JEWELLERY MART, Jaipur V. DCIT, Jaipur

ITA 792/JPR/2013

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 5265 (ITAT-JAIPUR)
• Duration Of Justice: 2 year(s) 6 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-05-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Assessment Year: 2006-2007
• Appeal Filed On: 25-10-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Difference of opinion
• Section: 69C; 133A; 145

Judgement Text

VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHE S, JAIPUR JH VKJ-IH-RKSYKUH] U;KF;D LNL; ,OA JH FOE FLAG ;KN O] YS[KK LNL; DS LE{K BEFORE: SHRI R.P. TOLANI, JM & SHRI VIKRAM SINGH YA DAV, AM VK;DJ VIHY LA-@ ITA NOS. 792/JP/2013 FU/KZKJ.K O'K Z@ ASSESSMENT YEARS : 2006-07 . SHRI JEWELLERY MART, PANCHBATTI, M.I. ROAD, JAIPUR. CUKE VS. THE DCIT CIRCLE-2, JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO. AAWFS 8911 E VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY S BY : SHRI P.C. PARWAL (CA) JKTLO DH VKSJ LS@ REVENUE BY : SMT. RUNI PAL (JCIT) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 27.04.2016. ?KKS'K .KK DH RKJH[K @ DATE OF PRONOUNCEMENT : 16 /05/2016. VKNS'K@ ORDER PER SHRI VIKRAM SINGH YADAV, A.M. THE APPEAL FILED BY THE ASSESSEE IS ARISING FROM TH E ORDER DATED 13.09.2013 PASSED BY THE LEARNED CIT (A)-I, JAIPUR FOR THE A.Y. 2006-07. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL :- (I) THE LD. CIT (A) HAS ERRED ON FACTS AND IN LAW IN CO NFIRMING THE PENALTY OF RS. 1,68,300/- U/S 271(1)(C) OF THE I.T. ACT. (II) HE HAS FURTHER ERRED IN IMPOSING THE PENALTY ON THE ADDITION MADE ON ESTIMATE BASIS BY HOLDING THAT ESTIMATION IS ALSO A LEGALLY A VALID METHOD OF ASSESSMENT OF INCOME IGNORING THAT ESTIMA TION MADE IN PRESENT CASE DO NOT ESTABLISH ANY CONCEALMENT OF IN COME. 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E IS ENGAGED IN THE BUSINESS OF MANUFACTURING AND TRADING AND EXPORT OF HANDICRAFTS, GOLD, SILVER JEWELLERY, PRECIOUS AND SEMI PRECIOUS STONES. A SUR VEY U/S 133A WAS ITA NO. 792/JP/13 SHRI JEWELLERY MART, JAIPUR VS. DCIT, CIRCLE-2, JAI PUR 2 CONDUCTED ON 27.12.2005 AT THE BUSINESS PREMISES OF THE ASSESSEE. IN SURVEY, VALUE OF PHYSICAL STOCK WAS ARRIVED AT RS.2,65,29,9 13/- WHEREAS BOOK STOCK WAS DETERMINED AT RS.1,31,41,879/-. ACCORDINGLY, ASSESS EE SURRENDERED AN AMOUNT OF RS.1,33,88,034/- ON ACCOUNT OF EXCESS STOCK. HOW EVER, AT THE TIME OF FILING OF RETURN, IT WAS