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2022 (7) TMI 536 - AT - Income TaxAddition on account of excess stock of jewellery found during survey - addition u/s 69A and not under Income from Business - HELD THAT:- On a consideration of the same on going through the PMGKY Scheme alongwith the Circular No. 2 and 9 of 2017 which clarify the Scheme considering the facts of the peculiar case, we find that in the facts of the present case, the AO incorrectly invoked Section 69A of the Act and the ld. CIT(A) on facts was not justified to sustain the addition so made. In the facts of the present case, accordingly, we are of the view that the order cannot be sustained. We have duly taken into consideration the facts as available in the respective orders of the ITAT. It is seen that the assessee is dealing in gold and silver jewellery etc. and the discrepancies in the silver jewellery cannot be arbitrarily said to be from an unexplained source as no such fact or allegation has either been made in the Survey or referred to by the AO. The discrepancy in the silver stock was in the regular course of the business of the assessee. We have taken into consideration the Surrender Letter dated 22.03.2017 filed by the assessee. It is a matter of fact that the surrender has been honoured and has not been retracted by the assessee. On a careful reading of the specific reasons for surrendering the income wherein very clearly the assessee states that; "it is submitted that certain discrepancies were observed related to cash deposit/income etc. However, is, order to by peace of mind and to avoid any litigation and is order to settle the group cases of the persons covered " - The wordings are very clear and categoric. We have taken into consideration the PMGKY Scheme 2016 and have also taken into consideration two Circulars which clarify those i.e. Circular No. 2/2017 and 9/2017. We have also taken into consideration the specific questions put to Shri Sachin Aggarwal, Partner. We have taken into consideration the Circular No. 2/2017 and 9/2017 and Paper Book page 59. On a careful consideration of the facts and evidences on record, we find that the addition cannot be sustained. Accordingly, on a consideration of facts on record, the specific Scheme, Surrender letter and case law relied upon, we are of the view that the addition cannot be sustained. Allowing the appeal of the assessee, the addition is directed to be deleted. Appeal of assessee allowed.
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