TaxTMI 
TaxTMI 
2022 (10) TMI 1096
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....he course of survey action? 2. The CIT(A) erred in accepting assessee's explanation that 91,321 grams of gold was returned by local sarafs and 53,469 grams of gold were re-melted which is an afterthought, created to explain the difference, and submitted later on to escape the tax liability and other consequences. 3. On the facts and circumstances of the case and in law, whether the CIT(A) is correct in directing the Assessing Officer to accept the income of Rs.2,19,48,940/- voluntarily disclosed by the assessee as additional income during the year under consideration, without calling any remand report from the Assessing Officer on this issue? 4. For this and such other reasons as may be urged at the time of hearing, the order of the CIT(A) may be vacated and that of the Assessing Officer be restored. 5. The appellant craves leave to add, amend, alter or delete any of the above grounds of appeal during the course of appellate proceedings before the Hon'ble Tribunal." 3. The brief facts relating to the issue on hand are that the assessee is a company engaged in the business of manufacturing and trading in gold, silver, diamond ornaments.....
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....ons made by the AO, is not justified. He argued that the reasoning of the AO in not accepting the reconciliation may be considered. He submits that the various documents in three bundles of loose papers were impounded from the premises of the assessee during the course of survey action. He drew our attention to page 59 of the paper book and submits that the said impounded documents shows the total weight of production during the year is 485695.677 Grams. During the course of survey, the director of the assessee was asked to reconcile the difference of quantity on the basis of impounded papers and tentative trading account. The said director clearly stated that he is not in a position to explain, will explain it later and drew our attention to Q. No. 4 of the said statement. He argued that the AO has given many opportunities to the assessee to reconcile the said difference but no reconciliation was filed by the assessee. He finally submits that the AO issued a letter dated 28-09-2011 to explain the said difference. He argued that the assessee filed its reconciliation vide its letter dated 21-10-2011 and explained the difference arose on 5 major items. The AO has not accepted the sai....
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....ng stock of pure gold and ornaments, wrong entry, return of gold and re-melting / reproduction of ornaments and referred to page 275 of the paper book. The assessee also given its submissions with regard to written questionnaire on 12-07-2013 and drew our attention to page 279 of the paper book. Further, the assessee explained the difference in gold, labour charges, reduction of 20 kgs pure gold on opening stock and copy of tentative trading account and referred to pages 282 to 285 of the paper book. The assessee after the survey explained the difference in stock in gold vide Q. No. 25 of the statement and drew our attention to pages 73 and 74 of the paper book. Further, he drew our attention to page 291 of the paper book and submits that the assessee submitted all the details of ornaments, address of PAN of customers who have given ornaments for labour jobs. The AO recorded the same in his order passed u/s. 143(3) of the Act and drew attention to the paper book at pages 275 to 285. He supported the order of CIT(A). 6. Heard both the parties and perused the material available on record. The main contention of the ld. DR is that the assessee did not explain regarding the differen....
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....ears). Therefore, in our opinion, the allegation of that the assessee did not properly explain by documentary evidences as contended by the ld. DR is incorrect. 8. Coming to the issue on hand, we find the details of impounded loose papers in three bundles at para 5.2 of the impugned order which are reproduced hereunder for ready reference : Bundle No. Total No. of Pages Page Nos. on which marks of identification placed. 1 1-115 1 and 115 2 1-134 1 and 134 3 1-181 1 and 184 9. We note that the survey team basing on the details reflected in loose sheet at page 112 worked out the production at 485695 kgs. The said loose sheet is placed at page 59 of the Revenue's paper book. Further, the details of item wise production/ornaments are reflected at page 111 of the impounded loose sheet. We note that the scanned copies of these loose sheets are reflected at pages 18 and 19 of the impugned order. On perusal of the loose sheet No. 112 shows that the figure of production from April, 2010 to March, 2011 but however the survey team worked out the figure of production up to 28-02-2011. We find the survey team worked out the difference in gold at 193.157....
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..../2011 to 22/03/2011 21.944 VII Production but Remelted 54.469 IV Finished Ornaments Brought from Market 0.914 VIII Wrong Entry in Production Figure 2.740 Closing Stock as on 22/03/2011 (As counted by survey party) 134.602 Difference 0.030 TOTAL 577.218 TOTAL 577.218 11. We note that supporting the above as correct position on 22-03-2011 the assessee substantiated the same by filing proof of figures of various items production before the AO as well as the CIT(A). The CIT(A) examined every explanation regarding the above chart in the impugned order from page12. On perusal of the same the assessee contended that gold bars weighing 20 kgs were not considered as opening stock by the survey team. The CIT(A) examined the ledger extract of factory production from 01-04- 2010 to 31-03-2011 in 49 pages. We note that the gold bars weighing 11.900 kgs were in the head office and 8.100 kgs were held in factory for preparing ornaments. It was explained during the post survey vide submissions on 21-10-2011 thorugh Doc. No. KN-1,4,5 etc showin....
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....asked the Directors by name Jitendra Dhanraj Sonigara for reconciliation the difference worked out at 193156.677 gms which is at page 73 of the Revenue's paper book. The said director answered that the difference can be reconciled on the basis of records maintained by factory manager which have been impounded in loose paper No. 3 and sought time for segregation the details in respect of labour job work, reproduction etc. The survey team allowed time to the said director and resumed the said statements on 02-08-2011. Vide Q. No. 26 the assessee submitted the figures for production details and tentative trading account up to 22-03-2011. On the basis of impounded material and the details provided by the assessee the survey team formulated a chart and asked the assessee to confirm the same regarding production figure up to 22-03-2011 vide Q. No. 26. The said director confirmed the production figures on gross weight and net weight from 01-04-2010 to 28-02-2011 and 01-03-2011 to 22-03-2011 as 510190.777 gms and 459184.196 gms is at page 21 of the impugned order. 14. The assessee has furnished production from 01-03-2011 to 22-03- 2011 vide Exhibit A along with submissions dated 02-03-2....
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....form re-melted ornaments to an extent of 54.469 kgs from the production figure. There is no dispute with regard to submissions of these details before the AO and the AO examined the same but did not consider in reducing from the production figure. 17. A contention was raised before the AO regarding the wrong entry in production figure to an extent of 2.740 Kgs which confirmed through the details vide Schedule VIII in the assessment proceedings. The details of which the CIT(A) reproduced at page 68 of the impugned order. The only contention of ld. DR is that it is an afterthought and no details were submitted before the AO. We note that the said details were submitted before the AO in post survey submissions vide explanation dated 21-10- 2011. 18. On perusal of tabular chart as projected by the assessee as on 22- 03-2011 which is reproduced at para 10 above and with our discussion made here-in-above the difference of net weight is comes to an extent of only 0.030 Kgs while taking into consideration the closing stock as noted by the survey team on 22-03-2011 at 134.602 Kgs. Therefore, we find no difference except to 0.030 Kgs which is meager from the details as furnished by the....