TaxTMI 
TaxTMI 
2016 (12) TMI 1769
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....y of the limitation. 2. Matter carried to ld. CIT(A), who dismissed the ground by holding that the assessee could not produce any proof for establishing that the assessment order was not framed on 31-03-2013. The CIT(A) held that sending of some envelope with blank papers could be a clerical error. The CIT(A) further held that it was not necessary for the Department to serve the Assessment Order on the assessee within the prescribed period of limitation. 3. The ld. AR for the assessee has made oral as well as written submission as under: "1.01 In the instant case, the search under s. 132(1) of the Income-Tax Act, 1961 was carried out in the appellant's premises on 25-11-2010 and the same got concluded as on 26-11-2010. In other words, last of the authorizations for search under s. 132 of the Act was executed during the financial year ended on 31-03-2011 and, consequently, in accordance with provisions of clause (a) of sub-section (1) to section 153B of the Act the order of assessment was compulsorily required to be made within a period of two years from the end of the financial year ended on 31-03-2011 in which such last authorization for search was executed i.e.....
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.... papers. 2.02 The theory of AO that sending of blank papers in a sealed envelope was only a clerical error deserves to be knocked down at threshold only for the reason that such an error could, at the best, be expected to have been made in one case and not in all the cases of the group assessees in which the assessment orders happened to be physically served on or after 01-04-2013 only. 2.03 In the instant case, it can also not be a case of the AO that the impugned assessment order was dispatched by himself or was handed over for dispatching to any of his ministerial staff on or before 31-03- 2013 thereby meaning that the subject order remained to be under the sole custody and control of the AO only till its actual serving upon the appellant by hand delivery on 02-04-2013. In such an eventuality, it has to be presumed that the subject assessment order was not passed by the AO on 28-03-2013, as stated in the order but the same was passed only and only after 31-03-2013. 3.01 In the identical circumstances, the Hon'ble Jodhpur Bench of ITAT in the case of Shanti Lal Godawat & Ors. Vs. ACIT (2009) 30 DTR 413 (Jd.) has held that the last date being 31st De....
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....earch assessment and normal assessment into one and, therefore, it was not necessary that valuable articles or incriminating material for each of the six years is found. According to the CIT(A), even if no such thing is found, a normal assessment has to be made under s. 153A of the Act. For such proposition, the CIT(A) relied upon the decision of Hon'ble Delhi High Court in the case of Filatex India Ltd. (2014) 49 Taxmann.com 465 (Delhi), Sunny Jacob Jewllers & Wedding Centre (2014) 362 ITR 664 (Ker.) and Anil Kumar Bhatia (2012) 24 Taxman.com 98 (Delhi). 8. Ld. AR for the assessee did not press this ground, therefore, same is dismissed being not pressed. Assessee's GROUND Nos. 3 & 4 9. Both the grounds relate to addition of Rs. 60,00,000/- made by the AO on account of share application money received by the assessee. Ground no. 3 relates to the scope of the assessment in view of the decision of the ITAT Special Bench, Mumbai in the case of All Cargo Global Logistics Ltd. & Ors. Vs. DCIT (2012) 74 DTR (Mum.) (SB) (Trib.) 89. As per the ground raised, the assessment year under consideration did not get abate and, further no document or any other incriminating material in re....
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.... from the statement of director of Indore based companies as recorded under s.131, the AO formed the view that share capital given by these companies were not genuine. Thus, the AO held that the assessee failed to establish the identity and creditworthiness of the provider of share application money and the genuineness of transaction was also not proved. Accordingly, the AO made an addition of Rs. 60,00,000/- in the income of the assessee as its undisclosed income. 11. Matter carried to ld. CIT(A). Before the CIT(A), on the legal ground, the assessee contended that the assessment year under consideration was a non- abated assessment year and in respect of such assessment year, the assessee had filed its original return under s.139 and in response to such notice, no proceeding was pending. It was also contended before the CIT(A) that the subject addition of Rs. 60,00,000/- has been made merely on the basis of the audited accounts without having recourse to any incriminating material. The CIT(A) has dealt with this legal ground at para 5, at page No.33 and para 6 at page No.38 of his order. The CIT(A) has dismissed the legal ground by holding that assessment under section 153A of ....
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....ment or valuable article or thing found during the course of the search proceedings. 3.02 The AO has dealt the issue of share capital received by the appellant company at para 3 from page No.2 to 8 of the assessment order. The AO has made a reference of the appellant's claim regarding receipt of amount by way of share application money. The AO has also made a reference of statements recorded post-search of the directors of the share applicant companies by the ADIT(Inv.). The AO has also made reference of statement of a director of one of the share applicant companies. However, nowhere the AO has made reference of any loose paper or document or any other incriminating material or evidence found during the course of search under s. 132 in the premises of the appellant. 3.03 It is submitted that without having any recourse to the incriminating material, the addition was not warranted for the assessment year under consideration which was not a year in respect of which any proceedings were pending. 4.01 The provisions of section 153A, 153B and 153C enjoining scheme for assessment in case of search or requisition have been brought to the statute by the Finance ....
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....rovisions of section 132 are invoked only when the authorizing officer being the Director General or Director or Chief Commissioner or Commissioner or Additional Director or Additional Commissioner or Joint Director or Joint Commissioner, in consequence of information in his possession, has reason to believe that any person is in possession of some money, bullion, jewellery or other valuable articles or things or books of account or documents which have not been or would not have been disclosed by such person for the purpose of the Income-Tax Act, 1961. The purpose of the provisions of section 132 is not to make any assessment or reassessment but to gather the material necessary for the purpose of making assessment or reassessment. It is submitted that the provisions of section 132 are not aimed for discovery of those assets, books or documents or transactions, which are already in the specific knowledge or domain of the revenue or if required may come in the specific knowledge or domain of the revenue. It shall thus be appreciated that the provisions of section 132 are not meant for verifying the transactions which are already recorded in the regular books of account of an assesse....
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....n case of any assessee, all the assessment proceedings which were either in the motion or which were pending shall come to a halt. 4.05 It is submitted that under the provisions of section 153A of the Act, assessment or reassessment of total income of the person searched or requisitioned for six assessment years immediately preceding the assessment year relevant to the previous year in which search is conducted or requisition is made has to be made by the concerning Assessing Officer. Under the second proviso to section 153A, it has been enjoined that assessment or reassessment, if any, relating to any of the six assessment years which is pending on the date of initiation of the search or making the requisition shall abate. On a plain reading of the proviso, it becomes abundantly clear that only the assessment proceedings which were pending on the date of initiation of search or requisition shall get abate whereas the assessment proceedings for other assessment years, which have attained finality, shall not get abated. Thus, a clear cut distinction has been made in the section itself in respect of those assessment years in respect of which proceedings have attained finalit....
