TaxTMI 
TaxTMI 
2018 (9) TMI 1775
X X X X Extracts X X X X
X X X X Extracts X X X X
.... by the Ld. C.LT.(A) on 30.06.2011 is completely arbitrary, unjustified and illegal. 2. For that on the facts of the case. Ld. C.I.T.(A) was wrong in not considering the merit of the case that 'survey was made on 12.09.2006 and income & expenditure were duly recorded in trading and profit & loss a/c. as on 31.03.2007, no material has been brought into record to justify the addition/ disallowance and without an specific defects, therefore, the order passed by the Ld. C.I.T.(A) is completely arbitrary, unjustified and illegal. 3. For that on the facts of the case, the C.I.T.(A) was wrong in dittoing the order of the A.O. and confirming the addition of Rs. 3,25,000/- on the basis of personal diary (M CS- 16) for the Financial Year 2005-06 found at the time of survey, treating the same as unexplained expenditure which is completely arbitrary, unjustified and illegal. 4. For that the A.O. has estimated the addition of Rs. 325,000 / - by adding 2 digits in (MCS-16), therefore, the actual expenditure is R.s.3250/-, therefore, the addition of Rs. 325,000/ - which is confirmed by Ld. CIT(A) should be deleted. 5. For that on the facts of the case, the A.O. was wrong in not consid....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ounting to Rs. 10,62,4801 - is completely arbitrary, unjustified and illegal. 12. For that on the facts of the case, the Ld. CIT(A) was wrong in sustaining the addition amounting to Rs. 77,553/-, out of total addition made by A.O amounting to Rs. 10,24,258/- as unexplained investment from undisclosed sources, therefore, restricted the addition amount.ing to Rs. 77,553/- is complet.ely arbitrary, unjustified and illegal. 13.For that. on the facts of the case, the Ld. CIT(A) was wrong in dittoing the order of the A.O. and confirming the addition amounting to Rs. 1,866/*, Rs. 1,000/- and Rs. 6,700/-, totaling at Rs. 9,566/- on account of advance paid made to the karigars [MCS- 13, 14,.15] which is completely arbitrary, unjustified and illegal. 14. For that. the appellant reserves the right to adduce any further ground or grounds, if necessary, at or before the hearing of the appeal" 4. Ground No.1 and 2 are general in nature and the ld. Representative of the assessee does not press these grounds. Thus these grounds are withdrawn as not pressed. Ground No.3, 4 and 5 : 5. The assessee has challenged the validity of the order passed by CIT(A) in confirming the addition of Rs. 3....
X X X X Extracts X X X X
X X X X Extracts X X X X
....t is true that payment made such small amount to economics Teacher and standard Chartered Accountant is a absurd matter. Payment paid to Economics teacher may be Rs. 200/- or 2000/- instead of Rs. 20/- and payment paid to Ashok Babu, a standard Chartered Accountant may be Rs. 500/- or Rs. 5000/- instead of Rs. 50/~. But the assessing officer has stated in his order that payment has made to Economics teacher Rs. 2000/- by adding two digits and similarly payment has made to Ashok Babu, a standard Chartered accountant Rs. 5000/- by adding two digits. Now the Question is Whether payment paid to Economics teacher is Rs. 200/- or 2000/- and payment paid to standard chartered Accountant is Rs. 500/- or 5000/- ? so it is a contradictory matter in respect of payment paid. It is expected from the prudent person that proper verification is necessary for knowing the actual fact. The assessing officer made no personal appearance and made no initiations for sending letters U/.S. 133 (6). The Assessing Officer has mentioned in his order that A/R has admitted the fact suppression of two digits. A/R is person whom power of Attorney is given for appearing a particular case, A/R is not a permanent ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....next ground no.6 is not pressed by the assessee. 9. Ground No.7:-- This ground is directed against the addition of Rs. 38,893/- on account of remuneration paid to the goldsmith on account of making charges the AO made the following observations :- "MCS-I2 : On perusal of MCS-12, a hand-written small note book, it is seen from page I to 9 that jewellery weighting 1080.350 grams was manufactured by the goldsmith, Paritosh, but the making charge relating /0 those ornaments "I have carefully perused the assessment order, submissionsmanufactured realized by the assessee could not be identified by the A.R. from the books of accounts produced before the undersigned. During the relevant period making charge realized from the customer was Rs. 60/- per gram. 60% to 65% share of making charge is kept with the assessee out of the manufacturing charges as was the convention in jewellery business. Hence,, Rs. 38.893/- (1080.350 X 60% of Rs. 60/- ) would he the share of the assessee. This was not reflected in the books of account of the assessee. The A.R. also could not explain such omission. Therefore. Rs. 38,893/* is added hack to the total income of the assessee. " 10. The case of the asse....