TaxTMI 
TaxTMI 
TaxTMI 
2023 (4) TMI 1096
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....r Section 143(3) of the Income-tax Act, 1961(hereinafter called "the Act"). We have heard these cross appeals in Open Court proceedings through physical hearing mode. 2. The assessee has raised following grounds of appeal in memo of appeal filed with Income Tax Appellate Tribunal, Allahabad Bench, Allahabad, U.P. (hereinafter called "the tribunal"), in ITA No. 100/Alld./2017 for ay; 2012-2013, which reads as under:- "The following grounds of appeal are independent of, and without prejudice to one another: 1. That on the facts and in the circumstances of the appellant's case, the Ld. CIT(Appeals) grossly erred both in fact and in law in confirming the addition of the Assessing Officer ("AO") on account of difference in stock (difference in physical stock on the date of survey and the stock shown in stock register without considering the books of accounts impounded) in Mirzapur premises of the appellant merely on the basis conjectures and surmises and also without appreciating the submissions filed and documents submitted and without analyzing the quantitative and value-wise details of opening stock, purchases/transfer, sales/ transfer and closing stock for the financial yea....
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....stances of the appellant's case, the Ld. CIT (Appeals) erred both in fact and in law in confirming the addition on account of difference in stock (difference in physical stock on the date of survey and the stock shown in stock register without considering the books of accounts impounded) in Varanasi Branch of the appellant merely on the basis conjectures and surmises and also without appreciating the quantitative and value-wise details of opening stock, purchases/ transfer, sales/transfer and closing stock for the financial year under consideration. Hence, the confirmation of addition on account of undisclosed investment is bad in law and is liable to be deleted. 2.1 That on the facts and the circumstances of the case and in law, the Ld. CIT (Appeals) grossly erred in giving direction to the Ld. AO to only exclude the weight of 177 kg of silver jewellery/gillate payal. Though the weight taken by the Ld. AO is of 177.174 kg which is all from same bill. Hence, the addition on account of weight of silver jewellery as confirmed by Ld. CIT(Appeals) on account of undisclosed investment is bad in law and is liable to be deleted. 2.2 That on the facts and the circumstances of the c....
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.... erred both in fact and in law in confirming the addition of INR 5,75,000/- on account of unexplained Unsecured Loan of Gopinath Agrawal (now deceased) u/s 68 only on the basis of conjectures and surmises without considering the submission and evidence filed by the appellant and without giving opportunity to the appellant to substantiate the same. Hence, the confirmation of the addition of INR 5,75,000/- on account of unexplained unsecured loan u/s 68 is bad in law and is liable to be deleted. 6. That the Ld. CIT (Appeals) erred on the facts and circumstances of the case and in law in confirming the charging of interest u/s 234B and 234C of the Income Tax Act, 1961 whereas there is no specific order in the assessment order for charging such interest and as such charging of interest under sections 234B and 234C of the Income Tax Act by way of Demand Notice u/s 156 is wholly illegal and liable to be quashed. 7. That, in any view of the matter interest under section 234B and 234C is chargeable on the income, as declared in the return of income and not on the assessed income. 8. That the appellant craves leave to add, to alter or to amend grounds of appeal before the appeal is he....
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....n u/s 68 of the Income Tax Act, 1961 without appreciating the facts. 10. That the Ld. CIT(A) has erred in law and on facts in deleting Rs. 22,37,000/- out of addition of Rs. 28,12,000/- made on account of unexplained secured loan u/s 68 of the Income Tax Act, 1961 while not providing opportunity to the Assessing Officer on the additional evidences filed during appellate proceedings. 11. The appellant craves right to add, alter or amend any grounds of appeal that may be taken at the time of hearing." 3. The brief facts of the case are that the assessee is engaged in business of Trading & Manufacturing of Silver Jewellery and trading of gold jewellery under the name and style of Raj Shree Jewellers, and assessee also runs Cinema Hall in the name and style of Rajshree Palace, Mirzapur. The assessee e-filed return of income on 15th September, 2012 declaring total income of Rs. 30,31,050/- from aforesaid businesses, under the heads business income and income from other sources. 4a. In this case, the survey under section 133A was conducted by Investigation Wing of the Department, Allahabad on 24th February, 2012 at the business premises of the assessee at Sudiya, Varanasi and at Ba....
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....ssessee has not kept proper and adequate records to substantiate the quantity of the stock at any given date and time, and it was observed by the AO that the arguments extended by the assessee cannot be relied upon for the following reasons: (i) In case of Silver Jewellery. The contention of the assessee is not admissible because of the fact that the valuation of the said jewellery has not been done by the Department. It has been done by an independent person having adequate expertise and experience who is authorized for the valuation of the jewellery and enjoys the status of a registered valuer for this purpose. Therefore, the objection of the assessee had no meaning, during the course of survey proceedings as well as during the course of assessment proceedings. Merely signing the valuation sheet 'under protest' does not exonerate the assessee from the onus to prove his contention. The objections to the correctness of valuation are without any specification whatsoever regarding the type of mistake which has occurred during the course of valuation. The relevant portion of the statement given on this issue is reproduced hereunder for the sake of clarity: 3.2(b) Actually,....
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....mt. Suman Agrawal, dated 12.02.2015, is meaningless and vitiated because of the mere fact that the arguments and reasons contained therein are not substantiated with any material evidence whatsoever. Similar is the case of Smt. Poonam Tripathi. If, at all it was necessary and expedient to keep the said personal jewellery at the shop at Mirzapur, necessary documents indicating the said safe deposit should have been found/produced during the course of survey itself. In absence of any document whatsoever indicating safe deposit of jewellery of the wife of the assessee as well as Smt. Poonam Tripathi, the affidavits dated 12.02.2015 cannot be accepted. Further, the claim of the assessee that they have shown gold jewellery to the extent of 1033.180 gms in the books of account is grossly incorrect as per the findings transpired in the survey proceedings. No stock register or other documents were either found during the course of the survey, nor could the same be explained during the course of the assessment proceedings. In these circumstances, the contention of the assessee cannot be accepted. The value of investment as worked out by the registered valuer i.e. Rs. 42,00,560/-is being add....
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....perusal of the statement recorded, during the course of survey, it is seen that bills regarding purchase of jewellery to the extent of 34.826 K.G. have been produced, hence the benefit of the same, is being given to the assessee and the rest of the stock i.e. 212.03 - 34.826=177.174 is being treated as undisclosed investment in stock and accordingly addition of the value of investment i.e. 56,32,361/- is being made to the total income of the assessee u/s 69B of the Act. The rate has been adopted at the rates prevailing as on date of the survey, as taken by the registered valuer i.e. @ 57,800/- with a purity of 55%. The working is as under: Total undisclosed stock=177.174 Amount of investment =177.174 x 57,800= 1,02,40,657/- 55% of the same 56,32,361/- Addition of Rs. 56,32,361/- Penalty proceedings u/s 271(1)(c) is being initiated separately for concealment of income. (ii) Regarding Gold Jewellery: Plain reading of the submission of the assessee on this issue, as quoted above, will make it sufficiently clear that the assessee has no concrete explanation to offer in this regard. The evidences filed by him at this stage cannot be relied upon, insofar as, it is a fact that....
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.... 4 15.09.2011 Shambhoo Nath Agrawal Sarraf Rs. 4,00,000/- 5 24.05.2011 Raj Shree Palace Rs.1,00,000/- 6 01.06.2011 Raj Shree Palace Rs.1,00,000/- 7 13.12.2011 Raj Shree Palace Rs. 65,000/- 8 30.01.2012 Raj Shree Palace Rs. 50,000/- Total Rs. 10,15,000/- The assessee was confronted on this issue by the AO to explain aforesaid cash deposits, and the assessee submitted as under: The AO considered the aforesaid reply of the assessee and observed that no such explanations have either been produced during the course of survey nor any such evidences have been produced during recording of statement. It was further observed that the same has not been adequately explained and substantiated by the assessee during the course of assessment proceedings. The AO observed that the assessee was required to substantiate the explanation submitted by it with credible evidences regarding the source of the aforementioned cash deposits in the cash book, and merely filing the copy of the account did not make good evidence for such claims to be accepted. The amount of Rs. 10,15,000/- with respect to aforesaid cash deposit in the cash books was treated b....
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.... some of the sundry creditors by issuing summons u/s 131(1), but the summons issued in most of the cases have been reported to be returned undelivered. The AO in order to conduct necessary enquiries, called for following information from the assessee with respect to sundry creditors: (i) Complete postal address for correspondence to be made with them., Confirmation in the case above Rs. 1,00,000/-, (ii) copy of their accounts, (iii) PAN/ITR of the persons concerned. The AO observed that in response, the assessee neither provided complete postal address of the sundry creditors (the addresses provided by the assessee are incomplete and are absolutely vague and without proper house No. etc.) nor their PAN/ITR was furnished by the assessee. The AO observed that in the absence of the aforesaid information, it is not possible for AO to obtain necessary information either from returns of income or from the Departmental software i.e. AST for conducting physical verifications. The AO observed that confirmations also could not be given in the following cases :- The AO observed that the assessee was duty bound either to provide complete details of the sundry creditors to the Assessing....
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....s could be submitted. Shri PramodSoni 3,00,000/- 3,00,000/- No ITR/PAN has been submitted. The entire amount is treated as unsubstantiated credit in the books of account of the assessee. The capacity also of the lender is not established because no details could be submitted Smt. Suman Agrawal 4,00,000/- 3,10,000/- The amount to the extent of Rs. 3,10,000/- is treated as unsubstantiated credit in the books of account of the assessee. Sri Gowardhan Das Agrawal 4,95,000/- No details whatsoever could be submitted The entire amount is treated as unsubstantiated credit in the books of account of the assessee, as the same could not be substantiated by the lender. The capacity also of the lender is not established because no details could be submitted. Sri Gowardhan Das Agrawal (HUF) 5,00,000/- 5,00,000/- The entire amount is treated as unsubstantiated credit in the books of account of the assessee, as the same could not be substantiated by the lender. The capacity also of the lender is not established because no details could be submitted. Thus, the AO made additions of Rs. 28,12,000/- in the hands of the assessee towards unsecured loans raised by the assesse....
