TMI Blog1992 (10) TMI 119X X X X Extracts X X X X X X X X Extracts X X X X ..... e 1986, the said Shri Mittal sent a Valuation Report to the A.O. (pages 9 and 10) whereby he recalculated the weight at a figure of 104.642 MT. This figure underwent a further change in March 1989 when Shri Mittal sent another Valuation Report to the ITO revising the weight to 97.117 MT. The AO in the subsequent assessment framed on22-3-1990, however, adopted a higher figure of 110.130 MT. The aforesaid figures came to be added another 10 MT which the assessee explained was its stock lying in godown located at Ghas Ki Mandi, Agra, which was under the control and possession of the sister concern namely, M/s. Pramod Kumar Vinod Kumar. As against the aforesaid figures, the stock as per the stock register maintained by the assessee was 77.490 which included 10 MT stated to be lying at the Ghas Ki Mandi godown. 3. On being asked to explain, the aforesaid figures, the assessee made detailed submissions which can be summarised as under :-- (i) That stock found physically at the time of search was less than that recorded in the stock register. (ii) That Shri S. K. Mittal was not an Approved Valuer, vis-a-vis the items in question. (iii) That the valuation report drawn up by him suf ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) That the raid on30-5-1986was mainly in the case of the sister concern, namely, M/s. Pramod Kumar Vinod Kumar and the search at the assessee's premises was 'consequential'. (ii) That the dispute was only about the weight and not the quantity. (iii) That provisions of section 145(2) were not applicable there being no adverse reference to the other items of the trading account such as purchases. sales, etc. (iv) That trading results had been accepted in the preceding assessment year and the subsequent assessment years viz. 3.2 per cent for 86-87 in 143(3) assessment completed after the raid and 5 per cent in Assessment Year 1988-89. In comparison, the rate for Assessment Year in appeal was 4 per cent. (v) That as a result of the addition, the effective GP rate for Assessment Year under appeal was 10.7 per cent which was not normal in the assessee's line of business. (vi) That the stock was physically weighed by the authorised officers, assisted by Shri S. K. Mittal on30-5-86and the weight stated in the inventory should be adopted rather than any other figure subsequently worked out. 7. In support of his arguments, the learned counsel placed reliance on the decision of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the presence of the authorised officers and Shri Mittal and there were the Dharma Kanta receipts to the same effect. This factual assertion has not been challenged by the Departmental Representative. 9. In the final analysis and on the facts of the case, we hold that the addition of Rs. 1,74,956 was not warranted and the same is hereby deleted. 10. The second issue pertains to the addition vis-a-vis the stock stated to be lying in a godown located at Ghas Ki Mandi,Agraand stated to be belonging to the assessee. In the course of proceedings before the tax authorities, it was stated on behalf of the assessee that the said godown although belonging to the sister concern, M/s. Pramod Kumar Vinod Kumar, yet the stock placed in the said godown belonged to the assessee. The aforesaid explanation was rejected by the AO on the ground that since the godown belonged to the sister concern, the presumption was that the stock placed therein also belonged to the said sister concern. He also took note of the fact that the stock register of the assessee did not indicate the place at which any particular item of stock was lying. In the final analysis he made an addition of Rs. 69,855 being the v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4. The AO, however, proceeded to examine the bank accounts of the various depositors and found that, on certain dates, deposits had been made and which he asked the assessee to explain and substantiate. Being dissatisfied with the reply tendered, he, in the ultimate analysis, proceeded to make the impugned addition vis-a-vis Smt. Abhilasha Jain, Kumari Sangeeta Jain, Smt. Kamini Jain and Smt. Rukhmani Devi Jain. As regards Smt. Alka Jain, the AO noted that she was a partner of the firm and had deposited a sum of Rs. 4,500 on24-4-1986. On being asked to explain the source, it was submitted by the assessee's counsel that she had deposited the same by withdrawing a sum of Rs. 5,000 from the firm on8-2-1986. The explanation tendered was rejected on the ground that no nexus had been established between the amount withdrawn on8-2-1986and that deposited on24-6-86. The addition in respect of this amount was also made. As a consequence of the aforesaid addition of Rs. 2,33,000, the ITO disallowed interest paid amounting to Rs. 8,814. On further appeal, the CIT(Appeals) upheld the action of the A.O. observing further in the process :-- (i) That although the assessments of the depositors ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ceiving the aforesaid documents/evidence from the assessee did not raise any further queries although the assessee in a letter dated12-3-1990undertook to furnish further information or evidence if called for. In support of his arguments, the learned counsel placed reliance on the following decisions :-- (a) Sarogi Credit Corprn v. CIT [1976] 103 ITR 344 (Pat.) (b) Addl. CIT v. Bahri Bros. (P.) Ltd. [1985] 154 ITR 244 (Pat.) (c) CIT v. Orissa Corpn. (P.) Ltd. [1986] 159 ITR 78 (SC). 18. The learned Departmental Representative, on the other hand, supported the order passed by the CIT(Appeals) and the subsequent arguments advanced by him were a reiteration of the reasons recorded by the tax authorities in rejecting the view point canvassed on behalf of the assessee. 19. We have examined the rival submissions and have also perused the material on record to which our attention was invited by the parties. The decisions cited at the bar have also been duly considered. In our opinion, the assessee had duly discharged the onus which lay on it vis-a-vis the various cash credits by placing on record cogent and positive material in the shape of (i) confirmations, (ii) assessment orde ..... X X X X Extracts X X X X X X X X Extracts X X X X
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