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....ance of notice under s. 143(2) had got expired deleted the addition made on account of disallowance of interest which was not based upon any seized material or document. Since, in the instant case too, the additions made for the assessment year under consideration are not based upon any seized material or document, the entire additions so made deserves to be deleted in toto. 5.04 The ratio laid down by the ITAT Special Bench, Mumbai in the case of Al Cargo supra has been approved explicitly by the Hon'ble High Court of Rajasthan in the case of Jai Steel (India) vs. CIT (2013) 259 CTR 281 (Raj.) and impliedly by the Hon'ble High Court of Delhi in the case of CIT vs. Anil Kumar Bhatia (2012) 211 Taxman 453 (Del.). 5.05 Recently, the Hon'ble High Court of Delhi in the case of CIT vs. Kabul Chawla (2015) 93 CCH 0210 (Del HC), after considering all the available decisions on the issue has held that in respect of the completed assessment, additions can be made only on the basis of incriminating documents. 5.06 It is submitted that following the judgment of the Hon'ble Delhi High Court, in the case of Kabul Chawla, the Hon'ble jurisdictional Bench of ITA....
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.... proceedings had already got completed earlier and therefore, in absence of any incriminating material or evidence collected during the course of search, no addition could have been made on the subject issue in view of the various judicial pronouncements, as discussed in respect of ground no.3 supra. 12.01 During the previous year relevant to the assessment year under consideration, the appellant company had received fresh share application money amounting to Rs. 75,00,000/- from 11 share applicants out of which 5 share applicants were the companies duly registered under the Companies Act, 1956. It is submitted that during the relevant previous year, the appellant company had refunded share application money aggregating to Rs. 10,50,000/- to the concerning share applicants which was received by it during the previous year 2005-06 relevant to A.Y. 2006-07. A copy of the statement showing details of share application money received by the appellant company is placed at page no.100 of our Paper Book. 12.02 That, out of the total share application money aggregating to Rs. 75,00,000/- as received by the appellant during the relevant previous year from 11 share applican....
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....ish some more information in respect of share application money. Along with the Notice, the appellant was also provided with a xerox copy of a statement of one Mr. Satynarayan Gadiya, a Director of two share applicant companies from whom the appellant had, inter-alia, taken share application money during the relevant previous year. The said statement was recorded under s. 131(1A) of the Income-Tax Act, 1961 before the DDIT(Inv.), Indore on 13-06-2011. A copy of the statement is placed at Page No. 101 to 105 of our Paper Book. 4.02 In compliance to the Show Cause Notice dated 15-02-2013, as aforesaid, the appellant company made its detailed reply through its counsel's letter dated 06-03-2013 (PB Page No. 78 to 80). 4.03 Meanwhile, as on 05-03-2013, the AO again recorded statement of Shri Satyanarayan Gadiya, a person holding position of a director in two share applicant companies viz. M/s. MGM Tools Pvt. Ltd. and M/s. Convenient Housing Finance Ltd., under s.131(1) of the Income-Tax Act, 1961. A gist of the statement of Shri Satyanarayan Gadiya has duly been reproduced by the learned AO at page No. 5 of the impugned Assessment Order. However, for the sake of mo....
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.... last few years, the directors of every company have to have a separate Director Identification Number [DIN] and the details of such DIN are compulsorily required to be filed with the concerning Registrar of Companies. The DIN, in its turn, is allotted to any director only upon his furnishing the necessary evidences in support of his identity and address proof. It is submitted that all the share applicant companies are in existence even till today and therefore, by no stretch of imagination, it can be said that these companies are not having any office or for that matter, the directors of these companies are not in existence. iv) That, all the share applicant companies are regularly assessed to Income-Tax with the PAN as mentioned in the table given at para 2.02 supra. Xerox copies of income-tax returns of share applicant companies or copies of PAN Cards allotted to such companies are placed at Page No. 199 to 203 of our Paper Book. v) That, the identity of Kolkata based three companies namely M/s. Bhanu Computron Ice & Equipment Pvt. Ltd., M/s. Fedder Tie-up Pvt. Ltd. and M/s. Remo Engineering Works ....
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.... behalf. A copy of the Board Resolution, copy of the share application forms duly filled up and signed and copy of covering letters accompanying the share application forms are placed at page No.204 to 231 of the Paper Book. ii) That, the entire share application money amounting to Rs. 60,00,000/- was received by the appellant from the aforesaid share applicant companies through account payee cheques only as per the details given in the share application forms themselves. Further, a copy of share applicant money account showing the complete details of the dates and modes of the receipts of share application money, is placed at page No. 232 to 233 of our Paper Book. iii) That, in consideration of the share application money of Rs. 60,00,000/- so received, the appellant company had duly allotted 60,000 equity shares of face value of Rs. 10/- each, at a premium of Rs. 90/- each, to these share applicant companies on 15-05-2007 and the necessary return for allotment of shares was duly filed by the appellant company with the concerning Registrar of Companies. iv) That, the genuineness of the transactions also gets established from the letters of confirmation d....
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....sessed to Income-Tax as per the details given hereinabove. 7.01 It is submitted that merely for the reason that some of the share applicant companies were having their registered office at Kolkata by itself cannot give rise to a conclusion that whatever transactions were made with such companies are not genuine. 8.01 In the instant case, the AO has heavily relied upon the decision of Hon'ble ITAT Indore Bench, Indore in case of M/s. Agrawal Coal Corporation as reported in 18 ITJ 717 without considering the material fact that the facts of the appellant company are quite distinguishable from that of the above cited case. The most distinguishing feature is that in the case of M/s. Agrawal Coal Corporation, the assessee company could not produce the directors before the AO or even before the ITAT whereas in the present case, two companies got themselves appeared through their director before the AO. Further, in the case of M/s. Agrawal Coal Corporation, notices/ summons issued to the share applicant companies returned unserved whereas in the case of the appellant company, the notices issued at the fag end of the limitation period, i.e. on 11- 01-2013, got duly ser....
