Alleged survey was not conducted by the empowered Assessing Officer of the assessee after obtaining lawful approval of Joint CIT u/s 133A. It is clear from all certified copies availed to the assesse that there was no such approval under the proviso to sec. 133A. It is also not clear when and how the A.O. sought the approval and when & how the approval was granted to the 6 ITA Nos. 528/Jodh/2018 Sh. Kanhaiya Lal vs. ITO. A.O. If any such approval was sought and granted, please instruct Ld. A.O. to provide certified copies of all such documents / correspondence. 2. Survey Without Approval : So far as copy of authorization u/s 133A (P.B.No.01) is concerned, it is neither the approval of Joint CIT u/s 133A nor any proceeding was carried out by the Assessing Officer (i.e. Income-tax Officer, Sumerpur) of the assessee in pursuance to any such authorisation. Assessee would like to mention here before your honor that alleged authorisation to a Survey Team in this case, is not the Approval u/s 133Ato the Ld. A.O. and thus, Authorisation and approval are not the same. As per provisions of sec. 133A(1) read with Explanation (a), only ITO Sumerpur, the Assessing Officer (as defined u/s 2(7A) is only authorized to carry out survey u/s 133A after obtaining the approval and ITOs other than ITO Sumerpur (the Assessing Officer) are not authorized and empowered to carry out a survey u/s 133A. Not only this, The A.O. and the Joint CIT has no authority to delegate their powers and rights given under section 133A. 3. Statement Prepared unfairly :Entire statement of the assesse-appellant was prepared as per sweet will and suitability of the officials of the Income-tax Department on which assessee’s signatures were obtained by pressure and threatening of Police arrest & Jail and therefore, alleged statement is also false, fabricated and unlawful. 4. Books were Impounded after Survey Completion : As shown by the un- empowered I.T. Authorities, alleged survey was completed on 18.02.2014 (P.B. No. 02 - 02) but books so found were impounded on 19.02.2014 after completion of survey and therefore, enclosed Impounding Order is also unlawful and this fact proves that the alleged survey proceeding was not genuine and lawful. 5. Assessee’s signature was taken by force on Surrender Letter :After the completion of survey, a letter was also prepared in the date of 18.02.2014 (P.B. No. 02-02) on which also assessee’s signature was taken by force. 6. Cheques were forcefully taken from the assessee :As per letter of surrender dated 18.02.2014, total 6 cheques were given by the assessee on 18.02.2014 whereas assessee never had any cheque book before 18.02.2014. In fact, assessee was taken forcefully to the Bank for obtaining / issuance of cheque book and there after, his signatures on six (6) cheques were obtained forcefully and those 6 blank cheques were forcefully taken from the assessee. Copy of Cheque Book Issuance Slip dated 18.02.2014 (P.B. No.03-03)has been placed in the Paper Book. Your honor, it is unimaginable that a person who is not even having a cheque book may be burdened with such a huge demand by an unlawful and fabricated survey proceedings by unauthorized Income Tax Officer 7. Shop was totally under the control and mercy of I.T. Authorities : This fact also proves that when the assessee was taken to the Bank for cheque book and to his house, his shop was totally under the control and mercy of un-empowered I.T. Authorities. 