R P JEWELLERS,GOPALGANJ vs. AC/DCIT, CENTRAL CIRCLE, MUZAFFARPUR

Assessment Year: 2019-2020 R.P. Jewellers Tax (Appeals), Patna-3 dated 20th June, 2023 passed for A.Y. 2019-20.

The assessee has taken twenty-six grounds of appeal, which are argumentative and descriptive in nature. In the first ground of appeal, the assessee has pleaded that ld. CIT(Appeals) has erred in passing the order ignoring the evidences/materials, namely books of account, purchase and sale invoices impounded on 16th April, 2019 for the year under consideration as well as of the immediately preceding assessment year, i.e. 2018-19, beside those, which are available on assessment and appeal records.

Brief facts of the case are that the assessee has filed its return of income on 07.01.2020 declaring total income of Rs.26,06,500/- for A.Y. 2019-20. At the business premises of the assessee, a survey under section 133A of the Income Tax Act was carried out on 08.03.2019. The return of the assessee was selected for compulsory scrutiny assessment on the basis of CBDT Instruction dated 27.09.2022. Notice under section 143(2) was issued on 28.09.2020. Thereafter there was change of jurisdiction and the case record was received by the new incumbent and a notice under section 142(1) was issued on 26.02.2021. The ld. Assessing Officer has passed the assessment order on 29.09.2021. The ld. Assessing Officer

The addition at Serial No. 2 of the above computation was made on account of cash found during the course of survey. The addition at Serial No. 3 of Rs.1,18,66,031/- was made on account of alleged excess stock was found at the time of survey.

The addition at Serial No. 4 was made on the ground that during the course of search, unaccounted sales of Rs.1,06,53,563/- was noticed and estimated gross profit @ 16.01% as shown by the assessee on its accounted sale was adopted to work out G.P. on unaccounted sales at Rs.17,05,635/-. This addition was made on the basis of above facts and circumstances.

The last item of computation sheet of Rs.25,39,000/- which was added on the basis of credits of customers in the accounts of the assessee.

Appeal to the ld. CIT(Appeals) did not bring any relief to the assessee.

The ld. Counsel for the assessee while advancing his argument for Ground No. 1 submitted that the finding of ld. CIT(Appeals) is based on the ground that the assessee could not produce the books of account at the time of search and thereafter he took us through the finding of the ld. CIT(Appeals) in this regard on page 11, which reads as under:- “During the course of survey proceedings, cash of Rs. 2,62,800/- was found in the h business premises. There is not dispute that the assessee did not produce the books of account and the cash book during the course of survey proceedings and even during the assessment proceedings. It transpires that the AO has considered the books of account as an afterthought. It is observed that the total turnover of the appellant-firm for the FY 2018-19 was; Rs.6,67,21,967/-. 4

The ld. Counsel for the assessee submitted that this finding is in contradiction to the observation of the ld. Assessing Officer and paragraph no. 4 at page no. 4 of the assessment order. He pointed out that ld. Assessing Officer has specifically recorded as under:-

On the strength of the above, he submitted that ld. 1st Appellate Authority has not examined the issue analytically and the whole issue be set aside to the file of ld. CIT(Appeals) for fresh adjudication.

On the other hand, ld. D.R. relied upon the orders of revenue authorities.

We have duly considered the rival contentions and gone through the record carefully. A perusal of the order of ld. CIT(Appeals) would indicate that ld. CIT(Appeals) has observed that there is no dispute that assessee did not produce the books of account and cash book during the course of survey proceeding and even during the course of assessment proceeding. This observation is in contradiction with the observation of the ld. Assessing Officer in the assessment order as well as qua the order vide which books were impounded. Therefore, it suggests that ld. 1st Appellate Authority has not gone through the material available on the record and not perused the books of account maintained by the assessee. In view of the above situation, we deem it appropriate that ends of justice will meet if we set aside the impugned order of the ld. CIT(Appeals) and direct the ld. CIT(Appeals) to re- adjudicate all the grounds of appeal afresh after looking into the record of the ld. Assessing Officer carefully.