TaxTMI 
TaxTMI 
TaxTMI 
2023 (4) TMI 103
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....e decided by consolidated order. In penalty appeal in ITA No. 493/Srt/2019 for A.Y. 2012-13, the revenue has raised following grounds of appeal: "1. Whether on the facts and circumstances of the case and in law, the ld. CIT(A) is justified in deleting the penalty U/s 271(1)(c) of the Act, levied on account of addition of Rs. 3,71,03,941/- confirmed in first appeal, in respect of undisclosed stock found during survey proceedings. 2. Whether on the facts and circumstances of the case, the ld. CIT(A) was justified in deleting the penalty U/s 271(1)(c) of Rs. 3,71,03,941/- holding that addition due to difference of valuation cannot be held as concealment of income without appreciating that the valuation was correctly made by the A.O. adopting average purchase price of the year, since, no quantitative records were maintained by the assessee to explain the item wise correct purchase price of the undisclosed stock so that it could be linked to the cost price to adopt the average cost price for valuation of the stock? 3. It is, therefore, prayed that the order of the ld. CIT(A) may be set aside and that of assessing officer may be restored to the above extent." 2. Brief facts of the....
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.... The Assessing Officer after dismissal of quantum appeal, issued show cause notice under Section 271(1)(c) r.w.s. 274 of the Act vide notice dated 17/01/2018. The Assessing Officer recorded that no reply was filed by assessee. The Assessing Officer levied penalty under section 271(1)(c) @ 100% of tax sought to be evaded on the addition of Rs. 3.71 crores. The Assessing Officer worked out the penalty of Rs. 1.14 crore in his order dated 23/08/2018. 3. Aggrieved by the order of penalty, the assessee filed appeal before the ld. CIT(A). Before the ld. CIT(A), the assessee submitted that during the assessment, the assessee submitted the details of undisclosed stock and its valuation and valued undisclosed stock at Rs. 8.10 crores. The assessee declared the disclosure of same amount. The assessee furnished details of breakup of stock disclosure on 09/03/2012 with its valuation of Rs. 7,64,47,187/- as per the following details: Item name Godown Quantity Rate Amount Destination (Production) Gold (22 Cts) Main Location 31,489.000 gms 1,657.00 gms 5,21,77,273.00 Platinum Main Location 132.000 gms 3,4,58.00 gms 4,56,456.00 Gold (18 Cts) Main ....
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....the assessee has not furnished inaccurate particulars of income, quantity remains the same and prayed to drop the proceedings. To support its submission, the assessee relied on the decision of Allahabad Tribunal in Vishwa Nath Agarwal Vs ACIT (2001) 71 TTJ 668 (All. Trib), Hon'ble Supreme Court decision in Dilip Shroff Vs CIT & Anr. (2007) 291 ITR 519 (SC)/161 Taxman 218 (SC) and Hon'ble Bombay High Court decision in CIT Vs Aarkay Saree Museum (1991) 187 ITR 147 (Bom). 6. The ld. CIT(A) after considering the submissions of assessee held that the Assessing Officer not disputed the quantity of undisclosed stock declared in the return of income. However, the valuation of said stock was not accepted by the Assessing Officer. The assessee valued its stock by average price method which was continuously followed. The Assessing Officer rejected the average price method on the ground that item wise quantitative details were not maintained and stock should be valued at market price. The Assessing Officer applied market price and added Rs. 3.71 crores. The addition was confirmed in quantum appeal for want of quantitative records. Before him, the assessee submitted that the addition is based ....
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....survey proceedings and thereby concealed its actual income. 8. On the other hand, the ld. AR of the assessee has vehemently supported the order of ld. CIT(A). The ld. AR of the assessee submits that there was a difference of opinion in the method of valuation of stock. The departmental valuer considered the market value of jewellery made from gold, diamond, platinum as well as silver. However, it is the long practice of assessee to make the valuation at the cost or market price whichever is lower. The assessee firm as well as their associate concerned conveniently followed the weighted average cost price method for valuation of stock which is done at the end of every financial year. On the date of survey, when asked by the survey party, the assessee submitted the computer generated stock statement in gms/carats and rupees. The valuation shown in the said statement also reflect weighted average price except diamond studded jewellery wherein manual working is required. The assessee is valuing its stock on average price from last seven years. The ld. AR for the assessee submits that the stock declared in the survey proceedings was included in closing stock of regular inventory mainta....
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.... enhanced the closing stock whereas in the present case, there was no change made in the closing stock for A.Y. 2012-13. Only unexplained investments in stock was unearthed during the course of survey proceedings which was accepted by the assessee and tax was paid by the assessee. 2. It is, therefore, prayed that the order of the ld. CIT(A) may be set aside and that of Assessing Officer may be restored to the above extent. 3. The appellant craves leave to add, alter, amend and/or withdraw any ground(s) of appeal either before or during the course of hearing of the appeal." 12. Facts in brief are that when the addition of Rs. 3.71 crores made on account of difference of valuation vis a vis the assessee's own valuation and the valuation of approved valuer was upheld by the ld. CIT(A) in AY 2012-13, the assessee filed application before the Assessing Officer that amount of Rs. 3.71 crores may be added in the opening stock for A.Y. 2013-14. In the application, the assessee relied upon the decision of Hon'ble Apex Court in V.K.J. Builders & Contractors (P) Ltd. Civil Appeal No. 5197/2009/(2009) 184 TAXMAN 357 (SC). The application of assessee was rejected by the Assessing Officer v....