TMI Blog2018 (6) TMI 1045X X X X Extracts X X X X X X X X Extracts X X X X ..... e provision of Section 263 - Decided against the assessee. - ITA No. 1716/Del/2017 - - - Dated:- 19-6-2018 - SHRI R.K. PANDA, ACCOUNTANT MEMBER AND MS. SUCHITRA KAMBLE, JUDICIAL MEMBER For The Assessee : Sh. Sameer Kapoor, CA For The Revenue : Smt. Paramita Tripathi, CIT (DR) ORDER PER SUCHITRA KAMBLE, JM This appeal is filed against the order dated 09.02.2017 passed by the Pr. CIT-Rohtak u/s 263 of the Income Tax Act, 1961. 2. The grounds of appeal are as under: 1. Whether the Ld. Pr. CIT has erred in law and circumstances of the case in holding the assessment u/s 143(3) of the Act as erroneous and prejudicial to the interest of the revenue u/s 263. 2. Whether the Ld. Pr. CIT has erred in law and circumstances of the case in rejecting the explanation provided by the assessee in the proceedings u/s 263 of the Act and directing the ld.AO to make an addition of ₹ 1,47,29,502/-. 3. The assessee may please be allowed the right to add/delete/modify any of the above grounds of appeal at any stage. 3. The assessee is engaged in the business of trading of bullion and artificial stones. The return of income was filed on 24 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ,47,29,502/-. Thus, the assessee had suppressed its sales by ₹ 1,47,29,502/- and consequently, income was shown less to this extent involving revenue impact of ₹ 45,51,415/-. Accordingly, show-cause Notice u/s 263 of the Act was issued to the assessee on 5th January, 2017 fixing the case for hearing on 24th January, 2017. The assessee filed written submissions on 03.02.2017. The assessee submitted that purchases and sales of Gold Bar were made at 1641 kg. and 1639 kg. respectively. The Pr. CIT held that the figures of purchase/sale which was tendered during the course of revisionary proceedings are fabricated one, being not substantiated with any documentary evidence. In view of above discussion, the assessment order u/s 143(3) of the Act dated 30.01.2015 passed by the Assessing Officer was held to be erroneous in so far as it is prejudicial to the interests of the revenue. The Pr. CIT further held that the Order passed by the Assessing officer was made without making enquiries or verification which should have been made. Thus, the Pr. CIT directed the Assessing Officer to make addition of ₹ 1,47,29,502/-. Accordingly, the Assessing Officer was directed to re-fram ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s per customer s request. The Ld. AR further submitted that the AO had not taken into consideration sale of pcs from 1 kg Bar especially in the month of March weighing 67 kgs sold in pcs. The value of the same comes to ₹ 18,51,97,030/- of Sixty Seven Kg. The position of gold a/c are as under: PURCHASE SALES 3827163207.00 1641 Kg. 995 1 Kg. each 3823390969.00 1639 Kg. 995 (1 Kg. Bar 1424 kg in pcs. 215 kg i.e. 1639 Kg) 3908498410.00 81335203.00 32 Kg. 100 gms each 3906075456.00 82684487.00 32 Kg 100 gms pcs. 3045832.00 Profit 5468786.00 2 Kg. 995 Closing Stock 3911544242.00 3911544242.00 As regard method of valuation of the stock the assessee is following FIFO method of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... month of March which was overlooked by the Assessing Officer. The assessee had purchased 1641 kg of Gold bars (.995%) for ₹ 3,82,71,63,207/- and not 1643 kg for ₹ 3,77,46,98,443/-. The correct figure is 1641 kg and its cost comes to ₹ 3,82,71,63,207/-. The average price of gold purchase works out to ₹ 23,32,214/- and not ₹ 22,97,442/- as mentioned in the notice issued under Section 263 of the Act as per the Ld. AR s contention. During the year the assessee had sold 1639 kg Gold bars (.995%) for ₹ 382,33,90,969/- and not 1641 kg for ₹ 343,89,91,867/- as per Ld. AR s contention. The average price of gold sold comes to ₹ 23,32,758/- and not ₹ 20,95,668/- as mentioned in the notice under Section 263 of the Act as per the Ld. AR s contention. The Ld. AR further submitted that no purchases and sales are effected after 21.03.2012. The closing stock as on 31.03.2012 is 2 kg only while entering closing stock of 2 kg, but due to inadvertent clerical mistake entry on 31.03.2012 of 2 kg gold bars was reflected in purchases while actually no purchases were made after 21.03.2012 and similarly due to inadvertent clerical mistake entry on 31.03 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er passed the Assessment order without making enquiries or verification which should have been made. The present case is covered by the decision of the Hon ble Apex Court in case of Deniel Merchants Private Limited Anr. Vs. Income Tax Officer (Appeal No. 2396/2017 order dated 29.11.2017). The Hon ble Supreme Court held as under: In all these cases, we find that the Commissioner of Income Tax had passed an order under Section 263 of the Income Tax Act, 1961 with the observations that the Assessing Officer did not make any proper inquiry while making the assessment and accepting the explanation of the assessee(s) insofar as receipt of share application money is concerned. On that basis the Commissioner of Income Tax had, after setting aside the order of the Assessing Officer, simply directed the Assessing Officer to carry thorough and detailed inquiry. It is this order which is upheld by the High Court. We see no reason to interfere with the order of the High Court. The Special Leave Petitions are dismissed. Since, in the instant case the Assessing Officer failed to make any enquiry regarding the purchase and sale including quantitative details of the gold bars, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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