2016 (1) TMI 168

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....eting the addition of Rs. 1,52,68,732/- being under valuation of stock up to the date of survey by further deducting 18.55% for gross profit from the value of stock computed by the Assessing Officer and, thus, valuing the stock below the cost price when in fact the Assessing Officer had already deducted 15% from the valuation of the Departmental Valuer for Gross Profit to arrive at the cost price of the assessee. (b) Under the fact and in the circumstances of the case, the Ld. CIT(A) was not justified in deleting the addition of Rs. 1,52,68,732/- being under valuation of stock up to the date of survey by taking the value of closing stock at Rs. 4,30,93,290/- instead of Rs. 3,63,05,575/- as taken by the Assessing Officer because the assessee had considered the wt. of diamond at 2880 carat and gold at 13552.367 gms. Whereas the diamonds including loose diamonds found during the course of survey as per valuation report of Departmental Valuer dated 1/2/2008 was 2269.85 carat and Total Net wt. of gold at 13122.47 gms. and the assessee admitted during the course of survey that no stock of his was lying any where with any other party, or the Karigars." 3. Briefly stated facts ....

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....the value of stock as on the date of survey should be Rs. 4,20,07,272/- (Rs.5,15,74,306/- minus Rs. 95,67,034/-). On the other hand, the appellant has recorded in its books of account, the value of stock as on the date of the survey at Rs. 4,30,93,290/- (in addition to the stock of Rs. 17,62,820/- lying with the karigars). The AO has taken the value of the stock as per the books of account at Rs. 3,63,05,575/- which is factually incorrect. I find that the relevant details of stock as on 31.01.2008 were filed in course of the assessment proceedings (available at page 485 of the assessment record) showing the value of stock at Rs. 4,30,93,290/- (comprising gold jewellery of Rs. 3,63,05,575/- and diamonds of Rs. 67,87,715/- in addition to the stock of Rs. 17,62,820/- lying with the karigars. In this factual background, there was actually no under valuation of stock as on 31.01.2008; and consequently, no addition on this account was Justified. The addition of Rs. 1,52,68,732/- is deleted. Ground no.1 is allowed." Aggrieved, revenue is in second appeal before Tribunal. 4. We have heard rival submissions and gone through facts and circumstances of the case. We find that the only di....

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....ssessee drew our attention to the gross profit rate calculation made by the survey party and valued the stock after reducing approximately 10%. In view of the above explanation given by assessee's counsel, which was never negated by Ld. Sr. DR, we find that the reduction made by CIT(A) at 18.5% of G.P. rate from the date of survey in consonance with the facts of the case. Actually, the value of stock on the date of survey as per books of account Rs. 4,30,93,290/- and in addition to the stock of Rs. 17,62,820/- was lying with the Karigars. This stock as per books of account of the assessee at Rs. 4,30,93,290/- comprises of gold jewellery of Rs. 3,63,05,575/- and separate diamond stock of Rs. 67,87,715/-. Even otherwise, if we go by rate of gold on the date of survey taken by valuation officer at Rs. 11,965/- as against the rate of Rs. 9395/- the increase is almost 28%. In term of the above facts, we find that the CIT(A) has rightly applied the gross profit rate of 18.55% for reduction of the value of stock and we confirm the same. This ground of revenue's appeal is dismissed. 5. The next issue in this appeal of revenue is against the order of CIT(A) deleting the addition being di....

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....e assessment stage that undisclosed sales were recorded in MJ/4 which has not been disputed or disproved by the AO. I find merit in the argument that the entire sales cannot be treated as undisclosed income of the appellant. Even if the transactions recorded on pages 6, 7, 11 and 13 are included, then all the transactions recorded in MJ/4 total to Rs. 38,57,105/- as also mentioned by the AO. If gross profit rate of 18.55% is applied on total sales of Rs. 38,57,105/-, then the gross profit should work out at Rs. 7,15,493/- whereas the appellant has already declared undisclosed income of Rs. 13,50,000/- in the return. In view of the above, no addition on account of transactions recorded in MJ/4 is called for. The addition of Rs. 25,07,105/- is deleted. Ground no. 3 is allowed." Aggrieved, revenue came in second appeal before Tribunal. 7. We have heard rival submissions and gone through facts and circumstances of the case. We find that the assessee has analysed pages 1 to 54 being impounded papers marked as MJ-4 found during the course of survey and the assessee's proprietary concern M/s. Mukut Jewellers. According to ld. Counsel, the transactions recorded in these papers involv....