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....eme Court in case of Lovely Exports supra and also of High Court of Madhya Pradesh in the case of DCIT vs. Peoples General Hospital Ltd. (2007) 9 ITJ 481 (MP) has held that when the identity of the shareholders is established, no addition can be made in the hands of the recipient company. 10.02 It is submitted that this Hon'ble Bench, again in the case of M/s. Anant Steel Pvt. Ltd. Vs. ACIT (in Appeal No. IT(SS)-31, 28, 29 & 30/Ind/2010), has deleted the entire addition made by the AO on account of share application money." 13. On the other hand, ld. DR has relied on the orders of the Revenue Authorities. 14. We have heard rival contentions of both the parties and perused material available on record. So far as the above ground no.3 with regard to incriminating material is concerned, we find that it is admitted fact that in response to the return furnished under s. 139(1), no notice under s. 143(2) was issued to the assessee uptil 31-10-2008 i.e. the time limit prescribed under the then prevailing sec. 143(2) of the Act being expiry of 12 months from the end of the month in which the return was furnished, thus, the assessment was deemed to have been framed under the ....
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....receivable as sale consideration of sale of land. The addition made in the search assessment order pertained to the issue already dealt in the original assessment order i.e. lease transaction categorized as sale transaction. The fact that the aforesaid issue bears no relation to the any of the material / documents / records found and seized during the search action on 16.04.2009. Ld. CIT(A) has relied upon the Circular No. 7 of 2003 which clarifies the position of the pending appeals as on the date of the search. The relevant portion is produced herewith - "The Assessing Officer shall assess or reassess the total income of each of these six assessment years. Assessment or reassessment, if any, relating to any assessment year falling within the period of six assessment years pending on the date of initiation of the search under section 132 or requisition under section 132A, as the case may be, shall abate. It is clarified that the appeal, revision or rectification proceedings pending on the date of initiation of search under section 132 or requisition shall not abate..........." Accordingly, as far as completed assessments are concerned, they do not abate. The AO c....
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....inating material unearthed during the course of search or requisition of documents or undisclosed income or property discovered in the course of search which was not produced or not already disclosed or made known in the course of original assessment. In all these cases no assessments were pending on the date of search for these assessment years. No assessments were abated in terms of second proviso to section 153A of the Act. Hon'ble Delhi High Court in the case of CIT vs. Kabul Chawla (supra) has considered various High Court decisions relied upon by the learned DR. The Hon'ble Delhi High Court has considered the cases of Canara Housing Development Co. vs. DCIT; Madugula vs. DCIT; CIT vs. Chetandas Laxmandas and CIT vs. Anil Kumar Bhatia (supra). The only decision of the Hon'ble Allahabad High Court in the case of CIT vs. Raj Kumar Arora; 367 ITR 517 relied on by the learned DR was not considered by Hon'ble Delhi High Court while deciding the issue in the case of Kabul Chawla. The Hon'ble Allahabad High Court has reversed the order of the Tribunal and remanded the issue to the Tribunal to consider the appeal of the department on merits. It is a settled legal p....
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....om the assessee has received share application money. Mr. Satyanarayan Gadia has, on oath in the statement recorded before the Assessing Officer, categorically admitted that he has invested money in assessee's co. with their own funds i.e. Rs. 25 lacs in MGM Tools P. Ltd. and Rs. 96,09,832/- in Convenient Housing Financing Ltd., Indore. Therefore, we are of the view that in respect of Indore based co., the assessee has submitted all the evidence, thus, no addition can be made. The assessee has submitted that three other cos. corporate identification no. allotted to each of the share applicant cos. by Registrar of Cos., GOI. These cos. are having office and without registered office, no Co. Registrar will register the cos. in the register of Registrar of Cos. The Xerox copies of share applicant cos., copies of PAN Cards were given. In respect of two cos., M/s. MGM Tools P. Ltd. and M/s. Convenient Housing Finance Ltd., the director gave statement on oath, therefore, it is established that these cos. were in existence at that time. Therefore, we are of the view that assessee has complied with all the information which was desired by the Assessing Officer to be submitted. Therefore, w....
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....010-11) AND GROUND NO. 2(a) & 2(b) (For A.Y. 2011-12) 18. These grounds of appeal of the assessee are directed against the action of the CIT(A) in upholding the decision of the AO of rejection of books of account. 19. Short facts of the case are that the assessee is a private limited company engaged in the business of trading in gold and silver bullion and future trading in commodities through MCX. The books of account are audited and TAR was also filed for both these years. A search under s.132 took place in the business premises of the assessee as well as in the various residential premises of its directors on 25-11-2010. During the course of the search, physical stock of Cadbury (Gold Bullions) & Coins aggregating to 8562.103 Gms. valued at Rs. 1,73,81,069/- was found in excess than that shown in the stock register and regular books of account maintained by the assessee. In view of such excess stock, Shri Pragnesh Neema, one of the directors of the assessee company, in his statement given under s. 132(4) of the Act, on 26-11-2010, admitted the entire value of the stock i.e. Rs. 1,73,81,069/- as undisclosed investment of the assessee company for A.Y. 2011-12. During the cou....
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..../-, no other discrepancy or defect was found by the search party but such finding of excess stock itself establish that day to day maintenance of quantitative and qualitative details of stock was defective. vi) The submission of the assessee that the discrepancy found during the course of the search was got rectified while drawing the financial statements for the year ended 31-03-2011 was found to be correct by the AO but the assessee could not furnish the required information so that the authentication of the books of account could be possible. vii) In respect of the assessee's claimed that during the course of surprise inspection of Anti Evasion Bureau no discrepancies were found, the AO held that copies of documents found and seized by the Sales Tax Department were not produced before him. The AO also held that although the assessee was required to obtain sales tax registration during F.Y. 2008-09 but he actually obtained such registration during F.Y. 2009-10 only. viii) The assessee itself could not obtain copies of its ledger accounts in the books of its debtors and creditors but required the AO to issue notice under s. 133(6) and summons under s. 13....
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..... of the assessee has dropped down from 0.66% in A.Y. 2009-10 to 0.57% and 0.29% respectively in A.Y. 2010-11 and A.Y. 2011-12. iv) G.P. for A.Y. 2011-12, shown at 0.29% shall get further decreased i.e. to 0.03% only if the amount of surrender income on account of excess stock at Rs. 1,73,81,069/- is excluded. In such a case, the G.P. will remain only Rs. 26,03,400/- on a sale of Rs. 674,81,22,607/-. There was no compelling reason for selling the stock of Rs. 1,73,81,069/- surrendered in search at a loss. v) The other concern namely M/s. M.P. Bullion had shown gross profit of Rs. 798.54 per 100 Gms. sale of gold as against the same shown by the assessee at Rs. 575.66 per 100 Gms. sale of gold when turnover of M.P. Bullion was Rs. 755 Crores in comparison of assessee's turnover of Rs. 675.81 Crores. 21. The Ld. AR for the assessee has made oral as well as written submission as under: " That, the appellant being a private limited company had maintained regular books of account, along with all supporting bills and vouchers, in the ordinary course of its business, in which all the transactions relating to trading receipts and expenditure were fully and tru....
