TMI Blog2015 (12) TMI 705X X X X Extracts X X X X X X X X Extracts X X X X ..... with the assessee, and hence, entire stock is not readily sellable to customers as it includes old gold ornaments. This stock of old gold ornaments was given to Senco Gold, Kolkata for adjustment with purchases of fresh ornaments from Senco Gold make. In this way, Senco Gold, Kolkata accepted old gold ornaments from assessee but customers while adjusting old gold ornaments with their new purchases would not only give the ornaments of Senco Gold but also of other parties. Finally, assessee has to convert this old gold ornaments of other make into 24 Kt. gold of Senco Gold except the same is converting to 22 Kt. of gold ornaments to 24 Kt. of gold has no financial implication and the same is shown as purchases. Accordingly, the entire undisclosed purchases are nothing but return of goods which was converted into 24 Kt. standard gold bars supplied to the assessee by the franchiser. In view of the above discussion and facts of the case, we are inclined to accept the contention of the assessee and hence, the order of CIT(A) on this issue is confirmed.- Decided against revenue Addition made on the ground of income from other sources - CIT(A) deleted the addition - Held that:-Originall ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Sec. 69 of the Act. Before the AO, assessee pleaded that the said security deposit had been made ten years back and hence, it cannot be treated as undisclosed income in the current year. Aggrieved, assessee preferred appeal before CIT(A), who deleted the addition as made by AO by observing that the AO has not disputed the assessee s contention that the said security deposit was made ten years back. He also observed that no facts to the contrary have been brought on record. It is also noted that the AO had made correspondence with the franchiser in spite of that no adverse finding on the assessee s claim has been given by the AO. In view of this, the CIT(A) accepted the contention of assessee and deleted the addition as made by AO. Aggrieved, revenue is in appeal before us. 4. We have heard rival submissions and gone through facts and circumstances of the case. We find that this deposit of security was made by assessee ten years back and this fact has been admitted by AO as well as CIT(A). Once the deposit is not made in the relevant assessment year, the same cannot be added. The deposit can be added only in the year when it first time introduced. Accordingly, we confirm th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n made out of undisclosed purchases, will lower his net profit, since it cannot be the A.O's case that such undisclosed purchases has resulted in undisclosed sales also. Further, there is no finding in the assessment order that the appellant has invested money for this alleged purchase out of undisclosed sources. Therefore, there is no case made out by the A.O. for an addition u/s.69 of the I.T.Act. It is also to be noted that 24 carat standard gold bars are not a commodity which can be purchased and sold like any other. In my opinion, the A.O. should have looked into this issue which he clearly has not. Besides, I fail to see how any franchisee would return goods which it had not received. As per the assessment order, no 24 carat standard gold bar was supplied to the appellant by the franchiser. There does not appear to be any dispute on this issue. Therefore, it would not be logical for the appellant to return the goods in the form of 24 carat gold bars by purchasing them from the market. I, therefore, find the appellant's explanation to be quite logical. The same is therefore accepted. This ground of appeal is allowed. Aggrieved, revenue is in appeal before Tribu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s automatically adjusted with respect to quantity of gold lying with the assessee, and hence, entire stock is not readily sellable to customers as it includes old gold ornaments. This stock of old gold ornaments was given to Senco Gold, Kolkata for adjustment with purchases of fresh ornaments from Senco Gold make. In this way, Senco Gold, Kolkata accepted old gold ornaments from assessee but customers while adjusting old gold ornaments with their new purchases would not only give the ornaments of Senco Gold but also of other parties. Finally, assessee has to convert this old gold ornaments of other make into 24 Kt. gold of Senco Gold except the same is converting to 22 Kt. of gold ornaments to 24 Kt. of gold has no financial implication and the same is shown as purchases. Accordingly, the entire undisclosed purchases are nothing but return of goods which was converted into 24 Kt. standard gold bars supplied to the assessee by the franchiser. In view of the above discussion and facts of the case, we are inclined to accept the contention of the assessee and hence, the order of CIT(A) on this issue is confirmed. This issue of revenue s appeal is dismissed. 8. The third issue in thi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ne through facts and circumstances of the case. We find that as per ledger copy and advances from customers the total advances declared is at ₹ 91,23,910/- out of which a sum of ₹ 8,42,064/- is received by cash and balance amount of ₹ 82,81,864/- is through cheque. Originally, the assessee declared these amounts to be received in cash as per old ledger register. Subsequently, the assessee filed new ledger account and explained that the advance nearly 90% are received through account payee cheques and other are in cash. Ld. Counsel for the assessee admitted that this is unintentional mistake in showing all the transactions in cash and this mistake has occurred due to copy paste in computer. The assessee before the AO offered that the advances received through bank can be examined from bank statement and other details. He filed complete details before the AO but the AO has not accepted the explanation of the assessee and added entire advance of ₹ 22,86,958/- which were outstanding as on 31.03.2009. We find that the assessee before the lower authorities filed complete details in respect of advances received by cheques and cash. In view of the above facts and ci ..... X X X X Extracts X X X X X X X X Extracts X X X X
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