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.... of the AO was that the valuation was done by the independent valuer and merely signing the valuation sheet 'under protest' does not exonerate the assessee from the onus to prove his contention. The assessee submitted before ld. CIT(A) that the AO had observed that the objections to the correctness of valuation are without any specification whatsoever regarding the type of mistake which has occurred during the course of valuation, and the assessee is creating unnecessary litigation in order to avoid payment of correct amount of taxes which he cannot be allowed to resort. The assessee submitted before ld. CIT(A) that despite that the assessee had requested to do the valuation of stock again, but the same was refused by the survey officers and by the AO during assessment proceedings, and the assessment order was passed without giving any opportunity of being heard to the assessee. The assessee also submitted before ld. CIT(A) that the assessee is questioning the valuation of the weight, basis of purity determined without having tunch certificate, which was not provided to the assessee, and purity was determined purely on estimation basis. The assessee relied upon the following decisi....
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....ged its onus as the assessee is of the belief that an affidavit is a piece of evidence which along with other material on record has been taken into consideration before arriving at a finding. The assessee submitted that it is entitled to assume that the AO is satisfied with the affidavit, unless the same is discredited in the cross examination or the assessee had failed to produce other supporting evidences which the assessee was called upon to produce. The assessee relied upon following judgments : (i) Mehta Parikh & Co. v. CIT, reported in (1956) 30 ITR 181 (SC) (ii) CIT v. Dharam Pal Premchand Ltd. - 295 ITR (Del HC). (iii) CIT v. Shankar Lal Ved Prakash - 300 ITR 243 (Del HC). The assessee further submitted before ld. CIT(A) that the allegation of the Ld. AO that the stock register and other documents were not found during the survey or were not been explained during the assessment proceedings, is not correct. The assessee explained before ld. CIT(A) that with respect to gold jewellery and silver bullion, the assessee was not maintaining stock register but will do so from next year. The assessee submitted that it has duly submitted reconciliation of the stock difference....
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....by the AO before the conclusion of assessment proceedings, and the same was provided after completion of the assessment which was unfair and against the principles of natural justice. It was also submitted by assessee before ld. CIT(A) that the statement recorded under Section 133A has no evidentiary value, and the admission made during the course of recording of statement during survey proceedings could not be made basis of addition without any corroborative material, and the additions so made by the AO is not justified. The assessee relied upon judgment and order of Hon'ble Supreme Court in the case of (2012) CIT v. S. Khader Khan & Sons (2012) 254 CTR 228(SC) 5b. The Ld. CIT(A) after considering reply of the assessee, partly allowed the relief to the assessee on this issue, by holding as under: "4.1. Discussion: Facts are that the appellant is an individual and proprietor of M/s Raj Shree Jewellers, Basnahi Bazar, Mirzapur, Uttar Pradesh-231001, and is into the business of trading in silver jewellery, gold jewellery and silver bullions since many years. Survey operations under section 133A of the income tax Act, 1961 were conducted at the business premises of the appellant ....
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....of the income. I have gone through the said quantitative details and I find that there is no mention of the purity % of silver in silver articles. Thus, as far as purity of silver is concerned, no reliance can be placed on these quantitative details too. I had requested the assessee to file tunch certificates obtained for the silver articles purchased or sold during the year and before the date of survey, however, no such tunch certificates were produced. I had also requested the assessee to produce the bills of purchase or sales which could demonstrate the purity of silver in silver articles, but no such bills of purchases or sales were produced which could help me in verifying the purity of silver in those silver articles. It is equally true that the purity % as determined by the departmental valuer is without any scientific basis and, therefore, cannot be accepted at its face value. In a similar case of survey, after due analysis of the trends as prevailing in this part of U.P., I had estimated the purity of silver jewellery at 55%. (which includes making charges @ 12-15% ). The same % age is being adopted for this case too. The A.O.is directed to re-compute the value of excess ....
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....e documents produced before them. They were entitled to look into the surrounding circumstances to find out the reality of the recitals made in these documents." Further, in the case of DIT vs. Bharat Diamond Bourse [(2003) 179 CTR SC225], the Hon'ble Supreme Court held that- "the story rings false from beginning to end, and yet, the tribunal accepted it by sayings, "As regards the bona fides of the transaction, in our opinion, there is nothing to suspect the same. "The Tribunal says, "there is a transparency about the entire transaction which nullifies any attempt to make out the transaction as something unusual and out of the ordinary." That diamonds are not transparent, that they dazzle with a brilliance that blinds the eyes, seems to have escaped the notice of the Tribunal. It undeservingly accepted the glib explanation of the assessee, though teeming with improbabilities and strenuous on credulity." 4.1.4 The AO is directed to work out the value of unexplained gold jewellery accordingly. 4.1.5 In case of Silver bullions, the dispute is of weight and purity of silver. Admittedly, there is no stock register being maintained by the assessee for silver bullion. The obj....
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....he only reason of the AO for making the additions was that the valuation was done by the independent valuer, and that the assessee plea cannot be accepted because the same was based on afterthought as such no such bills were either found during the course of survey or were produced during recording of statement, therefore evidences produced by the assessee could not be treated to reliable as they are created after being caught on wrong foot. The assessee submitted before ld. CIT(A) that the assessee had requested Survey team during the course of survey proceedings to get the valuation of stock done again, but the same was refused by the survey officers, and also by the AO during assessment proceedings, and the assessment order was passed without giving any opportunity of being heard to the assessee. The assessee also submitted before ld. CIT(A) that the assessee is questioning the valuation as well the weight, basis of purity determined without having tunch certificate, which was not provided to the assessee, and purity was determined purely on estimation basis. The assessee relied upon the following decisions: a) Amritsar-tribunal decision in the case of Smt. Kailash Devi v. ITO....
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....edings before the AO all the documents like computation of Income, ITR, copy of audited books of account, bank statements, bank book and the tax audit report. The assessee further submitted before ld. CIT(A) that the allegation of the Ld. AO that stock register and other documents were not found during the survey or were not been explained during the assessment proceedings, is not correct. The assessee explained before ld. CIT(A) that with respect to gold jewellery and silver bullion, the assessee was not maintaining stock register but will do so from next year. The assessee submitted before ld. CIT(A) that despite having all the information in his possession and all the replies filed during survey and assessment proceedings, the AO has not considered the same and additions were made without raising the question on the same. It was also submitted by assessee before ld. CIT(A) that during the course of survey proceedings, the assessee raised objection on the valuation and no Tunch certificate was provided to the assessee which means valuation is on estimated basis and not on proper weight and purity basis. The assessee made prayers before ld. CIT(A) to delete the additions as were m....
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....s also submitted by assessee before ld. CIT(A) that the statement recorded under Section 133A has no evidentiary value, and the admission made during the course of recording of statement during survey proceedings could not be made basis of addition without any corroborative material, and the additions so made by the AO is not justified. The assessee relied upon judgment and order of Hon'ble Supreme Court in the case of (2012) CIT v. S. Khader Khan & Sons (2012) 254 CTR 228(SC) 6b. The Ld. CIT(A) after considering reply of the assessee, partly allowed the relief to the assessee on this issue, by holding as under:- "5.2 Discussion: The Assessing officer has made addition on account of excess stock found in Varanasi premises in three categories, i.e. Silver jewellery, Gold Jewellery and Silver Bullions. I deal with each of these as under: 5.2.1 Decision: In case of Silver jewellery, the dispute is mainly on account of silver jewellery allegedly purchased from Mathura which was physically available at the time of survey but the bill wasn't available nor the same was entered in the stock register. It is the case of the appellant that the same stock had reached on the date o....
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....; sd- Sd/- CIT(A), Allahabad (Ramashrey Yadav) (RajkumarLachhiramka) Q. (1) Please tell what do you do? Ans. I work for the shop of Sr....
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....sp; Sd/- Sd/- CIT(A), Allahabad (Shiv Bachan Yadav) &nb....
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....illetpayals as I was afraid that our reputation will be at stake so I kept telling that only Nirajji can answer all the differences. Q. (13) Why did you not call Ramashrey Yadav to present the bill? Ans. The police did not allow anyone to enter the Katra and the shop. Q. (14) I am showing you the cheque no. 003094 of Axis Bank. Please identify the signature? Ans. The signature is that of Neerajji. Q (15) Ramashrey Yadav had stated that this cheque was given to him by you. Was Mr. Niraj present in Varanasi on 22 February? Ans. No, he was not there. But we keeps some signed cheques at Varanasi. And we fill the details as and when required. Q (16) Please see the cheque again. Please state if this cheque details were filled by you or Nirajji on someone else. Ans. This cheque has not been filled either by me or Niraj Ji. It is not in my handwriting. We had sent a blank cheque with only signature. And the details have been filled up by Mathura Party. Q. (17) Do you want to state anything else? Ans. No Sir. Whatever I have stated above is truly to best of my knowledge and belief. Statement by Sd/- CIT(A), Allahabad In presence of Sri Niraj Agarwal" 5.2.1.2 ....
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....ound. In this view of the matter, the pleading of the appellant with respect to the stock of 4.958 kg of silver bullion is hereby rejected as being an afterthought. In this regard, reference is made to the decision of the Hon'ble Supreme Court in the cases of Durga Prasad More (82 ITR 540) wherein it was held by the Hon'ble Supreme Court that- "the taxing authorities were not required to wear blinkers while looking at the documents produced before them. They were entitled to look into the surrounding circumstances to find out the reality of the recitals made in these documents." Further, in the case of DIT vs. Bharat Diamond Bourse [(2003) 179 CTR SC 225], the Hon'ble Supreme Court held that- "the story rings false from beginning to end, and yet, the tribunal accepted it by sayings, "As regards the bona fides of the transaction, in our opinion, there is nothing to suspect the same." The Tribunal says, "there is a transparency about the entire transaction which nullifies any attempt to make out the transaction as something unusual and out of the ordinary." That diamonds are not transparent, that they dazzle with a brilliance that blinds the eyes, seems to have esca....
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....ned. It was submitted that reasons for not updating of cash book was explained during survey operations. The assessee submitted that proper explanations were submitted during assessment proceedings, supported with relevant cash book extracts, but AO completely ignored the same and additions were made while framing assessment. It was also submitted that additions made by the AO are totally opposite and baseless, false and seem to be made without proper appreciation of the explanations furnished, materials produced and copies of the cash book submitted. It was submitted by assessee before ld. CIT(A) that the AO has passed a non speaking order without application of mind and no inconsistency or reasons were pointed out by the AO as to why explanation given by the assessee is not acceptable. It was also submitted that relevant copy of statement recorded during the course of survey under Section 133A was not provided to the assessee before completion of assessment, and the same was provided after assessment order was passed. Thus, it was submitted that there is violation of principles of natural justice. It was also submitted that the assessee has duly explained the sources of cash foun....