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....ommissioner of Commercial-Tax, Ujjain for the previous year relevant to A.Y. 2011-12, is placed at page No. 113 & 114 of the Paper Book. 5.00 That, the appellant company besides maintaining day to day financial books of account in its ordinary course of business was also regularly maintaining stock tally containing each and every transaction of receipt and issue of goods, in terms of quantity. The stock tally was duly produced before the AO and the AO after in-depth examination thereof with purchase invoices and sales invoices could not find even the slightest discrepancy in maintenance thereof. The appellant company at point No. 11 of Schedule-N of the audited financial statements for the relevant previous year, as placed at Page No. 112 of the Paper Book and as also in Schedule-D of the Tax Audit Report issued by the Tax Auditors, at page No.96, have furnished the full annual summary of the quantitative details such as Opening Stock, Purchases, Sales and Closing Stock, in respect of both the items in which it deals i.e. Gold Bullion and Silver Bullion. It would be pertinent to note that as per the findings given by the AO at para 2 on page No.22 of the impugned assessmen....
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....e AO issued a show-cause notice dated 22-01-2013 whereby the appellant company was required to show-cause as to why its books of account might not be rejected under the provisions of s.145(3) of the Act. In response to the show-cause notice, the appellant made a detailed reply vide its counsel's letter dated 28-01-2013, by demonstrating that the appellant's case was not a fit case for invoking the provisions of s.145(3) of the Act. A copy of the reply is placed at page No.80 to 84 of the Paper Book. The reply of the assessee has also been reproduced by the learned AO at page no. 12 to 17 of his Assessment Order. 9.01 As regard the first observation of the AO, to the effect that during the course of the assessment proceedings not a single sale bill was produced before him for verification, it is respectfully submitted that such an observation is completely baseless and far from truth. It is submitted that during the course of the assessment proceedings, the appellant had time and again produced the copies of sales invoices along with its books of account, stock tally, vouchers, etc.. On a perusal of the copy of the submission letter dated 03-12-2012 [kindly refer Pa....
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....not by itself lead to an inference that for the assessment year under consideration, the books of account of the appellant were not reliable. It is submitted that under the scheme of the Income-tax law each assessment year is a different assessable unit and on the basis finding in one assessment year, no adverse inference can be drawn in other assessment years. Even otherwise, it is submitted that neither during the course of the search proceedings nor during the course of the assessment proceedings, any instance of suppressed or unaccounted sales or purchases were noted. Further, excess stock found and surrendered during the course of the search and subsequently recorded in the regular books of account, cannot be legally sustainable ground for rejection of books of account when no other defect or discrepancy in maintenance of books of account was noted. For such preposition, reliance is placed on the decision of Hon'ble ITAT Nagpur Bench in the case of ITO vs. Dilip & Brothers (2004) 80 TTJ 0583. In this case, the Hon'ble Bench at para 6 has observed as under: "We have considered the rival submissions. We find that the AO rejected the book results only on the ground that ....
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.... that the appellant made cash deposits in its bank accounts even on those days when no sales was getting reflected as per stock register, it is submitted that the AO proceeded on a patently wrong notion that sales proceeds realized in the form of cash were deposited by the appellant on the very same day on which sales took place; whereas it is not a fact for the reason that many a times but not sales proceeds are deposited in bank accounts on subsequent day or days. It is submitted that it is not the case of the AO that he noted making of cash deposits on any particular day without availability of the sufficient cash balance as per the regular cash book of the appellant on that day. 9.06 As regard the sixth observation of the AO to the effect that during the course of search excess stock amounting to Rs. 1,73,81,169/- was found, it is submitted that such an observation of the AO is mere repetition of the observation made at para 2 on page No.17 of the impugned order. However, it shall be appreciated by Your Honour that the AO himself, at para 6 at page No.18 of his assessment order has admitted that the discrepancy as regard to the excess stock was duly rectified by the ap....
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.... 9.08 As regard the eighth observation of the AO with regard to non- furnishing of the copies of the documents found and seized by the Anti Evasion Wing of the Sales Tax Department on 10-11-2010, it is submitted that first of all not a single incriminating material or document was found or seized by the Anti Evasion Wing and, secondly, the appellant had duly furnished a copy of the order of the Sales Tax Department, passed in consequence of the aforesaid search, before the AO from which it was evident that no adverse material or document was found by the Sales Tax Department during the course of aforesaid search. The furnishing of such order has also been admitted by the AO in last para of page No.8 of the impugned order.. It shall be appreciated by Your Honour that the orders passed by the commercial tax authorities by themselves adduce evidence in support of the appellant's assertion that during the course of the search operations by the Anti Evasion Wing of the Commercial Tax Department, not a single incriminating document was found or seized. 9.09 As regard the ninth observation of the AO to the effect that the appellant could not produce copy of its accounts in....
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.... such proposition, reliance is placed on the following judicial pronouncements: i) Madnani Construction Corporation (P) Ltd. vs. CIT (2008) 296 ITR 0045 (Gau) ii) Pandit Bros. vs. CIT (1954) 20 ITR 159 (Punj.) iii) Veeriah Reddiar vs. CIT (1960) 38 ITR 152 (Ker.) iv) International Forest Co. vs. CIT (1975) 101 ITR 721 (J&K) v) Ratan Café vs. State of Madras (1974) 33 STC 39 (Mad.) vi) M. Dubai Raj vs. CIT (1972) 38 ITR 484 (Ker.) vii) R.M.P. Perianna Pillai & Co. vs. CIT (1961) 42 ITR 370 (Mad.) viii) Narendra Mafatlal Mehta vs. ITO (1997) 59 TTJ (Mum.) 165 ix) Nagarjun Construction Co. Ltd. vs. JCIT (2012) 52 SOT 0178 (URO) 9.11 As regard the eleventh observation of the AO to the effect that the appellant had sold the excess stock amounting to Rs. 1.73 crores, as found during the course of search, on a loss of Rs. 6 lakhs, it is submitted that first of all such an event had no bearing in the trading results or for that matter the books of account of the appellant for the relevant assessment year as such excess stock was found and sold during the subsequent year i.e. A.Y. 2011-12. Even ....
