TaxTMI 
TaxTMI 
TaxTMI 
2019 (1) TMI 101
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....ase and in law the Ld. Commissioner of Income Tax erred in confirming the action of Ld. AO in making an addition of Rs. 1,50,50,011/- on account of cash found during the course of search proceedings as per the grounds stated in the order or otherwise. 4. On the facts and circumstances of the appellant's case and in law the Ld. Commissioner of Income Tax erred in confirming the action of Ld. AO in holding that the appellant is engaged in unaccounted sales and purchases of bullion. 5. On the facts and circumstances of the appellant's case and in law the Ld. Commissioner of Income Tax erred in confirming the action of Ld. AO in adding a sum of Rs. 29,10,560/- by estimating Gross Profit Ratio at 1% on alleged business of unaccounted trading of bullion without any cogent basis. 6. The Appellant craves leaves to add, to amend, alter, modify and / or withdraw any or all of the above grounds of appeal, each of which are without prejudice to one another. The appellant prays this Hon'ble Tribunal to delete the additions/disallownaces by the Ld. AO and confirmed by the Ld. CIT(A). 2. The brief facts of the case are that assessee is an individual who has been in the busin....
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....eared before the investigation wing and admitted that the locker no. 418, belonged to him and in this respect, a statement u/s 131 was also recorded. As per records, the prohibitory order was revoked and in the said locker, gold bullion valuing Rs. 1,28,56,000/- and cash amounting to Rs. 1,50,50,011/- was found. It was noted that the cash bundles were bearing noting 'K.J' and '05 Nov 2012' and thus the said bullion and cash were seized. 6. It was submitted that immediately within 4 days, the assessee recorded an Affidavit on oath on 21.11.12 thereby stating that the contents of the statement recorded by the Department on 16.11.201 of the assessee was not read over and explained to him in Hindi. It was also submitted that since the assessee do not know English and understands only Hindi, therefore he do not know the contents of the statement which was got recorded on 16.11.12. Therefore immediately thereafter, the assessee sent affidavit through registered post to the investigation wing thereby intimating that the cash and gold found are duly accounted in the books of accounts for which the assessee also filed its books of accounts including Purchase and sale regist....
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....contents of the locker were duly accounted on 16.11.2012. It was submitted that assessee was acquainted with only Hindi. Therefore, it was assured by the revenue officers that although the statement is in English and the same has been typed as per his oral statement. 12. It was further submitted that in order to confirm his statement and substantiate the same with evidences, the assessee filed his affidavit explaining the position and also submitted the entire books of account along with invoices to prove that the stock& cash is accounted on 21.11.2012. The said explanation and documents were sent by the courier within 4 days of the original statement. 13. It was also submitted that it was impossible for the assessee to fabricate books of account, obtain purchase bills, issue sales invoices, make stock statement and cash book in such a short time of 4 days. Hench, such prompt reply by the assessee before the wing cannot be termed as an afterthought. 14. It was also submitted that AO had relied upon the statement which was not made to understand to the assessee and thus the said statement is incorrect in light of the various evidences and explanation submitted immediately subsequ....
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....cally mentioned in the affidavit that he does not know English and only understands Hindi and in this respect, he had filed sworn affidavit which has not been countered by the revenue. As far as the question of rejection of books of accounts is concerned, in this respect, we noticed that assessee had submitted that it is his practice to keep the excess stock in locker to avoid any loss due to theft or otherwise. It was also submitted that since it was the first time that the assessee had made cash sales, therefore the same was kept in locker. Having considered the factual submission made by the assessee, we are of the view that Ld. CIT(A) cannot step into the shoes of a businessman and decide as to where and how much stock was to be kept. It is quite normal for any jeweller to keep its stock in safe place and locker is an ideal safe place to keep such stock. Therefore, in our view the observation of Ld. CIT(A) as to why did assessee kept the entire stock at locker, is incorrect. 18. With respect to holding extraordinary stock of Rs. 1.33 Crs at the time of search, it was submitted that assessee had been holding stock of 80-90 lakhs in past as well and therefore, 1.33 Crs stock can....
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....nd saler. 22. We noticed that in para 5.11, Ld. CIT(A) had mentioned that the payment to M/s. Mahesh Gold Jewellery were made in cash. However, this finding of the Ld. CIT(A) is factually incorrect as the payment were made through cheque and bank statement for the same is placed at page nos.192 of the paper book-2. Thus, the finding of the Ld. CIT(A) that the creditors were paid through cash, were not correct. 23. Ld. CIT(A) also referred to large creditors outstanding than previous years and pointed out that purchases were merely booked in order to compensate the stock or sales shown by the assessee. In this respect, it was pointed out that out of 1.40 Cr, creditors of Rs. 1.04 Crs pertained to purchases made on 25.03.2012 and 28.03.14. The said creditors were cleared in the first two weeks of April. Therefore, considering these facts, we find that the observation of Ld. CIT(A) is incorrect. 24. The sales made by the assessee in current year as well as in last year around the search period are similar to sales made in immediate previous year. Therefore, the allegations of fabrication of books is order to increase the sales do not hold much water. Thus, the assessee had proved t....