7 ITA Nos. 528/Jodh/2018 Sh. Kanhaiya Lal vs. ITO. 8. Deliberately Removal of Certified true copy of Stock Inventory from Record : Appellant requested many times to the Ld. A.O. to provide the certified true copy of Stock Inventory but no copy of such stock inventory was given / issued to assessee. Assessee requested to provide certified copy of stock inventory many times vide letters dated 10.03.2014, 27.05.2014 and 27.05.2016 (Copies enclosed). 9. Still request for Certified Copy of Stock Inventory : But in one letter dated 08.06.2016 (copy enclosed), Ld. A.O. has tried to show that he has supplied the “Stock of inventory prepared during the proceedings u/s 133A” and “Valuation Report of Registered Valuer prepared during the proceedings u/s 133A on 18.02.2014”. But the fact is that appellant has never received such stock inventory. Appellant requests your honours to direct the Ld. A.O. to provide the stock inventory prepared during the proceedings u/s 133A on 18.02.2014”. 10. Stock Inventory was admittedly prepared : Apart from this, Ld. CIT(A) in the appellate order has clearly mentioned at Para 5.2 page No. 13 “I find that during the course of survey, the inventory was prepared in presence of the assessee and his staff/employee” and similarly in Para 5.2.1 at page No. 13. Ld. CIT(A) also mentioned “The inventories were prepared by survey party with the help of valuer’s report and assessee’s employees, which were certified and signed by the authorized official and the assessee”. But no such inventory was even shown to the A/R of assesse during the assessment and appeal hearingsnor it was ever provided to the appellant. B. UNLAWFUL, ILLEGAL& FABRICATED VALUATION REPORT On the basis of following facts and circumstances, appellant submits that alleged Valuation / Valuation Report and assessment on that basis is totally fabricated, unlawful, illegal and invalid :- 1. Valuation by unauthorized / un-empowered person.:Alleged valuation / Valuation Report was made by an unauthorized / un-empowered person. Mr. Indermal H. Bagarecha (So called Registered Valuer) is neither an Income-tax Authority as per provisions of sec. 133A nor otherwise, he was authorized to make valuation u/s 133A. 2. Mr. Bagarecha (R.V) was not authorized for valuation u/s 133A : Mr. Indermal H. Bagarecha was also not authorized for valuation by any Income-tax Authority prescribed u/s 133A. So far as claim of oral instructions of Shri J.S.Charan (as per reply during cross examination – Answer to Q No. 5) is concerned(P.B. No. 25), such telephonic instruction has no lawful value. More ever, Mr. Charan was not an Income-tax Authority for this particular survey as he never participated in the survey proceedings u/s 133A and rather he was conducting survey proceedings in other cases/s on the very same day / timing. This fact may be verified from the departmental records. 3. No commission to the valuer u/s 131(1) :In such circumstances, any commission should have been issued to any such valuer as per provisions of sec. 131(1) but Ld. A.O. or all the income-tax authorities failed in issuing commission to the alleged valuer and therefore, Mr. Indermal H. Bagarecha had no lawful authority for making valuation. 