9911796707
TMI Blog2013 (2) TMI 504X X X X Extracts X X X X X X X X Extracts X X X X ..... erved upon the assessee on 05.03.2007 Later on notice u/s 142(1) was issued on 27.06.2007 along with a letter bearing no.DCIT/Cir-41/Apan Jewellers/07-08/Kol/74 dated 27.06.2008 detailing queries required to be furnished and served upon on 10.7.2007. 3.1. After taking into consideration of the various written submission and after analyzing the same at page nos 3 to 8 he finally concluded that "On going through the valuation report of the approved valuer it is seen that the valuer has mentioned each items of each gold/ornaments with clearly gross and net weight. Total net has been worked out of 20267.000gms and corresponding value of Rs.1,39,32,873/-. Considering opening stock of gold ornaments of 9 177.065gm, purchases ofl4686.lO9gm and sales of 11018.l80 gms, closing stock as on the date of survey comes to 1306.994. But as per valuation report it comes to 7240.O56gms corresponding value of Rs.46,59,300/-. On the basis of comparative difference being weight of other items studded in/tied with the gold jewellery/ornament as per Stock Register (GS-Il & GS-12), and valuation report of the approved valuer, the assesseefirm has challenged the stock difference. It has been submitted th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at 22,896.410 gms. whereas the net weight was determined at 20,267.050 gms. On perusal of format of the valuation report it is observed that it consists of columns as (I) SI. No. (II) Description, (Ill) Gross Weight, (IV) Approximate Net Weight, (V) Approximate weight and No. of Stones, (VI) Stone Value, (VII) Metal Value and (VIII) Total Value. It is observed that the valuer has made valuation in lots and his report was having only the description, gross weight, approximate net weight, metal value and total value. It was further observed that as per the valuation report the metal value and total value was same and the valuer has not mentioned the weight of stones and stone value etc. As mentioned above, the gross weight of stock was determined by the valuer at 22896 410 gms and the net weight at 20,267.050 grns. whereas as per the appellant's stock records the A.O. determined the net weight as on the date of survey at 13,026.94 gms. Thus the A.O. was of the opinion that there was excess stock on net weight basis or 7,240.056 qms. i.e. (20,267.050gms. - 13,026.994 gms.). During the course of survey in the statement dated 29-09-2005, the partner of the appellant firm was asked to e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s record tallies more or less with the gross weight ascertained b the approved valuer, there could be no reason that there would be substantial difference in the net weight as per the stock records of the appellant vis-à-vis the weight determined by the valuer. However, the contention of the appellant was not accepted by the AO and he stick on the difference in net weight at 7,240.056 gms and added sum of Rs. 4659,300/- on account of excess stock. 6.1. On careful consideration of the facts, I am of the opinion that the A.O. was not justified in making addition of Rs. 46,59,300/- on the basis of valuation report prepared by the valuer by determining excess stock on net weight basis at 7,240.056gms. In any case the deference in the net weight as per the books of appellant and the valuer's report was 5,587.905 gms. as reconciled by the appellant during the post-survey proceedings and not disputed by the A.O. On perusal of OS-I I and GS-11 and GS-12 records I find force in the submission of the appellant that once gross weight of the ornaments almost tallies as per the appellant's records and valuer's report with minor difference of 91 .365 gms. , there would be no reason that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m the gross weight to arrive on the net weight which cannot be said to be correct or could be made a basis to conclude that the appellant was having excess stock of gold ornaments. I am of the opinion that the stock as per books of accounts and the valuer's report should be compared on gross weight basis and not on net weight basis because if there would be excess stock, it means that an assessee is making unaccounted purchases and that will reflect in the gross weight of the stock also. The net weight of stock is mere an estimation and same cannot be the basis of comparison of stock, Specifically, when the registered valuer has not valued each and every item separately. Further, the A.O did not find any defect in the books of accounts of the appellant. I am of the opinion that if at all there was excess stock with the appellant that can be only on the basis of gross weight of ornaments which includes gold as well as other items studded/tide with them. The stock on gross weight basis as per appellant's record was 22,805.045 gms. whereas the gross weight as per the valuer's report was 22,896.410 gms. Thus, there was excess stock of 91.365 gms. whose value @ Rs. 643.55/- per