TMI Blog2021 (10) TMI 735X X X X Extracts X X X X X X X X Extracts X X X X ..... Sahu, Member (A) For the Appellant : Rohit Mujumdar, DR For the Respondents : S. Rama Rao, AR ORDER Per S.S. Godara, JM This Revenue's appeal for A.Y. 2016-17 arises from the CIT(A)-7, Hyderabad's order dated 18-11-2019 passed in case No. 0143/CIT(A)-7/2018-19, in proceedings u/s. 143(3) of the Income Tax Act, 1961 [in short, 'the Act']. Heard both the parties. Case file perused. 2. The Revenue has raised the following substantive grounds in the instant appeal: i. The Ld. CIT(A), Hyderabad, erred in law and on facts, in not appreciating that the appellant had not been maintaining any regular books of accounts and the alleged balance sheet as on 31.03.2016 was drawn up by the assessee, considering the assets and liabilities available as on 01.4.2015 and 31.3.2016, without any supporting evidences provided for the alleged claim. ii. The Ld. CIT(A), Hyderabad, erred in law and on facts, in not appreciating that the assessee in order to arrive at the stock as on 31.3.2015, adopted the figure of stock available as in F.Y. 2004-05 and the fact that a survey u/s. 133A was conducted on 14.7.2004 in the business premises of the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rse of appellate proceedings and directed to submit the remand report after examine and verify the additional evidences along with supporting documents. 3. In this case, the assessment for the A.Y. 2016-17 was completed 143(3) on 28.12.2019 by making an addition of ₹ 4,62,87,257/- on account of unexplained investment. It is observed by the AO during the assessment proceedings that even after expiry of time, the assessee has neither furnished the information nor submitted any books of accounts to substantiate his claim of capital shown in the balance sheet. The AO further observed that the assessee not even explained the sources for additional capital made every year in the balance sheet. In the absence of the proper explanation and the supporting evidences the Assessing Officer has made the addition. 4. During the course of appellate proceedings, the assessee has submitted the additional evidence and requested the tax. CIT(A) to admit the same. In the written submissions the assessee submitted that while uploading the return of income for the A.Y. 2015-16, the loss figure of ₹ 2243550/- was uploaded as capital. 5. The assessee further submitted the calcul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he department found that there was 15 Kg. of gold jewellery and 96 kg. of silver article as on the date of survey. The modus operandi of the assessee's business is that as and when there is sale of any article, immediately the same weight of ornament will be replaced with new one. Therefore, the quantity of the stock will remain the same. Only there is a fluctuation in the rate, which will be booked as gross profit/gross loss to the profit and loss account. To arrive the opening balance of the capital, the assessee has followed the principle capital = assets - liabilities. 9. With regard to the opening balance of capital of ₹ 5,31,23,790/- for the A.Y. 2016-17, the assessee submitted that the assessee has not maintained any books of accounts upto the assessment year 2015-16. When there were no final accounts, the balance sheet has to be prepared by considering the assets and liabilities available as on 1.4.2015. The assessee further submitted that in order to arrive the stock as on 31.3.2015, the assessee has taken the stock available as on 2004-05 as there was a survey under sec. 133A of the IT Act on 14.7.2004 and the department found that there was 15 Kg. of gold ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... #8377; 4,62,87,257/- on account of additional capital. According to the Assessing Officer, the opening capital admitted for the year is not properly explained. The Assessing Officer considered the market value of 15 kg of gold available during Financial year 2004-05 and added the incomes received and arrived at the available capital at ₹ 1,11,94,921. The balance of ₹ 4,62,87,257/- is treated as unexplained. The appellant filed a detailed explanation by way of written submissions alongwith the petition for admission of additional evidence. The appellant submitted that he was carrying on the business activity and in the process purchasing and selling the gold jewellery. The increased value of gold, the income derived; the agricultural income formed the basis for increase in the capital account. It is submitted that there was substantial capital in the immediately preceding years and that based on the same the amount of the present capital is shown. The appellant worked out the availability of the funds from the financial year 2004-05 and onwards as the regular books of account were not maintained for all the years. As the said claim was made for the first time before ..... X X X X Extracts X X X X X X X X Extracts X X X X
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