NOTED THAT THE VALUE OF PHYSICAL STO CK IS RS.2,81,64,222/- AND THE VALUE OF STOCK AS PER BOOKS OF ACCOUNTS IS RS. 2,25 ,14,295/- . ACCORDINGLY ASSESSEE OFFERED RS.56,49,928/- IN THE RETURN OF IN COME FILED ON 31.10.2006 AND PAID TAX OVER THE SAME. THE AO COMPLETED THE AS SESSMENT ON 30.12.2008 WHERE HE FURTHER MADE THE ADDITION FOR THE DIFFEREN CE AMOUNT OF RS.77,38,106/- (1,33,88,034-56,49,928) SURRENDERED IN COURSE OF SURVEY. HE ALSO MADE ADDITION OF RS. 50 LACS ON THE BASIS OF L OOSE PAPERS AND RS. 4,29,198/- ON ACCOUNT OF NON GENUINE PURCHASES. 2.1. IN QUANTUM APPEAL, THE LD. CIT(A) EXAMINED THE VARIOUS CLAIMS OF THE ASSESSEE TO ARRIVE AT THE BOOK STOCK AT RS.2,25,14, 295/- AS AGAINST RS.1,31,41,879/- DETERMINED AT THE TIME OF SURVEY. HE ACCEPTED THE VARIOUS CONTENTIONS OF THE ASSESSEE AND FINALLY ARRIVED AT THE BOOK STOCK AT RS.2,22,97,869/-. THUS, THE VALUE OF EXCESS STOCK W AS DETERMINED AT RS. 58,66,353/- AS AGAINST RS. 56,49,928/- OFFERED BY T HE ASSESSEE. HE, THEREFORE, CONFIRMED AN ADDITION OF RS.2,16,426/- ON ACCOUNT O F EXCESS STOCK. THE OTHER TWO ADDITIONS MADE BY THE AO WERE DELETED. 2.2. THE HONBLE ITAT, JAIPUR BENCH VIDE ORDER DATE D 25.02.2011 IN ITA NO. 962/JP/09 AND CO NO. 2/JP/10 AFTER CONSIDERING THE ENTIRETY OF THE FACTS CONFIRMED AN ADDITION OF RS.5,00,000/- BY GIVING TH E FOLLOWING FINDINGS:- IT IS TRUE THAT EXCESS STOCK SURRENDER INCLUDE THE PROFIT ARISING FROM THE BUSINESS DONE OUTSIDE THE BOOKS OF ACCOUNT TILL THE DATE OF SURVEY. THE ASSESSEE HAS GIVEN EXPLANATION FOR THE DOCUMENTS BU T THE REVENUE HAS NOT MADE ANY EFFORT TO REBUT THE EXPLANATION. HENCE , WE FEEL THAT THE BOOKS OF ACCOUNTS ARE TO BE REJECTED AND AN ADDITIO N OF RS.5.00 LACS IS TO BE MADE ON ACCOUNT OF LESSER SALE ADJUSTMENT, CASH PAID OUTSIDE THE BOOKS OF ACCOUNTS FOR BANGLES FROM ONE SHRI SONI OF CHENNAI, ON ACCOUNT OF DOCUMENTS FOUND AND ON ACCOUNT OF NON-VERIFIABLE PURCHASES. ITA NO. 792/JP/13 SHRI JEWELLERY MART, JAIPUR VS. DCIT, CIRCLE-2, JAI PUR 3 2.3. IN PENALTY PROCEEDINGS, ASSESSEE EXPLAINED THA T THE ADDITION CONFIRMED BY HONBLE ITAT AT RS.5,00,000/- IS A LUMPSUM ADDIT ION ON ESTIMATED BASIS AND THEREFORE NO PENALTY SHOULD BE LEVIED. HOWEVER, THE ASSESSING OFFICER MADE THE FOLLOWING OBSERVATIONS:- - OUT OF UNEXPLAINED STOCK OF RS.56,49,928/- WHICH TH E ASSESSEE HIMSELF HAS ACCEPTED ON ACCOUNT OF PHYSICAL VERIFICATION, T HE LD. CIT(A) ACCEPTED ALL THE SUBMISSION