TMI Blog2015 (3) TMI 1020X X X X Extracts X X X X X X X X Extracts X X X X ..... . The assessee had field copy of stock ledger as well as sale tax assessment order for the year under consideration. We find that findings of Ld. CIT(A) are based upon verification of facts and evidences and, therefore, he had rightly deleted the addition.- Decided in favour of assessee. - I.T.A. No. 2011/Del/2011, I.T.A.No. 2313/Del/2011 - - - Dated:- 25-3-2015 - Shri G. C. Gupta And Shri T.S. Kapoor JJ. For the Appellant : Shri Salil Aggarwal, Adv. Shri Shailesh Gupta, CA For the Respondent : Shri P Dam Kanunjha, Sr. DR ORDER Per T.S. Kapoor, AM: These are cross appeals filed by revenue as well as by assessee against the order of Ld. CIT(A) dated 24.12.2010. The grounds of appeals taken by Revenue as well as by assessee are reproduced below: I.T.A.No. 2011/Del/2011 (Revenue s appeal):- i) The order of the Ld. CIT(A) is erroneous and contrary to facts and law. ii) On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in deleting the addition of ₹ 19,99,840/- made on account of undisclosed stock. iii) The Ld. CIT(A) ignored the finding recorded by the A.O. and the fact that the Ld. CIT(A) relied on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... above facts, it was submitted that the present case need not be sent back to Ld. CIT(A) as in the present year comparison of purchase rates with market price were furnished to A.O. and the A.O. had not found any discrepancy between the same and had arbitrarily relied upon earlier years for making the disallowance. Ld. A.R. argued that the rule of res-judicata does not apply to income tax proceedings and every year has to be looked into separately. 2. Ld. D.R. on the other hand argued that the A.O. has given clear cut findings and in this respect, last para of assessment order was read and therefore he argued that the order of Ld. CIT(A) should be upheld or in the alternative, it could be set aside to Ld. CIT(A) as done in earlier years. Ld. A.R. in his rejoinder submitted that none of the augments taken by him has been rebutted by Ld. D.R. 3. Arguing upon revenue s appeal, Ld. D.R. heavily relied upon the order of A.O. and submitted that the A.O. has clearly held that there was no sufficient stock in the books of accounts of assessee to make sales declared by it and, therefore, sales shown by assessee were out of unaccounted stock and, therefore, addition was rightly made. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 12.082002 Recd. 22Ct Gold Jew 011 App. From Mehrasons Jew. P.Ld. Rs.480/- 22.10.2002 Purchased 22ct Gold Jew from Mehrasons Jew. PLtd Rs.477/- Rs.477/- 10 12.2002 Purchased New 22c1. Gold Ornaments from Mehrasons Jewellers Pvt. Ltd. (Rs.489/- +S.64/- value addition) Rs.553/- Rs.489/- It would be seen that the purchases and sale of the above acquired stock have been made as per market norms/rate. A analysis of the records will further show and demonstrate that from Feb 2003 onwards the company began its retails operation. The goods purchased from Mehrasons Jewellers Pvt. Ltd. @ ₹ 553/- per gms had been sold with a positive value addition, i.e. the average selling price has been in the ₹ 600-650 vicinity. Thus, the company has booked a handsom profit on this transaction. 6. From the above submissions of assessee, we find that the assessee had filed sufficient explanations regarding alleged payments covered by Section 40A(2b) of the Act. However, the A.O. without co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... findings on the basis of surmises and conjectures and that too without commenting upon the explanations of assessee. Moreover, in the present year, we find that assessee has not earned any income from lease which fact is verifiable from paper book page 8 where a copy of P L account is placed and where there is nil other income as compared to earlier year income of ₹ 10,02,511/-. Therefore, facts in the present year are distinguishable as in the present year the assessee had filed documentary evidences with respect to gold rates and in this year there is no lease income. The addition sustained by Ld. CIT(A) is not based upon facts. 8. In view of above, appeal filed by assessee is allowed. 9. Now, coming to the appeal filed by Revenue, we find that the assessee had filed complete details before Ld. CIT(A) regarding discrepancy pointed out by A.O. In this respect, para 4.1 to para 4.8 of Ld. CIT(A) s order which relate to submissions of assessee and findings of Ld. CIT(A) are important, deserve to be reproduced. 4.0 Addition of ₹ 19,99,840/- on account of undisclosed stock: 4.1 As per the assessment order, the Id. AO reached to the conclusion that the appell ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ms (Confirmation from Mehrasons Jewellers (P) Ltd. is enclosed) 10-10-2002 Sold to Swam Gems (P) Ltd. (Copy of sale bill enclosed) The company's stock register has been examined in details and the receipt of the stock by the company has been noted. Evidently, there is no short fall in stock and the company has stock on the date on which it was sold. The allegation that the company has sold 5871.76 gms of 22ct. gold to M/s Swam Gems (P) Ltd. without any stock is baseless. It has been noted that the opening balance as on 1-4-02 was 2646.04 gms and the company purchase 3195.720gms on 22-10-2002. Therefore, it has been alleged that 3195. 72 gms out of the sale of 5871. 76gms of 22ct gold on 10-10-2002 is from undisclosed purchases as said gold ornaments were sold on 10-10-2002 yet that were purchased on 22-10-2002. This allegation it totally misplaced as the purchase on 22-10-2002 was for the goods that had already been received on approval by the company the receipt of the said stock has been noted by the department and that the said goods were received from Mehrasons Jewellers (P) Ltd. has been noted by the Department. There is ther ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... elow:- 1-4-2002 Opening Balance 2646.04gms 12-8-2002 Add: Received on approval 5043.72gms (confirmation filed) 7689.76gms 23-9-2002 Less: Returned back 1818.00gms (confirmation filed) 5871.76gms 10-10-2002 Sold to Swarn Gems (P) Ltd. 5871.76gms The appellant argued that from the above it is that there was no shortage of stock and that the goods received on approval as well as the purchases were fully explained. 4.7 As mentioned earlier, the Id. AO made an addition of ₹ 19,99,8401- on account of undisclosed stock. The above was done by the AO on the basis of the following alleged discrepancies in the accounts of the appellant:- (i) Unaccounted stock of 3195.72gms, valuing at ₹ 15,22,500/- was sold on 10-10-2002 to one M/s Swarn Gems (P) Ltd. (ii) The goods sold to the aforesaid party were in excess of 30.52gms 4.7.1 The appellant as per its submission has explained that jewellery weighing to 5871.76gms was sold to M/s Swarn Gems (P) Ltd. consisted of opening stock of 2646.04gms and 3195.72gms were out of the goods received on approval from M/s Mehrasons J ..... X X X X Extracts X X X X X X X X Extracts X X X X
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