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TMI Blog2016 (3) TMI 1332X X X X Extracts X X X X X X X X Extracts X X X X ..... sure by the assessee to support the addition of Rs. 45,71,382/- made by the A.O. The CIT(A) observation are purely speculative and can not be a substitute for the material/evidence found during survey to support the disclosure. (iv) That stock of Rs. 1,94,28,618/- was surrendered on 17-03-2010. There is no reasons to presume that such stock inventory was available to the assessee during the entire year, so estimating the sale at Rs. 82,33,571/- for the period of only 14 days on stock inventory of Rs. 1,94,28,618/- and calculating the G.P on the same for supporting the disclosure of Rs. 44,63,028/- is highly unjustified. 3. The brief facts of the case as noted in the assessment order are that the assessee is an individual and Prop. Of M/s Pardhan Jewellers and is engaged in the Jewellery business. A survey proceedings u/s 133A of the Act was carried out of the business premises of the assessee on 17.03.2010 wherein on physical verification stock to the tune of Rs. 1,94,28,618/- was found. The stock was not found to have been recorded in the books of accounts as well as in stock register and therefore, the assessee was confronted and was asked to explain vide question no.22. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) did not agree with the contentions of the assessee and upheld the addition by holding as under: "6. The assessee has raised ground number 3 in appellate proceeding that AO has ignored the opening stock of Rs. 10.80,000/- and same was claimed by the assessee in the letter dated 23.03.2010, that it should be reduced from the total stock found at the time of survey Rs. 1,94,28,618/-. However, it is seen from the trading account filed by the assessee that assessee has shown sale of such opening stock during the year and it is also fact that survey in this case was carried out at the fag end of the year i.e. on 17.03.2010, It is seen from the trading account that such opening stock was sold out for Rs. 14,40,558/- and unaccounted stock of Rs. 1,94,28,618/-, which was found during survey proceeding has been shown as closing stock. Thus it is clear that opening stock was sold out during the year and, hence no credit for opening stock was justified in this regard. During appellate proceeding assessee's counsel also agreed to this inference. In-fact, claim of opening stock from the stock found during survey is completely unjustified as it means that assessee has not carried out any sell ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ition disclosure. Under the circumstances the AO was justified in making addition of Rs. 44,63,028/- to the returned income. In view of above, ground of appeal number 1 & 2 are dismissed. 7. The ground number 3 regarding ignoring the opening stock of Rs. 10,80,000/- has already been discussed above and in view of above discussion, same is also dismissed." 5. Aggrieved the assessee is in appeal before us. 6. At the outset, the learned AR submitted that the actual figure of addition made by Assessing Officer comes out at Rs. 45,71,328/- against the figure of Rs. 44,63,028/- taken by Assessing Officer. 7. The learned AR submitted that at the time of survey the stock was found and the assessee had made a surrender of Rs. 2,40,00,000/- which he had made under great mental stress. The learned AR submitted that the amount of surrender cannot exceed the value of stock found during survey proceedings and value of stock found during survey was only Rs. 1,94,28,618/- He submitted that when assessee recovered from the stock of survey proceedings he felt that surrender of Rs. 2,40,00,000/- was not justified keeping in view the value of stock found during survey which was only Rs. 1,94,28,6 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ies to make addition to the tune of Rs. 1,83,48,618/- only being value of physical stock - opening stock. It is further a fact that the Revenue Authorities did not issue any notice to counter this retraction neither learned DR was able to demonstrate before us that the retraction was countered by the Assessing Officer. We further find that there is no material with the Department on the basis of which the addition in excess of the physical stock found during the survey can be made specially keeping in view the fact that assessee had reiterated from the statement recorded during survey proceedings within a period of six days only. The surrender letter itself can not be relied to make addition in the absence of other corroborated material. The other corroborated material available with the department is only to the extent of Rs. 1,94,28,618/- being the value of stock found during survey. Therefore, the addition of Rs. 45,71,382/- made by A.O and confirmed by CIT(A) do not have any corroborated material. The Hon'ble Supreme Court in the case of S. Khader Khan Sons (supra) has held that any statement recorded during survey proceedings has not evidentiary value. We further find that CBD ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dminister oath and to take any sworn statement which alone has evidentiary value as contemplated under law; 9iii) The expression " such other materials or information as are available with the Assessing Officer" contained in section 158BB would include the materials gathered during the survey operation under section 133A; (iv) the material or information found in the course of survey proceeding could not be a basis for making any addition in the block assessment; and (v) the word "may" used in section 133A(3) (iii) of the Act, viz., "record the statement of any person which may be useful for, or relevant to, any proceeding under this Act" makes it clear that the materials collected and the statement recorded during the survey under section 133A are not conclusive piece of evidence by itself. A survey was conducted in the premises of the assessee-firm. One of the partners in his sworn statement offered an additional income of Rs. 20 lakhs for the assessment year 2001-02 and Rs. 30 lakhs for the assessment year 2002-03. However, the said statement was retracted by the assessee through it letter dated August 3,2001, stating that the partner from who a statement was recorded during t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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