8 ITA Nos. 528/Jodh/2018 Sh. Kanhaiya Lal vs. ITO. 4. Valuer can’t be an Income-tax Authority :Even an Income-tax Inspector is not an Income-tax Authority for preparing a Stock Inventory u/s 133A, how a Valuer can be an Income-tax Authority for making valuation and inventory u/s 133A.In addition to clear provisions of sec. 133A, following decisions support appellant’s contention - (1) ITO, Sirohi Vs. Mahendra Kumar Rawal – ITA NO. 335/JODH/2017 order dated 20.02.2018 by ITAT Jodhpur(P.B.No 05-20) (2) Vastimal Vs. ITO, Sumerpur(2001) 26 Tax World 106 (3) Kamal & Co. Vs. ACIT (21TW 427) (4) ITO Vs. Jewells Emporium 48ITD 164 5. Alleged Valuer is not appointed for valuation for Bullion :As per registration certificate (P.B.No.21) of Mr. Indermal H. Bagarecha u/s 34AB of the WT Act, 1957, he was appointed for valuation of ‘Jewellery’ only and he is not appointed for valuation of Bullion (Gold and Silver). Despite this fact, he falsely made valuation of Silver. 6. Valuation report was not furnished in Form O-8 : As per provisions of Rule 111AB of I.T. Rules, 1962 read with Rule 8D of Wealth Tax Rules, 1957, valuation report shall be furnished in appropriate form i.e. Form O-8 but alleged valuation report was not prepared in mandatory prescribed Form O-8 (P.B.No. 22). 7. Valuation Report Without Prescribed Details : Also as per clause / item No.5,6,7,8,9 and 10 of Form O-8 (P.B.No. 22), Gross weight and Net weight of each item should be mentioned in Valuation Report but Gross weight and Net weight of even any single item was not mentioned in this unlawful Valuation Report. 8. V.R. was prepared by fabrication at Income Tax Office, Sumerpur :Alleged Valuation Report was prepared by fabrication at Income Tax Office, Sumerpur which is evident from alleged Valuation Reportdated 18.02.2014 (P.B. No. 23-23). 9. False and Incorrect Valuation / Valuation Report (i) Place of Jewellery found was shown as Resident of assessee (P.B. No. 23-23) whereas unlawful surveys were carried out at both places i.e. Residence and business place of assessee, and residence of his brother and father [Reply to Q. 9 of statement (enclosed)]. (ii) Name of Proprietorship firm (Owner of Jewellery) was also written in a very unbelievable manner as “ Shri/M/s SoniKanakraj उफ़ᭅ Kanyalal s/o panalalji ”. (iii) No weight of individual items :In this false valuation report(P.B. No. 23-23), no weight of individual items / jewellery were mentioned and it is impossible to have 101116 Kg Silver Ornaments and 2269 Kg Gold Jewellery of same tounch (purity). It is further surprising that in calculation 101.116 Kg Silver Ornaments and 2.269 Kg Gold Jewellery was considered by the alleged valuer. 9 ITA Nos. 528/Jodh/2018 Sh. Kanhaiya Lal vs. ITO. Appellant in his statement (copy enclosed) has also replied to Q No. 4,“मेरी दुकान मŐ आज लगभग 5 िकलो चांदी के आभूषण तथा करीब 300 Ťाम सोने के आभूषण होने का अनुमान है” and similarly, while replying to Q. No. 9, appellant stated that “घाणेराव के िजस मकान मŐ आप लोगो के साथ मै गया था वह मेरे िपताजी का मकान है।िजसमे मेरा छोटा भाई व उसका पįरवार रहता है। मेरा भाई (ईæवरलाल, उĨ-32 वष[) अपने ˢयं का घडाई का काम करता है। आप वहा से जो मेरे साथ चलकर एक बैग मŐ रखा जेवरात िजसमŐ 350 Ťाम सोने के आभूषण तथा लगभग 3.6 KG चांदी के आभूषण रखे थे वह मेरी द ु कान पर लेकर मूʞांकन कराया वह पूरा माल मेरे भाई व िपताजी से संबंिधत है।इससे मेरा कोई लेना देना नहीं है वह माल मुझे उɎŐ वापस लौटाना पड़ेगा। द ु कान के पास İ̾थत लƘीनाथ गली मŐ जो ːॉक (आभ ू षण) Ůाɑ Šआ व मेरी द ु कान का तथा कु छ मेरी पȉी के ʩİƅȕ आभूषण सʃिलत है।”