DCIT, Ludhiana V. M/s Super Jewellers Pvt. Ltd., Bathinda

ITA 678/CHANDI/2016

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 6649 (ITAT-CHANDIGARH)
• Duration Of Justice: 1 year(s) 5 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-11-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Next Hearing Date: 13-02-2017
• Assessment Year: 2011-2012
• Appeal Filed On: 01-06-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAVI SARANGA L
• Keywords: Search and seizure; Valuation report

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCHES B CHANDIGARH BEFORE SHRI SANJAY GARG, JUDICIAL MEMBER AND DR. B.R.R. KUMAR, ACCOUNTANT MEMBER ITA NO.678/CHD/2016 ASSESSMENT YEAR:2011-12 THE DCIT, VS. M/S SUPER JEWELLERS PVT. LTD. CENTRAL CIRCLE-III, POST OFFICER BAZAR, LUDHIAN A LUDHIANA PAN NO. AAICS3190G (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI. SUDHIR SEHGAL DEPARTMENT BY : SHRI. RAVI SARANGAL DATE OF HEARING : 24/08/2017 DATE OF PRONOUNCEMENT : 10/11/2017 ORDER PER DR. B.R.R. KUMAR, A.M: THE PRESENT APPEAL HAS BEEN FILED BY THE ASSESSEE A GAINST THE ORDER OF THE LD. CIT (A)-5, LUDHIANA DT. 14/03/2016. 2. THE ASSESSEE HAS RAISED THE FOLLOWING EFFECTIVE GROUNDS OF APPEAL: 1(I) THAT THE LD. CIT(A) HAS ERRED IN LAW AND ON F ACTS IN DELETING THE ADDITION OF RS. 50,08,150/-. (II) THAT THE LD. CIT(A) HAS ERRED IN LAW AND ON F ACTS IN NOT APPRECIATING THE FACT THAT THE DIRECTOR OF THE COMPANY NAMELY SHRI. AJAY KUMAR IN HIS STATEMENT RECORDED DURING SEARCH OPERATION ON 18.02.2011 COUL D NOT GIVE THE DETAILS OF THE CLOSE RELATIVES INCLUDING HIS WIFE AND MOTHER TO WH OM THE ALLEGED GOLD ORNAMENTS BELONGED TO AND THE SUBSEQUENT AFFIDAVITS FILED WERE AFTER THOUGHTS WHICH WERE WITHOUT ANY PROOF OF THE OWNERSHIP. 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSING O FFICER MADE ADDITION OF RS. 50,08,150/- ON ACCOUNT OF EXCESS STOCK FOUND DURING THE COURSE OF SEARCH. 4. THE LD. CIT(A) HAS DELETED THE ADDITION ON THE G ROUNDS THAT THE JEWELLERY OF THE RELATIVES KEPT AT THE PREMISES HAS TO BE DED UCTED WHILE DETERMINING THE EXCESS STOCK. 2 5. BEFORE US THE LD. AR ARGUED ELABORATELY. THE ARG UMENTS ARE AS UNDER: 6. A SEARCH AND SEIZURE ACTION HAS TAKEN PLACE AT T HE PREMISES OF THE ASSESSEE IN PHYSICAL INVENTORY WAS PREPARED IN STOC K OF GOLD WAS WORKED OUT TO RS. 102783285/- WHEREAS AS PER THE TRADING ACCOUNT PREPARED ON THE DAY OF SEARCH WAS RS. 56151284/- THUS AN EXCESS STOCK OF R S. 46632001/- WAS DETERMINED. THE ASSESSEE HAS DECLARED RS. 12937548/ - IN THE PROFIT ON ACCOUNT OF EXCESS STOCK OF GOLD ORNAMENTS AS THERE WAS SHOR TAGE OF RS. 7725102/- PERTAINING TO 18 K GOLD ORNAMENTS, DIAMOND AND SILV ER. THE CHART ON THE EXCESS STOCK AND THE SHORTAGE OF STOCK ON VARIOUS ITEMS WA S AS UNDER: SL. NO. PARTICULARS QUANTITY AS PER BOOKS QUANTITY AS PER PHYSICAL VERIFICATION DIFFERENCE VALUATION 1. GOLD ORNAMENTS 22 C 14645.653 9086.520 (THIRD PARTY AS PER LIST) 23732.173 33986.590 10254.417 @ RS. 