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.... the customer and the payment of INR 55,000 towards advance tax. Accordingly, I accept the pleading of the appellant in regard to the cash reconciliation at Mirzapur premises. As regards Cash found at Varanasi premises, It is seen from the statement recorded during the survey that the appellant had not offered any explanation with respect to the excess cash found. The explanation for the same had been provided for the first time during the course of the assessment proceedings. The explanation offered by the assesses is clearly an afterthought and lacks credible evidentiary value. Accordingly, this explanation is rejected and the addition so made by the AO gets confirmed. This grounds of appeal is partially allowed. Appellant gets relief to the extent of INR 18,074." 8a. The next issue before ld. CIT(A) was with respect to addition of Rs. 10,15,000/- made on account of cash deposits as were foun recorded in the cash book. The assessee submitted before ld. CIT(A) that survey operations under Section 133A of the Act was conducted by Revenue on assessee's premises on 24th February, 2012, and by that time cash deposit of Rs. 10,15,000/- was there duly recorded in the cash book of the a....
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....itted that question with respect to these receipts of cash of Rs. 10,15,000/- which were entered and recorded in cash book of the assessee even prior to date of survey, was asked for the first time by AO during assessment proceedings, and all the relevant explanations and evidences were furnished, but the same were not considered and assessment was made in a hurried manner, and a non speaking assessment order without application of mind was passed by the AO. It was submitted that the AO has stated in assessment order that no explanation was provided during survey proceedings, but the assessee claimed before ld. CIT(A) that no such explanation was called for during survey proceedings. No Show Cause Notice(SCN) was issued prior to framing of assessment, and principles of natural justice were not complied with. The assessee prayed before ld. CIT(A) to delete the additions. It was also submitted by assessee before ld. CIT(A) that the AO is only relying on survey statement, and it was submitted statement recorded under Section 133A has no evidentiary value, and the AO has not given any weightage to the evidences produced during assessment proceedings. It was submitted that no additions ....
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....evenue under Section 133A of the Act on 24th February, 2012 at Mirzapur and Varanasi premises of the assessee, and books of accounts were not updated at both the premises. It was submitted that reasons for non completion of books of accounts upto the date of survey, were duly explained during the survey proceedings. It was submitted that books of accounts were impounded during the survey, and the assessee requested that the accountant will come and update the same. The assessee submitted before ld. CIT(A) that the AO asked for the audited books of accounts along with audit report of the assessee's proprietary concern during assessment proceedings, which were duly submitted before the AO. The AO asked assessee for reasons as to why these books of accounts be not rejected as these books of accounts were found to be not complete during the course of survey proceedings. It was submitted by assessee that on the one hand, the AO is relying on the same books of accounts while making additions to the income of the assessee, and on the other hand, the AO is rejecting the books of accounts and is not considering the documents/evidences submitted during assessment proceedings but relying only....
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....f addition without any corroborative material, and the additions so made by the AO is not justified. The assessee relied upon judgment and order of Hon'ble Supreme Court in the case of (2012) CIT v. S. Khader Khan & Sons (2012) 254 CTR 228(SC) 9b. The Ld. CIT(A) rejected the contentions of the assessee and upheld rejections of books of accounts of the assessee u/s 145(3), by holding as under: "Decision: The books were rightly rejected by the AO as the books were admittedly not written uptodate. Further, during the course of survey operations, substantial amount of excess silver and gold jewellery were found in both the premises of the assessee. No stock register was being maintained for gold n silver bullion. Further, there was excess cash found which could not be satisfactorily explained. In view of these major discrepancies, the AO was right in rejecting the books of account. In any case, the rejection of the books in this case is just an academic exercise since no additions have been made by the A.O. on account of G.P/N.P. or he turnover. The additions have been made on specific discrepancies found by the A.O.". 10. The next issue before ld. CIT(A) was with respect to addi....
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....re copies of Sundry Creditors account for the financial year 2011-12 and financial year 2012-13 in the case of M/s Dashrath Silver Arts Private Limited, M/s D.D. Industries, M/s R.G Ornaments and Shri VariPayals. The assessee also enclosed copy of sundry creditors account for financial year 2010-11 with Shri Sati Ram and it was submitted that the assessee does not have any transactions with Shri Sati Ram during financial year 2011-12. The assessee made prayers before ld. CIT(A) to delete the additions. 10b. The ld. CIT(A) deleted the entire addition of Rs. 34,82,707/- as was made by the AO on account of unexplained sundry creditors under Section 68 of the Act, by holding as under: "9.2 Discussion & Decision: As per the Assessing Officer, the assessee had failed to file the confirmations in regard to the credit balances from the following parties- D.D. Industries, Mandi Ram Das, Mathura Rs. 9,49,700/- R.G. Ornaments, Namakki Mandi, Agra Rs 6,00,284/- Dashrath Silver Art Pvt. Ltd., Redak Road Near, Arya Nagar, SantKabir Road, Rajkot Rs 14,26,243/- Shri Sati Ram, JituDustakpur, Varanasi Rs 4,32,710/- Shri VariPayals, 216, Moongapadi, Street, Gugai, Salesm Rs 73,....
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....booked the same as his income in the next year. I have seen all the papers and based on that I am also deleting the addition of INR 4,32,710/- in regard to Shri Sati Ram. v) Shri Vani Payals - Rs.73,770 - the assessee had filed a copy of account of the said party, on perusal of which it is seen that the impugned credit appears in these accounts. This copy of account has also been confirmed by the said party. The A.O. is directed to send this copy of confirmation of account to the A.O. of the party for his verification. The addition made by the A.O. is hereby deleted." 11. The next issue before ld. CIT(A) was with respect to addition to the income of the assessee to the tune of Rs. 28,12,000/- made by the AO u/s 68 on account of unexplained Unsecured Loans. The assessee submitted before ld. CIT(A) that the AO asked assessee to give details of deposits from relatives and others along with complete postal address and the copy of accounts of these lenders, for the first time during the course of assessment which was submitted by the assessee. It was also submitted that the assessee submitted all the details from the relative and others. It was submitted that even the audited books o....
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....en the AO. had made enquiry u/s 133(6) of the I.T. Act, the said party had submitted Confirmation and bank statements before the A.O, on 18/03/2015. Copy of its ITR is at Page 24 of the Paper Book 1. In this view of the matter the genuineness of the credit is established and the addition so made is hereby deleted. The A.O. should send the confirmation letter filed by it to it's A.O. for him to verify the transactions. c. K. Aditya Khaitan - Details are at page 14-19 of the Paper Book) 2. On perusal of the case records, it is seen that when the A.O. had made enquiry u/s 133(6) of the I.T. Act and the said party had submitted Confirmation and bank statements on 18/03/2015. Copy of ITR is submitted at Page 19 of the Paper Book 1. The A.O. should send the confirmation letter filed by him to her A.O. for him to verify the transactions. The addition so made is hereby deleted. d. Shri. Gopi Nath Agrawal - Details are at page 20-21 of the Paper Book 2. No Confirmation and bank statements received as he was not well as per the letter of his son Shri Sharad Agrawal. But account number, bank name and branch was shared. In this view of the matter, the addition made is confirmed as the iden....
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....nd being a legal ground, is being admitted. 11.2 Decision on merits: The Hon'ble Supreme Court in the case of CIT vs. Bhagat Construction Co.Pvt. Ltd., (Civil Appeal No. 1198/2006) after noting the decisions in the case of CIT vs. Ranchi Club Ltd (247 ITR 209) and that of Kalyankumar Ray vs. CIT [1992 Supp(2) SC 424] have held that- "It will be seen that under the provisions of Section 234B, the moment an assessee who is liable to pay advance tax has failed to pay such tax or where the advance tax paid by such an assessee is less than 90 per cent of the assessed tax, the assessee becomes liable to pay simple interest at the rate of one per cent for every month or part of the month. Shri Guru Krishna Kumar is right in stating that levy of such interest is automatic when the conditions of Section 234B are met. We are of the view that the facts of the present case are squarely covered by the decision contained in Kalyankumar Ray's case in as much as it is undisputed that contained a calculation of Interest payable on the tax assessed. This being the case, it is clear that as per the said judgment, this Form must be treated as part of the assessment order in the wider....
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....at statement of Part time Munim was also recorded. It was submitted that valuation of jewellery /bullion was done by department through independent valuer. It was submitted that return of income for the impugned assessment year was filed within due date on 15.09.2012, and an income of Rs. 30,31,050/- was declared in the return of income filed with department. It was submitted by ld. Counsel for the assessee that the assessee co-operated with department. It was submitted that no discrepancy was pointed by the AO in the books of accounts during assessment proceedings. It was submitted that no show cause notice(SCN) was issued by the AO before completing assessment. It was submitted that the assessment order u/s 143(3) was passed by the AO on 20.03.2015 assessing income of the assessee at Rs. 2,14,71,400/-. The assessment order was received on 01.04.2015. It was submitted that additions to the tune of more than Rs. 1.84 crores were made by the AO. It was submitted that books of accounts were not updated at the time of survey viz. 24.02.2012. Our attention was drawn to various additions made by the AO in the assessment order. It was submitted that no SCN was issued by the AO prior to m....
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.... to Jewellery of assessee's Wife Mrs. Suman Agrawal of 850.800 gms lying in the Mirzapur showroom. The affidavit of Mrs. Suman Agrawal was submitted. It was explained in the survey statement that gold jewellery weighing 850.800 gms physically found during survey belonged to and owned by assessee's wife Mrs. Suman Agrawal. Our attention was drawn to assessment order. Our attention was also drawn to page 59 of the paper book, where affidavit of Mrs. Suman Agrawal (wife of the assessee) is placed. The date of affidavit is 12.02.2015, while date of survey was 24.02.2012. Our attention was drawn to page 11 of ld. CIT(A) appellate order, and it was submitted that ld. CIT(A) has accepted the contention of the assessee, and addition w.r.t. gold jewellery of 850.800 gms of Mrs. Suman Agrawal lying in Mirzapur premises was deleted. It was submitted that while recording statement during survey, the assessee stated about 850 gms of gold of wife lying in Mirzapur premises(HO). With respect to remaining difference, it was submitted that 202 gms of the gold jewellery which was physically found during survey, belonged to Mrs. Poonam Tripathi who left her jewellery in the Mirzapur premises(HO) on 2....