gms. com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ,267.050 gms. vis-à-vis net weight of gold ornaments as reflected in the stock records at 13,026.994 gms. and valuing the same @ Rs. 643.55/- per gms. totaling to Rs. 46,59,300/-. During the course of post survey proceedings, the detailed submission and reconciliation was filed vide letter dated 16-11-2005 which was verified by the A.0. at that time and no adverse inference was made by him in respect thereof. In the said submission dated 16-11-2005, item-wise gross weight and approximate net weight of the gold ornaments as ascertained by the approved valuer was furnished wherein the gross weight of gold ornaments was ascertained at 22,896.490 gms. and the approximate net weight at 20,267.050 gms. Correspondingly, the contents of the stock records in GS-11 and GS-12 maintained manually by the appellant as required under the provisions of Gold Control Act reflecting the gross weight and net weight separately as on the date of survey were also furnished before the A.O. As per books of account i.e. stock records in GS-1 1 & GS-12 the gross weight as on the date of survey was 22,805.045 gms. and net weight was 14,679.145 gms. Thus, as per the valuation made by the approved valuer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ight of ornaments. Thus, it is virtually impossible to identify, differentiate and ascertain net weight of such items if they are valued in a lot and not separately each item-wise. As mentioned, the approved valuer has valued the gold ornaments in lots and hence, it was not possible for him to judge accurately the net weight of each items and just on his estimation and guess works he reduced certain weight from the gross weight to arrive on the net weight However, There cannot be difference in the net weight, once the gross weight of all ornaments was almost same as recorded in the books of accounts. 5.2. It was argued by the appellant that it has maintained proper stock records as required under the provisions of the Gold Control Act as well as regular books of accounts wherein gross weight and actual net weight of closing stock of gold jewellery is reflected. That, the appellant continues to maintain its stock records manually in detail in GS-11 and GS-12. The quantity of each items with carat-wise description of detail and gross weight and net weight are separately mentioned in the aforesaid records. Even, in the tax audit report the appellant has always declared the gross weig ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not find any mistake in the appellant's record. The A.O. did not draw any adverse inference from the books of accounts and records maintained by the appellant and still he proceeded to make the addition on account of closing stock on net weight basis relying on the valuation report prepared by the approved valuer. It was further argued by the appellant that the A.O. could not adduce any proof or evidence on record by way of undisclosed purchases and/or any other material available on record to substantiate his allegation for excess stock of 7,240.056 gms. being the difference in net weight of gold ornaments found physically as on the date of survey as per approved valuers report at 20,267.050 gms. vis-à-vis net weight of gold ornaments as reflected in the stock records at 13,026.994 gms. with corresponding value of Rs. 46,59,300/- as ascertained by the registered valuer. It was contended that the A.O. has made the addition without verifying the contention of the apeIlant and the stock records maintained by him in its right perspective and without bringing anything on record to support his allegation of excess stock, which is arbitrary, based on presumption, assumption. witho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... records. It was argued by the appellant that it is apparent that there was a small difference of 91.365 gms. in the gross weight of gold jewellery found physically as on the date of survey as ascertained by the approved valuer vis-à-vis the manual stock records maintained by the appellant. The said difference is considered to be quiet negligible. But the A.O. has completely failed to consider the underline facts and circumstances of the case, the details and explanation made by the appellant from time to time and he only relied on the valuation made by the approved valuer to conclude that there was excess stock of 7,240.056 gms. It was contended that had the A.O. examined the stock record, books of accounts and the submission made before him in right perspective, he would have found that there was no excess stock on net weight basis.as observed by him on the basis of approved valuer's report. In view of above, it was contended by the appellant that the addition made by the A.O. on account of excess stock deserves to be deleted because there was no excess stock and that the approved valuer has not correctly ascertained the net weight of gold ornaments valued by him. The reli ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