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....and again in the case of Kishan Chand Chelaram vs. CIT (1980) 125 ITR 713 (SC). Even otherwise, it is submitted that the gross profit of the appellant was not comparable with the above named concern for the reason that first of all such other concern was pioneer in the bullion trading in Indore with more than 20 years' standing whereas the appellant started the business of bullion during the financial year 2008-09 only. Secondly, it is submitted that the prices of the gold bullion and silver bullion are governed by the globally prevailing rates and, therefore, the same are highly susceptible for volatile fluctuation on day to day basis. In such circumstances, it might be possible that a dealer had purchased the more quantity while the rates were low in comparison to other dealer or vice versa and, therefore, comparison of trading results cannot be a decisive factor for assessing the trueness and completeness of books of account of any assessee. For such proposition, reliance is placed on the decision of the Hon'ble High Court of Kerala in the case of M. Durai Raj vs. CIT (1972) 83 ITR 484 (Ker.). Further, as noted by the AO himself, the appellant made 90% of its sales in ca....
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....in their best wisdom have restricted an assessee to make purchases of any goods exceeding a sum of Rs. 20,000/- otherwise than by an account payee cheque or draft in accordance with provisions of section 40A(3) of the Act but in the entire scheme of the law, no restriction has been imposed for effecting any sales of any value in cash. It shall be pertinent to note that even the provisions of sub-section (1D) of section 206C of the Income-Tax Act, inserted by the Finance Act, 2012, requiring a person being a seller, who receives any amount in cash as consideration for sale of bullion, a sum over the prescribed amount, to make the collection of tax at source at the prescribed rate from the buyer, has its application only from 01-07-2012 and, therefore, for the years under consideration, it cannot be presumed that a seller of bullion was under any obligation under the Income-Tax Act, 1961 to keep the details of names and addresses of its customers. As regard the allegation of deliberately concealing the information of the customers, it was submitted that question of concealment of any information would arise only if any person is in possession of the required information and since in ....
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....ices can very well be compared and verified with the daily market quotes as aforesaid. It shall be appreciated that in the instant case, the AO has not brought on record any single instance of effecting the sales at a price lower than the price prevailing at the relevant time. It is further submitted that in respect of the credit sales, where the appellant was required to make a contact with the buyer for subsequent recovery of the sales proceeds, complete identity as regard to name and address of the buyer was not only maintained but the details of all such debtors with complete name and address were also furnished before the AO during the course of the assessment proceedings. 10.04 Further, it is also not the case of the AO, that the appellant, in order to avoid tax, made cash sales either to its associates or related parties at the rates below the then prevailing market rates. 10.05 It is further submitted that during the relevant previous year, the appellant had also effected sales of bullion on credit basis and in respect of such credit sales, the appellant had maintained complete details of the purchasers such as their names and addresses. Now, it is submitt....
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....ogent material on record. We, therefore, do not find any merit in the action of the AO for rejecting book results merely on the ground that in respect of some of the cash sale transactions, the names and addresses of the buyers were not recorded fully. 16. In the instant case, no mistake has been pointed out by the AO either in the books of account or in the statement of purchases, sales and stock which was maintained quantitatively on day-to-day basis. The findings recorded by the CIT(A) at page Nos. 3 and 4 have not been controverted by the Department by bringing any positive material on record. We are, therefore, inclined to agree with the learned Authorised Representative, Mr. Rindani, that the assessee has maintained proper books of account and full details regarding the purchases, sales and stock registers were furnished to the AO in which no defect whatsoever was pointed out, thus there was no reason before the AO for rejecting the book results and thereby estimating the profit merely by comparing the assessee's GP rate with M/s Gayatri Bullion, which was standing entirely on different footings than the assessee." 10.07 Following the judgment of the Hon'....
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....ground that only one consolidated cash memo was issued at the end of the day. 8. In Ramji Lal and Son vs. Commissioner Sales Tax, 50 STC 344 the Allahabad High Court has held that no adverse inference against the veracity of the account maintained by the assessee could be drawn nor the assessee's account book could be rejected on the ground of not issuing separate cash memo in respect of petty sales and in issuing a consolidated cash memo at the end of the day. The same view was reiterated by the Allahabad High Court in the case of Commissioner of Sales Tax vs. Vishnbu Chandra Vipin Chandra, 50 STC 345, wherein the Court held that failure to such memos by itself was insufficient to reject the books of account, where the books were otherwise verifiable. 9. In the light of the aforesaid, the order of the Assessing Officer rejecting the books of account under Section 145(3) of the Act and consequently, making an addition of the income on estimate basis was reversed by the Tribunal. Further, such addition made on estimate basis is a question of fact as has been held in Commissioner (Custom vs. Stoneman Marble, (2011) 2 SCC 758, Vijay K. Talwar vs. CIT, (2011) 1 SCC 67....
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....s depends on many factors specially in a commodity which is internationally traded and the market of which is very volatile changing from minute to minute. Merely because an assessee could not earn the profit, which as per the Revenue Authorities ought to have been earned by him, cannot be a ground for rejection of his books of account. There are many judicial authorities on this issue which have been cited in the preceding paras. 11.04 As regard the fourth and last reason i.e. sale of excess stock found during the course of the search at a loss of Rs. 13,12,505/- and further, dropping of the G.P. rate in F.Y. 2010-11 to 0.03% only, it is submitted that both these factors are not relevant for rejection of books of account. The CIT(A) has commented that there was no compelling reason for sale of excess stock found in search at loss. The CIT(A) ought to have considered that a Revenue Authority cannot occupy the judgment seat of businessman and cannot dictate as to when to sale or not to sale his goods. It shall be appreciated that on the date of search i.e. on 25-11-2010, the market price of the gold bullion was prevailing rate at Rs. 20,300/- per 10 gms., whereas on the dat....
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....actorily that the account books are unreliable, incorrect or incomplete before it can reject the accounts. The rejection of accounts is not a matter to be done light-heartedly, though it may not be possible to lay down in general terms the exact circumstances in which the accounts should be considered as unreliable or incorrect." In view of the above facts and circumstances of the case it would be appreciated by Your Honours that the authorities below would not having any justified reason to reject the books of accounts of the appellant by invoking provisions of the section 145(3) of the Income-Tax Act, 1961." 22. The ld. DR has relied on the orders of the Revenue Authorities. 23. We have heard rival contentions of both the parties and perused material available on record. In respect of assessment year 2011-12, we find that there was search and seizure operation carried out and excess stock amounting to Rs. 1,73,81,169/- was found and the Assessing Officer has also observed that assessee has rectified the discrepancies regarding the stock. In our considered view, finding of excess stock during the course of search by itself suggest that books of accounts of the asses....