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....irzapur premises(HO), which is placed in paper book-1 at page 244248. It was submitted that the assessee has duly disputed the quantities recorded in this valuation report as well purity. The ld. Counsel for the assessee submitted that ld. CIT(A) accepted partly the purity of the silver jewllery to the tune of 55% vis-à-vis purity of 66% adopted by AO, and part relief was granted. It was submitted that ld. CIT(A) did not applied scientific basis, to arrive at purity. Our attention was drawn to page 10 of appellate order passed by ld. CIT(A). It was submitted that as per ld. CIT(A) /para 4.1.2 bills were not produced to substantiate the purity/ weight. It was submitted by ld. Counsel for the assessee, that on the contrary, bills were duly submitted. Our attention was drawn to page 77/PB-II and it was submitted that purity was 40%, while at page 79/PB-II, the purity was 60%, and it was submitted that these are purchases made by the assessee. The assessee relied upon the judgment and order passed by Hon'ble Delhi High Court in the case of CIT v. Balaji Wire Private Limited reported in 304 ITR 393( Del. HC). With respect to difference in Silver Bullion, the ld. Counsel for the a....
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....tted that this is the first and the last dealing of the assessee in artificial silver jewellery being Gillet Payal. It was submitted that this Gillet Payal is not sold by the assessee and was lying in the stock .It was submitted that ld. CIT(A) deleted the addition of 177 kg of silver jewelry, while addition was made of 177.174 kgs. of silver jewellery. Regarding addition of Gold Jewellery at Varanasi, it was submitted that addition of 0.128 gms was made by the AO, which was sustained by ld. CIT(A). Our attention was drawn to assessment order as well appellate order passed by ld. CIT(A). Our attention was drawn to page 46/PB-1, wherein reply of the assessee explaining the stock physically found of gold jewellery was explained by the assessee. The gold jewellery was purchased from unregistered dealers, from 21.02.2012 to 23.02.2012. Our attention was drawn to statement of Mr. Neeraj Agrawal, recorded during survey proceedings, which is placed in PB-1/page 219228. Regarding difference in Silver Bullion at Varanasi Branch Office(BO), it was submitted that difference was 4.958 Kg, and it was submitted that the same was received from Mr. Gharau Yadav for selling the same to assessee and....
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..../s Raj Shree Jewellers were duly entered in cash book prior to date of survey. It was submitted that the assessee raised unsecured loans of Rs. 28.12 lacs, and ld. CIT(A) rightly deleted unsecured loans of Rs. 22.37 lacs while additions to the tune of Rs.5.75 lacs were wrongly confirmed by ld. CIT(A). Our attention was drawn to page 40 of ld. CIT(A) appellate order. It was submitted that additions w.r.t. unsecured loan received from Mr. Gopi Nath Agrawal of Rs. 5.75lacs was confirmed by ld. CIT(A).It was submitted that notice u/s 133(6) was issued by the AO. Our attention was drawn to page 43 of ld. CIT(A) orders. Our attention was drawn to page 20 of PB-1, wherein ITR of Mr. Gopi Nath Agrawal is placed. Our attention was also drawn to Page 20-21 of PB-II, wherein notice u/s 133(6), dated 13.03.2015 was issued by AO to Mr. Gopi Nath Agrawal and the reply dated 18.03.2015 submitted by his son Mr. Sharad Agrawal intimating AO that his father is unwell and seeking further time to submit reply. It was submitted that Mr. Gopi Nath Agrawal passed away on 01.04.2015. The copy of death certificate dated 06.04.2015 bearing registration number 476 issued by Registrar of Birth and Death ( sta....
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....aving two different sets of challans. It was submitted that the assessee is maintaining two different sets of challans. It was submitted that challans were produced before Court subsequently. Our attention was drawn to Page 6-7 of Paper Book-2 filed by Department, which is report of ACIT, Mirzapur to ADIT(Inv.). Our attention was also drawn to page 203,210 and 212 /paper book-I filed by the assessee. It was submitted by ld. Sr. DR that these are audited accounts of the assessee for the impugned assessment year, and there is an entry of DRI, Delhi Seizure of Rs. 2,31,364/- and it was submitted that the assessee is engaged in clandestine activities. Our attention was also drawn to Page G of written submissions filed by ld. Sr. DR. Our attention was also drawn to page 38-39 of PB-2 filed by department. Our attention was drawn to Para 2.2 of written submissions filed by department. It was submitted that two summons u/s 131 dated 27.02.2012 and 29.02.2012 were issued by ADIT(Inv.) to the assessee, and a subsequent letter dated 06.03.2012 was also sent to the assessee by ADIT(Inv.), but the assessee did not responded to these summons u/s 131 and letter sent by ADIT(Inv) which clearly ind....
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....ation done by Registered valuer. It was submitted by ld. Sr. DR that no valuation was done by assessee from their valuer, to counter the valuation of department. It was submitted that there was excess stock of gold ornaments found at Mirzapur HO, and our attention was drawn to para 3.2 of written submissions filed by department, and additions were made to the tune of Rs. 42,00,560/- by the AO. It was submitted that the assessee has supported excess stock by way of affidavits filed in 2015 of Mrs. Suman Agrawal and Mrs. Poonam Tripathi, which is after 3 years of survey conducted by Revenue in 2012. It was submitted that even in the aforesaid affidavits, there is no details of the items of gold jewellery belonging to Mrs. Suman Agrawal and of Mrs. Poonam Tripathi, as there is no specification/identification of items of gold jewellery claimed by them to belonging to Mrs. Suman Agrawal and Mrs. Poonam Tripathi. It was submitted that even in survey proceedings, the assessee never stated that which particulars items belonged to Mrs. Suman Agrawal. It was submitted that the assessee never stated during survey, that gold ornaments contained some items belonging to Mrs. Poonam Tripathi, as ....
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....gs being not entered in stock register, explanation of the assessee w.r.t. 34.826 kgs of silver jewelry was supported by a bill dated 21.02.2012 found during survey, and credit for 34.826 kgs were given by the AO itself and no addition were made to that. Thus, there was unaccounted silver ornaments of 177.174 kgs., and the same was not supported by any invoice/books of accounts found during survey, which was treated as an excess stock. It was submitted during survey conducted by Revenue u/s 133A on 24.02.2012, that the assessee did not gave any explanation for these excess stock. Even in post survey enquiry, ADIT issued 2 summons (dated 27.02.2012 and 29.02.2012) and one notice dated 06.03.2012, but the assessee did not cooperated and did not respond to these summons as well notice. It was submitted that the assessee never traded in artificial silver jewellery in the past and as well in future, and this is the solitary transaction of alleged purchase of artificial silver ornaments viz. Gilet Payal which the assessee is trying to explain to justify unexplained stock of silver ornaments found during survey. It was submitted by ld. Sr. DR that the assessee is not engaged in the tradin....
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....ught, and were produced after 3 years of survey and the explanation was given that these are purchases of old gold from unregistered dealers. It was submitted that no gold ornaments were manufactured by assessee. With respect to addition of Rs. 78,059/- made by the AO with regard to excess stock of Silver Bullion of 4.958 Kgs. found at Varanasi, it was submitted by ld. Sr. DR that no purchase bill was found during survey and there was no documents found in connection with purchase of these Silver Bullion and also that there was no entry in books of accounts of the assessee found at the time of Survey. It was submitted by ld. Sr. DR that after 3 years of survey, assessee came up with affidavit of Mr. Ghurahu Yadav, and claim is made that this silver bullion belonged to Mr. Ghurahu Yadav who left the said Silver Bullion with assessee for sale on 23.02.2012 but the transaction did not materialize, and it was later returned to Mr. Ghurahu Yadav on 27.02.2012. Thus, it was submitted that ld. CIT(A) rightly upheld the addition on this ground. With respect to cash physically found during survey at Varanasi, U.P. in excess of that recorded in cash book, the ld. Sr. DR submitted that it rem....
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....PB-2 filed by department, which are copies of accounts of these creditors in the books of the assessee, and it was submitted that these confirmations are not signed by creditors. At this stage, the counsel for the assessee stated that the assessee has filed duly signed confirmation by creditors, but these confirmations are not in PB filed with tribunal. The Division Bench asked department to file impounded material, for which ld. Sr. DR sought time, which was granted by the DB. 14d. The ld. Sr. DR submitted, when hearing effectively resumed, that relevant impounded material are filed on 21.07.2022 in the form of 3rd Paper Book(dated 20.07.2022), carrying 229 pages. The said PB-3 filed by department is taken on record. The ld. Counsel for assessee submitted that department never summoned assessee, and these summons dated 27.02.2012 and 29.02.2012 as well letter dated 06.03.2012 were never received by the assessee. It was submitted by ld. Counsel for the assessee that the assessee duly co-operated during assessment proceedings as well during investigation proceedings conducted by department post survey. It was submitted that on 21.01.2012 i.e. prior to survey on 24.02.2012, statemen....
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....y ld. Sr. DR that no explanation was given about gold ornaments claimed to be belonging to Mrs. Suman Agrawal and Mrs. Poonam Tripathi. There was no entry in the ledger in the name of Mrs. Suman Agrawal and Mrs. Poonam Tripathi, with respect to their gold ornaments claimed to be received by the assessee, nor any chit is found during survey. It was submitted that this is nothing but the undisclosed stock of the assessee found during course of Survey proceedings conducted at Mirzapur HO premises. It was submitted by ld. Sr. DR that affidavits filed by Mrs. Suman Agrawal and Mrs. Poonam Tripathi are self serving documents, and are merely after thought to justify their stand which were filed in 2015 i.e. after three years of the date of survey on 24.02.2012. It was submitted that there was no corroboration by way of independent evidence which was filed by the assessee. Our attention was drawn by ld. Sr. DR to the impounded ledger and the account of M/s Shambhu Nath Agrawal Saraff, which is placed at page 60 and 62 of paper book-3 filed by department. It was submitted that the assessee is claiming the same to be advances received in cash at various dates to the tune of Rs. 7.00 lacs whi....
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...., which were received from 24.05.2011 to 30.01.2012. It was submitted that the AO made additions by invoking provision of Section 68. Our attention was drawn to page 63/PB-3 filed by the department, and it was submitted that this is impounded ledger of Silver Bullion showing balance of Rs. 83,380/- and there is no mention of quantitative details. Our attention was drawn to Page 34-35 of Paper Book-2 filed by department, and it was submitted this is a valuation report of registered valuer valuing Silver Bullion found at Mirzapur HO, where in stock found was 6.180kg which was valued at Rs. 2,38,702/- by registered valuer on the date of survey. Our attention was drawn to Page M of written submissions filed by department in PB2, and it was submitted that no quantitative details of Silver Bullion was maintained by the assessee, and hence additions were made by the AO of the excess stock of Silver Bullion found during survey was justified. Our attention was drawn to page 64. Our attention was drawn to Page 64,65 and 67 of PB-3 filed by department, which are impounded ledger accounts of stock. Our attention was drawn to Page 67/PB-3 filed by department, which is impounded ledger account o....
