TMI Blog2014 (10) TMI 546X X X X Extracts X X X X X X X X Extracts X X X X ..... bunal is upheld as the issue is based on finding of facts – Decided against assessee. Addition corresponding to GP of sale of gold jewellery – Held that:- During search operation, shortage in the stock of gold was found - The explanation given by the assessee is that the assessee and M/s SRV Enterprises, Meerut, have close business connection and said firm was 100% export unit - M/s SRV Enterprises has made entry in their stock register pertaining to the jewelry received from the assessee's firm - One of the partner has confirmed the same, but another partner who was ignorant about the event has denied the knowledge of the transaction, but fact remains that the stock was duly reflected in the books of M/s SRV Enterprises – there is no reason to interfere with the order passed by the Tribunal – the order of the Tribunal is upheld – Decided against revenue. Addition of pawning business – Held that:- During the course of search, a bunch of loose papers was seized - they were not engaged in the pawning business - only bunch of loose papers was found, the person concerned were examined by the AO and they have denied any transaction with the assessee - no material was found pertain ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ; 2,32,417/- and ₹ 1,29,239/- by not only ignoring the provisions of Sec. 69 of the I.T. Act but also judgment cited from the bar coupled with the fact that during search neither any unaccounted for assets were found nor any documents were found suggesting carrying on business by the appellant firm outside its accounts books? (iv).Whether on the true and correct interpretation of Chapter XIV and the relevant provisions contained therein the Tribunal was legally justified in upholding the addition with reference to the deposits of Gold made by Mrs. Nutan Verma and Sh. Jai Prakash Agarwal thereby ignoring the provisions of Sec.132(4A) of the Income Tax Act also? 3. On 23.2.2007, a coordinate Bench has admitted the Department's appeal on the following substantial questions of law:- (1). Whether on the facts and in the circumstances of the case, the Tribunal was justified in deleting the addition corresponding the G.P. on sales of 7120 gms. of gold jewelry, ignoring the fact that the assessee failed to explain the short stock of jewelry at the time of search and further during the course of assessment proceedings? (2). Whether on the facts and in the circumstanc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... A.O. was correct because it represented the sale against the respective dates and the A.O. has rightly estimated the profit. 9. After hearing both the parties and on perusal of material available on record, it appears that the figures were mentioned as 74,000/- and 2,32,417/- against the dates of 9.4.1993 and 10.4.1993 represented figures in rupees and the same cannot be taken as stock entry. Details in terms of weight, date and amount is mentioned. The total transaction comes to ₹ 5,16,956/- as mentioned in the orders of the lower authorities. The assessee has stated that this is regarding stock checking of ornaments on various dates from different safe almiras, so it was rightly presumed that it relates to sale, out side the books. Moreover, it is a finding of fact, hence we declined to interfere with the order of the Tribunal pertaining to the grievance of the assessee. 10. The next grievance of the assessee is related to the addition with reference to the deposits of Gold by Mrs. Nutan Verma; and Sri Jai Prakash Agarwal. During the course of search and seizure operation, 41 entires in the name of customers were found and it was claimed that they had deposited old g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the stock of gold was found. The explanation given by the assessee is that the assessee and M/s SRV Enterprises, Meerut, have close business connection and said firm was 100% export unit. On 10.9.1999, one of the partner of M/s SRV Enterprises come to the shop of the assessee at about 08:00 P.M., just before the closing of the shop, and the goods were given to the M/s SRV Enterprises without recording the same in the books of account. Next morning there was a search so, no entry was made by the assessee. 18. By considering the totality of the facts and circumstances of the case, it appears that M/s SRV Enterprises has made entry in their stock register pertaining to the jewelry received from the assessee's firm. One of the partner has confirmed the same, but another partner who was ignorant about the said event has denied the knowledge of the said transaction, but fact remains that the said stock was duly reflected in the books of M/s SRV Enterprises. When it is so then we find no reason to interfere with the order passed by the Tribunal, the same is hereby sustained along-with the reasons mentioned therein. 19. Next grievance of the Department is pertaining to the add ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e size, design, weight and advance etc. If the papers were torn off it means that the transaction is confirmed. If the paper was left over in the design book then this can be treated only as a rough work which could not be converted into actual transaction. Nearly 1500 out of 2000 pages were not available in the design book, it means that the same were torn off. 25. After recording the statement of the assessee, the A.O. made an addition of ₹ 13,55,466/- as undisclosed income on this count consisting of estimated labour charges of ₹ 2,41,838/-; the profit is ₹ 8,13,628/-; and the initial unexplained investment estimated @ ₹ 3 lakhs. However, the Tribunal has deleted the addition by observing that all the 81 persons whose names recorded in the books were produced before the A.O. and on oath they supported the claim/statement made by the assessee. 26. When persons concerned were examined by the A.O. and they confirmed on oath the claim made by the assessee, then we find no reason to interfere with the order passed by the Tribunal, the same is hereby sustained along-with the reasons mentioned herein. 27. It may be mentioned that all the grievances in b ..... X X X X Extracts X X X X X X X X Extracts X X X X
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