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TMI Blog2022 (5) TMI 91X X X X Extracts X X X X X X X X Extracts X X X X ..... the same in this unjustified addition. The addition is arbitrary, unjust, uncalled-for, illegal and in any case highly excessive and against the material placed on record. 2. That the worthy CIT(A) has erred in law and facts in sustaining the addition of Rs. 6,00,000/- on account of unexplained cash credit u/s. 68 of the I.T. Act, 1961 as made by the Assessing Officer. Such action being palpably wrong and grossly unjust must be quashed. 3. That the orders of the worthy CIT(A) and AO are against the law and facts of the case. 4. The appellant craves leave to add, alter, amend or delete any of the above grounds of appeal." 2. Succinctly stated, the assessee who is engaged in the business of purchase/sale of bullion had e-filed his return of income for assessment year 2013-14 on 30.09.2013, declaring an income of Rs. 4,02,710/-. Return of income filed by the assessee was initially processed as such u/s. 143(1) of the Act. Subsequently, the case of the assessee was selected for scrutiny assessment u/s. 143(2) of the Act. 3. During the course of the assessment proceedings, it was observed by the A.O that the assessee had purchased bullion from State Bank of India, Ludhiana and f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... old Amount 1. M/s. Kapoor Sons Jewellers, Hsp. 28.01.2013 V 1 451.250 Gram Rs.13,85,360/- 2. M/s. Jagdambay Jewellers, Hosp. 28.08.2013 V 2 1000 gram Rs.30,60,000/- Backed by the aforesaid facts the A.O called upon the assessee to put forth an explanation as regards the aforesaid unrecorded sale transactions. In reply, the assessee vide his letter dated 03.12.2015 filed with the A.O a revised stock statement incorporating the aforesaid two sale transactions, as under: Date Opening Balance ( In Grams) Purchase Qty. ( in grams) Sales (in grams) Closing Balance ( in grams) 1 12.10.2012 0 1.50 0.00 1.50 2 16.10.2012 1.50 1.00 0.00 2.50 3 03.01.2013 2.50 1000.00 942.43 60.07 4 04.01.2013 60.07 2000.00 2057.57 2.50 5 07.01.2013 2.50 3000.00 0.00 3002.50 6 07.01.2013 3000.00 5948.65 53.85 7 08.01.2013 53.85 3000.00 3000.00 53.85 8 09.01.2013 53.85 0.00 36.04 17.81 9 10. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... id unrecorded sales transactions the A.O concluded that the assessee had made the aforesaid unrecorded sales transactions from purchases which were made by him out of his undisclosed sources. Backed by his aforesaid conviction the A.O made an addition qua the unrecorded sale transactions of 1451.240 grams (451.240 grams + 1000 grams) a/w the corresponding suppressed profit element of Rs. 44,45,306/- (Rs. 13,85,306/- + Rs. 30,60,000/-) to the returned income of the assessee. It was further observed by the A.O that the original stock statement filed by the assessee on 27.08.2015, revealed, that the closing stock of bullion with him on 12.03.2013 was 380.550 grams. Taking cognizance of the fact that the assessee had thereafter, i.e. during the period 12.03.2013 to 31.03.2013 purchased 3000 grams of bullion, viz (i). 1000 grams of bullion on 13.03.2013; (ii).1000 grams of bullion on 18.03.2013; and (iii).1000 grams of bullion on 20.03.2013, the A.O worked out the stock of bullion at Rs. 3380.550 grams. Considering the fact that the assessee had during the aforesaid period, i.e. 12.03.2013 to 30.03.2013 carried out sale of 2005.82 grams of bullion, as under: Name of the parties ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nter alia, after taking cognizance of the fact that the sale transactions in question were duly reflected in the revised stock statement filed by the assessee on 03.12.2015, thus, vacated the said addition. As regards the addition of Rs. 39,10,932/- (supra) that was made by the A.O on account of suppression of 1330.29 grams of closing stock of bullion, the CIT(Appeals) upheld the same. As regards the addition of Rs. 6 lac (supra), though the CIT(Appeal) principally concurred with the A.O but sustained the said addition by triggering the provisions of Sec. 69A of the Act. Backed by her aforesaid observations the CIT(Appeal) partly allowed the assessee's appeal. 5. The assessee being aggrieved with the order of the CIT(Appeal) has carried the matter in appeal before us. We have heard the ld. Authorized Representatives of both the parties, perused the orders of the lower authorities and the material available on record, as well as considered the judicial pronouncements that have been pressed into service by them to support their respective contentions. We shall first advert to the claim of the Ld. AR that the addition of Rs. 39,10,932/- (supra) made by the A.O as regards the alle ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s made." (B). Re: Sales to M/s. Jagdambay Jewellers (1000 grams) : Rs. 30,60,000/-: "As per the revised stock statement produced before the assessing officer, the assessee has stock in hand which was sold to M/s. Jagdambay Jewellers." However, quite strangely, the CIT(A) despite finding the revised stock statement filed by the assessee on 03.12.2015 as being in order, and, inter alia, by acting on the same had though vacated the additions that were made by the A.O on account of alleged unaccounted sales of Rs. 44,94,205/-, however, he had thereafter refused to take cognizance of the said statement which was relied upon and pressed into service by the assessee to dislodge the allegation of the A.O as regards suppression of 1330.29 grams of closing stock of bullion. Apart from that, we are of the considered view that the Assessing Officer except for claiming that the revised stock statement filed by the assessee on 03.12.2015 was merely an attempt on his part to show availability of sufficient stock with him on the dates corresponding to those on which the sale transactions in question had taken place had however, failed to place on record any such material which would reveal any ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pression of closing stock of bullion by the assessee. 