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....rawn to page 87-89 of PB-3 filed by department, which are ledger accounts of M/s R G Ornaments, M/s. Dashrath Silver Art Private Limited and M/s. Sati Ram, and it was submitted that additions were made by the AO by invoking provisions of Section 68. Our attention was drawn to cash book found during survey, which was impounded, placed at page 92-95 /PB-3 filed by department. Our attention was also drawn to Annexure A-8, which is journal impounded during survey, placed in PB-3/page 96-98 filed by department. Our attention was also drawn to Annexure A-10/page 114-141, which are loose papers impounded during survey, and it was submitted that no evidence was found regarding gold ornaments claimed to be belonging to Mrs. Suman Agrawal and Mrs. Poonam Tripathi. Our attention was also drawn to documents impounded from Varanasi BO. It was submitted that there was no direct purchases by Varanasi Branch Office from any party, and there are only transfers from Mirzapur HO to Varanasi BO. Our attention was drawn to stock register of silver ornaments, which was impounded by Revenue(Page 145-148/PB-3 filed by department). It was submitted that the stock of 453.900 Kgs was the stock shown in stock....
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....ences in quantity as well purity, and the owner did not co-operated during Survey as well post survey enquiries. It was submitted that it is only on 13.02.2015 during assessment proceedings, the assessee explained that the excess stock of silver ornaments of 177.500 kgs found during survey was artificial jewellery being Gillet Payal allegedly purchased from R S Bullions and Jewellers. It was submitted that the assessee claimed to have allegedly purchased these artificial silver Jewellery Gillet Payal only on 23.02.2012 and was brought on the Varanasi shop on the date of survey in the morning before the start of survey proceedings. It was submitted that the assessee is claiming that the person/employee of the assessee went to Agra to purchase these alleged artificial jewellery. It was submitted that it was an afterthought and even no documents substantiating that this transaction took place, was found during the course of survey proceedings .The ledger account of shop expenses was maintained until 07.01.2012, and no bill was found for journey undertaken for visiting Agra and return to Allahabad. It was submitted that it was merely an afterthought and purchase of artificial silver je....
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....ment, and it was submitted that there is an entry of these silver ornaments seized by RPF on 29.11.2011 in the audited Balance Sheet. Our attention was drawn to question number 8 of statement recorded on 24.02.2012 u/s 133A(3)(iii) of the 1961 Act, of Mr. Neeraj Agrawal, wherein he explained the source of these silver ornaments (page 225/PB-1 filed by assessee). On being asked by the Bench, the ld. Counsel for the assessee submitted that there was no VAT form issued for movement of goods from U.P. to Tamil Nadu, to cover aforesaid movement of silver ornaments on 28/29.11.2011. Thus, the claim of the assessee that movement of Silver Ornaments on 29.11.2011 from U.P. to Salem, TN for repairs was not recorded with the VAT department at U.P. as well at Tamil Nadu. It was, however, submitted that silver ornaments seized by RPF were later released under the orders of the Court dated 07.09.2012, subject to furnishing of Bond. The silver ornaments were released by RPF in pursuant to court orders, and were received in stock on 25.09.2012. These silver ornaments were sent to Salem, TN on 13.01.2013. The silver ornaments were sent back from Salem to Mirzapur after repairs, on 19.01.2013. The ....
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....s given by both the sons. It was submitted that in the case of unsecured loans raised by the assessee, the parties have deposited cash in their bank accounts before issung cheque to the assessee, but their confirmation/ ITR, bank statements etc were duly filed. The ld. Counsel for the assessee drew attention to each of the loan confirmation given by these parties as well bank statements, ITR filed by them. It was submitted that ld. CIT(A) rightly deleted additions, except in the case of Mr. Gopi Nath Agrawal. It was prayed that even in the case of Mr. Gopi Nath Agrawal, keeping in view facts and circumstances explained above, the addition is not sustainable. It was submitted that no interest u/s 234B and 234C could be levied as notice of demand is dated 24.03.2015, which is not part of assessment order dated 20.03.2015. On the other hand, the ld. Sr. DR relied upon decision of Hon'ble Supreme Court in the case of Kalyan Kumar Ray(supra). Both the ld. Counsel for the assessee as well ld. Sr. DR reiterated gist of their contentions. 15. We have carefully considered rival contentions and perused the material on record including cited case laws. We have observed that the assessee is e....
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....nd update the impounded books of accounts. The stock which was physically found at both the aforesaid premises, was got valued by department through registered valuer. Before proceeding further, it will be relevant to mention here that there was seizure by Railway Authorities by Railway Protection Force of silver ornaments aggregating to 188.220 kgs(gross weight) (net weight 183.293 kgs) from the possession of two persons on 29.11.2011 while travelling in the train Jodhpur-Howrah Express at Allahabad Junction, without proper documents. The assessee claimed ownership of these silver ornaments, which silver ornaments were seized by RPF. The assessee also claimed that the persons who were carrying silver ornaments in the train on 29.11.2011 are his employees. This information was passed on by Railway Authorities to Income-tax department. Statement of the assessee u/s 131(1)(d) was recorded by Department on 21.01.2012. Survey u/s 133A was conducted by Revenue on 24.02.2012. However, no addition to the income of the assessee was made by the AO with respect to the aforesaid seizure of 188 kgs(gross weight) (net weight 183.293 kgs) of silver ornaments on 29.11.2011 by RPF, and the matter ....
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....ch has occurred during the course of valuation. The relevant portion of the statement given on this issue is reproduced hereunder for the sake of clarity: 3.2(b) Actually, no specification regarding the kind of mistake has been given, therefore, it becomes clear that the assessee is apparently contending just to create a ground for unnecessary litigation in order to avoid payment of correct amount of taxes which he cannot be allowed to resort to. Merely saying that कुछ भूल ई है is not sufficient to admit the contention of the assessee. 3.2(c) It is imperative to mention that during the course of the survey proceedings, the valuation of stock was done by the registered valuer in front of Sri Sharad Agrawal, the employee of the assessee firm who did not point out any kind of mistake whatsoever. This also means the assessee is contending the issue with clear intention to mislead the Department. [Page 4, Question No. (iii) and concerned reply at Page 5, Reply No. (iii) of the statement recorded during the course of survey] 3.2(d). In the light of these facts of the case, the claim of the assessee cannot be treated to be reliab....
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.... In these circumstances, the contention of the assessee cannot be accepted. The value of investment as worked out by the registered valuer i.e. Rs. 42,00,560/-is being added to the total income of the assessee u/s 69B of the Income Tax Act, 1961. Penalty proceedings u/s 271(1)(c) is being initiated separately for concealment of income. Addition of Rs. 42,00,560/- (iii) Regarding Silver Bullions: Likewise, the submissions regarding silver bullion is also grossly misleading because no such stock register or composite stock register has been either found during the course of survey or during the course of assessment proceedings. Therefore, the entire differential amount as already tabulated above, is being treated as undisclosed stock and the purity of the silver bullion is taken as valued by the registered valuer (as mentioned on the inventory concerned), i.e. Rs. 2,38,702/.Accordingly, the addition of Rs. 2,38,702/-is being made to the total income of the assessee u/s 69B of the Act. Penalty proceedings u/s 271(1)(c) is being initiated separately for concealment of income. Addition of Rs. 2,38,702/-" The ld. CIT(A) gave partial relief to the assessee, by holding with respect ....
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.... submissions of the assessee that the valuer has adopted the percentages of purity of the silver articles on no scientific basis. The assessee has filed certain tunch certificates, but these certificates are much after the date of survey and, therefore, not much reliance can be placed for evaluating the purity of the silver articles found during the course of survey. The Ld. AR has strongly relied on the quantitative details which had allegedly been filed along with the return of the income. I have gone through the said quantitative details and I find that there is no mention of the purity % of silver in silver articles. Thus, as far as purity of silver is concerned, no reliance can be placed on these quantitative details too. I had requested the assessee to file tunch certificates obtained for the silver articles purchased or sold during the year and before the date of survey, however, no such tunch certificates were produced. I had also requested the assessee to produce the bills of purchase or sales which could demonstrate the purity of silver in silver articles, but no such bills of purchases or sales were produced which could help me in verifying the purity of silver in those ....
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....ned by the assessee during the course of the survey, nor any slip or any noting in this regard was found nor the said jewellery was segregated. Thus, the contention of the assessee in this regard is not accepted. In this regard, reference is made to the decision of the Hon'ble Supreme Court in the cases of Durga Prasad More (82 ITR 540) wherein it was held by the Hon'ble Supreme Court that- "the taxing authorities were not required to wear blinkers while looking at the documents produced before them. They were entitled to look into the surrounding circumstances to find out the reality of the recitals made in these documents." Further, in the case of DIT vs. Bharat Diamond Bourse [(2003) 179 CTR SC 225], the Hon'ble Supreme Court held that- "the story rings false from beginning to end, and yet, the tribunal accepted it by sayings, "As regards the bona fides of the transaction, in our opinion, there is nothing to suspect the same. "The Tribunal says, "there is a transparency about the entire transaction which nullifies any attempt to make out the transaction as something- unusual and out of the ordinary." That diamonds are not transparent, that they dazzle with a br....
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....ments, which led to excess weight of 3.32 kgs, and for purity the assessee is contending that Tunch certificates were not provided while determining purity of silver ornaments, and the purity determined by registered valuer was not done by adopting scientific method rather it was done by estimation. The AO rejected the objections and adopted the weight as well purity computed by the registered valuer who was an independent expert in the field valuing the silver articles. The ld. CIT(A) rejected the objection of the assessee so far as weighment is concerned, but estimated purity @55% of silver ornaments as against the purity of average of 65% as per version of ld. CIT(A) adopted by registered valuer. The ld. CIT(A) referred to purity prevailing in this part of U.P. and the same purity followed by him in some other case, although he did not specify the name of the tax-payer on whose case he estimated purity of 55% in the case of silver ornaments. The ld. CIT(A) asked assessee to file the necessary invoices and other details for purchase and sale of silver ornamnets by the assessee during the impugned period, as well ld. CIT(A) asked assessee to file tunch certificates for the silver ....
