TMI Blog1992 (2) TMI 161X X X X Extracts X X X X X X X X Extracts X X X X ..... gs. valued at Rs. 3,38,890 @ Rs. 3,450 per kg. and to this was added an amount of Rs. 4,550 (Rs. 2,530 + Rs. 1,920 item No. 68 and 70) and thus an addition of Rs. 3,43,340 was proposed. However, in the assessment, the addition made was of an amount of Rs. 2,29,630 taking the excess stock of silver at 98.653 kg on the basis that the actual weight of silver and silver ornamentes found was 335.534 kgs. There were five items aggregating to 87.040 kgs., the details being as follows: (1) Silver received from M/s B.R. Co. on 8-5-1984 28.348 kgs. (2) Silver ornaments from M/s Naveen Abhushan Bhander, Jpr. 18.582 kgs. (3) Silver ornaments purchased from various customers 11.693 kgs. (4) Customerss' ornaments received for polising repair, etc. 6.817 kgs. (5) Old ornaments of Smt. Nathi Devi 21.600 kgs. Total 87.040 kgs The ITO, after giving allowance for alloy, lead and thread worked out the discrepancy at 75.686 kgs. The ITO did not accept the assessee's explanations with regard to these items and, therefore, made the additions. 3. However, in appeal, the additions were deleted by the le ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by him, but as mentioned in the order of the learned Commissioner(A) Shri Vijay Prakash Khandaka, the Karta of the assessee-HUF, had sustained a head injury when he was an infant and in 1984 he was under the treatment of Dr. R.G. Thanvi, Neuro Psychiatrist and was also under the treatment of Dr. J.N. Vyas, Professor and Head, Department of Psychiatry SMS Medical College, Jaipur and Superintendent, Psychiatry Centre, Jaipur. The assessee had filed before the learned Commissioner(A), the patient tickets dt. 21st Jan., 1984, 25th March, 1984 and 2nd May, 1984. At pages 8 to 10 of the assessee's paper book are given some bills on which incorrect dates were put by Shri Vijay Prakash which shows his mental imbalance. He had also undergone treatment by Shri Swami Laxmiram Pharmacy, Sanganeri Gate, Behind Anaj Mandi, Jaipur in March, 1984. He also calculated sale prices wrongly in a number of bills. These details at page 2 of assessee's written submissions remain uncontroverted. These circumstances and the factum of treatment had been duly brought to the notice of ITO vide detailed letter dt. 1st July, 1984 of the assessee but it does not appear that the statement of Shri Vijay Prakash Kha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee in the books of M/s Naveen Abhushan Bhandar as well as the account of M/s Naveen Abhushan Bhandar in the books of the assessee. The said evidence cannot be said to have been controverted by the ITO. As such we are of the view that in view of the satisfactory evidence furnished by the assessee in this regard, the learned Commissioner(A) was justified in accepting the explanation of the assessee. The next item of 11.693 kgs. relating to silver ornaments purchased from various customers on 4th May, 1984. During the course of the search, 16 slips had been found. According to the assessee they were orders placed by customers which were executed. The ITO held the explanation of the assessee to be not established by observing that the slips had not been recorded in the books of account of the assessee family, prior to the date of the search. On these slips it was indicated that advances aggregating to Rs. 29,806 were received at the time of placing orders for delivery of ornaments. It is out of this cash that the silver ornaments were purchased. The assessee had shown that sale memos, corresponding to those slips were separately issued. This is clear from a perusal of pape ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s her own daughter. It is understandable that in order to meet the obligation of "Mayara" or "Bhat" at the time of the marriage of the daughters' children, the ornaments in question may have been entrusted to Shri Vijay Prakash Khandaka. The weight also exactly tallies and in view of the corroborative evidence, there is no reason why the explanation of the assessee could not be accepted by the learned Commissioner(A). The mere fact that these ornaments of "amanat" were found among other ornaments forming part of the trade could not displace the mass of reliable evidence. We uphold his finding based on reliable evidence. 9. The result is that there was no excess stock and that the addition of Rs. 2,29,630 was rightly deleted by the learned Commissioner(A). 10. The next ground relates to interest paid to M/s B.R. Co. The ITO had disallowed an amount of Rs. 8,656 consequent upon the addition made with reference to 28.350 kgs. of silver received from M/s B.R. Co. on 3rd May, 1984. The same had been deleted by the learned Commissioner(A) consequent upon his finding that the explanation of the assessee was correct. 11. In view of our finding confirming the order of the learned ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 43B could not be attracted with reference to the sales-tax amount in question. On the other hand, on behalf of the Department, reliance was placed on the decisions of the Delhi High Court in the cases of Sanghi Motors vs. Union of India (1991) 91 CTR (Del) 15 : (1991) 187 ITR 703 (Del) and Escorts Ltd. vs. Union of India Ors. (1991) 93 CTR (Del) 169 : (1991) 189 ITR 81 (Del) in which a contrary view has been expressed. 19. After considering the rival submissions as also decisions referred to above, we find that on the well known principle laid down by the Supreme Court in the case of Vegetable Products Ltd. vs. CIT 1973 CTR (SC) 177 : (1973) 88 ITR 192 (SC) and also followed all along and notably in the case of CIT vs. J.K. Hosiery Factory (1986) 52 CTR (SC) 142 : (1986) 159 ITR 85 (SC), in such a situation of two views, there being no view of the jurisdictional High Court of Rajasthan available, a view favourable to the assessee has to be taken. Therefore, on this point we would reverse the order of the learned Commissioner(A), and hold that no disallowance of the amount of Rs. 1,195 could be made. 20. In the result the appeal (ITA No. 566/Jp/90) filed by the Department fa ..... X X X X Extracts X X X X X X X X Extracts X X X X
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