6. Also, we find that the addition towards impugned suppression of 1330.29 grams (supra) of bullion had been made by the Assessing Officer, for the reason, that after considering the purchases of 3000 grams of bullion made by the assessee subsequent to 12.03.2013, viz. (i) 1000 grams of bullion on 13.03.2013; (ii) 1000 grams of bullion on 18.03.2013; and (iii) 1000 grams of bullion on 20.03.2013, and, the sales of 2005.82 grams of bullion made by him over the same period, the closing stock of bullion with the assessee on 31.03.2013 as per the A.O. worked out at 1374.73 grams [3380.550 grams (-) 2005.82 grams]. Considering the fact that now when the assessee as against the availability of 1374.73 grams of closing stock of bullion with him on 31.03.2013 had reflected closing stock of only 44.440 grams of bullion in his financial statements for the year under consideration, the A.O had concluded that there was a suppression of 1330.29 grams of closing stock of bullion by the assessee. Accordingly, the A.O backed by his aforesaid observations had determined the value of the suppressed 1330.29 grams of closing stock of bullion at Rs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and (ii). Invoice No. V5, dated 30.03.2013 of 909.560 grams (gross weight) i.e. 88% purity which on conversion into 99.59% purity was reduced to 800.4 grams (net weight). 8. Considering the aforesaid two fold contentions of the ld. A.R we find substantial force in the same, viz (i). that the CIT(Appeal) by taking recourse to a self-contradictory approach had wrongly refused to consider the assessee's revised stock statement; and (ii). that the A.O had erred in not considering the net weight (i.e weight of 99.50% purity gold as mentioned in the invoices) of the aforementioned two sale transactions in question, viz. (a) Invoice No. V4, dated 29.03.2013 of 560.560 grams (gross weight) i.e 95% purity which on conversion into 99.50% purity was reduced to 532.5 grams (net weight); and (b). Invoice No. V5, dated 30.03.2013 of 909.560 grams (gross weight) i.e. 88% purity which on conversion into 99.59% purity was reduced to 800.4 grams (net weight). Backed by our aforesaid observations, we herein vacate the addition of Rs. 39,10,932/- (supra.) made by the Assessing Officer towards the alleged suppression of the stock of bullion. Accordingly, we set-aside the order of the CIT(Appeal) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion as regards the source of the cash deposits in question, therefore, the lower authorities had rightly sustained the said addition. Rebutting the claim of the Ld. AR that as the cash of Rs. 6 lacs(supra) deposited by the assessee in his bank account lost its character as that of money, thus, the same could not have been added u/s. 69A of the Act, the Ld. DR had drawn support from the judgment of the Hon'ble High Court of Punjab & Haryana in the case of Smt. Kavita Chandra Vs. CIT (2017) 81 taxmann.com. 317 (P&H) and that of Naresh Kumar Vs. CIT (2017) 88 taxmann.com 547 (P&H). 11. In so far the claim of the assessee that the aforesaid amount of Rs. 6 lacs (supra) was sourced from the funds lying in the common pool with him and his son, viz. Sh. Robin Kumar, Prop. M/s. Robin Jewellers, Hoshiarpur, we are afraid is an explanation which being devoid of any merit cannot be accepted. As regards the claim of the Ld. AR that CIT(Appeal) had grossly erred in law and the facts of the case in sustaining the addition of Rs. 6 lac (supra) u/s. 69A of the Act, we find that the same is based on the premise that as cash on being deposited in the bank account looses the colour and characte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reditor and not as that of a trustee and beneficiary. Admittedly, as held by the Hon'ble Apex Court, once moneys are deposited by the assessee in a bank account, then, the banker is entitled to use the monies without being called upon to account for such user as his only liability is to return the amount in accordance with the terms agreed between him and the customer. But then, we cannot remain oblivious of the fact that at the relevant point of time, i.e. when the assessee had deposited the 'money' in his bank account which had resulted to the aforesaid relationship as that of a debtor and creditor inter-se the banker and the assessee, the latter was the owner of the same. Accordingly, there is no gainsaying that as at the relevant point of time, i.e. at the time of deposing the 'money' in the bank account during the year under consideration, i.e. on 03.01.2013 the assessee was admittedly the owner of the said amount which was not recorded in his books of accounts, and, no explanation about the nature and sources of the acquisition of the same was offered by him, therefore, no infirmity could be related to the treating of the same as unexplained money within t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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