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.... evidentiary documents to substantiate its objections as to the weightment and purity of silver ornamnets, immediately after survey. The assessee was called upon by authorities to explain the differences, at three different stages, firstly by the investigation wing of the department, wherein the summons dated 27.02.2012 and 29.02.2012 as well letter dated 06.03.2012, were issued wherein the assessee had opportunity to explain the differences in the stock. The ld. Counsel for the assessee Advocate Shri Divyanshu Agrawal, being officer of the Court made statement before the Bench, that these summons and letter dated 06.03.2012 were never received by the assessee and hence there is no question of compliance by the assessee. On perusal of the Survey Report dated 16.04.2012, which is placed on record, in Departmental Paper Book filed on 09.11.2021 at Page 1-10, it is clearly mentioned at Para 5 that the assessee namely Mr. Neeraj Agrawal was duly issued Summon dated 27.02.2012 u/s 131(1A) by ADIT(Inv.), for appearance before him on 28.02.2012 but the assessee did not comply with the summons. It is also mentioned in the said Survey Report at para 5, that another summon dated 29.02.2012 u....
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....revealed by ld. CIT(A)) in this part of U.P.. There are two parties before ld. CIT(A) and principles of nature justice demand that fair hearing be granted to both the parties. Reference is drawn to Section 250(1) and 250(2) of the 1961 Act, as well Rule 46A of the Income-tax Rules, 1962. In our considered view based on facts and circumstances of the case and in the interest of justice, one more opportunity is required to be granted to the assessee to rebut through cogent evidences the valuation report of the registered valuer as to both weighment of the silver ornaments found during survey as also as to the purity of silver ornaments adopted by the registered valuer. So far as legal precedents relied upon by the assessee, it is not the case of the surrender of the undisclosed income during the course of survey proceedings, but incriminating material by way of excess stock of silver ornaments found during survey vis-à-vis stock recorded in stock register, and additions were made based on the incriminating material ( being excess stock) found during survey conducted u/s 133A. The orders of the authorities are set aside on this issue of silver ornaments, and matter so far as ad....
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....11, the assessee made purchases of the following gold jewellery viz. 225.8gms from Mr. Om Prakash Tiwari on 12.10.2011 ; 311.10 gms from one Shri Santosh Kumar Singh on 14.10.2011 and 936.480 gms from Sati Developers n Tower Private Limited on 07.02.2012, and as per ld. CIT(A) all these purchases entries were found entered in the books impunded during the year course of survey proceedings. The ld. CIT(A) observed that copy of Khata Bahi is produced before him. The ld. CIT(A) further observed that the assessee has sold 450.1gms of gold ornaments to one Dhiraj Jewellers on 01.02.2012, and the bill was impunded on 24.02.2012(page 75/PB-2 filed by assessee/PB-3 filed by department at page 28). We have gone through ledger account of gold ornaments (page 67/PB-3 filed by department) and as contended by ld. Sr. DR that there were three entries in the ledger account of gold ornaments, opening balance of Rs. 20,500/- (without mentioning of any quanity) and there are two entries of purchases in the said impounded ledger account of gold ornaments at Mirzapur i.e. Rs. 293,540/- and Rs. 4,18,500/- on 12.10.2011 and 14.10.2011 respectively. There are no entry of alleged purchase of 936.480 gms f....
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....e survey and also to substantiate the affidavit, by way of wealth tax returns of Mrs. Suman Agrawal or declarations in the ITR of Mrs. Suman Agrawal or purchase bills for purchasing personal jewelry by Mrs. Suman Agrawal, nor even photographs etc. to substantiate that the said jewelry was used by her on various occasions/cermenoy to identify and prove ownership of such gold jewellery belonging to and/or owned by Mrs.Suman Agrawal. However, the contention of the assessee at the time of survey that 850 gms of the gold ornaments belonged to her wife which was kept for safekeeping, is not completely out of preponderance of human probabilities as it is claimed that she went to her parental house at Satna, M.P. to see her ailing father and thus left the personal jewellery for safe keeping at the Mirzapur HO, as it is in the realm of possibilities that she kept her personal jewellery at Mirzapur HO premises keeping in view that it will be safe to keep jewellery in the showroom owing to safety equipments installed therein, but in normal circumstances the personal jewelry of the wife of the assessee ought to be at their residence as keeping in view the background of the assessee and his soc....
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....e on the case law cited before us is misconceived, firstly it is not the case of surrender of income during survey rather incriminating material by way of excess stock of gold ornaments were found during survey on 24.02.2015. Secondly, the affidavit filed by the assessee of Mrs. Poonam Tripathi is a self serving documents without any corroboration with any evidences. It is incomprehensible to believe that Mrs. Poonam Tripathi will leave 202 gms of gold ornaments with the employee of the assessee for valuation without any receipt. No such receipt was found / impounded during survey. It is also incomprehensible to believe that the assessee will keep gold ornaments of 202 gms in his business premises, without making entries in the record. No such entry or noting was found during survey or in the impounded material. It is further incomprehensible to believe that said Mrs. Poonam Tripathi gave the gold ornaments weighing 202 gms to Mr. Sharad Agrawal on 24.02.2012 at 10.30 AM, but the said Mr. Sharad Agrawal who was present along with assessee while stock was inventorised by department, weighed and valued by registered valuer, that Mr. Sharad Agrawal did not brought this to the notice o....
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....as raised objections with respect to weight and purity. The valuation is done by registered valuer who is an expert in the field. The department has discharged its onus, and now the onus shifted to the assessee to demonstrate that there are specific flaws in the valuation done by the registered valuer both in terms of purity as well weighment, and merely general and balled statement is not sufficient. The assessee did not produce any valuation report of approved valuer, done at his behest immediately after conclusion of survey, as no such valuation report by approved valuer was ever filed by the assessee. The assessee was called upon by authorities to explain the differences, at three different stages, firstly by the investigation wing of the department, wherein the summons dated 27.02.2012 and 29.02.2012 as well letter dated 06.03.2012, were issued wherein the assessee had opportunity to explain the differences in the stock. The ld. Counsel for the assessee namely Advocate Mr. Divyanshu Agrawal, being officer of the Court made statement before the Bench, that these two summons and letter dated 06.03.2012 were never received by the assessee and hence there is no question of complia....
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....lver Ingot as on 01.04.2011 as opening stock in audited statement for 2011-12. The corresponding quantity of silver ingot is 5.751 kgs. (page 26 and 37/PB-1 filed by department). Similar corresponding figures both valuation wise of Rs. 83,390/- of silver ingotas well stock of silver ingot of 5.751 kgs were there in the preceding year audited accounts for financial year 2010-11 (page 153 and 155/PB-1 filed by assessee). It is admitted position that no stock register was maintained by the assessee for Silver Bullion. This claim made by assessee as to opening stock of 5.751 kgs of Silver ingot(silver bullion) requires verification as to looking into dealing of the assessee in Silver Bullion viz. purchase, consumption for manufacturing silver ornaments during the year, as both the authorities rejected claim of the assessee at threshold without verifying in details. We refrain from commenting on merits of this claim. In our considered view based on facts and circumstances of the case and in the interest of justice, one more opportunity is required to be granted to the assessee to rebut through cogent evidences the valuation report of the registered valuer as to both weighment of the sil....
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....t on wrong footing. On perusal of the statement recorded, during the course of survey, it is seen that billsregarding purchase of jewellery to the extent of 34.826 K.G. have been produced, hence the benefit of the same, is being given to the assessee and the rest of the stock i.e. 212.03 - 34.826=177.174 is being treated as undisclosed investment in stock and accordingly addition of the value of investment i.e. 56,32,361/- is being made to the total income of the assessee u/s 69B of the Act. The rate has been adopted at the rates prevailing as on date of the survey, as taken by the registered valuer i.e. @ 57,800/- with a purity of 55%. The working is as under: Total undisclosed stock=177.174 Amount of investment =177.174 x 57,800= 1,02,40,657/- 55% of the same 56,32,361/- Addition of Rs. 56,32,361/- Penalty proceedings u/s 271(1)(c) is being initiated separately for concealment of income. (ii) Regarding Gold Jewellery: Plain reading of the submission of the assessee on this issue, as quoted above, will make it sufficiently clear that the assessee has no concrete explanation to offer in this regard. The evidences filed by him at this stage cannot be relied upon, insof....
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.... case of Silver jewellery, the dispute is mainly on account of silver jewellery allegedly purchased from Mathura which was physically available at the time of survey but the bill wasn't available nor the same was entered in the stock register. It is the case of the appellant that the same stock had reached on the date of survey but the bill had not been received. The copy of the bill (by which the said artificial payals were allegedly purchased) has been enclosed at Page No. 63 of the Paper Book 1 and the payment for the same was through bank, proof of which was enclosed at Page No. 197 of the Paper Book I. All these documents were also present before the AO at the time of assessment proceedings. On perusal of the said bill, it is seen that the bill is dated 23 February, 2012 and the place is Mathura which is good 600 km away from Varanasi. The said bill contains reference of mode of the payment as Ch no. 003094 of Axis Bank, which is also dated 23.02.2012. When I enquired about this with the assessee, he stated that one of his employees, namely Sri Ramashreyyadav had been to Mathura and he had carried the said Cheque to Mathura and, therefore, the reference of the same got inc....
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....bsp; (RajkumarLachhiramka) Q. (1) Please tell what do you do? Ans. I work for the shop of Sri Niraj Agarwal ji at Varanasi. I work at shop and also outstation work for him. Q. (2) Did you ever travel to Mathura for the shop-work? Ans. 3-4 times. Q. (3) Did you go to Mathura in February 2012? Ans. Yes, I had gone to Mathura on 22 February by night train Magadh Express which reached Tundla in the morning and then next to Mathura by bus and reached Mathura at 12 noon. Q. (4) What did you do at Mathura ? Ans. I reached the shop and handed over the cheque to the owner of the shop who handed me payals in 6 bags weighing about 177 kg. The shopkeeper also gave me the bill for the same. Q. (5) When did you reach Varanasi ? Ans. From Mathura, I took the taxi to Tundia and then took the train to MathuraLichavi Express and reached Varanasi Cantt. At 8:30 am on 23 February and by auto reached the shop at Varanasi. The Manager was waiting for me at the shop and I took out the payals from these bags and alongwith the Manager took these payals in the counters/ Almir....
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....ri Niraj Ji generalily lives at Mirzapur. Q. (2) Who is RamashreyYadav ? Do you know him? What does he do? Ans. Yes Sir, he is our Staff. He works at our shop. He also travels outside to get goods if needed. Q. (3) Do you recall that there was a survey by I.T. Department on 24th February at your shop? Ans. Yes Sir, I was present at that time in the shop. Q (4) Did Ramashrey Yadav bring anything that morning? Ans. Yes, Ramashrey Yadav brought payals in 6 bags in the morning of 24th February from Mathura. Q (5) What did you do after he came with these payals? Ans. I and him put the payals in the almirahs and show case along with other and then I asked him to go and freshen up. Q. (6) Did you take the bill from him? Ans. No, I did not remember and the bill was with him. Q. (7) Why did not you call him to the shop when Survey party came ? Ans. The police did not allow anyone to come inside. Q (8) When there was excess of Silver jewellery found, why did you not tell the survey party that the payals were received just in the morning 7. Ans. I was frightened by the Group of I.T. Officers and Police and I was all alone. I did not know how to react. Q (9) You m....
