TaxTMI 
TaxTMI 
2025 (2) TMI 1532
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....early indicating the quantity with cost price, the date of receipt etc and it had not produced item wise stock list either during the assessment proceedings or appellate proceedings. 2.2 The CIT(A) failed to appreciate that the assessee was not able to produce the bills for purchase on the date of survey. Subsequently the assessee produced 10 bills claiming that jewellery of 8512.059 gms were received from 10 suppliers and they have been reported in the GST returns. The assessee had not produced GST returns during the assessment proceedings. The CIT(A) observed that this issue could have been cross verified by the AO. But the CIT(A), without mentioning whether the GST returns are verified at his end, has given relief to the assessee. The CIT(A) ought to have called for remand report from the assessee for verification of claim of the assessee regarding purchases and gold given for job work. 2.3 The CIT(A) failed to appreciate that the assessee declared additional income of Rs. 2,01,36,732/- and paid tax at normal rates. Since the assessee has not satisfactorily explained the source for excess gold and silver, the same ought to have been brought to tax u/s. 69 of th....
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....ken to be 78143.513 grams as against book stock of 62452.936 grams leaving a difference in stock of gold for 15690.575 grams. Similarly, physical stock of silver was found in excess by 47015 grams. 3.2 The Managing Partner Shri R. Ramesh, in statement recorded on 17-02-2020, admitted the discrepancy but stated that the difference of gold was explainable by way of job orders for goods received and pending purchase bills received which were in hand as well as receivable but the same remained to be recorded in the books of account. The difference in stock of silver could not be explained and the same was offered as unaccounted purchases. On 19-02-2020, certain bills were furnished for purchase of gold for 8512.059 grams along with confirmation of the vendors. However, Ld. AO observed that these bills were not available at the time of survey nor the purchases were found recorded in the books at the time of survey. Therefore, these bills could not be accepted. Accordingly, the value of excess stock of gold for Rs. 616.01 Lacs (15690.575 grams x Rs. 3926/- per gram) was proposed to be added. The addition on account of Silver was proposed for Rs. 18.80 Lacs (47015 grams x Rs. 40/- per ....
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....nces for the reasons that the same were not available during the course of survey. However, Ld. AO did not make any attempt to disprove the evidences furnished by the assessee. No enquiries were conducted, whatsoever, to establish that the evidences were not genuineness. When the supplier and manufacturer of jewellery were assessed to GST and Income Tax, the issue could have been cross-verified but Ld. AO did not make any such attempt. The Ld. CIT(A) also rendered a finding that the assessee admitted value of excess quantity of stock of gold amounting to Rs. 177.57 Lacs (for 4523.121 grams of gold) and Rs. 23.78 Lacs (for 47015 grams of Silver). The two aggregated to Rs. 201.36 Lacs. The assessee admitted income of Rs. 604.31 Lacs after including the amount of Rs. 201.36 Lacs. The assessee also paid advance tax of Rs. 50 Lacs on 19-02-2020 as admitted in the sworn statement. The Ld. AO did not consider the additional income as offered by the assessee and made the impugned addition in a mechanical way. Therefore, the impugned addition was deleted. The excess stock as offered by the assessee was to be considered as 'business income' as per the decision of DCIT vs. Ramnarayan Birla (I....
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....physical stock of gold and jewellery was found in excess. In the recorded statement, it was stated by managing partner that difference of gold was explainable by way of job orders for goods received and pending purchase bills which were received and receivable but not yet recorded in the books of account. After two days, i.e., on 19-02-2020, the assessee furnished certain purchase bills for purchase of gold for 8512.059 grams along with confirmation of the vendors. The suppliers were duly registered under GST and the sales were duly evidenced by the sales invoices. The same also corroborate the statement made by managing partner during survey. However, Ld. AO chose not to verify the same and simply rejected the claim of the assessee and made impugned addition in a mechanical way. The addition of excess cash for Rs. 38.05 Lacs was also made in similar manner without making any verification from the customers. 6. During appellate proceedings, the assessee duly reconciled the physical stock as tabulated in preceding para 4.1. The un-reconciled quantity of gold was arrived at 4523.121 grams which was offered as additional income. Similar additional income was also offered for discre....