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TMI Blog2014 (6) TMI 891X X X X Extracts X X X X X X X X Extracts X X X X ..... bsp; "1. On the facts and in the circumstances of the case, the learned Commissioner of Income-tax (Appeals) has erred in deleting the addition of Rs. 62,20,986 under section 69A which was made on the basis of verification during the course of survey under section 133A of the Income-tax Act." 3. Briefly stated the facts of the case are that M/s. Subhas Brothers Jewellers Pvt. Ltd., the assessee-company filed its return of income disclosing a total income of Rs. 8,19,780. In this case a survey was conducted and certain discrepancies like deficit in cash, stocks, etc., noticed. Accordingly the assessee admitted Rs. 14,00,000. While filing the return of income the assessee admitted this additional income under th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as Ch. Dey already been expired. 3. That the discrepancy in gold ornaments was 556.986 gms was due to non-entry of stock register. 4. That discrepancy in diamond is 1,993 cents and silver is 6351.1/8 gms which was not bear property entered in the stock register. The main point is that all the jewellery gold ornaments and diamond and silver were purchased by cash but proper entry in stock register was not made properly due to lack of knowledge of the accountant or the transaction intimation was not intimated to the accountant. 5. We have already explained that an amount of gold ornaments having quantity of 827.6 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arrated above. Cash found is part of cash balance as recorded in books. Cash not found but which existed as per cash book was utilised to do business and income of Rs. 14 lakhs was mutually discussed with search party and admitted as income which does appear in accounts and the Assessing Officer has accepted the same. 2. Without prejudice to the above, quantity of jewellery and ornaments found less at the time of survey cannot be converted in term of money and thus cannot be treated as income. Utmost, it may be taken as sales not recorded in books on which only an income can be calculated with reference to the business of the appellant. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 51.178 gms Found less Rs. 95,267.00 Apart from the above, the Assessing Officer also noticed that gold ornaments of 877 gms in quantity were issued to sister concerns. Since the same were found to be not entered in the books, the value of such gold ornaments amounting to Rs. 5,13,112 was also added as income. When pointed out these discrepancies the appellant admitted Rs. 14,00,000 to cover up all the above discrepancies and accordingly filed return of income. However while completing the scrutiny assess ment, the Assessing Officer, added the amounts corresponding to these discrepancies. Judging by the discrepancies noticed and corre sponding additions made, I find that the additions made are irrational and unjustified. If the ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d sales of Rs. 12,14,641 and value of gold ornaments issued to sister concerns and not entered in books (Rs. 5,13,112), I agree with the submissions made by the appellant in this regard. In view of the facts, I feel that the entire addition under various heads falls through because of factual position as discussed above. As such I direct the Assessing Officer to delete the various additions made under the various heads." Against the above order the Revenue is in appeal before us. 6. We have heard both counsel and perused the records. We find that in the case of the assessee during the course of survey operations, certain shortages were noticed. These shortages pertained to cash in hand, gold ornaments, diamond items and silver items. Sin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee in this regard suffice the ends of justice. Now we come to the addition for shortage in case of the following : (1) Gold ornaments-18 carat-addition made for shortage- Rs. 2,78,493 (2) Diamond items-additions made Rs. 1,993 (3) Silver items-additions made Rs. 95,267 6.2. We find that the above shortages can at best be treated as undisclosed sales. In such circumstances the entire amount cannot be added. In our considered opinion, an estimated addition of 10 percent. profit on the above sales would be sufficient and would serve the ends of justice. Accordingly we confirm the order of the learned Commissioner of Income- tax (Appeals) with only modification that 10 per cent profit may be added for the items mentioned above. 7. In the r ..... X X X X Extracts X X X X X X X X Extracts X X X X
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