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....with a profit in the range of Rs. 3500/- to Rs. 5000/- and One K.G. Silver Bar was sold with a profit in the range of Rs. 1000/- to Rs. 2000/- during F.Y. 2009-10. Finally, at para 3.6, the AO estimated G.P. on Gold Bar weighing 571227 Gms. @ Rs. 4000/- per 100 Gms. (Rs.2,28,49,080/-) and after reducing the G.P. of Rs. 43,27,982/- shown by the assessee in its books of account on sale of gold bullion made an addition of Rs. 1,85,21,098/- on account of G.P. on gold bullion. The AO, likewise, estimated G.P. on Silver Bar weighing 3372.500 K.G. at Rs. 1500/- per K.G. (Rs.50,58,806/-) and after reducing the G.P. of Rs. 13,59,696/- shown by the assessee in its books of account on sale of Silver Bar made an addition of Rs. 36,99,110/- on account of G.P. on silver bullion. Likewise, for A.Y. 2011-12, the AO made addition of Rs. 12,18,17,410/- and Rs. 39,76,118/- respectively on account of G.P. on Gold Bullion and G.P. on Silver Bar by estimating the G.P. rate on Gold Bullion at Rs. 4200/- per 100 Gms. and Silver Bar at Rs. 1800/- per K.G. 26. Matter carried to learned CIT(A), who found that the AO made mistake in conversion of 1 K.G. Gold Bar, by taking it as equal to 100 Gms., whereas ....
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.... stock tally in respect of each and every item of purchases and sales of the goods in which it trades. Further, such books of account and stock tally were also subjected to audit both under the Companies Act, 1956 and under s. 44AB of the Income-Tax Act, 1961 and the auditors have not found any fault in maintenance of such books of account. Furthermore, the AO has also not found any significant defect or deficiency in such books of account which could have, legally, given rise to rejection of books of account. In such circumstances, in terms of the provisions of sub-section (1) of section 145 of the Act, income of the appellant, chargeable under the head 'Profits and gains of business or profession', ought to have been computed only on the basis of the books of account without making any interference or disturbance. 1.02 During the course of the search, not even a single document was found or recovered from which it could have been inferred that the appellant had not fully and correctly recorded its business transactions. 1.03 That, for the assessment year under consideration, the commercial tax authorities have assessed the turnover of the appell....
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....t, then the resultant amount being the gross profit shall also have to be taken as correct. In the instant case, the learned AO has not doubted the correctness of any of the items of the trading account and therefore, there was no justification for making an estimation of gross profit other than that arrived at by the items of the trading account. It is submitted that in the instant case, the learned AO has not doubted the correctness of the purchases and as also the day-to-day quantity tally as well as valuation of opening and closing stock. The learned AO has also not estimated any sales as against that shown by the appellant in its books of account. In other words, the earned AO has not doubted the correctness of inventories or purchases or sales and therefore, there was absolutely no justification for him for making the estimation of gross profit. For such proposition, reliance is placed on direct judgment of Hon'ble ITAT Delhi 'D' Bench in the case of Master Abhinav Malhotra vs. ACIT (2004) 89 TTJ (Del) 144. The relevant abstract of the decision is reproduced as under : "25. We have heard the parties with reference to the material available on record. Ther....
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....ast moving items with the peculiar feature of higher volume and turnover and very meager margin of profit. In the bullion trade, because of its unique features such as no quality discrimination, complete awareness of the customers as regard to the prevailing selling price, high value and lower weight, a bullion trader can never be expected to earn the gross profit as arbitrarily estimated by the AO & CIT(A). It is submitted that the assessment year under consideration was just the second year of operation of bullion trade by the appellant and therefore, its profit was not comparable with the other dealers having very old establishment with their own trusted customers base. It is submitted that for establishing in the bullion market, the appellant was compelled to keep its GP margin relatively on a lower side. 6.00 The CIT(A) grossly erred in stating at para 9.2.5 that the appellant had not maintained stock register whereas the fact that such stock register was not only maintained but it was also verified by the AO. Such stock register even found by the search party which is apparent from the answer to question no. 6 in the statement of Shri Pragnesh Neema given under s. 13....
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.... 683 (MP) iii) Dhakeshwari Cotton Mills Ltd. vs. CIT (1954) 26 ITR 775 (SC) iv) A. Musa & Sons vs. CIT (1953) 23 ITR 73 (Bom.) v) CIT vs. K.Y. Pillaiah and Sons (1967) 63 ITR 411 (SC) vi) Raghubeer Mandal Harihar Mandal vs. State of Bihar (1957) 8 STC 770 (SC) 9.00 The Hon'ble Apex Court in the case of State of Orrissa vs. Maharaja Shri B.P. Singh Deo (1970) 76 ITR 690 (SC) on best judgment assessment has observed as under: "4. Apart from coming to the conclusion that the materials placed before him by the assessee were not reliable, the Asstt. Collector has given no reasons for enhancing the assessment. His order does not disclose the basis on which he has enhanced the assessment. The mere fact that the material placed by the assessee before the assessing authorities is unreliable does not empower those authorities to make an arbitrary order. The power to levy assessment on the basis of best judgment is not an arbitrary power; it is an assessment on the basis of best judgment. In other words, that assessment must be based on some relevant material. It is not a power that can be exercised under the sweet will and pleasure of....
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....rom." 12.00 In the appellant's case except finding excess stock of a worth of nearly Rs. 1.71 Crores, no other discrepancy or other undisclosed asset was found by the search party and therefore, there is no justification for making the estimation of huge income in the instant case. For the proposition, a reference can also be drawn from the judgment of the Hon'ble ITAT, Jaipur Bench in the case of Mustaq Ahmed & Ors. vs. ACIT (2000)66 TTJ (Jp) 305 as under: "In case of searchers where all belonging to assessee are being caught by the Department, it is more rational and appropriate to determine the income on the basis of assets/expenditure theory which duly approved in accountancy. The estimation of undisclosed income by way of a positive working on the basis of statements of two persons and a very few transactions appearing in seized papers for the whole block period for all the persons is not les than a wild guess. The best judgment assessment is not a punitive assessment and one has to try to make a fair estimate nearer to the true affairs. An estimation based on assets and expenditure is obviously better than making a wild guess without backing of assets/expend....