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....and was in the name of R.S. Bullion &Jewellery and had been cleared on 02.04.2012(sic. 02.03.2012). Looking at the totality of facts (i.e. version of the assessee which has been corroborated by two witnesses and the bank details), hereby hold that silver jewellery weighing 177 kg. had been purchased by the assessee from Mathura and the same could not be recorded in the stock register as it had been received only in the morning of the date of survey. The A.O. is thereby directed to exclude this weight i.e. from the excess weight of silver jewellery computed by him. If there is any excess weight beyond this, the same will be computed @ 55% of silver purity. Before parting with the issue, I would like to mention here that this transaction is being accepted by me for the reason that it is backed by a pucca bill/ invoice from the supplier and the payment was made through cheque which was dated 23.02.2012 and the same had also been cleared on 02.04.2012(sic. 02.03.2012). These facts support the contention of the assessee. It is a well-known - dictum that the income tax proceedings operate on the theory of preponderance of probability, which works for both the parties i.e. in favour of th....
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....carefully considered the entire material on record. It is observed that during survey proceedings conducted by Revenue u/s. 133A on 24.02.2012, the stock at Varanasi B.O., was inventorised by department, and its welighment and valuation was done vide valuation report prepared by an registered valuer namely M/s Girdhar Gopal, Varanasi, dated 24.02.2012 (Page 49-55/PB-2 filed by department). The assessee's Manager(Varanasi Branch) Mr. Shiv Bachhan Yadav was present at the time of valuation by registered valuer, and his statement was recorded (page 60-64/PB-2 filed by department). The assessee was maintaining stock register for silver ornaments/jewellery, while no stock register was maintained by assessee for Gold Jewellery and Silver Bullion dealt with by the assessee. The silver ornaments stock shown in stock register was 453.90 kgs, while physical stock found was 665.93 kgs. as on the date of survey u/s 133A on 24.02.2012. There was a difference of 212.03 kgs as excess stock of silver ornaments was found during survey on 24.02.2012. The assessee's Manager could not explain the aforesaid difference in the statement recorded during survey on 24.02.2012, except that he explained that ....
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.... found during survey on 24.02.2011. At the assessment stage in 2015, the assessee submitted before AO that the assessee had purchased 177.500 Kgs of artificial silver ornaments being Gillet Payal from Mathura from M/s R S Bullion & Jewellers, Mathura vide their invoice number 16 dated 23.02.2012, for Rs. 2,16,550/-. It was claimed that aforesaid Gillet Payal(artificial silver jewelry) was received at Varaansi BO on 24.02.2012 at 10.00 AM from Mr. Ram Ashrey Yadav(employee of the assessee) who went to Mathura to bring the said alleged Gillet Payal to Varanasi, but the same was not entered in the stock register. The AO rejected the contentions of the assessee and made additions with respect to difference in physical stock of silver ornaments found during survey and the stock as per stock register. The ld. CIT(A) accepted the contentions of the assessee, on preponderance of human probabilities and deleted the additions as were made by the AO to the tune of Rs. 56,32,361/-. The ld. CIT(A) recorded the statement of Mr. Shiv Bachhan Yadav, Manager of Varanasi BO as well Mr. Ramashrey Yadav(employee of the assessee), who brought the said alleged artificial silver ornaments being Gillet Pa....
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....unbelievable that Mr. Shiv Bachan Yadav, Manager of Varanasi BO, who is well experienced to deal in valued metals such as gold, silver, ornaments etc. will not differentiate between real silver ornaments and artificial silver ornaments, and that he will not object to the artificial silver jewellery being valued at the valuation of real silver jewellery. He was working with assessee for last 10-15 years as per his statement recorded before ld. CIT(A) on 20.01.2017. Mr. Shiv Bachan Yadav, Manager signed on the valuation report dated 24.02.2012 prepared by registered valuer, valuing 177.50 kgs of aforesaid alleged Gillet Payal at value of real silver ornaments. After receiving the material, it is also incomprehensive to believe that Mr. Shiv Bachan Yadav, Manager of Varanasi BO displayed the said artificial silver jewellery in the show room alongside real silver ornaments for displaying meant for sales. It is incomprehensive to believe that knowingly well that it is artificial silver ornaments, he will mix the same with the real silver ornaments. The assessee was also asked by the Department to explain the difference in silver ornaments on 24.02.2012 while recording his statement, but....
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....s, both these statements are rejected, and we hold that this explanation of alleged purchase of 177.50 kgs of artificial silver ornaments being Gillet Payal is merely an afterthought by the assessee to wriggle out of tax liability. Thus, we set aside the appellate order passed by ld. CIT(A) and uphold/sustain the addition as was made by the AO. So far as legal precedents relied upon by the assessee, it is not the case of the surrender of the undisclosed income during the course of survey proceedings, but incriminating material by way of excess stock of silver ornaments was found during survey vis-à-vis stock recorded in stock register, and additions were made based on the incriminating material ( being excess stock) found during survey conducted u/s 133A. The orders of the ld. CIT(A) is set aside on this issue of excess silver ornaments and the assessment order is upheld. We order accordingly. With respect to difference of stock of gold jewellery found during Survey on 24.02.2012 at Varanasi, U.P. of 128 gms vis-à-vis no stock shown in the stock register. It is an admitted position that the assesee is not maintaining stock register so far as gold jewellery and silver....
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....re no entries found of said purchase of gold jewelry of 128 gms from 14 different person in the books of accounts/stock records prior to the date of survey, nor these are part of impounded material. The assessee has during assessment stage in 2015 i.e. after three years of survey on 24.02.2012 tried to justify these purchases of gold ornaments by producing 14 invoices(page 71-84 of PB -1 filed by department). The AO rejected the contentions of the assessee. The ld. CIT(A) also rejected the contentions of the assessee, as source of the said gold jewellery could not be explained. It is highly improbable that the assessee purchssed gold ornaments from 14 different persons who all are unregistered dealers just within 3-4 days prior to the date of survey, and further that no evidence whatsoever related to said purchases were found during the course of survey conducted on 24.02.2012. These evidences were created post survey, to justify the excess gold ornaments of 128 gms found during survey, which was otherwise undisclosed and undeclared stock of the assessee and but for the survey conducted on 24.02.2012 would not have come into record. As per document A-2 impounded from Varaansi B.O.,....
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....dated 06.03.2012 were never received by the assessee and hence there is no question of compliance by the assessee. On perusal of the Survey Report dated 16.04.2012, which is placed on record, in Departmental Paper Book filed on 09.11.2021 at Page 1-10, it is clearly mentioned at Para 5 that the assessee namely Mr. Neeraj Agrawal was duly issued Summon dated 27.02.2012 u/s 131(1A) by ADIT(Inv.), for appearance before him on 28.02.2012 but the assessee did not comply with the summons. It is also mentioned in the said Survey Report at para 5, that another summon dated 29.02.2012 u/s 131(1A) was issued by ADIT(Inv)to the assessee for appearance before ADIT(Inv.) on 05.03.2012 at 11AM, but again the assessee did not comply. It is further stated that letter dated 06.03.2012 was issued to the assessee to remain present on 12.03.2012, but the assessee did not comply with the said directions. During assessment proceedings in 2015, the assessee sought to explain the difference by explaining that the same was brought by one Mr. Ghurahu Yadav for sale.. There is no entry found for said silver bullion of 4.958 kgs brought by Gurahu Yadav, in the stock records as well in the books of accounts pr....
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....y the assessee, which were found during the course of survey operations u/s 133A on 24.02.2012, as detailed hereunder: S.No. Date Concerned Persons/Firm name Amount 1 01.04.2011 Shambhoo Nath Agrawal Sarraf Rs.1,00,000/- 2 20.05.2011 Shambhoo Nath Agrawal Sarraf Rs.1,00,000/- 3 30.06.2011 Shambhoo Nath Agrawal Sarraf Rs.1,00,000/- 4 15.09.2011 Shambhoo Nath Agrawal Sarraf Rs. 4,00,000/- 5 24.05.2011 Raj Shree Palace Rs.1,00,000/- 6 01.06.2011 Raj Shree Palace Rs.1,00,000/- 7 13.12.2011 Raj Shree Palace Rs. 65,000/- 8 30.01.2012 Raj Shree Palace Rs. 50,000/- Total Rs. 10,15,000/- The assessee was confronted on this issue by the AO to explain aforesaid cash deposits, and the assessee submitted as under: The AO considered the aforesaid reply of the assessee and observed that no such explanations have either been produced during the course of survey nor any such evidences have been produced during recording of statement. It was further observed that the same has not been adequately explained and substantiated by the assessee during the course of assessment proceedings. The AO observed that the assessee was....
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.... Decisions: We have carefully considered the entire material on record. There were cash deposits recorded/entered in the cash book at various dates (all prior to the date of survey) from the following parties: S.No. Date Concerned Persons/Firm name Amount 1 01.04.2011 Shambhoo Nath Agrawal Sarraf Rs.1,00,000/- 2 20.05.2011 Shambhoo Nath Agrawal Sarraf Rs.1,00,000/- 3 30.06.2011 Shambhoo Nath Agrawal Sarraf Rs.1,00,000/- 4 15.09.2011 Shambhoo Nath Agrawal Sarraf Rs. 4,00,000/- 5 24.05.2011 Raj Shree Palace Rs.1,00,000/- 6 01.06.2011 Raj Shree Palace Rs.1,00,000/- 7 13.12.2011 Raj Shree Palace Rs. 65,000/- 8 30.01.2012 Raj Shree Palace Rs. 50,000/- Total Rs. 10,15,000/- During assessment proceedings, the assessee explained that an amount of Rs. 3,15,000/-was received from the properitory concern namely M/s Raj Shree Palace on different dates, and the assessee is the properitor of M/s Raj Shree Palace. The said properitory concern namely M/s Raj Shree Palace is running Cinema Hall. The account of the assessee in the books of Raj Shree Palace as well account of M/s Raj Shree Palace in the books of the asses....