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ng the appellate proceedings made an elaborate submissions before the ld. CIT(A). The assessee further requested the CIT(A) to determine the value of gold and silver at the cost price. The statement of conversion of 24 carret to 22 carret of gold from 01.04.2006 to 12.09.2006 were also provided by the assessee. The ld. CIT(A) ultimately deleted the addition of Rs. 9,24,798/- out of the total amout of Rs. 55,70,948/- as made by the AO with the following observations : "I have carefully perused the assessment order, submissions of the assessee, remand report of the A.O. and the assessee's rejoinder. The undisputed facts in this case are that gold jewellery of net weight of 11206.200grms, was found in stock with the assessee on the date of survey. The assessee claimed 4442.470grms. of such net gold to be belonging to karigars who had deposited the same with the assessee as 'security' and 1352.l70grms. of net gold to be belonging to various customers who had given the same for repairs to her. The assessee was unable to prove the genuineness of her claim. On verification carried out by the A.O. by issue of notices uls.l3 3 (6) and summons uls.l31 to the alleged karigars an....
X X X X Extracts X X X X
X X X X Extracts X X X X
....to them. As per the valuation report of the Departmental Valuer the applicable rate of 22 carat gold as on the date of survey was Rs. 834/- per gram. Therefore, the claim of the assessee regarding 11 08.870grams of gold is accepted. and addition on account of excess stock is reduced by an amount of Rs. 9,24,798/- ( 1108.870 X Rs. 834/-). Accordingly, the assessee gets relief of Rs. 9,24,798/- and the balance addition of Rs. 46A6, 150/- is confirmed. As regards the addition of a sum of Rs. 3,40,697/- on account of excess payment Silver found at the time of survey, the A. O. has mentioned in the assessment order (on pages 9 and 10) that the difference had been admitted by the assessee in her submissions furnished before him on 30/11/2009. In this connection the A.R. submitted that the difference arose because the assessee was valuing her stock at cost whereas the departmental valuer valued the stock at market rate. It is the fact that the assessee was having no stock register. The assessee has also not been able to explain, with the help of supporting evidence, as to how much quantity of silver was purchased when and at what rate and how much of the silver in stock was purchased ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e Tribunal; and, the direction given for taking sales of rice and bran into account before arriving at the additional income which could be said to have escaped assessment. Before the Commissioner (Appeals), the assessee had relied on a document signed by an official of the Food Corporation of India that evidenced the stock figures at the relevant point of time. The Commissioner (Appeals) dealt with such aspect of the matter in great detail and by referring to the admitted statements of the representatives of the assessee, which were not sought to be controverted at any point of time on behalf of the assessee, concluded that it was the physical verification of the stocks undertaken by the Assessing Officer in course of the survey operation that was to be given primacy. Indeed, the Commissioner (Appeals) found that there was no evidence that the FCI official who had issued the certificate had undertaken any physical verification of the stock at the rice mill of the assessee and the document appeared to have been filled up by the assessee and merely signed by the FCI official. Such part of the order of the Commissioner (Appeals) was unexceptionable and could not have been interfered ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....call for any interference. Accordingly, ITAT NO.196 of 2015 and GA N0-4047 of 2015 are disposed of by modifying the judgment and order of the Appellate Tribunal dated June 30, 2015 as indicated. There will be no order as to costs." 16. The coordinate Bench of this Tribunal held as follows :- "5. Now comes the equally Important question as to whether the- entire discrepancy in stock addition or only the profit element embedded therein is to be considered for the impugned addition. We find this issue to be no more res integra as co-ordinate bench of this tribunal in M/s Subarna Rice Mill vs. ITO ITA No.1781/Ko1/2014 decided on 30.06.2015 holding only the profit element liability to be added in such circumstances; stand upheld by hon'ble jurisdictional high court's recent judgment dated 20.06.2018 in ITAT 196 of 2015 GA NoA047 of 2015. We therefore conclude that the impugned former addition of the entire discrepancy in stock deserves to be deleted. We accordingly accept assessee's former substantive ground challenging correctness thereof. Its latter substantive ground stands declined in view of our foregoing discussion. We confirm the gross profit addition of Rs. 6,94,832....