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....he ld. DR has relied on the orders of the Revenue Authorities. 29. We have heard rival contentions of both the parties and perused material available on record. Looking to the facts and circumstances, we find that there was a simultaneous search u/s 132(1) and simultaneous assessment proceedings were carried out in case of one assessee namely, Omprakash Dhanwani, Indore. The nature of business of assessee was also that of dealing in gold, silver bullion on large scale. In that case, the rate of g.p. was estimated by learned CIT(A) @1.25% of the sales value. We find that the Tribunal has decided IT(SS)A No.241 to 243/Ind/2015 and IT(SS)A Nos.254 to 256/Ind/2015 wherein it is held as under: "12. As regards application of gross profit rate and enhancement in the turnover, we have gone through the various documents placed before us as also the record of the case. We find that the assessee has disclosed GP rate of 0.53% in the assessment year 2009-10, 0.13% in assessment year 2010-11 and 0.10% in the assessment year 2011-12 on the sales recorded in the books of accounts. The turnover as per books of the assessee for the assessment year 2009-10 was Rs. 190.26 crores. The turn....
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....that profit on one kg silver bar was in the range of Rs. 1200/- to Rs. 2500/- per kg. He, therefore, estimated the gross profit @ Rs. 2,000/- per kg. in A.Y. 2010-11 and @ Rs. 2,500/- per kg. on sales of 522.946 kg in A.Y. 2010-11 & on 1861.524 kg in A.Y. 2011-12 on sales of silver bar. 15. We also find that the assessee is dealing in precious metal like gold and silver and the rates are verifiable and available in open to every customer from MCX gold reports or Sarafa Publications. Thus, the customers who purchase goods from the assessee were well aware about the prevailing market price of these metals at the relevant time. Most of the purchases are from reputed dealers. Very few documents pertaining to the assessment year 2011-12 were seized which suggest that the assessee indulged in trading which was not recorded in the books of accounts. For recorded purchases, the assessee was maintaining day to day stock register with quantities and purchase vouchers. The payments were also made through banking channels. Therefore, the learned CIT(A)'s action in enhancing the turnover by 17.5% for all the years is unjustified. There was seizure of documents which suggest unaccounted....
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.... Bench of ITAT and in the case of Mahendra Kumar Agrawal (2015) Tax Publication (DT) 2124 the Jaipur Bench of the Tribunal accepted the GP of 0.1%. Further, we are of the view that on unrecorded sales estimated, the profit has to be worked out at the rate of 1.25%. Considering all these aspects we sustain the gross profit rate of 1.25% on the enhanced turnover of gold bullion for the assessment years 2010-11 and 2011-12 and on the recorded turnover disclosed in the books of accounts, we direct to apply gross profit rate of 0.25%. 16. We also hold that the CIT(A) was not justified in considering the combined sales of gold and silver bullion because there was not a single incriminating document or any evidence found on the basis of which the Assessing Officer could reject the book results of purchase/sale of silver bullion. No addition can be made on estimations and on hypothetical grounds with regard to sale of silver bullion. We are also of the view that not only the enhancement made by the CIT(A) in silver bullion account by 17.5% but the application of GP rate of 1.25% applied by the learned CIT(A) is not justified. We, therefore, delete the additions made in silver bull....
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.... of sales, the CIT(A), relying upon the decision in the case of Trilokchand Girdharilal (2014) 369 ITR 751, directed to enhance the declared turnover of the assessee by 20%. 32. The Ld. AR for the assessee has made oral as well as written submission as under: "(i) The CIT(A) had not issued any notice under s. 251 of the Act averting the appellant of his proposed action of enhancing the sales by 20%. (ii) The rejection of books itself was not justified. Once it is held that the books of account were properly maintained, no estimation of sales or GP would be permissible. (iii) During the course of the search, not a single instance of suppressed sales was found. (iv) Sales shown by the appellant have duly been accepted by the Commercial Tax Authorities. The Hon'ble High Court of Rajasthan in the case of CIT vs. Mahan Marbles (P) Ltd. (2013) 354 ITR 0238, has held that when the sales declared by the assessee was accepted by the Sales Tax Authorities and no case of out of books sales was found, no addition by estimating extra sales can be made. (v) The CIT(A) has enhanced the sales merely on presumptions and assumptions." 33. The ld. DR....
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....s. 56,47,000/- and Rs. 2,39,99,497/-, respectively, for the A.Y. 2010-11 and A.Y. 2011-12. However, the ld. Counsel for the assessee did not press ground Nos. 4(a) & 4(b) for A.Y. 2010-11 and ground Nos. 3(a) & 3(b) for A.Y. 2011-12 which are related to giving of opportunity by the CIT(A) under s.251(2) of the Act. Therefore, same are dismissed being not pressed. 36. Short facts relating to the remaining ground nos. 4(c) for A.Y. 2010-11 and 3(c) for A.Y. 2011-12 are that during the course of the appellate proceedings, the CIT(A) compared commodity transactions trading income and brokerage income for three assessment years with the transactions charges shown to have been paid by the assessee in these three assessment years. The CIT(A) noted that for A.Y. 2009-10, the assessee had earned 212.50% income in comparison to transaction charges paid whereas, for A.Y. 2010-11 and A.Y. 2011-12, these income had got reduced respectively to 179.68% and 116.98%. Thus, according to the CIT(A), there was suppression of commodity trading income by the assessee to the extent of Rs. 56,47,000/- for A.Y. 2010-11 and Rs. 1,92,52,243/- for A.Y. 2011-12. Further, the CIT(A), at para 10.1.2 of his or....
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....es are being charged by the commodity exchanges depending upon the nature of the transaction and volume of the transaction. Such transaction charges are charged on every transaction whether it has been carried out by the appellant on its own account or on account of its customers. However, the trading income shown by the appellant in its audited financial statements is net result of various forward trading transactions carried out by it on its own behalf. It is submitted that on some voluminous transactions of a larger amount, the appellant may earn a little profit or even incur a loss and in such case since the transaction charges are charged on the basis of volume, the ratio of income over charges is bound to get reduced. The position may be conversed if on a small volume of transaction relatively higher income is earned. In such circumstances, comparison of transaction charges cannot be a yardstick for determining the net result of the trading income for the reason that trading income is not directly dependent upon the payment of transaction charges but it is dependent upon the fluctuation and volatility in the commodity market. In such circumstances, the approach of the learned....