20150/- PER 10 GRAM 2,06,62,650/- . EXCESS STOCK 2 GOLD ORNAMENT 18C 8967.172 6377.91 2589.262 @ RS. 16486/- PER 10 GRAM -42,68,657/- SHORT STOCK 3 DIAMOND 1516.720 C 1295.46 221.26 @ 14500/- PER CENT -32,08,270/- SHORT STOCK 4 SILVER 47.015.00 41.500.00 5.515.00 @ 45000/- PER KG -2,48,175/- SHORT STOCK TOTAL OF SHORT STOCK -77,25,102/- ADDITION WORKED OUT ON ACCOUNT OF EXCESS STOCK 1,29,37,548/- (20662650 EXCESS STOCK (-) 7725102 SHORT STOCK BEING SALE 7. IT WAS ARGUED THAT THE ASSESSEE HAS STATED THAT 9086.52 GM BELONGS TO THE CUSTOMERS. THE CIT, DR ARGUED THAT THE CONTENTION O F THE ASSESSEE DURING THE ASSESSMENT PROCEEDINGS THAT A QUANTITY OF 2866 GMS LYING IN A SEPARATE PACKET 3 FOUND DURING THE SEARCH PROCEEDING AS BELONGING TO THE RELATIVES CANNOT BE ACCEPTED. LD. DR ARGUED THAT THE ACTION OF THE ASS ESSING OFFICER IS CORRECT AND ADDITION NEEDS TO BE CONFIRMED. 8. IN RESPONSE LD. AR ARGUED THAT 1. DURING THE REC ORDING OF STATEMENT OF SHRI. AJAY KUMAR, DIRECTOR ON 18/02/2011 (DATE OF S EARCH) HAS CATEGORICALLY STATED THAT JEWELLERY VALUED RS. 5008150/- BELONGS TO RELATIVES AND THE DETAILS CAN BE GIVEN BY SHRI. GIRDHARI LAL WHO WAS AWAY ON A PERSONAL TRIP. 2. THE JEWELLERY WAS KEPT SEPARATELY AND IDENTIFIED DURING THE COURSE OF SEARCH AND WAS NOT MIXED WITH OTHER STOCK OF JEWELLERY. 3. SEP ARATE INVENTORY WAS PREPARED BY THE VALUER OF THE DEPARTMENT AT THE TIME OF SEAR CH PERTAINING TO THIS JEWELLERY 4. AFFIDAVITS HAVE BEEN FILED DURING THE ASSESSMENT PROCEEDINGS BY THE HOLDERS OF THE JEWELLERY AND IDENTIFYING THE JEWELLERY BELO NGINGS TO EACH RELATIVE. 9. WE HAVE HEARD LD. REPRESENTATIVES OF BOTH THE PA RTIES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. 10. WE FIND THAT A. AS PER THE PAGE NO. 4 OF THE VALUATION REPORT TH E JEWELLERY OF RS. 5008150/- WAS SEPARATELY VALUED VIDE VALUATION REPO RT DT. 18/12/2011. IT WAS CLEARLY MENTIONED JEWELLERY FOUND AT THE PREMIS ES OF M/S SUPER JEWELLERS PVT. LTD. BHATINDA, CLAIMED TO BE BELONGI NG TO THE RELATIVES. B. THE GROSS WEIGHT OF THE JEWELLERY IS 2866 GMS AN D NET WEIGHT 2801 GMS C. AFFIDAVITS HAVE BEEN FILED BY THE OWNERS OF THE JEWELER. D. NO SEARCH WAS CONDUCTED AT THE PREMISES OF THE O WNERS OF THE JEWELLERY EXCEPT URMIL SINGLA 4 E. THE STOCK OTHER THAN THIS 2866 GMS HAS BEEN EXPL AINED BY THE ASSESSEE DURING THE ASSESSMENT PROCEEDINGS. HENCE KEEPING IN VIEW IN THE TOTALITY OF THE FACTS AND CIRCUMSTANCES THAT THE JEWELLERY UNDER CONSIDERATION WAS NOT MIXED UP WITH OTHER STOCK OF THE ASSESSEE, AND KEPT SEPARATELY, OWNED BY FAMILY MEMBERS, CONFI RMED BY THE SEARCH PROCEEDINGS BY THE STATEMENT RECORDED AND THE VALUA TION REPORT MADE ON THE DATE OF SEARCH WE DECLINE TO INTEREFERE WITH THE OR DER OF LD. CIT(A). 11. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISS ED. SD/- SD/- (SANJAY GARG) (DR. B.R.R. KUMAR ) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 10/11/2017 AG COPY TO: THE APPELLANT, THE RESPONDENT, THE CIT, TH E CIT(A), THE DR