(Copy enclosed) but nothing such is reflecting in this unlawful valuation report. (iv) No Tounch of individual items :In the alleged valuation report which was prepared by Mr. Indermal H. Baharecha, a term has used i.e. “TUNCH”. So basically, TUNCH is a hindi word which means purity of gold/silver. In English we know “TUNCH” as “CARAT”. It defines only what level of purity of gold/silver has been used in jewellery. So, according to alleged valuation report, he mentioned that there is 70% tunchin 101116 Kg of silver ornaments . It is not possible that all the alleged silver jewellery weighing 101116 kgs are having same tunch or purity. It means that silver has been used with 70% purity and he simply calculated 70% of gross weight and multiplied with the current rate of silver. He even did not show the weight of other metals, gems, stones and other items. Similarly, he also calculated 80% tunch in 2269 kgs of Gold Ornaments. He even did not mentioned the type and making and name of gold jewellery in the alleged valuation report. It is not possible that all the alleged gold jewellery weighing 2269 kgs are having same tunch or purity. He simply calculated 80% of gross weight and multiplied with the current rate of gold. He even did not show the weight of other metals, gems, stones and other items. (v) Statements of Mr. Indermal H. Bagarecha are totally false and unbelievable and therefore, a comparision (with contradiction) of both the statements is being produced here under to establish the falseness of Mr. Bagarecha and on the basis of following comparision, valuation report and valuer’s statements should be rejected / ignored – S. No . Statement Dated 12.07.2016(P.B. No. 24-29) Statement (Cross Examination) Dated 06.12.2016(P.B. No. 30-47) Comments / pleadingsof Appellant 01 Ans to Q No. 5 :मै ᮰ी जवानᳲसह चरण, आ.अ. (ता᭜कालीन ITO,सुमेरपुर) ᳇ारा मोबइल पर दी गयी सूचना व Ans to Q No. 8 :जी नहᱭ. कोई नोᳯटस नहᱭ ᳰदया गया िसफᭅ मोबाइल पर सूचना के इससे ̇ʼ है िक वैʞूएशन įरपोटŊ िकसी कतŊʩ के िनवाŊह करने के िलए नहीं बनाई बİʋ िबना िकसी 10 ITA Nos. 528/Jodh/2018 Sh. Kanhaiya Lal vs. ITO. िनदᱷश कᳱ पालना मᱶ एक पंजीकृत वै᭨यूएशर कᳱ हेिसयत से गया था तथा मैने उपरोᲦ वै᭨यूएशन ᳯरपोटᭅ अपने कतᭅ᳞ का िनवाᭅह करते ᱟए बनाई थी. आधार पर ही मै गया था. Ans to Q No. 9 :जी नहᱭ. मुझे कोई िलिखत Authority नहᱭ दी गई थी. Ans to Q No. 10 :᮰ी जवान ᳲसह चारण के ᳇ारा कहे अनुसार मेने Valuation ᳰकया, इसी मौिखक Authority के आधार पर मेने Valuation ᳰकया. अथॉįरटी के आयकर अिधकारी को िनजी तोर पर संत ु çट करने, उनके कहे अनुसार व अपने िनजी ˢाथŊ/ अपनी फीस कमाने के िलए Income Tax Office, Sumerpur मŐ बनाई थी. 02 Ans to Q No. 6: ᳰदनांक 18.02.2014 को आयकर िवभाग कᳱ सवᱷ कᳱ कायᭅवाही के दोरान करदाता ᮰ी क᭠हैयालाल सोनी ᭭वयं,एवं ᮰ी सोनी का एक बंगाली कारीगर उपि᭭थत था, इसके अलावा आयकर अिधकारी ᮰ी शेले᭠ᮤ भंडारी एवं आयकर िनरीᭃक ᮰ी राजेश भाटी उपि᭭थत थे. Ans to Q No. 10 : उस ᳰदन जब मᱹ देसुरी ि᭭थत क᭠हैयालाल सोनी कᳱ दूकान पर पᱟचा तो ᮰ी जवान ᳲसह चारण, ᮰ी शेले᭠ᮤ भंडारी एवं ᮰ी राजेश जी भाटी िनरीᭃक आᳰद उस वᲦ मोजूद थे. Q No. 36 : आपकᳱ Valuation के दोरान दूकान पर कौन-कौन लोग उपि᭭थत थे ? Ans to Q No.36 :आ.अ.᮰ी जवान ᳲसह चारण, ᮰ी शेले᭠ᮤ भंडारी आ.अ., ᮰ी राजेश भाटी िनरीᭃक, मै ᭭वयं, दूकान के कारीगर उनका ᳯर᭫तेदार और एक कारीगर के अलावा ᭭वयं क᭠हैयालाल उपि᭭थत थे. पहले बयान के अनुसार ᮰ी जवान ᳲसह चारण व उनका ᳯर᭫तेदार उपि᭭थत नहᱭ थे जबᳰक दूसरे बयान के अनुसार ये दोनᲂ भी उपि᭭थत थे. क᭠हैयालाल व ᮧवीण के बयान के अनुसार ᮰ी जवान ᳲसह चारण उपि᭭थत नहᱭ थे लेᳰकन ᮧवीण उपि᭭थत था िजसने वजन ᳰकया था. ᭭प᳥ है ᮰ी बागरेचा का बयान िव᳡शनीय नहᱭ है. 11 ITA Nos. 528/Jodh/2018 Sh. Kanhaiya Lal vs. ITO. 03 Ans to Q No. 7: Valuation कᳱ पूणᭅ ᮧᳰᮓया करदाता कᳱ दूकान पर ही कᳱ गयी एवं पूरी ᮧᳰᮓया के दोरान करदाता ᭭वयं एवं उसका कारीगर, आ.अ. ᮰ी भंडारी जी, िनरीᭃक ᮰ी भाटीजी दूकान के भीतर मेरे पास ही उपि᭭थत थे एवं पूरी ᮧᳰᮓया इन सबके सामने कᳱ गई. Ans to Q No. 10 : उस ᳰदन जब मᱹ देसुरी ि᭭थत क᭠हैयालाल सोनी कᳱ दूकान पर पᱟचा तो ᮰ी जवान ᳲसह चारण, ᮰ी शेले᭠ᮤ भंडारी एवं ᮰ी राजेश जी भाटी िनरीᭃक आᳰद उस वᲦ मोजूद थे. Q No. 36 : आपकᳱ Valuation के दोरान दूकान पर कौन-कौन लोग उपि᭭थत थे ? Ans to Q No.36 : आ.