GIVEN BY THE ASSESSEE TO EXPLAIN THE EXCESS STOCK WERE OUT AS MENTIONED ABOVE. DESPITE THAT, UNDISCLOSED I NVESTMENT IN STOCK OF RS.2,16,426/- REMAINED UNEXPLAINED. FOR THIS AMO UNT, THE ASSESSEE COULD OFFER NO EXPLANATION FOR SUCH EXCESS STOCK OV ER AND ABOVE THE BOOKS. THIS CLEARLY SHOWS THAT ASSESSEE HAS FILED W RONG PARTICULARS OF INCOME AND HENCE CONCEALED THE INCOME. - SURRENDER WAS OFFERED ONLY AS A RESULT OF SURVEY. H AD SURVEY WAS NOT DONE, NO DISCLOSURE WOULD HAVE BEEN OFFERED. THEREF ORE, IN VIEW OF EXCESS STOCK FOR WHICH ASSESSEE COULD OFFER NO EXPL ANATION, THERE IS CLEARLY CONCEALMENT OF INCOME THROUGH FURNISHING OF WRONG PARTICULARS OF INCOME. - HONBLE ITAT HAS ALSO NOT ACCEPTED ALL THE EXPLANAT IONS GIVEN BY THE ASSESSEE FOR UNEXPLAINED STOCK FOUND. - THE PLEA TAKEN BY THE ASSESSEE THAT ADDITION MADE O N ESTIMATION CANNOT BE TREATED AS CONSCIOUS CONCEALMENT IS NOT ACCEPTAB LE. IT IS CLEARLY ESTABLISHED THAT ASSESSEE IS ENGAGED IN HOLDING STO CK OUT OF BOOKS. THE ASSESSEE IS FOUND IN POSSESSION OF UNEXPLAINED STOC K DURING THE COURSE OF SURVEY. THE SAME TANTAMOUNT TO FURNISHING OF WRO NG AND CONCEALED PARTICULARS OF INCOME. THE AO ACCORDINGLY LEVIED PENALTY OF RS.1,68,300/- U/S 271(1)(C) WITH REFERENCE TO THE ADDITION OF RS.5,00,000/- FINALLY SUSTAINED. FOR THIS, HE RELIED ON CERTAIN CASE LAWS AS MENTIONED AT PAGE 4-5 OF HIS ORDER. ITA NO. 792/JP/13 SHRI JEWELLERY MART, JAIPUR VS. DCIT, CIRCLE-2, JAI PUR 4 3. BEING AGGRIEVED BY THE ORDER OF AO, ASSESSEE CAR RIED THE MATTER BEFORE LD. CIT (A) WHO CONFIRMED THE ACTION OF THE AO BY O BSERVING AS UNDER :- 4. I HAVE CONSIDERED THE SUBMISSIONS OF THE APPELL ANT AND HAVE ALSO GONE THROUGH THE PENALTY ORDER OF THE AO. IT IS NOTICED THAT IN THIS CASE THE ADDITION WAS MADE BY THE AO ON THE BASIS OF DOCUMENTS FOUND DURING THE COURSE OF SURVEY. THE MA TTER WENT UP IN APPEAL BEFORE THE HONBLE ITAT WHO VIDE ITS O RDER DT. 22.02.2011 IN ITA NO. 962/JP/2009 ENHANCED THE ADDI TION OF RS.5 LACS AS AGAINST THE ADDITION OF RS.2,16,426/- AS SU STAINED BY THE CIT(A). WHILE ENHANCING THE ADDITION FROM RS.2,16,4 26/- TO RS.5 LACS, THE HONBLE ITAT TOOK THE COGNIZANCE OF THE F ACT THAT CASH PAYMENT OF RS. 1 LACS WAS NOT INCLUDED IN THE STOCK , SALE OF ITEM BY CREDIT MEME 1647 AFTER 02.02.05 WAS LESS THAN RS.1. 