X X X X Extracts X X X X
X X X X Extracts X X X X
....firmed the addition of Rs. 77,553/- out of the total addition made by the AO amounting to Rs. 10,24,258/- as unexplained investment from undisclosed sources. 20. The facts of this is this that the facts pertaining to this issue as discussed in the assessment order are that the assessee had claimed one M/s. Laxmi Narayan Bullion to be her creditor for an amount of Rs. 17,36,816/-. On verification by issue of notice uls.133(6) by the A.O., the said creditor informed the A.O. that a sum of Rs. 10,24,258/- only was due to them from the assessee. As per the A.O., the assessee failed to reconcile the difference in the closing balance as per her own books of account and as per the accounts of M/s. Laxmi Narayan Bullion, therefore, the A.O. added the entire amount of credit balance of Rs. 17,36,816/- claimed to be due by the assessee to M/s. Laxmi Narayan Bullion. The A.O also added a sum of Rs. 10,24,258/- for the reason that that amount was not* reflected in the books of' account of .the assessee. 21. During the assessment proceedings the details of the submissions in this regard was made by the ld. AO including detailed account of the said M/s laxmi Narayan Bullion. The AO found n....
X X X X Extracts X X X X
X X X X Extracts X X X X
....0,000/-. Thus this ground of appeal is dismissed as not pressed. 24. Ground No.2 of the revenue's appeal relate to that of ground no.8 of the assessee's appeal which we have dealt with by us we reply upon the same and dismiss this ground preferred by the revenue. 25. Ground No.7 relates to ground no.11 of the assessee's appeal . Ground No.7 is akin to ground no.12 of the assessee's appeal. 26. In the result the appeal of the revenue is dismissed and the assessee's appeal is partly allowed for statistical purposes. ITA No.1084/Kol/2014 327 The instant appeal been filed by the assessee against the order dated 17.02.2012 passed by the ld. C.I.T., Kol-XVII, Kolkata u/s 263 of the Act arising out of the order dated 31.12.2009 passed by the D.C.I.T., Circle-5, Kolkata for A.Y.2007-08. 28. There is an application for condonation of delay of 731 days in filing the instant appeal before us. In support of his statement an affidavit affirmed by the assessee has also been filed which has been gone through by us. We find sufficient reason for delay in preferring the instant appeal by the assessee particularly in view of death of the husband of the assessee. Hence the delay is condoned. ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....mined the expenses relating to incentive to staff, new year expenses, travelling and conveyance, staff welfare expenses, advertisement, repair and maintenance, car running expenses and puja expenses which were incurred in cash by the assessee. The AO had not examined the balance with various creditors excepting M/s Laxmi Narayan Bullion as also opined by the ld.CIT On this premise the ld.CIT came to a finding that the assessment order is erroneous and prejudicial to the interest of the revenue. While observing this the ld. CIT upon setting aside the assessment order directed the AO to do the assessment afresh in terms of law after carrying out necessary verification in respect of issues mentioned in clause (i) to (iv) of the order. At the time of hearing of the instant appeal the ld. Representative of the assessee vehemently argued against the order passed by the ld. CIT in remitting the issue to the file of the AO for making assessment order afresh which according to the ld. Representative of the assessee is without jurisdiction. In support of his argument he relied upon the judgment of the Hon'ble Delhi High Court in the case of ITO vs D.G.Housing Project Ltd. 343 ITR 329 and he ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e made by the Assessing Officer, making the order unsustainable in Law. In some cases possibly though rarely, the CIT can also show and establish that the facts on record or inferences drawn from facts on record per se justified and mandated further enquiry or investigation but the Assessing Officer had erroneously not undertaken the same. However, the said finding must be clear, unambiguous and not debatable. The matter cannot be remitted for a fresh decision to the Assessing Officer to conduct further enquiries without a finding that the order is erroneous. Finding that the order is erroneous is a condition or requirement which must be satisfied for exercise of jurisdiction under Section 263 of the Act. In such matters, to remand the matter/issue to the Assessing Officer would imply and mean the CIT has not examined and decided whether or not the order is erroneous but has directed the Assessing Officer to decide the aspect/question. 17. This distinction must be kept in mind by the CIT while exercising jurisdiction under Section 263 of the Act and in the absence of the finding that the order is erroneous and prejudicial to the interest of Revenue, exercise of jurisdiction under....