2018 (6) TMI 548

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....llowed. Though, the assessee objected to the proposed disallowance, however, rejecting the claim of the assessee the Assessing Officer disallowed Rs. 3,15,069, under section 43B of the Act. Though, the assessee challenged the aforesaid disallowance before the learned Commissioner (Appeals), however, it met with no success. Hence, the assessee came in appeal before the Tribunal. 4. We have considered rival submissions and perused materials on record. It is evident from the assessment order itself that, though, the assessee has not paid the employee's contribution to ESIC and PF within the due date prescribed under those Acts, however, it is a fact on record that it has made the payments before the due date of filing of return of income for the impugned assessment year as provided under section 139(1) of the Act. That being the case, as per the decision of the Hon'ble Jurisdictional High Court in CIT v/s Ghatge Patil Transports Ltd., [2014] 368 ITR 749 (Bm.), no disallowance under section 43B of the Act can be made. Accordingly, we delete the disallowance made by the Assessing Officer and sustained by the learned Commissioner (Appeals). Grounds no.1 and 2 are allowed. 5. In....

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....ement of assessment to the tune of Rs. 5,10,38,012. Thus, he directed the assessee to show cause why the addition to that extent should not be made. Though, the assessee vehemently opposed the enhancement of its income both on the validity of exercise of power of enhancement as well as on merit, however, the learned Commissioner (Appeals) rejecting the submissions / objections of the assessee enhanced the income by Rs. 5,10,38,012, alleging under valuation of the closing stock of diamond jewellery. 8. The learned Authorised Representative submitted, assessee is following a method of valuation of closing stock consistently, therefore, learned Commissioner (Appeals) was not justified in rejecting the accounting method followed by the assessee. He submitted, learned Commissioner (Appeals) having not pointed out any specific defect or deficiency in the books of account, the exercise of power under section 251 of the Act is invalid. 9. The learned Departmental Representative submitted, learned Commissioner (Appeals) having enhanced the assessment by complying to the provisions of section 251 of the Act, the validity of such enhancement cannot be challenged. 10. We have consider....

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....ining the assessment records concluded that the assessee has undervalued the closing stock of diamond jewellery. Hence, he enhanced the income of the assessee by Rs. 5,10,38,012. Challenging the enhancement of income assessee is in appeal before us. 13. The learned Authorised Representative submitted that the purchase value of diamond jewellery shown in the stock statement includes loose diamond, gold, platinum, making charges, etc. as some times the assessee purchases jewellery where diamond is embedded in gold and platinum. Whereas, the opening stock and closing stock shown in the stock statement consists of lose diamonds only. The learned Authorised Representative referring to the stock statement submitted that the opening stock shown by the assessee is more than his sales. Therefore, there was no necessity for the assessee to purchase 1107.540 carat of diamond jewllery @ Rs. 86,124=90 to keep it in the closing stock and in the process block the capital of Rs. 9,53,86,780, unless, the opening stock is not sellable as per customer's preference and is slow moving item. He submitted, the very fact that even after availability of opening stock of diamond jewellery the assessee pu....

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....les include largely diamond jewellery set in gold and platinum. In support of such claim, the assessee has also furnished few invoices. The learned Commissioner (Appeals) has rejected the aforesaid claim of the assessee on the reasoning that the auditors have failed to provide the details of raw materials, finished products and other quantitative details. He has also observed that the assessee has not furnished any details to substantiate its claim that the purchases and sales shown in the stock statement include diamond jewellery set in gold and platinum and opening and closing stock consist of only lose diamond. In the process, he has also refused to accept the evidences submitted by the assessee in the form of invoices. Thus, as can be seen from the aforesaid facts, the learned Commissioner (Appeals) alleging lack of evidence being furnished by the assessee has adopted the average purchase value of diamond jewellery at Rs. 86,124=90 per carat to arrive at the value of the closing stock shown by the assessee. However, as rightly pointed out by the learned Authorised Representative, purely on conjecture and surmises it cannot be assumed that the entire purchases made during the ye....