01 LACS AND ALSO THAT ONE OF THE PARTNERS ADMITTED TO BE INDULG ED IN SALE AND PURCHASE OUTSIDE THE BOOKS OF ACCOUNTS. IN VIEW OF THESE FACTS, IT IS CLEAR THAT THE APPELLANT HAD FURNISHED INACCURATE P ARTICULARS OF INCOME. SO FAR AS THE ARGUMENT THAT THE ADDITION SUSTAINED BY THE HONBLE ITAT WAS BASED ON ESTIMATION IS CONCERNED, SUFFICE TO SAY THAT MERELY BECAUSE INCOME HAS BEEN DETERMINED ON THE BA SIS OF ESTIMATE IT CANNOT BE SAID THAT THERE WAS NO CONCEA LMENT. DETERMINATION OF INCOME BY WAY OF ESTIMATION IS ALS O A LEGALLY VALID METHOD OF ASSESSMENT OF INCOME. IN VIEW OF TH ESE FACTS, I DO NOT FIND ANY REASON TO INTERFERE WITH THE ORDER OF THE AO. 4. THE LD. A/R FOR THE ASSESSEE SUBMITTED THAT THER E IS NO DISPUTE AS TO THE FACT THAT IN COURSE OF SURVEY EXCESS STOCK WAS FOUN D. THE ASSESSEE OFFERED SUCH EXCESS STOCK IN COURSE OF SURVEY. HOWEVER THE AMOUN T OF EXCESS STOCK DETERMINED IN SURVEY WAS INCORRECT. THIS WAS BECAUS E THE BOOK STOCK HAS BEEN WRONGLY ARRIVED AT THE TIME OF THE SURVEY AT A LESS ER FIGURE. THEREFORE AFTER CORRECTING THE VARIOUS MISTAKES IN ARRIVING AT THE BOOK STOCK AT THE TIME OF SURVEY, ASSESSEE WORKED OUT THE CORRECT BOOK STOCK AT RS. 2,25,14,295/- AND THE DIFFERENCE BETWEEN SUCH BOOK STOCK AND THE VALU E OF PHYSICAL STOCK ARRIVED ITA NO. 792/JP/13 SHRI JEWELLERY MART, JAIPUR VS. DCIT, CIRCLE-2, JAI PUR 5 AT RS. 56,49,925/- WAS OFFERED FOR TAX. THE CIT(A) ACCEPTED THE BOOK STOCK AS ARRIVED BY THE ASSESSEE EXCEPT THAT HE ADOPTED G.P RATE OF 8.80% AS AGAINST G.P RATE OF 10% APPLIED BY THE ASSESSEE TO ARRIVE AT TH E BOOK STOCK OF M/S SHRI JEWELLERY MART. THIS ITSELF ACCOUNTS FOR A DIFFERE NCE OF RS.3,69,203/-. ULTIMATELY AFTER CONSIDERING THE OTHER CONTENTIONS THE CIT(A) UPHELD AN ADDITION OF RS.2,16,426/- ON ACCOUNT OF EXCESS STOC K FOUND OVER AND ABOVE THAT SURRENDERED BY THE ASSESSEE. THUS THE ADDITION ULTI MATELY CONFIRMED BY CIT(A) IS ON ACCOUNT OF APPLICATION OF G.P RATE OF 8.80% A S AGAINST 10 % APPLIED BY THE ASSESSEE WHICH IS THE G.P RATE DECLARED BY THE ASSE SSEE AT 10.36 % IN THE YEAR UNDER CONSIDERATION. 4.1 THE HONBLE ITAT AFTER CONSIDERING THE ENTIRET Y OF FACTS AT PAGE 26 OF ITS ORDER HAS OBSERVED THAT EXCESS STOCK AS PER THE DEP ARTMENT IS RS.1,47,75,188/- . THIS WAS EXPLAINED BY WAY OF STOCK AS PER BOOKS T AKEN LESS BY RS.41,01,457/- AND THE EXCESS STOCK SURRENDERED IN THE RETURN RS.5 6,49,928/- TOTALING TO RS.97,51,387/- LEAVING A DIFFERENCE OF RS.50,23,801 /-. THIS DIFFERENCE IS EXPLAINED ON ACCOUNT OF ADJUSTMENT OF PURCHASES LES S SALES