TMI Blog2016 (1) TMI 168X X X X Extracts X X X X X X X X Extracts X X X X ..... arate diamond stock of ₹ 67,87,715/-. Even otherwise, if we go by rate of gold on the date of survey taken by valuation officer at ₹ 11,965/- as against the rate of ₹ 9395/- the increase is almost 28%. In term of the above facts, we find that the CIT(A) has rightly applied the gross profit rate of 18.55% for reduction of the value of stock and we confirm the same - Decided against revenue Addition being difference between the undisclosed income recorded in the impounded documents MJ-4 and undisclosed income declared by assessee - CIT(A) deleted the addition - Held that:- The assessee has brought out estimated income out of sales at ₹ 2,31,700/-. But in a nutshell, the assessee has offered an income of ₹ 13,50,000/- being undisclosed income out of the above undisclosed transaction of sales and purchases. When a query was put to Ld. Sr. DR from the bench, he could not answer whether there is only sales or purchase element is also there, if we take the transactions of sale as well as purchase then net profit is to be estimated and also some investments. If we apply net profit rate of 19.55% as declared by assessee to the sale of undisclosed transaction ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er the fact and in the circumstances of the case, the Ld. CIT(A) was not justified in deleting the addition of ₹ 1,52,68,732/- being under valuation of stock up to the date of survey by taking the value of closing stock at ₹ 4,30,93,290/- instead of ₹ 3,63,05,575/- as taken by the Assessing Officer because the assessee had considered the wt. of diamond at 2880 carat and gold at 13552.367 gms. Whereas the diamonds including loose diamonds found during the course of survey as per valuation report of Departmental Valuer dated 1/2/2008 was 2269.85 carat and Total Net wt. of gold at 13122.47 gms. and the assessee admitted during the course of survey that no stock of his was lying any where with any other party, or the Karigars. 3. Briefly stated facts are that the assessee is a manufacturer/dealer of gold and diamond jewelleries and ornaments. He is proprietor of M/s. Mukut Jewellers and M/s. Moh. A survey u/s. 133A of the Act was conducted on the business premises of the assessee on 31.01.2008 i.e. relevant to AY 2008-09 and during the course of survey, cash book, ledger book, bank book and stock book were inventorised and books of account bearing identification ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tock as per the books of account at ₹ 3,63,05,575/- which is factually incorrect. I find that the relevant details of stock as on 31.01.2008 were filed in course of the assessment proceedings (available at page 485 of the assessment record) showing the value of stock at ₹ 4,30,93,290/- (comprising gold jewellery of ₹ 3,63,05,575/- and diamonds of ₹ 67,87,715/- in addition to the stock of ₹ 17,62,820/- lying with the karigars. In this factual background, there was actually no under valuation of stock as on 31.01.2008; and consequently, no addition on this account was Justified. The addition of ₹ 1,52,68,732/- is deleted. Ground no.1 is allowed. Aggrieved, revenue is in second appeal before Tribunal. 4. We have heard rival submissions and gone through facts and circumstances of the case. We find that the only dispute relates to valuation of stock as on the date of survey and no excess stock physically was found by the Income-tax department from the business premises of the assessee. As argued by Ld. Counsel for the assessee before us that the valuation in the course of survey was made at current market rate prevailing as on 31.08.2008 at t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . rate from the date of survey in consonance with the facts of the case. Actually, the value of stock on the date of survey as per books of account ₹ 4,30,93,290/- and in addition to the stock of ₹ 17,62,820/- was lying with the Karigars. This stock as per books of account of the assessee at ₹ 4,30,93,290/- comprises of gold jewellery of ₹ 3,63,05,575/- and separate diamond stock of ₹ 67,87,715/-. Even otherwise, if we go by rate of gold on the date of survey taken by valuation officer at ₹ 11,965/- as against the rate of ₹ 9395/- the increase is almost 28%. In term of the above facts, we find that the CIT(A) has rightly applied the gross profit rate of 18.55% for reduction of the value of stock and we confirm the same. This ground of revenue s appeal is dismissed. 5. The next issue in this appeal of revenue is against the order of CIT(A) deleting the addition being difference between the undisclosed income recorded in the impounded documents MJ-4 and undisclosed income declared by assessee during the course of survey at ₹ 13.50 lacs treating the receipts noted in MJ-4 as sales and purchases. For this, revenue has raised following ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecorded on pages 6, 7, 11 and 13 are included, then all the transactions recorded in MJ/4 total to ₹ 38,57,105/- as also mentioned by the AO. If gross profit rate of 18.55% is applied on total sales of ₹ 38,57,105/-, then the gross profit should work out at ₹ 7,15,493/- whereas the appellant has already declared undisclosed income of ₹ 13,50,000/- in the return. In view of the above, no addition on account of transactions recorded in MJ/4 is called for. The addition of ₹ 25,07,105/- is deleted. Ground no. 3 is allowed. Aggrieved, revenue came in second appeal before Tribunal. 7. We have heard rival submissions and gone through facts and circumstances of the case. We find that the assessee has analysed pages 1 to 54 being impounded papers marked as MJ-4 found during the course of survey and the assessee s proprietary concern M/s. Mukut Jewellers. According to ld. Counsel, the transactions recorded in these papers involving monetary value are the sales and purchases, which were not recorded in the regular books of account, consists of sale value amounting to ₹ 34,12,449/-. Ld. Counsel for the assessee referred to page 23 wherein each page ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m. This reply is in response to notice dated 03.12.2010. The letter is enclosed at pages 41 and 42 of assessee s paper book. Ld. Counsel for the assessee now before us stated that form No. 15G from one Mrs. Narayani Devi Agarwal is received that no TDS is to be deducted u/s. 194A of the Act being interest payment of ₹ 1,62,612/-. As the assessee has received form No. 15G he was prevented from deducting the TDS. The CIT(A) also deleted the disallowance only on the premise and the relevant finding of CIT(A) has given in para 14, which reads as under: .. I find merit in the submissions. As the person to whom interest was paid had submitted a declaration in Form No. 15G in accordance with the provisions of section 197A, the appellant was not liable to deduct tax u/s. 194A; and consequently, the provisions of section 40(a)(ia) have no application. The addition of ₹ 1,62,612/- is deleted. Ground no. 7 is allowed. 10. We find that the assessee has received declaration in form No. 15G from the payee of the interest i.e. Smt. Narayani Devi Agarwal and once the assessee received form no. 15G he is not liable to deduct TDS and hence, no disallowance can be made u/s. 40 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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