M/S KUNDAN MAL ROOP CHAND JEWELLERS PVT. LTD,NEW DELHI vs. DCIT, CC-28, NEW DELHI

It transpires during the course of hearing that all these five cases emanate from the Revenue’s common survey operation u/s 133A of the Act conducted at the business premises of these three assessees on 21.12.2016 at Karol Bagh, New Delhi. There is further no issue between the parties that all these three assesses are engaged in jewellery business in diamonds etc who were found to have deposited varying cash amounts in the relevant previous year including the demonetization period. We further wish to emphasize here that the learned Assessing Officer’s all three assessments forming subject matter of our adjudication preferred to apply GP @ 25% at uniform rate than having treated the said cash deposits as unexplained per se which resulted in the corresponding additions involving sums in their respective loans. We next notice that all what the learned CIT(A) has done is to reduce the said GP estimation once again at a uniform rate of 10 % each which leaves the assesses as well as the department aggrieved.

That being the case, both the parties vehemently reiterate their respective stands. All these three assessee’s more particularly seek to buttress the point that once the learned lower authorities have estimated the foregoing gross profit rates ranging between 10 to 25%, the impugned additions are not sustainable in entirety. The Revenue’s case on the other hand is that the learned Assessing Officer had already extended the best 3 | P a g e

We have given our thoughtful consideration to the assessee’s and the Revenue’s foregoing stands. We are of the considered view that neither of their arguments deserves to be accepted in entirety. This is for the precise reason that the learned Assessing Officer on the one hand accepted the assessees’ turnover shown in books in principle, the fact however remains that they could not get the entire book entries of sales and receipts etc. reconciled and verified to his entire satisfaction as well. We deem it appropriate in these peculiar facts that instead of the assessees’ already declared GP @ 3.04%, 1.66% & 2.05% respectively, a further estimation thereof @ 5%, 3.5% and 5% of the impugned additions (inclusive of the GP already disclosed) would meet the end of justice with a rider that the same shall not be treated as a precedent. We are of the considered view that the same shall cover the assesses all shortfalls in explaining their respective credit entries as well. Learned Assessing Officer(s) shall accordingly finalise consequential computation in their respective cases as per law in very terms.

We make it clear before parting that hon’ble Madras High Court in S.M.I.L.E. Microfinance Ltd. Vs. ACIT, W.P. (MD) No.2078 of 2020 & 1742 of 2020, dated 19.11.2024 (Madras) wherein their 4 | P a g e

These three assessees’ appeals ITA Nos. 8155, 8161 & 8177/Del/2025 are partly allowed and the Revenue’s cross appeals ITA Nos. 1667 & 1668/Del/2026 are dismissed in foregoing terms. A copy of this common order be placed in the respective case files.