AMOUNTING TO RS.51,58,383/-, THUS, THERE IS NO EXCESS STOCK CONS IDERING THE SURRENDER MADE RATHER THERE IS A SHORT STOCK TO THE EXTENT OF RS.1 ,34,582/-. HOWEVER, THE HONBLE ITAT FURTHER OBSERVED THAT THERE IS A CASH PAYMENT OF RS. 1 LACS WHICH IS NOT INCLUDED IN THE STOCK AND SALE OF A ITEM BY CREDIT MEMO IS LESS THAN RS.1.01 LACS. THEREFORE, ON AN ESTIMATED BASIS, THE TRIBUNAL CONFIRMED AN ADDITION OF RS.5 LACS. 4.2 FROM THE ABOVE FACTS IT IS EVIDENT THAT ASSESS EE HAS OFFERED THE EXCESS STOCK FOUND IN COURSE OF SURVEY WHICH IS DETERMINED ON THE BASIS OF THE EVIDENCE ON RECORD. EVEN THE HONBLE ITAT HAS ACCEP TED THAT EXCESS STOCK SO OFFERED BY THE ASSESSEE IS MORE BY RS.1,34,582/- BU T STILL CONSIDERING THE ENTIRETY OF THE FACTS ADDITION WAS CONFIRMED AT RS. 5 LACS. THE EXPLANATION GIVEN BY THE ASSESSEE TO ARRIVE AT THE EXCESS STOCK WAS N OT FOUND TO BE FALSE OR UNSUBSTANTIATED. FURTHER THERE IS DIFFERENCE OF OP INION IN THE QUANTUM OF ADDITION MADE BY CIT(A) AND THAT MADE BY HONBLE IT AT. THE ADDITION MADE ON SUCH DIFFERENCE OF OPINION AS WELL AS ON ESTIMATION DO NOT WARRANT LEVY OF PENALTY U/S 271(1)(C) AS HELD IN THE FOLLOWING CASE S : DURGA KAMAL RICE MILLS VS. CIT 265 ITR 25 (CAL.) ITA NO. 792/JP/13 SHRI JEWELLERY MART, JAIPUR VS. DCIT, CIRCLE-2, JAI PUR 6 CIT VS SOOD HARVESTAR 304 ITR 279 (P&H) CIT V/S CALCUTTA CREDIT CORPORATION 166 ITR 29 (CAL ) CIT V/S JAGBANDHU SEN PODDAR 133 ITR 156 (CAL) SHIV LAL TAK V. CIT 251 ITR 353 (RAJ.) CIT VS SANGUR VANASPATI MILLS LTD 303 ITR 53 (P & H ) HARIGOPAL SINGH V. CIT 258 ITR 85 (PUNJ. & HAR.) CIT V. SURESH KUMAR BANSAL 254 ITR 130 (PUNJ. & HAR .) CIT V. RAVAIL SINGH & COMMISSION. 254 ITR 191 (PUNJ . & HAR.) IN VIEW OF THE ABOVE FACTS AND POSITION OF LAW, THE LD. A/R REQUESTED THAT THE PENALTY LEVIED BY THE AO U/S 271(1)(C) IS UNCALLED FOR AND BE DELETED. 4.3 ON THE OTHER HAND, THE LD. D/R SUPPORTED THE OR DERS OF THE AUTHORITIES BELOW AND REQUESTED TO CONFIRM THE ORDER OF LD. CIT (A). 4.4 WE HAVE HEARD RIVAL CONTENTIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE CO-ORDINATE BENCH IN THE QUANTUM PROC EEDINGS HAS CONFIRMED THE ADDITION OF RS. 5,00,000/- IN THE HANDS OF THE APPE LLANT AND THE SUBJECT PENALTY OF RS. 1,68,300/- HAS BEEN LEVIED THEREAFTER ON THE SAID ADDITION OF RS 5,00,000. THE LOW AUTHORITIES HAVE RELIED HEAVILY ON THE DECI SION OF THE CO-ORDINATE BENCH IN QUANTUM PROCEEDINGS HENCE IT WOULD BE RELE VANT TO REFER TO THE RELEVANT FINDINGS OF THE CO-ORDINATE BENCH. 