TaxTMI 
TaxTMI 
2014 (7) TMI 602
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....d to give the details of stock of gold and silver ornaments as per its books of account on 05.03.2008. The details submitted by the assessee were as under: Details Gold Silver Opening stock Less: Sale from 01.04.2007 to 05.03.2008 16701/861 Gram (-) 4081/660 Gram 83320.029 gram 11648.000 gram Total closing stock of old ornaments 12620/201 gram 71672.029 gram Add: purchase of gold from 01.04.2007 to 05.03.2008 6712/337 gram 35244.300 gram Total stock as per books 19332/578 gram 106916.329 gram Value: Gold 12620/201x850/- (Old stock) 6712/377x11125/- (New stock) Rs. 10730069/- Rs. 7467519/- Silver Rs. 1669070/- The above details of stock as per books were given in a signed statement of Ramji Patel, partner of the assessee firm. Thus, the Assessing Officer noticed that there was difference in stock of gold and silver as physically found and as shown in the books of account as under: Details Gold Silver Stock actually found as on 05.03.2008 21610.620 gms 111.493 Kg Book stock as per sales & purchase register as on 05.03.2008 19332.578 gms 106.916 Kg Difference (Excess found) 2278.048 gms 5.577 Kg Value of difference ....
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....n grams Silver in gms Date of receipt of such goods from the persons 1 Nareshbhai Ramsunghbhai Chaudhary 75.740 14/02/2008 2 Nanjibhai Narsangbhai Judal 238.000 23/02/2008 3 Devjibhai Ratubhai Samodiya 119.360 16/02/2008 4 Nareshbhai Virsangbhai Chaudhary 27.170 03/03/2008 5 Satishkumar P Mevada 33.070 22/02/2008 6 Hirjibhai Hemrajbhai Valaganth 142.560 27/02/2008 7 Shamlabhai Dhanrajbhai Patel - 658 01/03/2008 8 Smt. Surajben Jesungbhai Fof 476.590 20/02/2008 9 Baldevbhai Narottambahi Soni 409.760 16/02/2008 10 Rameshbliai Pafthibhai Chaudhary 105.460 18/02/2008 11 Smt Manjulaben Laxmanbhai Patel 650.330 23/02/2008 12 Vasrambhai Laxmanbhai Ratda 1791 25/2/2008 13 Devabhai Laljibhai Fof 1089 28/02/2008 14 Sardarbhai Laxmanbhai Jegoda 1039 22/02/2008 Total 2278.04 4577.000 8. Further, the assessee also filed copies of affidavits prepared by the persons mentioned in the table above. The affidavits were in the same language except difference in figure and therefore, the Assessing Officer extracted....
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....ven Date when received back Amount paid. With date. Details ofTDS Rate per gram at which work done Date of return of such gold/silver ornaments Amount received against such job work 1 Nareshbhai Ramsangbhai Chaudhary No Sona Har 75.74 14/02/2008 Usmanbhai Momin (Bangali) 14/02/2008 13/03/2008 27/03/2008 Rs. 8105 130 13/03/2008 9843 2 Devjibhai Ratubhai Samodiya No 55.630 20.990 42.740 16/02/2008 16/02/2008 16/02/2008 Rameshbhai Harjibhai Patel Ratanbhai Bangali Ketanbhai Ramanlal Soni 16/02/2008 16/02/2008 16/02/2008 10/3/2008 10/3/2008 10/3/2008 20/03/2008 Rs. 7784 24/03/2008 Rs. 2860 22/03/2008 Rs. 2860 100.00 100.00 100.00 10/3/2008 10/3/2008 10/3/2008 5560.00 2098.00 4270.00 11. The Assessing Officer pointed out from the above table that it can be seen that in the first case that is of Shri Nareshbhai Chaudhary, the ornaments 75.74 grams were shown as received from him on 14.02.2008, which was given to Shri Usmanbhai Momin (Bengali) for job work on 14.02.2008, the same were received from him on 13.03.2008 and returned to Nareshbhai Chaudhary on 13.03.2008. Similarly, in the case of Devjibhai Ratubhai Samodia, ornaments were received f....
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....in the books of accounts. Though the appellant retracted the disclosure made by Shri Ramjibhai Patel after the survey, it is clear that such retraction was an afterthought because even during the assessment proceedings the appellant has not .been able to satisfactorily explain the excess gold and silver found at the business premises. During assessment proceedings the appellant produced receipts from customers to evidence that gold and silver was received from them for remaking / remodeling however from the submissions filed before he AO it is seen that such gold or silver received was immediately issued to karigars for job work to be done. The explanation offered by the appellant has been made a part of the assessment order. The AR of the appellant has claimed during the appellate proceedings that the ornaments received from the customers were .given to karigars who carried out the repair / remodeling work at the premises of the appellant. This claim of the AR of the appellant is not supported by any evidence. It is seen that no evidence was found at the business premises of the appellant which indicated that the karigars had carried on the repair / remodeling work at the business....
