TMI Blog2022 (10) TMI 1096X X X X Extracts X X X X X X X X Extracts X X X X ..... herefore, we find the survey team committed an error in adopting the production date and also the closing stock date which was followed by the AO is contrary to the evidences brought on record by the assessee. Therefore, we find the reasons recorded by the CIT(A) in holding that the AO conducted the assessment proceedings in a casual manner, is justified and the order of CIT(A) is fair and reasonable based on appreciation of material facts concerning the case of the assessee. Assessee offered additional income voluntarily for taxation in respect of value of purchase of gold to an extent of 4210 gram, sale of gold to an extent of 4210 gram and excess stock of ornaments 917 gram totaling to Rs.2,19,48,940/- but we find no discussion whatsoever made by the AO regarding the said details offered by the assessee except proceeding to make addition on account of stock difference found by the survey team regarding gold an extent of 193.157 Kgs. We find force in the arguments of ld. AR the addition made by the AO in respect of stock different at 193.157 Kgs is not justified irrespective of having every details along with the submissions with clear evidences vide Schedule I to VIII on r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rounds of appeal during the course of appellate proceedings before the Hon'ble Tribunal. 3. The brief facts relating to the issue on hand are that the assessee is a company engaged in the business of manufacturing and trading in gold, silver, diamond ornaments. The assessee conducts its business under the name and style as Sonigara Jewellers Pvt. Ltd. . The assessee filed return of income on 23-09-2010 for A.Y. 2011-12 declaring a total income of Rs.66,84,944/- which was accepted vide proceedings u/s. 143(1) of the Act. Thereafter, a survey u/s. 133A of the Act was conducted on 22-03- 2011 at the premises of the assessee. Notices u/s. 143(2) and 142(1) of the Act were issued. In response to the said notices, the authorized representative on behalf of the assessee appeared and filed various details before the AO. During the course of scrutiny proceedings, the assessee was asked to show cause why the difference in the quantity on the basis of impounded papers and the quantity worked out on the basis of tentative trading account should not be added to the total income of the assessee. The assessee replied vide its letter dated 21-10-2011 of which the AO reproduced at page 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... see. He finally submits that the AO issued a letter dated 28-09-2011 to explain the said difference. He argued that the assessee filed its reconciliation vide its letter dated 21-10-2011 and explained the difference arose on 5 major items. The AO has not accepted the said explanation and the CIT(A) accepted the same reconciliation and gave relief to the assessee, which is incorrect. The ld. DR submits that the assessee did not file any documentary evidence in support of reconciliation filed on 21-10-2011 and no proper explanation was offered with the support of evidences. The ld. DR further submits that the CIT(A) plainly accepted the claim of assessee without any independent verification or a remand report from the AO. The CIT(A) was not justified in accepting the submissions of assessee without there being no independent evidence substantiating the claim of assessee. The ld. DR vehemently argued that the order of CIT(A) may be set aside and restore the order of AO. 5. The ld. AR, Shri Sharad Shah submits that the arguments of ld. DR in respect of fresh evidences being filed before the CIT(A) is misconceived. He submits that there was no fresh evidences filed before the CIT(A). ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Act and drew attention to the paper book at pages 275 to 285. He supported the order of CIT(A). 6. Heard both the parties and perused the material available on record. The main contention of the ld. DR is that the assessee did not explain regarding the difference in gold. We note that the assessee requested the AO to provide impounded material for giving proper explanation vide letter dated 23-03-2011 which is at page 14 of the paper book and there is no dispute with regard to furnishing of said copies of impounded material until 02-08-2011. Therefore, it is clear the appellant-revenue did not provide the copies of impounded material till 02-08-2011 from the date of survey i.e. 22-03-2011. It is also not disputed that the assessee tendered its first submissions on 21-10-2011. The note dated 01-05-2012 by the AO which is at page 93 of the Revenue s paper book submitted to CCIT stating the details provided by the assessee and the stock of gold sent for the reproduction are not free from doubt, due verification will be done at the time of scrutiny proceedings. Therefore, post survey and during scrutiny proceedings, the assessee furnished all the details in respect of differe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... em wise production/ornaments are reflected at page 111 of the impounded loose sheet. We note that the scanned copies of