4.5 WHILE DECIDING THE MATTER IN QUANTUM PROCEEDING S, THE CO-ORDINATE BENCH HAS DRAWN REFERENCE TO THE DECISION OF HONBL E RAJASTHAN HIGH COURT IN THE CASE OF RAJENDRA PRASAD SUBHASH CHAND VS. UNIO N OF INDIA 237 ITR 382 WHERE IT WAS HELD AS FOLLOWS: WHERE EXCESS STOCK WAS FOUND DURING THE COURSE OF SURVEY, IT WOULD DEPEND ON THE NATURE OF EXPLANATION SUBMITTED BY THE ASSESSE E AND THE SATISFACTION OF THE AO ABOUT THE ACCEPTABILITY OF THE SAME WHICH IS THE SINE QUA NON FOR INVOKING THE PROVISIONS CONTAINED IN SECTION 69, 69A, 69B AN D 69C OF THE ACT. IT IS IN THIS CONTEXT THAT THE SATISFACTION OF THE AO ABOUT THE CORRECTNESS AND COMPLETENESS OF BOOKS OF ACCOUNTS MAINTAINED BY TH E ASSESSEE AS PER PROVISIONS CONTAINED IN SECTION 145 OF THE ACT CO-R ELATES WITH THE SATISFACTION OF THE AO ARRIVED AT UNDER SECTION 69,69A,69B AND 69C OF THE ACT. ITA NO. 792/JP/13 SHRI JEWELLERY MART, JAIPUR VS. DCIT, CIRCLE-2, JAI PUR 7 4.6 TAKING INTO CONSIDERATION THE DECISION OF THE H ONBLE RAJASTHAN HIGH COURT, THE CO-ORDINATE BENCH HAS GIVEN ITS FINDINGS WHICH ARE CONTAINED AT PARA 2.28 WHICH IS REPRODUCED AS UNDER:- HENCE WE HAVE TO CONSIDER ALL THE FACTS IN PROPER P ERSPECTIVE. WE ARE NOT IN AGREEMENT WITH LD. CIT(A) THAT BOOK STOC K TAKEN AT 8.8% SHOULD BE TAKEN TO ASCERTAIN THE EXCESS STOCK AND HENCE T HE ADDITION TO THE EXTENT OF RS.2,16,426/- IS TO BE UPHELD. THE REVEN UE AT THE TIME OF SURVEY ASCERTAINED THE EXCESS STOCK AT RS. 1,31,41, 879/-. WHILE CONSIDERING SUCH EXCESS STOCK THE REVENUE HAS NOT I NCLUDED SILVER STOCK TO THE EXTENT OF RS. 16,34,309/- AS THE VALUE WAS N OT ADOPTED IN RESPECT OF SILVER BUT WEIGHT WAS TAKEN. HENCE THE REVENUE WHILE CONFRONTING THE ASSESSEE FOR THE PURPOSE OF SURRENDER FROM THE ASSE SSEE TOOK THE VALUE OF STOCK BY PHYSICAL INFORMATION BY A LESSER FIGURE. HENCE, EXCESS STOCK AS PER REVENUE AFTER INCLUDING SILVER ARTICLES WILL BE AS UNDER: EXCESS STOCK BY TAKING BOOK VALUE OF STOCK RS.1,31,41,879/- AT RS. 89,03,879/- VALUE OF SILVER JEWELLERY NOT INCLUDED RS. 16,34,309/- RS.1 ,47,75,188/- WE HAVE NOTICED IN EARLIER PARAS THAT STOCK AS PER BOOKS WAS TAKEN LESS BY RS. 41,01,457/-. THE ASSESSEE HAS SURRENDERED E XCESS STOCK OF RS.56,49,928/-. THUS THE ASSESSEES EXPLANATION IS TO THE EXTENT OF RS. 97,51,387/- IS ACCEPTABLE. HENCE, BALANCE DIFFEREN CE TO BE EXPLAINED WILL BE RS. 