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.... Rs. 4,00,000/- as advance tax on 15.03.2008. However, in the return of income filed for the assessment year 2008-09, the income was shown at Rs. 16,369/- only. The assessee explained before the Assessing Officer during the course of assessment that the excess stock found of gold and silver ornaments was received from different persons for converting it into new ones and filed affidavits of all concerned persons. The Assessing Officer found that the gold and silver ornaments were given to the assessee by the persons for job work and that as per the details submitted by the assessee, from the date of survey the jewellery were not lying in the business premises of the assessee and hence the total physical stock found during the course of the survey proceedings at the business premises of the assessee belonged to the assessee and represented the additional income of Rs. 26,04,350/- declared by the assessee as its unaccounted income. Therefore, he made addition of the same to the income of the assessee. On appeal, the Commissioner of Income Tax (Appeals) confirmed the action of the Assessing Officer observing that the Authorized Representative of the assessee has claimed that the ornam....
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....rried out work of repairing/remodelling at the premises of the assessee and kept such goods at the premises of the assessee. We find that no material was brought before us to controvert the above point highlighted by the Commissioner of Income Tax (Appeals). In absence of any such material, we do not find any good reason to interfere with the orders of the lower authorities. Therefore, this ground of appeal of the assessee is dismissed. 15. Ground no. 2 of the appeal of the assessee is directed against the order of the Commissioner of Income Tax (Appeals) confirming the disallowance of labour payment of Rs. 66,459/-. 16. The brief facts of the case are that the Assessing Officer observed that the assessee claimed that excess stock of gold and silver ornaments found during the course of survey proceedings were actually belonging to other persons received for job work was rebutted earlier in para 3.5 of his order as the same has been found untrue. The assessee has shown labour payment of Rs. 2,90,981/- against job work of this jewellery. As it has been proved earlier that the payment of labour has been shown only to create an alibi of excess stock, the same labour payment is treate....
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....22/-. The addition made by the Assessing Officer is hence reduced from Rs. 2,90,981/- to Rs. 66,459/-." 18. The Authorized Representative of the assessee reiterated the submissions made before the lower authorities whereas the Departmental Representative supported the orders of lower authorities. 19. We find that it is not in dispute that the assessee has shown receipt for labour charges of Rs. 4,49,043/- which was accepted by the Assessing Officer as income of the assessee. Thus, to hold that no labour charge expenses were incurred for earning the said labour charges income is not justified without cogent material. Further, the Commissioner of Income Tax (Appeals) allowed labour charge expenses at the rate of 50% of the labour charge receipt which is also without any basis. In absence of any specific defect being pointed out in the vouchers of labour charge expenses, in our considered view, the disallowance of Rs. 66,459/- made by the Commissioner of Income Tax (Appeals) is unsustainable. We, therefore, delete the disallowance of Rs. 66,459/- under the head 'labour charge expenses' and allow this ground of appeal of the assessee. 20. Ground no. 3 of the assessee's appeal is dir....
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....entre. In view of the above, the addition made by the Assessing Officer is justified. The same is confirmed." 25. The Authorized Representative of the assessee reiterated the submissions made before the lower authorities whereas the Departmental Representative supported the orders of lower authorities. 26. We have heard the rival submissions and perused the orders of lower authorities and material available on record. The undisputed facts of the case are that in the instant case, the assessee has debited Rs. 1,08,646/- in the profit and loss account under the head "hallmark checking expenses". The Assessing Officer observed that the assessee has made payment of Rs. 75,601/- to Gujarat Board Centre and not deducted any tax at source on it. Therefore, he disallowed the same by invoking the provisions of section 40(a)(ia) of the Act which was confirmed in appeal by the Commissioner of Income Tax (Appeals). The first contention of the Authorized Representative of the assessee is that hallmark certification is not a contract of professional service provided by the entity and therefore, the assessee was not liable to deduct tax at source from payment made for hallmark certificate for q....
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....lver Rs. 1669070/- From the above, the Assessing Officer observed that the assessee till 05.03.2008 had not sold a single gram of new gold purchased by it during the year. The assessee had shown sales out of only old ornaments. He observed that the balance sheet as on 31.03.2008 submitted by the assessee alongwith audit report in form no. 3CD was perused and found hat from the said balance sheet, the assessee has shown closing stock of old gold at 12620.801 grams which implies that after 05.03.2008, no gold have been sold by it. The stock of new gold ornament was shown as 55575.268 grams. This implies that after 05.03.2008, the assessee sold only new gold ornaments purchased during the year. Hence, vide letter dated 10.12.2010, the assessee was required to confirm he same. The Assessing Officer observed from the copies of purchase bills submitted by the assessee that the value of gold purchased during the year from 01.04.2008 to 05.03.2009 comes in the range of Rs. 832/- to Rs. 1009/- per gram. Therefore, the assessee was required to justify valuation of closing stock on 05.03.2008 on new gold at Rs. 1125/- per gram. In reply, the assessee submitted that the asses....