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TMI Blog2015 (4) TMI 552X X X X Extracts X X X X X X X X Extracts X X X X ..... 44 AB in Form No. 3CD were as follows : Gold(In gms) Opening stock nil Purchase during the previous year 22,09,402.07 Sales during the previous year 22,09,337.315 Closing stock nil Net loss/shortage 64.755 As per the Auditor's report dated 15th June 2005 purchase of gold and silver (P42) during the relevant year was for a sum of Rs. 1,91,97,99,908/-. But the details of the purchase produced partywise and quantity wise indicated total purchase of a sum of Rs. 1,90,46,90,248/-. There was, thus, a difference of a sum of Rs. 1,51,09,660/-. The purchase appeared to have been overstated by the aforesaid sum. The explanation offered (P157) by the assessee was as follows: - " In the case of purchases from M/s. J.J.Gold House of 11/1, S.C.Bose Road, Kolkata-20, the purchase was mentioned erroneously as Rs. 3,51,58,008/- instead of Rs. 4,94,64,263/- thus a difference of Rs. 1,43,06,255/-, the balance Rs. 803405/- was directly credited and disclosed as income in the P/L a/c of the said year under the head other income & adjustment Profit on Unfixed deal - Schedule 12 ". Thus the difference as above is fully explainable. The above error was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .J. House was 83,402.07 Gms as against 58402.070 declared during the course of assessment and appellate proceeding'. Considering the reply of the assessee the CIT (Appeals) held that 'if this is taken into consideration the total purchase during the year comes to 2234402.070 Gms. as against 2209402.070 declared by the assessee. The assessee has shown sale of 220,337.315 Gms and wastage of 64.755 Gms. Since there is no closing stock, the only conclusion can be drawn that there was unaccounted sale of 25000 Gms of gold'. The assessee was given a further chance to explain. The assessee explained that ' by mistake the quantity of purchase of Gold has been shown from M/s. Jindal Dychem Industries (P) Ltd. at 455,000 Gms as against actual purchase of only 430,000 gms.'. The assessee however could not substantiate the aforesaid allegation that purchase from M/s. Jindal Dychem Industries (P) Ltd. had been overstated by 25 kilograms. The CIT (Appeals), therefore, held that the assessee had failed to account for sale of gold of 25 kilograms. In the circumstances the addition made by the Assessing Officer was confirmed. An appeal preferred by the assessee before the learned Tribunal ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r was fully sold as would appear from the figures quoted above. There is also no dispute as regards the fact that total purchase during the year was shown at a sum of Rs. 1,91,97,99,908/- whereas detail of purchase revealed that the total purchase was for a sum of Rs. 1,90,46,90,248/-. Therefore, the purchase figure was inflated by a sum of Rs. 1,51,09,660/-. In the circumstances re-assessment proceeding was initiated and the assessee was called upon to explain. The explanation of the assessee was that during the financial year 2003-04, to be precise, on 30th December, 2003 the assessee had received 20 kilograms of gold from M/s. J.J. Gold House. Similarly another 5 kilograms of gold was received from the same J.J. Gold House on 3rd January, 2004. The aforesaid gold received on 30th December, 2003 and 3rd January, 2004 was shown purchased by the assessee in its books of accounts on 6th July, 2004 at a sum of Rs. 1,43,06,255/-. It was contended that a sum of Rs. 8,03,405/- was credited to the P & L Account by way of other income. Thus the difference of the sum of Rs. 1,51,09,660/- was explained. The explanation offered by the assessee did not explain the discrepancy pointed o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mark, whereas the goods allegedly lying in unaccounted opening balance as on 1st April, 2004 was "FINE 9950 (CREDIT SUISSE)" etc. as more fully quoted above. Therefore, the finding of the authorities that the goods allegedly purchased on 6th July, 2004 and actually received on 30th December, 2003 and 3rd January, 2004 was, in fact, sold during the financial year 2003-04, appears to be a possible view. Mr. Modi submitted that it is true that the goods were sold during the financial year 2003-04, but they were replaced by the goods which contained the mark "FINE 9950 THE PERTH MINT, AUSTRALIA". This explanation was not shown to us to have been advanced before any of the authorities below. However from a letter dated 7th June, 2010 addressed to the assessee by its auditors appearing at page 179 of the Paper Book the following paragraph was brought to our notice. " The quantity and value of sales during the financial year ending 31st March, 2005 do include 25 Kgs. of Gold Bars bearing Identification Nos. 916303 to 916306, 916308 to 916310, 916312 to 916317, 916288, 916289, 916291, 916292, AC054151 to AC054153, AC 54154 to AC54158 sold to various parties, as per details given i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5th June 2005 discussed at page 2 above. Mr. Modi further contended that the re-assessment proceedings under section 147 were initiated on the ground that there was excess debit of Rs. 1,51,09,660/- to the purchase account, whereas the CIT (Appeal) has accepted the contention of the assessee and held that there was suppression of sale of 25 Gms. of Gold. He submitted that a new case was made out for which there is no foundation in the recorded reasons and therefore the entire proceeding was bad. We have not been impressed by the submission of the assessee. The case remains the same. The audited accounts coupled with the records submitted by the assessee go to establish that the purchase account was debited by an excess sum of Rs. 1,51,09,660/-. In seeking to explain, the assessee came out with a disclosure that it had purchased from J.J. Gold House 83 Kgs. of Gold and not 58 Kgs. of Gold. The total cost of gold purchased by the assessee furnished at the initial stage has remained unchanged. If the case of assessee is that he purchased 25 Kgs of gold in addition than what was shown originally from J. J. Gold House, then the total quantity purchased in the year has to be incr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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