TaxTMI 
TaxTMI 
TaxTMI 
2023 (4) TMI 1113
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....of the provisions of section 69A of the Act while rejecting the explanation offered on the reconciliation of cash balance/inventories in the computation of taxable total income without assigning proper (reasons and justification. 3. The CIT (Appeals) erred in sustaining the estimated addition of Rs.27, 18,374/- representing the manufacturing loss to the extent of 1060.738 gms in the conversion of old gold into new gold on the presumption of collection of such wastage from the customers/sellers of old gold in the computation of taxable total income without assigning proper reasons and justification. 4. The CIT (Appeals) failed to appreciate that having not properly considered the explanation offered including the process of conversion and the trade practice, the sustenance of the estimated addition was wrong, erroneous, unjustified, incorrect and not sustainable in law. 5. The CIT (Appeals) went wrong in recording the findings in para 5.5.6 of the impugned order in this regard without assigning proper reasons and justification. 6. The CIT (Appeals) erred in sustaining the addition of Rs.33,90,758/being the difference in stock based on the survey report in the computation of ....
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..... AO observed that the assessee has converted old gold into new gold, but no wastage or manufacturing loss has been claimed for such conversion. The ld. AO also observed that the assessee used to charge 15% for wastage and takka to its customers. However, for converting old gold into new gold assessee has not shown any manufacturing loss. The ld. AO, accordingly calculated that if 15% manufacturing loss rate is applied on the old gold of weighing 7071.590 grams, quantity of 1060.738 grams which will account for the excess stock found during the course of survey, and accordingly made additions of Rs. 27,18,374/-. The assessee failed to get any relief from the ld. CIT(A). 5. Ld. Counsel for the assessee, during the course of hearing stated that when said conversion is carried out through job work basis, the goldsmith purifies the old gold jewellery and add copper for manufacturing new gold jewellery and therefore, the weight of old jewellery is equal to the weight of new jewellery and there is no weight loss in manufacturing the new gold jewellery. He, however failed to controvert this fact that while conversion there has to be some wastage or manufacturing loss which is inevitable.....
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.... a shortage of 74.580 gms. 9. Ld. AO during the course of assessment proceedings examined the details filed by the assessee, but did not find any error in the quantitative details. However, for the purpose of valuing the excess gold jewellery, he after considering the rate of 24 carat gold at 2661.50 grams and considering the gold rate of 22 carat as well as making charges adopted the per gram rate of Rs. 2469.717 as on 26.11.2014 i.e., the date of survey and calculated the total value of excess gold jewellery at Rs. 3,27,53,387/- and the difference between the amount offered by the assessee and the amount calculated by the Assessing Officer i.e, Rs. 33,90,758/- was added to the income of the assessee for the shortfall in the valuation of excess gold jewellery found during the course of survey. 10. When the assessee carried out the matter before the ld. CIT(A) reiterating the details and submission filed before the Assessing Officer but failed to get any relief. 11. Now, the assessee is in appeal before this Tribunal. 12. Ld. Counsel for the assessee stated that the statement given during the course of survey u/s. 133A of the Act does not carry any evidentiary value and additio....
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....0 6 Agreed for the addition of income @ Rs2622 13866 7 Add: Making charges @ gram 184 Total amount agreed for addition 14050 There is no difference in admitting the excess quantity of gold jewellery based on the books of accounts and the return of income except the difference of 6.130 gms of gold jewellery. The difference in terms of value of Rs.14050 which may be added to my returned income. In view of the above, there is no need for the addition of 451.08 gms value of the gold jewellery to the returned income. b. Old Gold Jewellery SI Details Grams Remarks 1 Old Gold Jewellery found on surve 399.5 2 Old Gold Jewellery as per accounts 474.0 3 Shortage of old Gold jewellery 74.580 If the value of the shortage of Old Gold Jewellery 74.580 gms is treated as income and the said value shall be given credit/offset against the value of the excess stock admitted as income in the return of income." 15. Based on the above details, the assessee offered the amount of Rs. 2,93,62,629/- for taxation. Whereas, ld. AO computed the value of Rs. 3,23,55,528/- in the following manner: Gold in the....
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....y adopting this method the value of Gold Jewellery is arrived and for manufacturing the said jewellery, the manufacturing cost of Rs.30/g is added. The total value is admitted for the excess gold jewellery found. While valuing the Gold jewellery no distinction is made i.e. Gold jewellery stones and gold jewellery without stones. Only 15% deduction is made for impurities, soldering materials i.e. takka from the bullion rates, As alleged in the show cause notice, the entire stock of excess gold jewellery is not having purity Of 91.667%. hence the value worked out based on 22K is unreasonable an- and against the normal practice followed in this line of business. Further, in the recent article of "The Hindu" dated 11.12.2017 will clearly show that the content of the Gold in Gold Jewellery 91.667. Copy of the "The Hindu" dt: 11.12.17 enclosed. The excess Gold Jewellery found has not been* valued as old gold jewellery since New: Gold Jewellery was found at the time of survey. Hence, the said Gold Jewellery has been taken/recorded in New Gold Jewellery. The method of valuation adopted by me is highly reasonable and scientific as compared to any other method of valuation for the natu....