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TMI Blog2017 (3) TMI 88X X X X Extracts X X X X X X X X Extracts X X X X ..... 1991-92, Rs. 65,10,524/-for AY 1992-93, Rs. 48,70,916/-for AY 1993-94 and Rs. 46,01,866/-for AY 1994-95 in respect of the so called accounted local sales of gold, made by the Assessing Officer, the assessee has preferred the present Tax Appeals with the following proposed questions of law. "(1) Whether on the facts and in the circumstances of the case, the Tribunal was right in law in holding that the artisans did not use the same quantity of gold, which the appellant had sent to them for manufacturing of gold ornaments, and therefore, the difference was to be added as unaccounted local sales within the country? (2) Whether the Tribunal erred in not seriously considering the new evidence and the result thereof which new evidence, the appellant produced in the present matter, which was not there in Asst. Year 1989-99? (3) Whether on the facts and in the circumstances of the case, the order of the Tribunal is perverse? (4) Whether the order of the Tribunal is a speaking order?" [2.0] For the sake of convenience the facts in Tax Appeal No.855/2016 arising out of ITA No.2414/Ahd/2011 for AY 1990-91 are narrated and considered and the Tax Appeal No.855/2016 be treated as a lea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r AY 2002-03 and 200304 in respective appeals holding that the evidence, which the assessee had purchased in these years has not been examined by the Assessing Officer. [2.3] That thereafter the Assessing Officer framed the assessment for AY 1990-91 to 199495 and made the addition as under: Assessment Year Returned Income (Rs. ) Assessed Income (Rs. ) Export Turnover (Rs. ) Disputed Tax (Rs. ) 1990-91 18,340 2,47,360 14.72 Crores 48,578 1991-92 16,370 4,83,450 27.89 Crores 87,382 1992-93 1,95,550 10,13,360 29.66 Crores 1,65,959 1993-94 41,762 4,91,630 31.48 Crores 2,03,545 1994-95 30,070 4,13,990 30.42 Crores 1,73,438 [2.4] That feeling aggrieved and dissatisfied with the respective assessment orders for AY 1990-91 to 199495, the assessee preferred appeals before the learned CIT(A). The learned CIT(A) passed a composite order for AY 1990-91 to 199495 and dismissed the appeals following the order of AY 1989-90 holding that the new evidence does not prove anything in light of the discussion in the ITAT's order of AY 1989-90. [2.5] Feeling aggrieved and dissatisfied with the common order passed by the learned CIT(A), the assessee preferred appe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the matter to the Assessing Officer and to pass a fresh order on considering the new evidences. It is submitted that the learned ITAT has erred in making a short swift of the matter by pointing out that all these new evidences were not contemporaneous or evidences to establish actual consumption of gold at higher purity level. It is further submitted by Shri Shah, learned Counsel appearing on behalf of the assessee that by observing that new evidences are not contemporaneous or evidences to establish actual consumption of gold at higher purity level, virtually the learned ITAT has sat in the judgment over the earlier order of the learned ITAT in AY 2000-01, which sent the matter for consideration of the additional evidence. Shri Shah, learned Counsel appearing on behalf of the assessee has taken us to the evidences produced, from the paper book filed before the learned ITAT and relying upon the said evidences it is submitted that all those new evidences which were not there in AY 1989-90 are contemporaneous evidences to establish actual consumption of gold at higher purity level. Making above submissions, it is requested to admit / allow the present Tax Appeals and/or remand the ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unsel appearing for respective parties at length. Considering the submissions made by Shri Shah, learned Counsel appearing on behalf of the assessee it appears that the main grievance is that though new evidences were produced for the year under consideration, which were not there in AY 1989-90, without considering the same and solely relying upon the decision of this Court for AY 1989-90, the learned ITAT has materially erred in dismissing the appeals and confirming the additions made by the Assessing Officer. Therefore, it is the case on behalf of the assessee that the matter is required to be remanded to the learned ITAT to consider the new evidences produced which were not there for AY 1989-90. Therefore, it is the case on behalf of the assessee that the decision of this Court for AY 1989-90 shall not be applicable to the facts of the case on hand for other assessment years i.e. 1990-91 to 1994-95. [6.1] To appreciate the above more particularly whether the learned ITAT has missed to consider new evidences produced for the years consideration, the grounds on which the Assessing Officer made the additions are required to be considered. It appears that the Assessing Officer noti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ents actually carried purity of 93.37% but were reflected in export documents having purity of 91.66% because the importers had desired such level of purity whereas the assessee to air on safer side used more gold so that stringent international standards were not even unintentionally breached, which would incur liability of rejection of consignment. Such explanation by the assessee was found unacceptable and inadequate and came to be rejected by all the lower Authorities which came to be confirmed by the High Court in Tax Appeal No.346/2000 (AY 1989-90). While confirming the additions made by the Assessing Officer after noting some submissions which are now made by the learned Counsel appearing on behalf of the assessee, the Division Bench has considered the submissions and observed and held as under in paras 7 to 10.1. "7. As can be seen from the questions framed, there are two main elements of assessee's contentions. Learned counsel Shri J.P Shah's first contention [relatable to Question No.2 framed above] was that the entire procedure of manufacturing ornaments was controlled by the State authorities under the Gold Control Act. Raw gold supplied to the karigars for preparation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d to contend that the revenue authorities and the Tribunal had concurrently come to the conclusion that there was sizeable discrepancy in the consumption of gold reflected by the assessee in its own books of account. The assessee was unable to explain such discrepancies. The assessee's explanation that it exported gold of greater purity and thereby greater quantity than what was reflected in the assessee's documents cannot be believed, and therefore, rightly not accepted by the authorities below. Counsel submitted that the onus was on the assessee to explain such discrepancies. 8. Having thus heard learned counsel for the parties and having perused the documents on record, it emerges that the revenue authorities as well as the Tribunal came to conclusion that there was considerable discrepancy in the quantity of gold recorded in the assessee's books at the time when the ornaments were manufactured and received from the artisans, as compared to the gold actually exported by the assessee to its foreign importers. 8.1 This is not even seriously disputed by the assessee. If we take as sample of such discrepancy that emerges in the category of 22 Carat gold ornaments, after supplying ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uantity of gold that would be available for import against the export undertaken by it. The analysis made by the Customs authorities also matched with that of th assessee's own declaration regarding purity of gold. 9. Had the revenue relied solely on the Customs analysis, we would have further examined the assessee's contention that such analysis was based on the touchstone method which may not yield highly accurate results. In the present case, however, assessee itself declared certain purity of gold which also considered with the random testing carried out by the Customs authorities. 10. The difference between the two sets of declarations was not minor or insignificant. It could not have been passed off as mixing of impurity or error in measuring standards. It was simply a case where the assessee utterly failed to explain the considerable difference in the gold quantity in two sets of documents maintained by itself. 10.1 It can therefore not be stated that the finding of the authorities below, as confirmed by the Tribunal, are per verse. It is also not true that in coming to such conclusions, the Revenue authorities ignored the presence of the certificate of the Gems & Jewelle ..... X X X X Extracts X X X X X X X X Extracts X X X X
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