अ. ᮰ी जवान ᳲसह चारण, ᮰ी शेले᭠ᮤ भंडारी आ.अ., ᮰ी राजेश भाटी िनरीᭃक, मै ᭭वयं, दूकान के कारीगर उनका ᳯर᭫तेदार और एक कारीगर के अलावा ᭭वयं क᭠हैयालाल उपि᭭थत थे. पहले बयान के अनुसार ᮰ी जवान ᳲसह चारण व उनका ᳯर᭫तेदार उपि᭭थत नहᱭ थे जबᳰक दूसरे बयान के अनुसार ये दोनᲂ भी उपि᭭थत थे. क᭠हैयालाल व ᮧवीण के बयान के अनुसार ᮰ी जवान ᳲसह चारण उपि᭭थत नहᱭ थे लेᳰकन ᮧवीण उपि᭭थत था िजसने वजन ᳰकया था. ᭭प᳥ है ᮰ी बागरेचा का बयान िव᳡शनीय नहᱭ है. 04 Ans to Q No. 8 : इस ᳯरपोटᭅ कᳱ दो ᮧितया मेने ᮰ी भंडारी को उसी वᲦ उसी ᭭थान यानी ᳰदनांक 18.02.2014 को करदाता कᳱ देसुरी ि᭭थत दूकान पर दे दी थी. Ans to Q No. 9: मुझे भली भाित ᭭प᳥तया याद है ᳰक मै एवं आयकर िवभाग के अिधकारी /कमᭅचारी करदाता ᮰ी Ans to Q No. 18 : दोपहर 04 बजे . ᮰ी जवान ᳲसह चारण, जी का मोबाइल पर कॉल आया था और 05.30 लगभग पर मै देसुरी पᱟचा दूकान पर. पᱟचने के लगभग 15 िमनट बाद Valuation start ᳰकया और पूरा होने का मुझे याद नही है. दूकान उसी रात को छोड़ दी थी लेᳰकन समय याद नहᱭ है. Q No.23 : वै᭨यूएशन ख़᭜म As per AO’s own explanation / version, survey was completed on 19.02.2014 at 01.55 AM .(P.B. No. 57-58) These contradictions prove that the valuer is a liar person and therefore, his statement as well as Valuation report can not be relied upon against the 12 ITA Nos. 528/Jodh/2018 Sh. Kanhaiya Lal vs. ITO. क᭠हैयालाल सोनी कᳱ दूकान से साथ-साथ ही रवाना ᱟए थे. होने के बाद आप ᮰ी क᭠हैयालाल कᳱ दूकान पर और ᳰकतने समय तक ᱧके रहे थे ? Ans to Q No.23 :मै लगभग 10 िमनट बाद वहा से िनकल गया था. Q No.41 :Valuation पूरा होने के बाद ᭍या आप व आयकर टीम वहा से साथ-साथ रवाना ᱟए थे या आप अपना Valuation करके िनकल गए थे ? Ans to Q No.41 :हम सब साथ-साथ ही िनकले थे. assessee. 05. Q No. 12: ᭍या सवᱷ कᳱ कायᭅवाही के दोरान या वै᭨यूएशन ᮧᳰᮓया के दोरान आयकर िवभाग के अिधकारी अथवा कमᭅचारी ᳇ारा करदाता ᮰ी क᭠हैयालाल सोनी को डराया या धमकाया गया, कृपया ᭭प᳥ करे ? Ans to Q No. 12 : जी नहᱭ, सवᱷ कᳱ कायᭅवाही सोहादᭅपूणᭅ माहोल मᱶ ᱟई आयकर िवभाग के कमᭅचारी / अिधकारी का ᳞वहार एवं भाषा स᭥मानपूवᭅक थी. करदाता ने भी यािन ᮰ी क᭠हैयालाल सोनी ने भी सवᱷ कᳱ कायᭅवाही मᱶ िवभाग कᳱ सहायता कᳱ (coperate) तथा स᭥पूणᭅ ᮧᳰᮓया के दोरान क᭠हैयालाल सोनी ने भी ऐसी कोई Ans to Q No. 18 : दोपहर 04 बजे . ᮰ी जवान ᳲसह चारण, जी का मोबाइल पर कॉल आया था और 05.30 लगभग पर मै देसुरी पᱟचा दूकान पर. पᱟचने के लगभग 15 िमनट बाद Valuation start ᳰकया और पूरा होने का मुझे याद नहीनहᱭ है. दूकान उसी रात को छोड़ दी थी लेᳰकन समय याद नहᱭ है. Mr. Valuer is giving false certificate of fairness and evidence because he was not (i) at the residence of assessee on 18.02.2014 and (ii) at the shop before the 5.30 PM. on 18.02.2014 and (iii) after completion of survey till 1.55 AM. Of 19.02.2014. These contradictions prove that the valuer is a liar person and therefore, 13 ITA Nos. 528/Jodh/2018 Sh. Kanhaiya Lal vs. ITO. िशकायत नहᱭ कᳱ. his statement as well as Valuation report can not be relied upon against the assessee. 06 Ans to Q No. 13 :मेरे लɾे अनुभव व िवषय के ǒान से मेने सोने-चांदी के वैʞूएशन मŐ जो िनपुणता Ůाɑ की है उसका मै पूणŊ इमानदारी व िनʿा के साथ िवभाग को व सरकार को सेवा देने मŐ Ůयोग करता šँ. Ans to Q No. 10:᮰ी जवान ᳲसह चारण के ᳇ारा कहे अनुसार मेने Valuation ᳰकया, Q No.13 :आयकर िनयम या CBDT ᳇ारा Valuationका कोई prescribed format है ᭍या ? Ans to Q No.13 :सरकार ने ऐसा कोई फॉमᱷट नहᱭ बना रखा है. Q No.44 :लेᳰकन ᳯरपोटᭅ मᱶ आपने िनवास ᭭थान बताया है. इस स᭥ब᭠ध मᱶ आपको ᭍या कहना है ? Ans to Q No.44 :मेरा ता᭜पयᭅ दूकान से है. िनवास से नहᱭ. Q No.45 : लेᳰकन आपने तो ᳯरपोटᭅ मᱶ residing at श᭣दᲂ का उपयोग ᳰकया है िजसका अथᭅ िनवास ᭭थान से हैअत: ᭭प᳥करे ᳰक सही ि᭭थित ᭍या है? Ans to Q No.45 :मुझे अंᮕेजी का ᭄ान कम है. Ans to Q No.46 : जेसा मेने