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2006 (1) TMI 204 - AT - Income TaxBlock Assessment - income from trading in gold and silver ornaments and also from job work - search and seizure operation - incriminating documents and books of account, and assets including cash, gold and silver ornaments were found and seized - Addition made on account of the value of the stock-in-trade - HELD THAT:- We are of the considered opinion that the observation of the learned CIT(A) that the assessee did not object during the course of such operation, is not correct, as the assessee had objected to it only during the period of suspension of search, when the provisions of s. 132(3) were in operation. This fact is evident from the above letter. But at the same time, we are of the opinion that there has been no flagrant violation of the principles of natural justice because-(1) the assessee did not object when the approved valuer was doing such a valuation, (2) the AO gave clear opportunity of hearing and of explanation, to the assessee, while dealing with the aspect of valuation of the impugned assets. Therefore, we cannot allow these grounds so as to set at naught the whole of the assessment order by declaring it a nullity. In the result, this ground stands dismissed. Addition made on account of the value of the stock-in-trade - The overwhelming pieces of evidence in the form of job register which is maintained for quite long time now and the respective bills have to be given credence over the statements. Therefore, we are of the opinion that the action of the learned CIT(A) is quite correct and justified. We dismiss ground No. (ii) of Department's appeal. Stock-in-trade of silver - In our opinion, the assessee had made such a claim by writing to the ADIT, as stated above. The books remained incomplete due to sickness of the assessee. This claim of the assessee is also not unnatural, it may be correct also, but the AO has not cared to look into this aspect. The most important argument of the learned Authorised Representative seems to be with regard to the affidavit of Shri Ganesh Kumar, which was not at all controverted by the AO. In these circumstances, we are of the considered opinion that this issue has to be redecided by meeting each and every objection of the assessee. Therefore, we restore this issue to the file of the AO with the direction to decide the same in the light of our above observations. This ground is allowed for statistical purposes. Gold ornaments found during the course of search - We are of the considered opinion that the written document has to prevail over the oral statement made during search. The 'Will' in question was found during search from the possession of the assessee, therefore, it has to be accepted as a valid document and has to be relied upon. It is also true that the written evidence has to prevail over the oral statement. In this case the existence of 'Will' has not been rebutted by the Department. The only statement of denial regarding this Will by the wife of the assessee cannot really wipe out the evidence given by this Will. We also agree with the learned Authorised Representative that in view of CBDT circular possession of 500 gms. of gold ornaments for each married lady has to be considered as an explained possession and so is the case in relation to the men and unmarried daughter except the amount of gold ornaments. In addition, the above affidavit of respective owners of gold ornaments as referred to the above, which is uncontroverted by the Department have to be given due weight. With these observations this issue is restored to the file of the AO to look into the matter including that of purity as is envisaged in ground No. 7.2 of the appeal and to find out if any gold remained unexplained therein. If any gold ornaments remained unexplained even after following our above observation that has to be added in the hands of the assessee. Therefore, the ground taken by the assessee in this regard is allowed for statistical purposes and ground No. 1 taken by the Department is dismissed. All these grounds stand disposed of along with the grounds of appeal of the assessee because these grounds are interconnected; ground No. 1 of the Department's appeal stands dismissed. ground No. 2 is allowed for statistical purposes and ground Nos. 3, 4 and 5 are dismissed. In the result, both the appeals are partly allowed.
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