TMI Blog2023 (4) TMI 103X X X X Extracts X X X X X X X X Extracts X X X X ..... We find that the CIT(A) after following the decision in V.K.J. Builders Contractors (P) Ltd. [ 2009 (8) TMI 101 - SUPREME COURT] directed the AO to correct the entry of opening stock. We do not find any illegality or infirmity in the order of ld. CIT(A) which we affirm. In the result, grounds raised by the revenue is dismissed. - ITA No. 493/Srt/2019 And ITA No. 265/Srt/2019 - - - Dated:- 30-3-2023 - Shri Pawan Singh, Judicial Member And Dr. Arjun Lal Saini, Accountant Member For the Department : Shri Ashok B Koli, CIT-DR For the Assessee : Shri Mehul K Patel, Advocate ORDER UNDER SECTION 254(1) OF INCOME TAX ACT PER: PAWAN SINGH, JUDICIAL MEMBER: 1. These two appeals by the Revenue are directed against the separate orders of learned Commissioner of Income Tax (Appeals)-2, Surat (in short, the ld. CIT(A)) dated 21/08/2019 and 28/02/2019 for the Assessment Year (AY) 2012-13 and 2013-14 respectively. In ITA No. 439/Srt/2019 for A.Y. 2012-13, the revenue has challenged the order of ld. CIT(A) in deleting penalty levied under Section 271(1)(c) of the Income Tax Act, 1961 (in short, the Act) and in ITA No. 265/Srt/2019, the revenue has challenged the or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... jewelleries. Inventory of jewellery found during the survey was prepared and its valuation was made by approved valuer for Rs. 62.93 crores. The assessee accepted the correctness of inventory with regard to quantity. However, the assessee disputed valuation of approved valuer on the ground that the same was valued on the basis of market price. On the basis of discrepancy in the stock of gold and diamond jewellery with other unrecorded sales, the assessee offered amount of Rs. 8.10 crores as additional income in its disclosure. The assessee valued the unrecorded investment in stock considering the average rate. As recorded above, the survey party valued the inventory on the basis of market rate. On the basis of valuation of assessee vis a vis the valuation made by approved valuer, there was a difference of Rs. 3.71 crores which was added as unexplained investment under Section 69B of the Act. The assessing officer also made other addition of Rs. 5.10 Crore on account of value of closing stock as on 31/03/2012. On further appeal in quantum assessment, the addition of Rs. 3.71 crore was upheld, however, the addition of Rs. 5.10 crore was deleted vide order dated 17/01/2017. No further ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... purchase rate of the year Amount in Rs. 1. 22 Carat Gold 31,489 Grams 2438.54 7,67,87,186 2. 18 Carat Gold 4571 Grams 2701.25 1,24,38,833 3. 18 Carat studded diamond 1122 Carat 21273.31 2,38,68,653 4. Platinum 13.200 Grams 3458.80 4,56,456 Total ..Rs. 11,35,51,128 5. On the basis of both the valuation, there was a difference of Rs. 3.71 crore, which was considered as unexplained difference in valuation and was added back to the income of assessee. The assessee further explained that during the assessment, the assessee made compliance of all notices. There was a difference of opinion in the method of valuation of stock. The departmental valuer considered the market value of jewellery made from gold, diamond, platinum as well as silver. H ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sed on difference of opinion in method of valuation. The government approved valuer undertaken physical verification of stock of each and every item. While valuing the items, the government valuer considered the market value of jewellery of gold, diamond, platinum and silver. The assessee valued its stock at cost price or market price whichever was low. The ld. CIT(A) after referring the decision of Hon ble Apex Court in Dilip Shroff Vs CIT Anr (supra) held that a duty may be enjoined on the assessee to make and correct disclosure of income, but if such disclosure is based on the opinion of an expert, who is otherwise also a registered valuer having been appointed in terms of a statutory scheme, only because his opinion is not accepted or some other expert has given another opinion, the same by itself may not be sufficient for arriving at a conclusion that the assessee has furnished inaccurate particulars. The ld. CIT(A) specifically recorded that there is no dispute about the undisclosed stock and its item but the dispute is only about the method of valuation which leads to addition of Rs. 3.71 crores. Such addition is a result of difference in valuation which cannot be held as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y maintained by the assessee and the same was valued at the average method of valuation. The Assessing Officer made addition by adopting other method of valuation in closing stock. The ld. AR of the assessee submits that the ld. CIT(A) deleted the addition of Rs. 5.10 crores and accepted the fact that average rate method of valuation is correct method. The assessee reported that the quantity is same, simply the difference is on account of method of valuation. Thus, the assessee has not furnished inaccurate particulars of income, quantity remains the same. The ld. AR of the assessee has relied on various case laws as cited in earlier paras of this order. 9. We have considered the submissions of both the parties and have gone through the orders of the lower authorities carefully. We have also deliberated upon the case laws as relied upon by the ld. AR of the assessee. There is no dispute that the addition of Rs. 3.71 crore was made on account of adopting different method of valuation by assessee and the government valued valuer. We find that the ld CIT(A) deleted the entire penalty on the basis of decision of Hon ble Supreme Court in Dilip Shroff Vs CIT(Supra) wherein it was held ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cted by the Assessing Officer vide order dated 03/10/2017 by holding that the facts of the case law relied by the assessee is not applicable on the facts of the present case. In the said case, the Assessing Officer made addition in closing stock which was accepted by the assessee in KVS Scheme, 1998. 13. Aggrieved by the rejection of application under Section 154 of the Act, the assessee filed appeal before the ld. CIT(A). Before the ld. CIT(A), the assessee stated that the assessment for AY 2012-13 was completed under Section 143(3) wherein the addition of Rs. 3.71 crores towards the valuation of undisclosed excess investment under Section 69, was made. The Assessing Officer also made addition of Rs. 5.10 crores towards value of closing stock. The addition of valuation of closing stock was deleted by the ld. CIT(A). However, the addition on account of difference of valuation of undisclosed excess stock was upheld by the ld. CIT(A) vide order dated 17/01/2017. After receipt of order of ld. CIT(A), the assessee requested the Assessing Officer to give effect the order of ld. CIT(A). The Assessing Officer refused to give effect of the said order, therefore, the assessee filed appli ..... X X X X Extracts X X X X X X X X Extracts X X X X
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