पहले ही बताया मुझे अंᮕेजी का स◌्प᳥ है ᳰक वै᭨यूएशन ᳯरपोटᭅ पूणᭅ इमानदारी व िन᳧ा से तेयार नहᱭ कᳱ गयी है बि᭨क ᮰ी जवान ᳲसह चारण के ᳇ारा कहे अनुसारValuation ᳰकया गया. वै᭨यूएशन मᱶ िनपुणता कᳱ बात बᱟत बड़ा झूठ है जो ᳰक कॉलम तीन मᱶ दशाᭅए जवाबो से सािबत हो रहा है. िजस वै᭨यूएर को अपने ᮧोफेशन से स᭥बंिधत क़ानून व फॉमᭅ तक कᳱ जानकारी नहᱭ है, वो िबलकुल ही झूठा ही दावा कर रहा है ᳰक उसने िनपुणता से काम ᳰकया है. These contradictions prove that the valuer is a liar person and therefore, his statements as well as Valuation report can not be relied upon against the assessee. 14 ITA Nos. 528/Jodh/2018 Sh. Kanhaiya Lal vs. ITO. ᭄ान कम है. Ans to Q No.65 : आयकर अिधकारी जी के कहने पर मेने 133A िलखा था हालाᳰक मुझे इस अिधिनयम कᳱ पूरी जानकारी नहᱭ है. Ans to Q No.68 :मेने उᲦ फॉमᱷट मᱶ ᳯरपोटᭅ नहᱭ दी है यह ᳯरपोटᭅ मेने पर᭥परागत फॉमᱷट मᱶ दी है. Q No.31 : आपने अपनी VR मᱶ दशाᭅए माल कᳱ तुलाई कहा कᳱ ? Ans to Q No.31 : इसके दूकान पर ही कᳱ थी. Q No.32 : दूकान पर केसा काँटा उपल᭣ध था, ᭃमता ᭍या थी बताये ? Ans to Q No.32 :मुझे याद नहᱭ है. Q No.33 : आपने पूरे माल कᳱ तुलाई कुल ᳰकतने राउंड मᱶ कᳱ थी? Ans to Q No.33 :मुझे याद नहᱭ है. Q No.34 : लेᳰकन एक राउंड मᱶ ही ही तो सारी तुलाई नहᱭ ᱟई थी ? Ans to Q No.34 :मुझे याद नहᱭ है. Q No.35 : इस VR तेयार करने से पहले आपने कोई िल᭭ट या ᳰकसी पेपर पर वजन िलखा था 15 ITA Nos. 528/Jodh/2018 Sh. Kanhaiya Lal vs. ITO. ᭍या या सीधी ही ᳯरपोटᭅ तेयार कᳱ थी? Ans to Q No.35 :मुझे याद नहᱭ है. Q No.37 : वहा पुिलस कमᱮ भी उपि᭭थत थे ᭍या? Ans to Q No.37 :यह मुझे याद नहᱭ है. Q No.39 : ᮰ी क᭠हैयालाल कᳱ दूकान कᳱ साइज़ ᭍या थी ? Ans to Q No.39 :मुझे याद नहीं है. (vi) Removal of list of stock inventory from the record :It is also very clear from the statement (P.B. No.48-53) of Mr. Praveen (Relative of Appellant) and the appellant as recorded by Ld. A.O., detailed Stock Inventory was prepared in four pages (P.B. No. 50) by IT survey Team and weighing was done by Mr. Praveen and Mr. Bagarecha on cross examination stated, “ मैने िसफᭅ माल का वै᭨यूएशन ᳰकया है” but now, that list of Inventory has been perhaps removed from the record. Therefore, complete Survey and assessment proceeding has become illegal. 16 ITA Nos. 528/Jodh/2018 Sh. Kanhaiya Lal vs. ITO. (vii) Even Voluminous Weighing was not possible:As per statement of Mr. Bagarecha on cross examination, entire weighing was done in the shop of assessee but he does not remember capacity of weighing scales and claims “ वै᭨यूएशन मᱶ जो िनपुणता ᮧा᳙ कᳱ है उसका मै पूणᭅ इमानदारी व िन᳧ाके साथ िवभाग को व सरकार को सेवा देने मᱶ ᮧयोग करता ᱠँ.”but fact is this that the assessee had / has two certified Weighing Scales. One Weighing scale is for Gold with capacity of maximum 300 Gms since 2007 and another Weighing scale is for Silver with capacity of maximum 6 Kgs since 2010. Copies of Verification Certificates of both the Scales by िनरीᭃक, िविधक माप िव᭄ान, पाली (राज) are being filed in paper book (P.B. No.54-55) for your kind satisfaction. Latest Certificate of Gold Weighing Scale is missing but the fact is verifiable from िनरीᭃक, िविधक माप िव᭄ान, पाली (राज). More ever, please also find copies of Updated Certificate Plates of both the Weighing Scale dated 28.02.2016 in paper book (P.B. No.56). Whereas, As per the answer to Q. No. 53 (P.B. No. 40-40) of statement of Mr. Bagarecha on cross examination, he stated that “सभी आइटम कᳱ टंच एक समान होने से सबका वजन मᱶ एक साथ ही ᭍या था।” which is not possible as the maximum capacity of both the weighing machines were much lower and it was not possible to weight all the alleged jewellery items at once. (viii) With these weighing scales, it was not