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2015 (10) TMI 463 - ITAT AHMEDABADPenalty levied u/s.271(1)(c) - value of 485.26 carats of diamonds found and seized during the course of search on the mini-bus belonging to M/s. Patel Ambalal Hargovandas & Co., Angadia's in Mumbai - CIT(A) deleted the penalty - Held that:- The Assessee produced complete stock register and supporting documents in this regard and not only this, assessee was able to establish the correlation of diamonds seized in the course of search with the purchases made in the year relevant to assessment year 2003-04 and the return of income for assessment year 2003-04 was filed much before the date of search and in the audited financial statements of the years ended on 31-03-2003, 31-03-2004, 31-03-2005 and closing stock shown by assessee includes the stock seized. We further find that the valuation shown by assessee in accounts in respect of seized diamonds is ₹ 67,66,360/- which is almost at par with the valuation made by Department at ₹ 67,93,643/-. The opening stock and closing stock for the year 2003-04 was the same as there was no purchase and sale during the year at Mumbai office. There was only purchase and sale at Surat office. In view of these facts and circumstances, we are of the view that there are ample evidences which prove that the diamond seized are explained and purchased from disclosed sources as these are fully disclosed in the books of accounts. Accordingly, we accept the explanation of the assessee and the orders of the lower authorities on this issue are reversed. This issue of assessee's appeal is allowed on merits - no infirmity in the deletion of penalty by learned CIT(A) and the same is hereby confirmed - Decided in favour of assessee.
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