TMI Blog2011 (8) TMI 1133X X X X Extracts X X X X X X X X Extracts X X X X ..... duction of 10% on account of weight of stones, lac and wax, etc. which cannot be said to represent and included in the weight of gold while valuing the stock of gold jewellery. 4. Grounds Nos. 7 to 10 of the appeal of the assessee are directed against the order of the ld. CIT(A) in not allowing deduction of 25% while valuing the unaccounted stock of gold jewellery and silver articles on account of impurities. 5. As both the issues are inter-connected, they are being disposed of together for the sake of convenience. 6. Brief facts of the case are that search and seizure operation was conducted u/s 132 of the Income-tax Act, 1961 [in short, the Act] on 13.9.2005. Assessee filed return of income on 29.10.2006 disclosing a total income ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... turbed. The Assessing Officer held that this clearly shows that the value adopted by the assessee by claiming rebate and adjustment for purity was resulting in undervaluation of the stock. 8. Since the assessee was following the LIFO method of accounting, it was held by the Assessing Officer that the excess stock found on the date of search has to be taken as unrecorded purchases of the assessee. He valued the excess stock as unrecorded purchases at the purchase rate of ₹ 602/- per gram, prevalent on the date of search as ascertained from the Madras Jewellers and Diamonds Association. 9. In respect of silver articles the assessee submitted before the Assessing Officer that purity of silver articles should be taken at 70% for r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ellery and silver articles found in not in dispute before us. The only dispute before us is that the gold jewellery was to be valued at the rate after deducting 10% on account of stones, lac and wax, etc. and after adjusting 25% for impurities in the gold jewellery. Similarly, silver articles were to be valued at 70% purity. The Assessing Officer observed that if the valuation adopted by the assessee on that basis is considered, then the assessee had valued the gold jewellery at ₹ 465.75 per gram whereas the cost of the gold jewellery shown by the assessee was ₹ 555/- per gram. Therefore, there was under valuation of gold jewellery by the assessee. Similarly, the Assessing Officer found that the assessee has valued the silver ..... X X X X Extracts X X X X X X X X Extracts X X X X
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