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....acs was received as well genuineness of transaction. It is incomprehensible to believe that advance cash was received on 01.04.2011 onwards, while sale is made on 16.03.2012 for Rs. 7,07,002/- i.e. almost after one year and that too of a highly volatile item of gold ornaments where prices of gold are fluctuating on day to day basis. There is one more account of Shambhoo Nath Jewellers in the books of the assessee, and transaction through banking channel of Rs. 47800/- received on 06.05.2011 and sale having made within short time gap of Rs. 47,793/- on 26.05.2011 for sale of silver jewellery by assessee to the said party (page 9495/PB-1 filed by department). The ld. CIT(A) accepted the contentions of the assessee, without seeing whether mandate of Section 68 is satisfied or not, rather ld. CIT(A) invoked Section 269SS to take suitable measures against M/s Shambhoo Nath Agrawal Saraf, without appreciating that even if Section 269SS r.w.s. 271D is to be invoked, it is to be invoked against receipient who was the assessee in the instant case who infact received said cash of Rs. 7,00,000/- from M/s Shambhoo Nath Agrawal Saraf, and Section 269SS cannot be invoked against the lender namel....
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....xplanation submitted by the assessee is not substantiated properly with support of credible evidences. The AO observed that merely filing of an affidavit which is not substantiated with any material information or for that matter, filing of copy of account/bills and vouchers etc. which were neither found during the course of survey nor demonstrated/produced during the course of recording of statement at both the places i.e. Mirzapur and in Varanasi cannot be treated to be sufficient in any manner. The AO observed that differences of the cash could not be corroborated with cash book/other relevant documents, during the course of survey or during the course of assessment proceedings., and hence, the AO added the same i.e. Rs. 5,87,424/- to the total income of the assessee under Section 68 of the Act. The ld. CIT(A) granted part relief to the assessee, by holding as under: "6.2 Discussion & Decision: The Assessing officer has made an addition on account of difference in amount of physical cash found during the course of survey and cash as per cash book. In regard to Cash found at Mirzapur premises, it is seen from the statement recorded during the course of survey that the appell....
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....st prior to survey on 24.02.2012. The affidavits of these four parties were submitted during assessment proceedings(page 93-100/PB-1 filed by assessee). No such explanation was furnished during survey that cash found during survey at Varanasi BO constituted advance cash given by these parties against future supplies of silver/gold ornaments. No entry was found recorded in the cash book/ledger or any other records, prior to date of survey, with respect to alleged cash receipts from these persons aggregating to Rs. 5,45,000/-. Cash of Rs. 6,05,400/- was found at Varanasi BO on the date of survey on 24.02.2012. The cash book was completed until 20.02.2012, and balance recorded was Rs. 20,876/-. These cash receipts from all the four persons (7 entries) have taken place between 21.02.2012 and 23.02.2012 just prior to date of survey on 24.02.2012, which is highly improbable, and these entries/cash receipts were introduced in the books of accounts/cash book as the assessee was cornered as excess cash was found which was from undisclosed/undeclared sources. There are no trace of receipt of any of these alleged cash advances receipts to the tune of Rs. 5,45,000/- in the books of accounts or....
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....d under sub-section (2), the AO may make an assessment in the manner provided in Section 144 of the 1961 Act, wherein Section 144(1) stipulates that the AO can then make assessment of the total income of the assessee to the best of his judgment after taking into all relevant material which the AO has gathered. First Proviso read with Second Proviso to Section 144(1) stipulates that there is no requirement of issuing SCN when notice u/s 142(1) is already issued by the AO prior to making of an assessment u/s 144. The AO in the instant case duly issued notices both u/s 143(2) and 142(1), which are found recorded in assessment order. Reference is drawn to three judge bench decision of Hon'ble Supreme Court in the case of CIT v. Devi Prasad Vishwanath reported in (1969) 72 ITR 194(SC), wherein Hon'ble Apex Court held as under: "There is nothing in law which prevents the Income-tax Officer in an appropriate case in taxing both the cash credit, the source and nature of which is not satisfactorily explained, and the business income estimated by him under section 13 of the Income-tax Act, after rejecting the books of account of the assessee as unreliable. This was so decided in Kale Khan....
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....assessee has only filed unconfirmed copies of account of these sundry creditors. The AO made addition of Rs. 34,82,707/- to the income of the assessee. The ld. CIT(A) deleted the entire addition of Rs. 34,82,707/- as was made by the AO on account of unexplained sundry creditors under Section 68 of the Act, by holding as under: "9.2 Discussion & Decision: As per the Assessing Officer, the assessee had failed to file the confirmations in regard to the credit balances from the following parties- D.D. Industries, Mandi Ram Das, Mathura Rs. 9,49,700/- R.G. Ornaments, Namakki Mandi, Agra Rs 6,00,284/- Dashrath Silver Art Pvt. Ltd., Redak Road Near, Arya Nagar, SantKabir Road, Rajkot Rs 14,26,243/- Shri Sati Ram, JituDustakpur, Varanasi Rs 4,32,710/- Shri VariPayals, 216, Moongapadi, Street, Gugai, Salesm Rs 73,770/- Total Rs. 34,82,707/- 9.2.1 I have seen the list of sundry creditors. It has been informed to me that all the confirmations had already been called for by the survey team (after the survey proceedings) and all the trade creditors had already submitted the confirmations to the department directly. However, since these submissions were in the realm of....
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.... account has also been confirmed by the said party. The A.O. is directed to send this copy of confirmation of account to the A.O. of the party for his verification. The addition made by the A.O. is hereby deleted." Analysis and Decisions: We have carefully gone through the material on record. It is observed that the investigation department issued summons u/s 131 to sundry creditors to verify their genuineness, but the summons returned back. In order to verify these sundry creditors, the AO asked assessee to furnish complete details, but the same were not furnished by the assessee. Unsigned copies of their ledger accounts in the books of the assesse were submitted, which are placed on record at page 41-46 of PB-2 filed by the assessee. The confirmations filed for these creditors are placed in PB-1 filed by department at page 118-122, which are only signed by the assessee and not by the creditors. The AO made additions to the income of the assessee by invoking provisions of Section 68. The ld. CIT(A) deleted the additions by holding that copy of confirmation signed by these creditors are now filed by the assessee. The ld. CIT(A) deleted the additions towards sundry creditors witho....
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....of being heard to the assessee. We order accordingly. 15G. Addition on account of Unsecured loans raised by assessee to the tune of Rs. 28,12,000/- The AO observed that the assessee has raised unsecured loan to the extent of Rs. 33,70,000/- which have been shown to be obtained from various persons during the year under consideration. The details are as under: The AO issued letters/notice under Section 133(6) to these persons for obtaining, inter-alia, copy of the bank statements apart from the other documents. The AO observed that in some of the cases, Bank statements were submitted and on the perusal of the same, it was observed by the AO that unsubstantiated cash was deposited in the concerned bank accounts immediately before issuing the cheques for extending the said loan to the assessee. It was also observed by the AO that in some of the cases the ITR/PAN details etc. could not be provided by the respected persons. The summary of the information as received by the AO through DAK, was reproduced by AO in his order, as under: Name of the Lender Amount of Loan Amount of Cash deposited for granting the loan Remarks/Findings Smt. Shilpa Khaitan 6,00,000/- 2,70,000/- ....
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....reditors/ depositors as under: a. Smt. Suman Agrawal - Rs.3,10,000 - Details on Page 7-10 of the Paper Book 2. The appellant has submitted a copy of Confirmation and bank statements which was filed before the AO on 18/03/2015 Copy of ITR of Smt. Suman Agarwal is also at Page 23 of the Paper Book 1. In view of confirmation filed by Smt. Suman Agrawal and also the fact that she is a Tax payer, the addition so made is hereby deleted. The AO should send the confirmation letter filed by her to her A.O. for him to verify the transactions. b. M/s Gopal Khaitan (HUF)- Rs.3,00,000- Details on Page 11-13 of the Paper Book 2. On perusal of the case records, it is seen that when the AO. had made enquiry u/s 133(6) of the I.T. Act, the said party had submitted Confirmation and bank statements before the A.O, on 18/03/2015. Copy of its ITR is at Page 24 of the Paper Book 1. In this view of the matter the genuineness of the credit is established and the addition so made is hereby deleted. The A.O. should send the confirmation letter filed by it to it's A.O. for him to verify the transactions. c. K. Aditya Khaitan - Details are at page 14-19 of the Paper Book) 2. On perusal of the case recor....
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.... after analyzing the replies filed by these eight lenders observed that in the case of most of the lenders, the issue of cheque favouring assessee is preceded by deposit of cash in their respective bank account, and the AO restricted the addition to the amount of cash deposits in their bank account which is preceded by the issue of cheque favouring assessee granting of loan. The ld. CIT(A) erroneously deleted the additions and accepted the aforesaid loans(except in one case of Mr. Gopi Nath Agrawal) which were preceded by cash deposits before issuing the cheque in favour of the assessee, as confirmation, ITR, bank statements were filed notwithstanding that the return of income were of meagre amounts and further that loan to the assessee is preceded by cash deposit in the bank account of the lender, and additions made were deleted by ld. CIT(A), except in the case of Mr. Gopi Nath Agrawal, where no confirmation and no bank statement was submitted, which addition in the case of Mr. Gopi Nath Agrawal was confirmed by ld. CIT(A), while rest of the addition stood deleted by ld. CIT(A). It was claimed that Mr. Gopi Nath Agrawal was not well and hence no details could be filed. Later on 0....
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....notice u/s 133(6). The AO is directed to write to the bank to obtain statement directly. However, we clarify that the onus still remain on the assessee to satisfy the mandate of Section 68. We order accordingly. 15H Chargebility of Interest u/s 234B and 234C The assessee raised additional ground of appeal before ld. CIT(A) challenging the chargeability of interest u/s 234B and 234C pursuant to assessment order dated 20.03.2015 passed by the AO. It was brought to our notice that notice of demand was issued on 24.03.2015 and hence no interest u/s 234B and 234C can be charged as the assessment order is dated 20.03.2015. The levying of interest u/s 234B and 234C is mandatory and automatic. Reference is drawn to judgment and order of Hon'ble Supreme Court in the case of CIT v. Anjum S Ghaswala, reported in (2001) 119 Taxman 352(SC), decision of Hon'ble Supreme Court in the case of CIT v. Bhagat Construction Company Limited, reported in (2016) 383 ITR 9(SC) and also to decision of Hon'ble Supreme Court in the case of Kalyankumar Ray v. CIT, reported in (1991) 191 ITR 634(SC). The AO passed assessment order dated 20.03.2015 u/s 143(3), wherein there is a directions to issue notice of de....