1,47,75,188/- MINUS RS. 97,51,387/- I.E. RS. 50,23,801/-. FOR THE BALANCE THE ASSESSEE HAS GIVEN EXPLANATION OF ADJUS TMENT OF PURCHASE TO THE EXTENT OF RS. 54,22,148/- AND SALES TO THE EXTE NT OF RS. 2,63,765/-. THE DIFFERENCE ADJUSTMENT AS SOUGHT BY ASSESSEE IS RS. 54,22,148/- MINUS RS. 2,63,765/-I.E. RS.51,58,383/-. HENCE AD JUSTMENT SOUGHT IS LESS BY RS. 51,58,383/- MINUS RS. 50,23,801/- I.E. RS. 1 ,34,582/-. WE HAVE MENTIONED THAT SALES HAVE BEEN REDUCED FOR ADJUSTM ENT AND THE FIGURE OF SALES AT RS.2,63,765/- CAN BE ACCEPTED. THERE I S CASH PAYMENT OF RS. 1.00 LAC WHICH IS NOT INCLUDED IN THE STOCK. SALE OF AN ITEM AFTER 02-02- 2005 BY CREDIT MEMO 1647 IS LESS THAN RS. 1.01 LACS . IT IS ALSO NOT ASCERTAINABLE THAT ALL ITEMS OF PURCHASES WHICH HAS BEEN SOUGHT FOR ADJUSTMENT WERE VERIFIABLE FROM THE STOCK INVENTORY PREPARED AT THE TIME ITA NO. 792/JP/13 SHRI JEWELLERY MART, JAIPUR VS. DCIT, CIRCLE-2, JAI PUR 8 OF SURVEY. THERE ARE PURCHASES FROM PARTIES WHICH W ERE INDULGING IN ISSUING BOGUS BILLS. ONE OF THE PARTNER ADMITTED T O BE INDULGING IN SALES AND PURCHASES OUTSIDE THE BOOKS OF ACCOUNT. IT IS TRUE THAT EXCESS STOCK SURRENDER INCLUDE THE PROFIT ARISING FROM THE BUSIN ESS DONE OUTSIDE THE BOOKS OF ACCOUNT TILL THE DATE OF SURVEY. THE ASSE SSEE HAS GIVEN EXPLANATION FOR THE DOCUMENTS BUT THE REVENUE HAS N OT MADE ANY EFFORT TO REBUT THE EXPLANATION. HENCE, WE FEEL THAT THE BOOKS OF ACCOUNT ARE TO BE REJECTED AND AN ADDITION OF RS. 5.00 LACS IS TO BE MADE ON ACCOUNT OF LESSER SALE ADJUSTMENT, CASH PAID OUTSIDE THE BOOKS OF ACCOUNT FOR BANGLES FROM ONE SHRI SONI OF CHENNAI, ON ACCOUNT O F DOCUMENTS FOUND AND ON ACCOUNT OF NON-VERIFIABLE PURCHASES. THE LD . CIT(A) HAS ALREADY CONFIRMED THE ADDITION OF RS. 2,16,426/- AND HENCE BALANCE TO BE ADDED WILL BE RS. 2,83,574/-. HENCE THE APPEAL OF THE RE VENUE IS PARTLY ALLOWED WHILE THE CROSS OBJECTION OF THE ASSESSEE IS DISMIS SED. 4.7 IN LIGHT OF CLEAR CUT FINDING OF THE COORDINAT E BENCH (SUPRA), WE AGREE WITH THE CONTENTION OF THE LD AR THAT ASSESSEE HAS OFFERED THE EXCESS STOCK FOUND IN COURSE OF SURVEY AND EXCESS STOCK SO OFFER ED BY THE ASSESSEE IS MORE BY RS.1,34,582/-. HENCE, WHERE STOCK HAS ALREADY B EEN OFFERED TO TAX AND SUCH STOCK IS MORE THAT WHAT HAS BEEN FOUND DURING THE C OURSE OF SURVEY, THE SAME CANNOT BE THE BASIS FOR LEVY OF PENALTY. HOWEVER, REGARDING CASH PAID OUTSIDE THE BOOKS OF ACCOUNT FOR