TMI Blog2020 (5) TMI 186X X X X Extracts X X X X X X X X Extracts X X X X ..... ers passed by CIT(A) in both the years and restore the issues relating to estimation of gross profit rate and examination of various expenses claimed by the assessee in both the years to the file of the assessing officer, who shall examine them in accordance with law after affording adequate opportunity of being heard to the assessee. - ITA Nos. 1335 And 1336/Bang/2017, ITA Nos. 1393 And 1394/Bang/2017 - - - Dated:- 28-4-2020 - Shri N.V. Vasudevan, Vice President And Shri B R Baskaran, Accountant Member For the Assessee : Shri Rohit G., CA For the Revenue : Shri Pradeep Kumar, CIT(DR)(ITAT), Bengaluru. ORDER PER B R BASKARAN, ACCOUNTANT MEMBER These cross appeals are directed against the orders passed by Ld CIT(A)-5, Bengaluru and they relate to the assessment years 2012-13 and 2013-14. All these appeals were heard together and are being disposed of by this common order, for the sake of convenience. 2. In both the years, the assessing officer estimated the net profit of the assessee by rejecting books of accounts. The Ld CIT(A) confirmed the rejection of books of accounts in AY 2013-14, but he held that the rejection is not justified in AY 2012-13 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mation of income are being contested. In the appeal of the revenue, the relief granted by Ld CIT(A) is being contested. The first issue relates to the rejection of books of accounts. According to the assessee, it has offered explanations to all the queries raised by the AO and explained the differences, if any, noticed during the course of search. Hence there is no justification for rejection of books of accounts in AY 2013-14. The assessee has further contended that the AO has not found any deficiency in the books of accounts pertaining to AY 2012-13. The AO has simply followed his decision taken for AY 2013-14 for rejection of books of accounts in AY 2012-13 also. Accordingly it was contended that the rejection of books of accounts for assessment year 2012-13 is not justified. The Ld A.R reiterated the contentions raised before the tax authorities in this regard. The Ld D.R, on the contrary, submitted that the search action revealed that the books of accounts maintained by the assessee are not reliable for the reasons discussed by the AO in the assessment order. He submitted that the deficiencies pointed out by the tax authorities are related to the State of Affairs of busines ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 731.603 grams 767.080 grams 35.477 grams The assessee has explained the difference before the search officials. The main explanations offered were that :- (a) goods have been sent on approval basis to its related concerns named M/s Sri Krishna Diamonds (on consignment basis). (b) goods sent to gold smiths for making jewellery. (c) Some goods are available with another related concern named M/s Raj Diamonds. After giving credits for above items, the search team found that there were still difference of 201.848 carat of diamonds jewellery (excess); deficit of 9.884 kgs of gold and excess of 95.199 carat of loose diamonds. The search team also found that the assessee has not collected acknowledgements from the Gold smiths for the gold given to them. It was also noticed that the assessee has been using several kinds of vouchers for goods sent on approval basis and some of them have not been included in the computer system for inventory. The search officials have also noticed that the several cash sales bills in the name of Aura Jewels have not been included in the sales reflected in the books of accounts. Accord ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the assessee only. There is no proper explanation as to why the approval books pertaining to the period prior to 1.4.2012 was destroyed. Though the assessee has offered explanations as to why the cash sales made to Aura jewels was not accounted for, yet the same is also self supporting explanations. It is in the common knowledge that the rate of diamond would depend upon four Cs , i.e., carat, colour, clarity and cut. The AO has noticed that the assessee did not maintain grade wise stock details, which is unlikely. This fact alone would show that the assessee has not maintained proper books of accounts. On the whole, we notice that the explanations furnished by the assessee on various types of deficiencies noticed by the revenue are self supporting explanations, i.e., no third party evidences or materials were brought on record by the assessee to explain the differences. Hence we are of the view that the assessing officer was justified in rejecting the book results in AY 2013-14. 10. We have noticed that the AO has rejected the book results of assessment year 2012-13 also by considering the various types of deficiencies noticed by the search team. The contention of the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X
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