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2018 (9) TMI 1775 - AT - Income TaxAddition based on personal diary found at the time of survey u/s 133A - Held that:- There is no justification of addition on the basis of assumption of deletion of two digits on account of expenditure as recorded in MCS-16 as revealed or that the assessee has failed to show any evidence that the figures recorded therein or have been suppressed by only one digit during the survey proceedings from assessee’s business place. Further more when the expenditure was made in the previous earlier year not relevant to this assessment year, the same cannot be added to the income of the assessee as not explained. We therefore delete the addition made by the authorities below. Addition on account of remuneration paid to the goldsmith on account of making charges - Held that:- As perused the materials available on record. We find substance in the submissions made by the assessee’s representative. No cogent reason has been assigned by the authorities below while making addition on estimate basis on the making charge of the gold as mentioned therein. We thus delete the order passed by the authorities below in making addition on account of contractual remuneration paid to the goldsmith. Discrepancy in stock addition or the gross profit embedded considered for addition - Held that:- As relying on M/S. SUBARNA RICE MILL VERSUS INCOME-TAX OFFICER, WD-2 (3) , BURDWAN [2015 (7) TMI 522 - ITAT KOLKATA] we observe that only the gross profit can be added to the income of the assessee and not the entire undisclosed stock. We thus delete the addition made by the authorities below. addition on account of excess stock of silver found at the time of survey treating the same as unexplained u/s 69 - Held that:- We find from the recording of the order of the ld. AO that in the assessment year the difference has been admitted by the assessee in his submission furnished before him on 30.11.2009. Such submissions was made on this premise that the difference arose because the assessee was valuing her stock at cost while departmental valuer valued this stock at market rate. However since there were no supporting documents how much quantity of silver was purchased and at what rate and how much silver was in stock and at what rate in the absence of which the contentions made by the asessee was not accepted by the CIT(A) and an addition of ₹ 3,40,967/- was confirmed. We have however not appreciated the stand taken by the ld. CIT(A) relying upon the observations made herein above in respect of ground no..8 and 9 we delete the said addition of ₹ 3,40,967/- and remand this issue to the file of the AO in view of the above gross profit declared by the assessee which in our considered view will be the undisclosed purchases as shown by the assessee and same is admitted by the revenue. In our opinion reasonable gross profit rate will be 10% for computing the profit of the assessee. Addition as bogus sundry creditors and unexplained investment from undisclosed sources - Held that:- Without considering the assessee’s previous years record and reconciliation statement produced by the assessee the AO added a sum of ₹ 17,36,816.39 as bogus sundry creditors and ₹ 10,24,258.25 as unexplained investment to the total income of the assessee. However, the difference between closing balance of the assessee’s books of account and as per the books of account of M/s. Laxmi Narayan Bullion was considered by the ld.CIT(A) and added ₹ 1062480/- (1736816 – 674336) to the total income of the assessee. We find that in both the cases when there is a discrepancy in the accounts of the assessee and with the statements made by the assessee that no cash payment has been made by the assessee to M/s Laxmi Narayan Bullion the AO ought to have done enquiry on this issue by issuing summons to the party concerned for verification of the controversy involved in the issue. In the absence of which addition as made by the AO and confirmed by the ld. CIT(A) is not called for - delete the addition as confirmed by the CIT(A) on account of bogus sundry creditors and on account of unexplained investment. Revision u/s 263 - Held that:- As find from the order passed by the CIT that he has shifted the duties and obligations on the AO while setting aside the order passed by him. It is a well settled law that in the event the CIT finds that the order is erroneous on the ground of lack of enquiry and /or investigations on the part of the AO on the issue involved then it is the duty of the ld. CIT to conduct an enquiry into the matter and upon enquiry and examination of evidence to come to a conclusion upon specific finding that enquiry conducted by the AO is inadequate and the order passed by the AO is erroneous and prejudicial to the interest of the revenue. Such an enquiry has not been done by the CIT(A) to prove the order passed by the AO erroneous and prejudicial to the interest of the revenue instead he has shifted the ball to the AO’s court which in our considered view is not permissible under law. - Decided in favour of assessee
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