BANGLES FROM ONE SHRI SON I OF CHENNAI, ON ACCOUNT OF DOCUMENTS FOUND AND ON ACCOUNT OF NON-VERIFIABLE PU RCHASES, THE LD AR HAS SUBMITTED THAT FOR ALL THESE REASONS, EXCESS STOCK WAS OFFERED IN THE RETURN OF INCOME AND THE SAID EXPLANATION OF THE ASSESSEE HAS NOT BEEN FOUND TO BE FALSE OR NOT BONAFIDE OR THAT MATERIAL FACTS IN RELATION THERETO WERE NOT FURNISHED. WE ARE UNABLE TO ACCEDE TO THE SAID EXPLANATION OF THE LD AR. THE COORDINATE BENCH HAS EXAMINED THE MATTER AT LENGTH AND THEREAF TER HAS GIVEN ITS FINDINGS AND THE SAID FINDINGS DOESNT CORRELATE TO THE CLAI M OF THE LD AR. WE ARE THEREFORE OF THE VIEW THAT IN RESPECT OF MATTERS OT HER THAN EXCESS STOCK, THE FINDINGS OF THE COORDINATE BENCH ARE CLEAR THAT THE SE ARE THE ITEMS OF DISALLOWANCE IN ADDITION TO THE EXCESS STOCK AND IN RESPECT OF WHICH, THE ASSESSEE HAS FAILED TO PROVIDE APPROPRIATE EXPLANAT ION. FURTHER, WE DO NOT AGREE WITH THE CONTENTION OF THE LD AR THAT THERE W AS DIFFERENCE OF OPINION IN THE QUANTUM OF ADDITION MADE BY CIT(A) AND THAT MAD E BY HONBLE ITAT AND ITA NO. 792/JP/13 SHRI JEWELLERY MART, JAIPUR VS. DCIT, CIRCLE-2, JAI PUR 9 THE ADDITION MADE ON SUCH DIFFERENCE OF OPINION AS WELL AS ON ESTIMATION DO NOT WARRANT LEVY OF PENALTY U/S 271(1)(C) OF THE AC T. AS WE HAVE HELD EARLIER, THE DISALLOWANCES ARE IN RESPECT OF SPECIFIC ITEMS WHICH HAVE BEEN CONFIRMED BY THE COORDINATE BENCH AND INSTEAD OF QUANTIFYING EACH OF THE DISALLOWANCES SEPARATELY, ALL THE DISALLOWANCES HAVE BEEN CLUBBED TOGETHER. 4.9 IN THE ENTIRETY OF FACTS AND CIRCUMSTANCES OF THE CASE, LEVY OF PENALTY IS CONFIRMED. HENCE, GROUND OF APPEAL IS DISMISSED IN THE RESULT, APPEAL OF THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 16 /05/ 2016. SD/- SD/- VKJ-IH-RKSYKUH FOE FLAG ;KNO (R.P.TOLANI) (VIKRAM SINGH YADAV) U;KF;D LNL;@ JUDICIAL MEMBER YS[KK LNL;@ ACCOUNTANT MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 16/05/2016 PILLAI VKNS'K DH IZFRFYFI VXZSFKR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- SHRI JEWELLERY MART, JAIPUR. 2. IZR;FKHZ@ THE RESPONDENT- THE DCIT, CIRCLE-2, JAIPUR. 3. VK;DJ VK;QDR@ CIT I, JAIPUR 4. VK;DJ VK;QDRVIHY@ THE CIT(A)-I, JAIPUR 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR 6. XKMZ QKBZY@ GUARD FILE (ITA NO. 792/JP/2013) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASST. REGISTRAR ITA NO. 792/JP/13 SHRI JEWELLERY MART, JAIPUR VS. DCIT, CIRCLE-2, JAI PUR 10