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....o justification for CIT(A) in making disallowance of claim of the appellant for transaction charges at Rs. 47,47,254/- for A.Y. 2011-12. The income referred to by the CIT(A) was in respect of only one exchange and in respect of such exchange the appellant has shown even higher income (iii) That, as regard the estimation of trading income from commodity transactions, for A.Y. 2011-12, it is submitted that here again the learned CIT(A) has committed a factual error by presuming that the income shown in the provisional Profit & Loss Account found and inventorized as B-I/12 [LPS-4] page no.12 at Rs. 2,94,82,095/- was the income of the appellant from the entire commodity transactions carried out by the appellant through all the commodity exchanges. However, the fact remained that the appellant is carrying out its forward trading transactions through various commodity exchanges such as, NMCE, MCX, ICEX, CURRENCY and NCDEX. During the relevant previous year, the appellant earned a net income of Rs. 1,02,29,852/- from all such commodity exchanges, taken together, as shown in a separate statement placed at page no.163 of the Paper Book. However, the Profit & Loss Account [....
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....he audited P & L account, placed at page no.162 of the paper book, the assessee has shown consolidated profit from non-delivery based transactions on all exchanges at Rs. 1,02,29,852/-. The assessee has filed the break-up of such income of Rs. 1,02,29,852/- at page no.163 of the paper book. On a perusal of such break up, we observed that the assessee has derived profit from two exchanges and from other exchanges, it has incurred losses. So the net result of all the exchanges has worked out at Rs. 1,02,29,852/-. We observed that in such break-up, the assessee has shown a higher amount of profit at Rs. 4,00,80,795/- from ICES division, for the period from 01.4.2010 to 31.3.2011, as against the same shown in the P & L account found and seized in respect of ICEX division at Rs. 2,94,82,095/-. Thus, we find that the assessee has shown an increased amount of profit in its audited accounts in comparison to the profit shown in the loose paper. It appears that the learned CIT(A) has committed a factual error by comparing the results of only one division and that too, for a shorter period with the consolidated results of all the divisions for the whole year. We find that the assessee has mai....
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.... the assessee are allowed. Assessee's GROUND No.5(a), 5(b) & 5(c) (For A.Y. 2010-11) AND GROUND No. 4(a), 4(b) & 4(c) (For A.Y. 2011-12) 40. These grounds of appeal of the assessee are directed against the action of the ld. CIT(A) of enhancement by making disallowance of salary of a sum of Rs. 53,93,000/- for A.Y. 2010-11 and Rs. 54,93,000/- for A.Y. 2011-12. However, ld. Counsel for the assessee did not press ground Nos. 5(a) & 5(b) for A.Y. 2010-11 and ground Nos. 4(a) & 4(b) for A.Y. 2011-12 which are related to giving of opportunity by the CIT(A) under s.251(2) of the Act. Therefore, same are dismissed being not pressed. 41. Short facts relating to the remaining ground nos. 5(c) for A.Y. 2010-11 and 4(c) for A.Y. 2011-12 are that during the course of appellate proceedings, the CIT(A), from a document seized and inventorized during the search as B- I/12 [LPS-4] page no.10, being the provisional Profit & Loss Account, noted that the assessee had shown the salary expenses only at Rs. 39,53,000/- only. The CIT(A) further observed that in yet another loose paper, found and inventorized as B-I/1 page no.5, the details of monthly salary of the staff was stated to be at Rs. 1,....
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....lable (iv) That, the employee-wise details of salary for A.Y. 2010-11 are placed at page no.209 to 212 whereas the similar details for A.Y. 2011-12 are placed at page no.194 to 196 of the Paper Book. On a perusal of such statements, it shall be appreciated by Your Honours that the appellant has furnished the complete details as regard to the name of the employees, their father's name, addresses, their designation and total salary paid to them. Entire salary payment made through account payee cheques only (v) That, the entire payment of salary has been made by the appellant company through account payee cheques only. In evidence of such fact, specimen copies of bank account and bank statements for one month are placed at page no.213 to page no.218 and page no.197 to page no.200 of our Paper Book. The AO did not find any discrepancy (vi) That, during the course of the assessment proceedings, the appellant had produced all the necessary records and books before the AO and the AO did not find any discrepancy or defect in claim of the appellant as regard to the payment of salary. In view of the above facts and circumstances, the enha....
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....or A.Y. 2011-12 AND DEPARTMENTAL GROUND Nos. (i) TO (iv) (For A.Y. 2011-12) 45. These grounds of appeal of the Department are directed against the action of the ld. CIT(A) in deleting the addition of Rs. 13,12,505/- made by the AO by disbelieving the loss incurred by the assessee on account of sale of surplus stock of gold bullion found during the course of search. 46. Ld. Counsel for the assessee did not press ground nos. 7(a) & 7(b) for A.Y. 2011-12, therefore, same are dismissed being not pressed. 47. Short facts of the grounds taken by the Revenue are that during the course of the search proceedings which were carried out on 25-11-2010, inter alia, in the assessee's premises situated at Bungalow No. 9, 11 Bungalow Colony, 61/1, Lal Bagh, Keshar Bagh Road, Indore, physical verification of gold bullion, ginny, coins, etc. was carried out by the search party. Upon physical verification, total physical stock of gold bullion, ginny, coins etc. weighing 13624.000 gms. was found in the assessee's premises whereas as per the books and stock register of the assessee maintained uptill the date of search, the stock of gold bullion, ginny, coins etc. was found recorded at ....
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....investment. Finally, on the one hand, the AO disallowed the entire loss of Rs. 7,40,297/- as arisen to the assessee on sale of surplus stock of gold bullion found on search and on the other hand, further estimated GP rate of Rs. 4200/- per 100 gms. on the entire physical stock of gold bullion weighing 13624 gms. as found on the date of search, at Rs. 5,72,208/-. Thus, in totality, an addition of Rs. 13,12,505/- [Rs.7,40,297 + Rs. 5,72,208] was made by the AO in the assessee's returned income. 48. Matter carried to learned CIT(A), who deleted the entire addition of Rs. 13,12,505/- by holding that the AO failed to prove that sale bills of bullion where stock was sold at a loss were bogus and even if such sale is considered as doubtful, it is duly taken care of, by GP addition already upheld by him. 49. The Ld. AR for the assessee has, reiterating the submissions made before the ld. CIT(A), relied upon the order of the ld. CIT(A). 50. On the other hand, ld. DR has relied on the orders of the Assessing Officer. 51. We have heard rival contentions of both the parties and perused material available on record. We find that the assessee had sold the entire stock of aforesai....