these loose sheets are reflected at pages 18 and 19 of the impugned order. On perusal of the loose sheet No. 112 shows that the figure of production from April, 2010 to March, 2011 but however the survey team worked out the figure of production up to 28-02-2011. We find the survey team worked out the difference in gold at 193.157 kgs in the goods/ornaments produced by taking into opening stock as on 01-04-2011 at 137.120 kgs and production at 485.695 kgs. Further, the survey team worked out the difference in stock at 193.157 kgs taking into consideration sales at 295.056 kgs closing stock at 134.602 kgs. The CIT(A) discussed the same at para 5.2.8 of the impugned order. We note that according to the assessee the survey team committed error in pointing out the difference of 193.157 kgs without appreciating the figure of production is not the criteria for determination of difference in stock. The ld. AR contended that the production figures varies due to re-melting of the ornaments already produced for various reasons like change in fashion, defects in production, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Production but Remelted 54.469 IV Finished Ornaments Brought from Market 0.914 VIII Wrong Entry in Production Figure 2.740 Closing Stock as on 22/03/2011 (As counted by survey party) 134.602 Difference 0.030 TOTAL 577.218 TOTAL 577.218 11. We note that supporting the above as correct position on 22-03-2011 the assessee substantiated the same by filing proof of figures of various items production before the AO as well as the CIT(A). The CIT(A) examined every explanation regarding the above chart in the impugned order from page12. On perusal of the same the assessee contended that gold bars weighing 20 kgs were not considered as opening stock by the survey team. The CIT(A) examined the ledger extract ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2.32 November 53473.04 48396.75 330419.07 December 43751.19 39459.85 369878.92 January 35194.19 31615.95 401494.88 February 39934.29 35887.35 437382.23* March till 22nd Mar 24346.19 21944.56 459326.79 22nd 31 Mar 3615.12 3392.64 462719.43 13. The above said chart further shows the gross weight production sales net weight and total net weight from 01-03-2011 to 31-03-2011. Therefore, it clearly shows that the AO did not consider the details in respect of ornaments of 92% purity, names, addresses and PAN Nos. of the parties who have given the gold ornaments for labour job, pure gold of 20 kgs in the opening stock and month wise quantity production up to the date of survey i.e. 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f gold received for conversion from local saraffs to extent of 91.321 Kgs and also confirmations, ledger extracts etc. of such parties which gave the gold for making ornaments. According to the CIT(A) the said information has been examined by the AO and satisfied with explanation offered by the assessee vide order sheet noting dated 18-02-2014 by the AO. The CIT(A) reproduced the said details with regard to Ambika Jewellers, Swapan GoldSmith, Kantilal T. Soni and Ranka Jewellers from pages 38 to 52 of the impugned order. We find no adverse noting by the AO and no evidence contrary to the return of gold received for conversion from local safaffs was brought on record by the appellant-revenue. 16. We find the items wise details of gold smith register for the period between 01-04-2010 and 23-03-2011 in respect of factory production at pages 53 to 68 of the paper book. It was submitted by the ld. AR that the assessee is required to re-melt the ornaments already produced for various reasons i.e. defect in production, change in fashion, quality check, change in fineness etc. We find force in the arguments ld. AR that the re-melted ornaments are necessarily be deleted while arriving at ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... see cannot be believed and proceeded to make addition the alleged difference worked out by the survey team. Further, it is not the case of AO that the assessee failed to discharge the primary onus lying upon it by filing full details in support of its claim, therefore, in our opinion, without making any enquiries involving explanation and documentary evidences filed by the assessee, the AO cannot make any addition based on conjectures and assumptions as well as without bringing any conclusive evidence on record. Therefore, we find the survey team committed an error in adopting the production date and also the closing stock date which was followed by the AO is contrary to the evidences brought on record by the assessee. Therefore, we find the reasons recorded by the CIT(A) in holding that the AO conducted the assessment proceedings in a casual manner, is justified and the order of CIT(A) is fair and reasonable based on appreciation of material facts concerning the case of the assessee. 19. Further, the assessee offered additional income voluntarily for taxation in respect of value of purchase of gold to an extent of 4210 gram, sale of gold to an extent of 4210 gram and excess sto ..... X X X X Extracts X X X X X X X X Extracts X X X X
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