TaxTMI 
TaxTMI 
2018 (6) TMI 276
X X X X Extracts X X X X
X X X X Extracts X X X X
....000/- by the CIT(A) as made by the AO on account of gifts, none of which was received by the assessee. 3. The facts in brief are that the assessee filed return of income on 25.10.2005 declaring total income at Rs. 9,41,420/-, which was processed u/s. 143(1) of the Act. The case of the assessee was selected for scrutiny and survey was conducted u/s. 133A on 23.11.2004. During the course of survey statement of the assessee was recorded and gift declarations/deed of following persons were found: S. No. Name of the donor Name of the donee Amount 1. Shri Ajay Vedia Dipen Pravin Jain Rs.6,00,000 2. Shri Japan Kumar Modi Kishore Kumar M. Jain HUF Rs.5,00,000 3. Shri Mukesh Maneklal Choksi Devika Navin Jain Rs.11,91,000 4. Shri Prakash B. Tuklia Navin Kumar M. Jain (HUF) Rs.5,00,000 5. Shri Mahesh Pandya Pravin Kumar M. Jain Rs.5,00,000 6. Ms. Minaxi M. Chokshi Alka Kishor Jain Rs.12,11,000 7. Shri Fenil Shah Dikshit Pravin Jain Rs.5,00,000 8. Shri Mukesh M. Chokshi Ms. Nikita Pravin Jain Rs.12,11,000 9. Shri Ganeshlal M. Sissodia Ms. Shantibai M. Jain Rs.10,00,000 ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....the AO in not disallowing interest paid on such loans will not act as a facilitator in automatically establishing the genuiness of the gifts, if the surrounding circumstance prove otherwise. 9.7 appellant has contended that it is the responsibility of the AO to prove that the apparent is not real. I find that the surrounding circumstances can also be looked from the angle as to whether the apparent can be considered as real. As laid down by the Hon'ble Supreme Court in the case of CIT vs Durga Prasad More 82 ITR 540, the apparent must be considered as real only if it is shown that there are reasons to believe that the apparent is not real and that too taxing authorities are entitled to look into the surrounding circumstances to find out the reality and the matter has to be considered by applying the test of human probability. For this proposition, I draw support from the decision of the Hon'ble Supreme Court in the case of Sumati Dayal vs CIT 214 ITR 801 wherein the Supreme Court has held "dismissing the appeal, that the settlement Commission after considering the surrounding circumstances and applying the test of human probabilities had rightly concluded ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....sing the arguments of the learned AR, contended that undoubtedly the gift deeds belonged to the assessee as the same were found in the premises in which the assessee was carrying on business. He further contended that if the assessee was not connected with any of the gift deeds/declarations how the papers could be found in the premises of the assessee. He also submitted that all replies were filed by the CA on behalf of the donees and not the donees themselves, which raised doubt on the nature and character of the transactions. Keeping in view these facts the learned DR submitted that the order of the CIT(A) needs to be confirmed. 6. In the rejoinder, the learned AR submitted that the premises which were subject to survey u/s. 133A were not belonging to the assessee but to the brother of the assessee and therefore, the plea of the learned DR that these documents were lying at the premises of the assessee carries no weight and, hence, should be discarded. 7. We have heard the rival submissions and perused the material available on record. The undisputed facts are that the nine gift deeds involving amount of Rs. 72,13,000/- were found by the survey team on 23rd Nov. 2004 during....
X X X X Extracts X X X X
X X X X Extracts X X X X
....d or add a new ground which may be necessary." 9. The issue involved in all these grounds is against the deletion of addition of Rs. 54,76,827/- by the CIT(A) as made by the AO on account of unexplained stock of gold and the failure on the part of the CIT(A) to appreciate the fact that excess stock of gold of 8862.18 gms was determined from the documents, books and incriminating material found during the course of survey. 10. The facts in brief are that during the course of survey, the survey team found stock of gold to the tune of 12392.890 gms as belonging to the assessee and 8862.18 gms as that of customers received for the purpose of manufacturing gold ornaments. Accordingly, the AO required the assessee to produce the address of the persons from whom the gold was received for manufacturing gold ornaments. The assessee replied to the AO vide submissions dated 3.11.2007 and 05.11.2007. The AO issued summons u/s. 131 to the parties to whom the gold belonged to and recorded their statements. According to the AO the statement recorded u/s. 131 were not co-relating with the explanation of the gold to the tune of 8862.18 gms found during the course of survey and served to show ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....s 5935.37 grams. The Assessing Officer has examined the explanation of the appellant in page No.2 of the assessment order. The appellant has submitted during appellate proceedings that all these details relating to reconciliation were submitted on 15/02/2005 and 12/12/2007 before the AO, a copy of the said letter was duly acknowledged by the IT. Office and filed during the present proceedings. The reconciliation of customer's stock, as submitted vide reply dated 12/12/2007, is also reproduced in page 2 of the assessment order. The AO did not accept the reconciliation, as she observed that the gold ornaments delivered to M/s.Shefali Arts and M/s.Manibhadra Jewellers before the date of survey i.e. 23/11/2004. Thereafter, the AO has adopted the figure of 8862.18 grams as unexplained stock of gold found during survey. 4.12. Considering the aforesaid matrix of the fact, I find that the AO has taken wrong stock figure & without properly verifying the inventories of stock taken and statements recorded during survey proceedings and in response to summon issued u/s.132 of the IT. Act. Even in the remand report, proper facts were not brought on record. From the above discussion ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....se was undertaken to tally the stock discrepancies which were found during the course of survey. The learned DR submitted that even in the remand proceedings, the assessee has submitted report to the CIT(A) explaining the different in clear terms. The learned DR therefore, submitted, that the addition as deleted by the CIT(A) was based on wrong facts and presumptions and therefore, deserved to be deleted. 12. The learned AR on the other hand relied heavily on the order of the CIT(A). He submitted that a very detailed and substantial finding of fact have been recorded by the CIT(A) before deleting the addition. The learned AR took us through the submissions made before the AO, copies of which have been filed at page nos. 16 to 22 of the paper-book. The learned AR took us through the statement recorded of Shri Jayant Kumar Sancheti, proprietor of Shefali Art & Shjri Sureshkuar R Punamiya, Director of Kundan Jewellers P. Ltd. and submitted that nowhere both the parties disowned gold given to the assessee for manufacturing of ornaments. The learned AR submitted that the assessee submitted the tally of total stock found during the course of survey and duly reconciled it with its book....