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Income Tax Appellate Tribunal, AHMEDABAD “C” BENCH
Before: SHRI PRADIP KUMAR KEDIA & SHRI MAHAVIR PRASAD
PER MAHAVIR PRASAD, JUDICIAL MEMBER
This appeal filed by the Assessee is directed against the order of the Ld. CIT(A)-5, Ahmedabad dated 01.08.2016 pertaining to A.Y. 2012-13 and following grounds have been taken:
2 . A.Y. 2012-13 1. On the facts and circumstances of the appellant's case, Learned. CIT(A) has erred in confirming the addition of Rs.11,86,570/- without appreciating the fact that the excess stock of 532.094 gms of 22Ct gold found during the course of survey action is belong to family members of the Appellant and accordingly the same are not recorded in the books of accounts.
2. On the facts and circumstances of the appellant's case, Learned. CIT(A) has erred in confirming addition of Rs.28,007/- on account of excess stock of silver and Rs.1,14,600/- on account of excess stock of 24ct gold found during the course of survey action without appreciating the fact that while arriving at the net weight the valuer has estimated values for precious stone and metals studded in the jewellery whereas the weight as reflected in financial books of account is precise and actual weight and in view of this facts the difference arise in stock of silver, diamond and gold as per books of accounts and as physically found by the survey party.
3. Without prejudice to the same, Ld. CIT(A) ought to have appreciated the fact that there is shortage of 408.883 gms in the quantity of 18ct gold and 21.560 carat in the quantity of diamond and accordingly it can be presumed that differential amount of 18 ct gold and diamond sold before the survey proceedings and money sold has been utilized to buy excess of 47.950 gm of 24ct gold, 532.094 gm of 22ct gold and 1120.291 gms of silver found in the premises of the Appellant and accordingly the Appellant should be allowed the benefit of telescoping to the extent of Rs. 12,40,234/- 4. The appellant craves leave to add to, alter, amend and/or withdraw any ground or grounds of appeal either before or during the course of hearing of the appeal.
During the course of survey proceeding, as on 08/06/2011 as per books of A/c opening stock of 22ct gold ornaments was shown of 25364.716 grams whereas physical stock during survey proceedings was found of 27379.140 grams.
In reply to the notice, assessee stated that 1015.800 grams of gold ornaments belong to the family members of the assessee group which should not be construed as stock in trade of the business . As assessee and has family member 3 . A.Y. 2012-13 do not have any locker facility, therefore, in order to safeguard the jewellery of the assessee has kept his and family member jewellery in a strong room bault of the business premises.
But ld. A.O. was not agree with the contention of the assessee and made addition of Rs. 11,86,570/- on account of excess stock of 22ct gold.
Against the said order, assessee preferred first statutory appeal before the ld. CIT(A) who confirmed the action of the Assessing Officer.
We have through the relevant record and impugned order and heard both the parties. During the survey proceeding, as Question No. 30 of the statement of the assessee was recorded and same is part of paper book pages 40 to 58 wherein he has given details 32 jewellery item and stated that same belong to his and, family members of the assessee. As assessee is not having bank locker facility, therefore, same was kept in a strong room of the business premises and stated before the lower authorities, no entries passed in the financial books of accounts for the movement of stock between three parties and assessee, a proper track record is maintained for all the transactions through “ORNET” which is the accounting software used by the assessee.
When the specifically asked the ld. D.R. that whether any statement of family member to whom purportedly jewellery is belonging was recorded during the survey proceeding or during the assessment proceeding. Ld. D.R. said no such statement was recorded by the revenue. However, he vehemently supported the orders of the Revenue.
4 . A.Y. 2012-13 8. From the date of survey proceeding, assessee took the stand that the difference of jewellery is belonging to his family members. No rebuttal to the stand of the assessee was brought on record. In the absence of any contrary position shown to be taken by the family members/relatives of assessee, the stand of the assessee taken in the course of survey requires to be believed. We, thus, find merit in the case made out by assessee for bona fides of its explanation.
In the result, appeal filed by the Assessee is allowed.
Order pronounced in Open Court on 14- 10- 2019