2025 (3) TMI 1667

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....[AO] u/s. 153A r.w.s. 143(3) of the Act on 27-12-2018. Having heard vehement arguments of both the sides and upon perusal of case records, our adjudication would be as under. Assessment Proceedings 2.1 The assessee being resident firm is stated to be engaged in jewellery business. The assessee was subjected to search action u/s 132(1) on 01-12-2016. The firm was constituted on 30-08-2016. It was reconstituted on 19-10-2016 and the new partners were Shri Naveen Jain and Shri Madan Parihar. 2.2 During the course of search, it was noted that the assessee deposited cash of Rs. 12.76 Crores in its two bank accounts held with Yes Bank and Axis Bank during demonetization period. The statement of Shri Naveen Jain was recorded u/s 132(4) in....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....tantially and therefore, the owners of gold demanded their gold and the melting centers purchased gold from the assessee firm and the same was returned to the customers by the melting centers. The assessee also filed ledger account of purchases and sales. Shri Naveen Jain, in statement u/s 132(4), made voluntary disclosure of Rs. 2 Crores. However, the statement was retracted after 22 months from the date of search. The Ld. CIT(A) held that entire sales could not be held to be profit of the assessee as per the decision of Hon'ble MP High Court in the case of CIT vs. Balchand Ajit Kumar (263 ITR 610) and also in the case of Manmohan Sadani vs CIT (304 ITR 52). In these decisions, it was held that total sales could not be regarded as the prof....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....e assessee came into existence on 20-08-2016 and the search happened within a short span of time on 01-12-2016. During the course of search, no incriminating material has been found which would show that the assessee earned unaccounted income of impugned magnitude within short span of time. The assessee, undisputedly, carries out the business of jewellery. It transpired that the assessee deposited cash of Rs. 12.76 Crores in two bank accounts. During search, statement of Shri Naveen Jain (Partner) was recorded. The assessee furnished explanations and stated that cash deposit was out of sales proceeds of bullion and gold ornaments which was duly recorded in the books of accounts i.e., in the stock register in Tally data which was also seized....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....sion of unrecorded sales and offered voluntary disclosure of Rs. 2 Crores. However, nothing incriminating was found from assessee's premises at the time of search which would indicate that the assessee earned that much of unaccounted income from any other sources. The Hon'ble CBDT, vide instruction no. 286/2/2003-IT (inv. II) dated 10-03-2003 emphasized the fact the while recording statement during search and seizure, no attempt should be made to obtain confession as to the undisclosed income. 6. The Hon'ble Andhra Pradesh High Court in the case of CIT vs. Naresh Kumar Agarwal (53 Taxmann.com 306), as cited by Ld. AR, held that for all practical purposes, the statement recorded under subsection (4) of Section 132 of the Act partakes the ....