TMI Blog2020 (3) TMI 172X X X X Extracts X X X X X X X X Extracts X X X X ..... ered correctly but a standard 22 Carat purity was taken by the Departmental Approved Valuer. These facts as pointed out by the assessee have substance and merits when there was no discrepancy found in the quantity of the stock at the time of survey. Accordingly, in the facts and circumstances of the case the addition is based only on the higher valuation done by the Departmental Approved Valuer as against the valuation recorded by the assessee in the books of account and purchase bills. Further, some of the stock is also from the opening stock of the assessee and to that extent no addition can be made on account of higher valuation as the undervaluation, if any would not affect the income of the assessee being part of both sides of profit and loss account. Hence, the addition made by the AO and sustained by the ld. CIT(A) is deleted. Unverifiable purchases - HELD THAT:- Non-production of parties cannot be a reason for holding the transaction as unverifiable. Even otherwise the AO has not given the conclusive findings that these purchases are not genuine. It is only a suspicion and doubt about the genuineness of purchases that too for want of non-production of parties. Further, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ration declaring total income at ₹ 14,77,100/-.During the scrutiny assessment, the AO has made the addition of ₹ 1,17,80,068/- on account of excess stock based on the valuation of the stock at the time of survey. The AO also treated the purchases to the extent of ₹ 12,66,540/- as unverifiable. However, no separate addition was made as the said amount was considered as covered by the addition made on account of excess stock. The assessee challenged the action of the AO before the ld. CIT(A) but could not succeed. 2.3 Before us, the ld.AR of the assessee submitted that the valuation by the Departmental approved Valuer is based on incorrect facts and also incorrect rates applied for various items of jewellery. He submitted that the assessee vide letter darted 16-12-2014 pointed out various defects in the valuation done by the Departmental approved valuer and specifically highlighted the facts that Departmental approved valuer has assumed the contents/ purity of the gold in all the articles at 22 Carat whereas most of the articles contain gold of 4,9,17 Carat and only very few articles contain 22 Carat gold. He further submitted that assessee has also pointed out t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s which were found during the survey of jewellery sold by the assessee in the Exhibition in Mumbai. The said sale bills were having high rate due to the reason that it was sold in the Exhibition and high price was charged by the Manager of the Exhibition which is also the part of the sale bills. Thus if the valuation of the stock is done as per the purchase bills then there will be no excess stock. 2.4 On the other hand, the ld. DR has submitted that the valuation was done in the present of the Director of the assessee company who has not objected or raised any objections during the course of survey proceedings against the valuation. On the contrary, in his statement during the survey, Shri Umesh Soni, Director of the assessee, accepted the valuation done by the Departmental Approved Valuer and also accepted that the books of account were not complete as some entries of purchases/sales were not entered. The AO has given the credit of purchase bills not entered into the books of account at the time of survey and therefore, the balance amount was found to be excess stock which was not explained or recorded in the books of account. The ld. DR has relied on the orders of the lower a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cally highlighted the defects and discrepancies in the valuation determined by the Departmental Approved Valuer. Neither the Investigation Wing nor the AO in the assessment proceeding have even made an attempt to examine and verify the correctness of the fats as highlighted by the assessee. The AO has made addition based on the valuation whereas the assessee to counter the valuation done by the Departmental Approved Valuer has filed the valuation report of Registered Valuer dated 29-11- 2014. The ld. CIT(A) while confirming the addition and rejecting the valuation report filed by the assessee and observed in para 2.3.3. as under:- 2.3.3. As per registered valuer s valuation report, it is made on 29-11-2014, though the same was filed with ADIT on 16-12-2014 and no explanation was tendered for such delay. All this creates a doubt that it is an afterthought and whether the assessee's valuer truly examined the same goods or not. The contention raised by assessee seems baseless and thus rejected and action of Assessing Officer is upheld. These grounds of appeal are dismissed. The only reason cited by the ld. CIT(A) for rejecting the valuation report of Registered Valuer is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the confirmation of these parties, their bills and proof of payments through cheques. The AO did not accept the documentary evidence produced by the assessee on the ground that the assessee has failed to produce these parties for verification and consequently treated the purchases to the tune of ₹ 12,66,540/- as unverifiable purchases. The assessee challenged the action of the AO before the ld. CIT(A) but could not succeed. 3.3 Before us, the ld.AR of the assessee has submitted that the assessee submitted the confirmations of these three parties containing PAN and full addresses. The assessee also submitted the proof payments to these parties through banking channel. The AO without pointing out any defects in the evidence produced by the assessee, has treated the purchases as unverifiable on the ground that the assessee has not produced the parties before him for verification. The ld.AR of the assessee further contended that instead of asking the assessee to produce the parties for examination or verification, the AO ought to have exercised his powers to summon them or to verify their existence and genuineness through his Inspector. Thus the ld.AR of the assessee submitted ..... X X X X Extracts X X X X X X X X Extracts X X X X
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