possible to weigh the jewellery items in single round as shown in the alleged unlawful Valuation Report and there is no Item-wise list and round-wise weighing list with the ITD and Valuer as well which also proves that the alleged Valuation Report is false, fabricated and illegal. (ix) Alleged valuation Report seems to be prepared in very casual and summary manner even without any detail of alleged jewellery. (x) If any little reliance is put to this unlawful valuation Report, it was prepared at Income-tax Office, Sumerpur, 90 Km away from the location of Survey. It also implies that alleged jewellery(as per alleged valuation report) was unlawfully seized from survey location without issuing any seizure / impound memo and alleged jewellery as per alleged valuation report was carried to Sumerpur and it was never returned to the Assessee. C. ADDITION ON ACCOUNT OF EXCESS STOCK OF Rs. 90,58,811/- Ld. CIT(A) erred in law in confirming the addition of Rs. 90,58,811/- on account of excess stock. Appellant clearly mentioned and submitted in above paragraphs that entire survey proceeding and surrender therein are fabricated, unlawful and illegal. Alleged valuation report is also false, fabricated and illegal and therefore, appellant clearly denies for the so called jewellery of Rs. 90,58,811/- which is totally false and fabricated. Alleged jewellery mentioned in alleged Valuation Report was never found from the shop and residence of the assessee. 17 ITA Nos. 528/Jodh/2018 Sh. Kanhaiya Lal vs. ITO. In addition to submission in preceding paras, appellant would like to draw your honor’s kind attention towards following few questions / answers in assessee’s statement dated 07.11.2016 during the assessment proceedings – ᮧ᳤ 3 –ᳰदनांक 18/02/2014 को आपकᳱ देसुरी ि᭭थत दूकान पर सवᱷ कᳱ कायᭅवाही तथा त᭜प᳟ात कर िनधाᭅरण कᳱकायᭅवाही के स᭠दभᭅ मᱶ आपकᳱ कोई आपिᱫ हो तो बताये? (Copy Enclosed) उᱫर – वᱫᭅमान मᱶ चल रही कर िनधाᭅरण ᮧᳰᮓया से मुझे कोई आपित नहᱭ है लेᳰकन आयकर सवᱷ कᳱ कायᭅवाही के दौरान कोई वेलुशन ᳯरपोटᭅ नहᱭ बनाई गयी गयी थी, िसफᭅ खाली छपे ᱟए ᮧोफोमाᭅ पर मेरे ह᭭ताᭃर आयकर अिधकारी भंडारी साहब ने करवाये थे. सवᱷ कᳱ कायᭅवाही के ᳰदन मेरे ᭭वयं का सोने कᳱ ᭔वेलरी का कोई ᭭टॉक नहᱭ था. लगभग 250GM सोने कᳱ ᭔वेलरी मेरी प᳀ी कᳱ मेरे घर से लाई गयी थी तथा लगभग 100 ᮕाम सोने कᳱ ᭔वेलरी ᮧवीण कᳱ थी, जो मेरी दूकान पर ही खुद का ᳞वसाय भी करता है,जो ᳰक मेरे साले का लड़का है.दूकान पर सोने व चांदी के आभूषणᲂकᳱ दो अलग-अलग िल᭭टेबनाई गयी थी, जो ᳰक कुल चार पेज मᱶ थी, माल का सारा वजन ᮧवीण ने ᳰकया था, उन चारो पेजᲂ पर मेने और ᮧवीण ने ह᭭ताᭃर ᳰकये थे. ᮧ᳤4 –मै आपको आयकर िवभाग मᱶ पंजीकृत वेʞुअर ŵी इȽरमल एच. बागरेचा Ȫारा 18/02/2014 को आपके केस मᱶ बनाई ᱟई वे᭨युशन ᳯरपोटᭅ िजस पर आपके ह᭭ताᭃर है, ᳰदखा रहा ᱠँ. कृपया बताये ᳰक इस ᳯरपोटᭅ को सही व स᭜य ᭍यᲂ ना माना जाए? उᱫर –जेसा ᳰक मᱹने पूवᭅ मᱶ ही बताया ᳰक आयकर अिधकारी ᮰ी शेले᭠ᮤ भंडारी ने मुझ से खाली ᮧोफोमᲃ पर ह᭭ताᭃर करवाए थे. मुझे अ᭒छी तरह याद है ᳰक इ᭠ही दो ᮧोफोमᲃ पर ह᭭ताᭃर करवाए गए थे हालाᳰक ह᭭ताᭃर करते समय इस पर हाथ से िलखा ᱟआ कोई वजन या वे᭨युशन आᳰद का ᭣योरा नहᱭ था, साथ ही मै यह भी ᭭प᳥ करना चाहता ᱠँ ᳰक आयकर सवᱷ कᳱ पूरी कायᭅवाही के दौरान अथवा इस कायᭅवाही से पहले या बाद मᱶ आज तक ᮰ी इ᭠ᮤमल बाघरेचा मेरी दूकान पर कभी नहᱭ आया. ᮰ी बागरेचा भी सोने-चांदी के ᳞ापारी है तथा िशवगंज मᱶ उनकᳱ दूकान है, मै उनको िसफᭅ श᭍ल से जानता ᱠँ. मᱹने ᮰ी बघरेचा से कोई ᳞ापाᳯरक स᭥ब᭠ध नहᱭ रखा है. D. ADDITION ON ACCOUNT OF EXCESS CASH OF Rs. 9,45,000/- Ld. CIT(A) erred in law in confirming the addition of Rs. 9,45,000/- on account of excess cash as this cash in hand of Rs. 9,45,000/- was appellant’s valid balance as on 18.02.2016 and therefore, there