TaxTMI 
TaxTMI 
2026 (2) TMI 1131
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....AC/S/250/2023-24/1062973842(1)] confirming the penalty of Rs. 25,000/- levied by the NeFAC under Section 271A of the Act. All these three matters have been heard analogously and are being disposed of by a composite order for the sake of convenience. ITA No. 779/Del/2019 (Revenue's appeal): 2. In its appeal the Revenue has raised following grounds of appeal for adjudication: "(i) In view of the facts and circumstances of the case, whether the Ld.CIT(A) was justified in deleting the addition of Rs. 12,95,07,554/-made by the A.O. on account of unaccounted stock of jewellery in the hands of the assessee in absence of proper stock register and rejection of books of account especially when the CIT(A) has himself corroborated the fact that the A.O. was right in rejecting the books of account of the assessee for the relevant year. (ii) In view of the facts and circumstances of the case, whether the CIT(A) was justified in directing that the assessment order may be treated as having been passed u/s 143(3) of the Act whereas the A.O. had passed the assessment order u/144 of the act keeping in view the provisions laid down u/s 145(3) of the Act, after rejecting the boo....
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....old in the said exhibition having FOB value of Rs. 8,69,824/- and the balance unsold items were brought back as 're-import' and the FOB value whereof was Rs. 12,86,37,730/-. It is the case of the assessee that the unsold items which were brought back are duly valued by the jewellery appraiser of Customs Department of the Airport the complete details whereof including the packing list, invoices, bills, bills of lading along with other documents in support of the contention made by the assessee were duly furnished before the Ld. CIT(A) and before us too. It is the further the case of the assessee that all the sales and purchase including the sales made during the exhibition at Sharjah was duly recorded in the books of account and, therefore, the AO has not appreciated that the opening stock in the P&L Account was valued at cost whereas the value declared in the invoice with respect to the goods taken for the exhibition was valued at FOB value including the carriage, insurance and freight and also profit margin. The case of the Revenue is that the assessee is required to value the goods which were taken to Sharjah for exhibition at FOB value and not at cost and even though various doc....
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....port of the Department, the value was Rs. 13,08,96,419/- with assessable value at Rs. 13,37,19,430/-, which according to the Learned Assessing Officer represented a mismatch requiring further investigation. 3.4 A complete reconciliation and values was filed with the Assessing Officer with the clarity that difference represents only the difference in rate of currency in dollar terms and there is no difference in the quantity as reimported which was same and it was only unsold goods which were reimported back. Thereafter, the Learned Assessing Officer made some further observations and referred the matter to the JCIT for seeking his directions u/s 144A of the Income Tax Act. The assessee represented and clarified each and every aspect of the transaction to the Learned JCIT including filing of an affidavit on the complete item wise quantitative reconciliation of goods which were lying as opening stock with the assessee as on 01.04.2014, goods taken out, goods purchased during the year, goods sold during the year as well as goods which were reimported as also the closing stock as on 31.03.2015 as per the audited financials of the assessee. As regards the requirement of producing a s....
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.... goods sold during the year and the goods which were re-imported to India as well as the closing stock as on 31.03.2015 as per the audited financials of the assessee and the stock mentioned. The details whereof is as follows:- (i). That the assessee had an opening stock of Rs. 7,32,75,000/- as on 01.04.2014 as per its audited financials which is not in dispute - Paper Book Page-5. (ii) That the assessee has closing as on 31.03.2015 at Rs. 7,84,25,000/- is not in dispute - Paper Book Page-5. (iii) That the opening stock as on 01.04.2014 amounting to Rs. 7,32,75,000/- comprised of items are available at Paper Book Page-66 to 69A. (iv) The packing list with gross weight 18840.448 grams at a packing value on FOB basis at Rs. 12,95,07,554/- for which cost value was Rs. 6,89,69,000/- appearing at Pages 70 to 74 of the Paper Book. (v). We have further considered that the export Invoice duly certified by the independent jewellery appraiser, duly stamped at the IGI Airport dated 25.04.2014 appearing at page 75 of the Paper Book wherein the consigner and consignee of the jewellery is assessee only. It further clarifies that the FOB value of the je....
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....es be deleted." 7. The AO rejected the books of account for the said amount of Rs. 12,95,07,554/- and further made addition pertaining to net profit of the assessee and estimated the same at 3% as against 2.24% calculated by the assessee. In appeal, the Ld.CIT(A) confirmed the addition made by the AO estimating the profit at 3% with the following observations:- "7.3.1 It is also observed that the gross profit rate has also been shown by the appellant at a lower value of 21.24% in this year as against the value of 22.06% in the immediate previous year. Accordingly, I am of the view that the AO has rightly estimated the net profit at 3% which compensates for the fall in GP Rate shown by the appellant. In view of this, the addition made by the AO is upheld and the grounds of appeal are dismissed." 8. As regards the maintenance of a stock register, it has been submitted that the assessee had explained that it is regularly doing business of retail sale of gold and diamond jewellery ornaments, gems and all other related items. The Ld. AR also submitted that for such nature of business, maintenance of a stock register is not a statutory requirement and has not been prescrib....