is no question of surrender or undisclosed income of the assessee. More ever, Ld. AO also ignored that fact that appellant also deposited advance-tax of Rs. 10,60,000/- under pressure out of his business accruals / savings / bank withdrawals in March 2014 and above mentioned amount of Rs. 9,45,000/- (balance as on 18.02.2014) was also utilized in depositing advance-tax of Rs. 10,60,000/-. Appellant also submitted his Balance Sheet , Profit & Loss and Trading Account for the F.Y. 2010-11, 2011-12, 2012-13, and 2013-14. Your Honor, the balance sheet as on 31.03.2013 clearly shows that the cash and bank balance was Rs. 958596/- and all these financial statements were submitted before Ld. A.O. vide letter dated 22.12.2016. Please find enclosed herewith the Financial Statements for the F.Y. 2012-13. E. Excessive interest U/s 234A, 234B, and 234C 18 ITA Nos. 528/Jodh/2018 Sh. Kanhaiya Lal vs. ITO. Ld A.O. erred in law for levying the excessive interest U/s 234A , B and C and therefore, those should be deleted /reduced accordingly. Therefore, on the basis of above facts and circumstances , appellant requests your honour to allow the complete appeal.” 6. Per contra, the ld. DR supported the orders of the lower authorities praying that the assessee was provided various opportunities by the lower authorities to argue the case but the assessee was lethargic and unserious to pursue his case and thus the order passed by the ld. CIT(A) should be sustained. 7. We have heard both the parties and perused the materials available on record. The ld. AR for the assessee has submitted written submission and evidences pertaining to stock in trade inventory which was not produced before the ld. AO and ld. CIT(A). Further, the ld. AR for the assessee has submitted that the additions of Rs. 90,58,811/- on account of excess stock during the survey proceeding u/s 133A of the Act is merely on the basis of falls fabricated, unlawful , illegal and alleged valuation report. We observed that the ld. AO or ld. CIT(A) has not considered the actual stock inventory during the survey proceedings. The ld. AO has to verify the stock inventory which will be produced by the assessee in the assessment proceeding. The assessee himself prays that the matter may be remanded back to the file of the 19 ITA Nos. 528/Jodh/2018 Sh. Kanhaiya Lal vs. ITO. ld. AO for proper adjudication on merit after giving due opportunity of hearing to the assessee. 8. Looking to the peculiar facts of the case and as agreed by both the parties and having regard to them we feels that in the interest of justice and fair play, we deem it fit an appropriate to remand back the issue to the file of the ld. AO for proper adjudication after giving opportunity of hearing to the assessee, uninfluenced by his earlier decision. We order accordingly, the assessee also direct to ensure the participation in the hearing fixed by the ld. AO and do not seek unnecessary adjournment. Thus, the appeal of the assessee is allowed for statistical purposes. In the result, the appeal of the assessee is allowed for statistical purposes. Order pronounced under Rule 34(4) of the Income Tax (Appellate Tribunal) Rules, 1963 by placing the details on the notice board. Sd/- Sd/- (RATHOD KAMLESH JAYANTBHAI) (DR. S. SEETHALAKSHMI) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated : 11/09/2023 *S antosh Copy to: 1. The Appellant 2. The Respondent 20 ITA Nos. 528/Jodh/2018 Sh. Kanhaiya Lal vs. ITO. 3. The CIT 4. The CIT(A) 5. The DR 6. Guard File Assistant Registrar Jodhpur Bench