CHANDRAKANT SHRIDHAR BHADGAONKAR,MALKAPUR vs. ITO 4 RANGE CODE 101 WARD 1 KHAMGAON, KHAMGAON

Assessee has raised following grounds of appeal :

Brief facts of the case are that the assessee is an individual and declared income of Rs.5,50,700/- in the e- return for A.Y. 2018-19 furnished on 29.09.2018. Survey proceedings u/s.133A of the Act were conducted on 07.09.2017 during which certain discrepancies were found in the stock and excess value of Gold and Silver ornaments were calculated at Rs.30,23,000/-. After validly serving notices u/s.143(2) and 142(1) of the Act, ld. Assessing Officer carried out the assessment proceedings and confronted the assessee for not offering to tax the value of excess stock of Rs.30,23,000/-. During the course of assessment proceedings, assessee submitted that the unaccounted stock of Gold has been calculated at 1125.26 grams but the source of the same is of 490.50 grams stock declared under Voluntary Disclosure of Income Scheme(in short ‘VDIS,1997 scheme’) and 541 grams under the Gold Bond Scheme and the excess stock is only 93.76 grams and not the alleged 1125.26 grams. It was submitted that for the excess stock of 93.76 grams assessee has already offered an amount of Rs.2,51,885/- under the head declaration of additional stock u/s.133A of the Act. Ld. Assessing Officer however was not satisfied and did not accept the declaration made by the assessee at Rs.2,51,885/- and made addition u/s.69B r.w.s.115BBE of the Act at Rs.30,23,000/- and assessed income at Rs.33,21,820/-.

Aggrieved assessee preferred appeal before ld.CIT(A) and reiterated the submissions filed before ld. Assessing Officer. However, ld.CIT(A) observed that the assessee failed to rebut the Assessing Officer’s finding as it could not present VDIS and Gold Bond documents during the survey and post survey made reclassification of assets and there is lack of linkage of the individual declaration under VDIS and Gold Bond to the Jewellery stock found at business premises. The assessee even did not avail the personal hearing granted on 05.08.2025 and 08.08.2025. Ld.CIT(A) confirmed the finding of ld. Assessing Officer. Now the assessee is in appeal before this Tribunal.

Ld. Counsel for the assessee gave reference to the paper book running into 58 pages providing the copy of VDIS certificate and Gold Bond certificate. He stated that the Gold declaration under VDIS as well as Gold Bond Certificates are very much appearing in the balance sheet of the assessee and even though the head may have changed that does not disentitle the assessee of possessing the Gold declared under VDIS and Gold Bond scheme at the time of survey.

On the other hand, ld. DR supported the order of ld.CIT(A).

I have heard the rival contentions and perused the record placed before me. The issue under consideration relates to the excess stock found during the course of survey not offering it to tax in the return of income. I observe that as per the survey team of the Income Tax Department 1125.26 grams of excess stock of Gold declaration was found. Assessee could not give the explanation for the excess stock and accepted to offer it to tax in the statement given during the course of survey. Thereafter in the return of income assessee has only offered the value of excess tock of 93.76 grams and for the remaining excess tock of 1031.50 grams he claimed that the assessee has declared 490.50 grams under VDIS 1997 scheme and 541 grams under Gold Bond scheme. I observe that during the course of assessment proceedings, assessee failed to furnish any evidence of VDIS 1997 Scheme and Gold Bond Scheme certificates. Ld.CIT(A) has denied the benefit on the ground that assessee could not place the proof of declaring Gold under VDIS 1997 scheme and Gold Bond Scheme and secondly they were not forming part of the regular business stock and was shown as Fixed Assets and Investments and post survey the assessee has changed the nomenclature in the balance sheet. Admittedly, the assessee has not made any mention of the Gold under VDIS 1997 scheme and Gold Bond Scheme during the course of survey. Though the assessee has filed copy of audited balance sheet as on 31.03.2017 showing the Gold Bond under VDIS under the head current assets but surprisingly that balance sheet which pertains to F.Y. 2016-17 has been audited on 12.09.2018. It is not discernible as to whether return of income for A.Y. 2017-18 has been filed belatedly along with the report or whether the assessee has furnished other financial data in the return for A.Y. 2017-18. The doubt further increase because the balance sheet for A.Y.

I also note that the assessee has furnished VDIS 1997 certificate placed at pages 54 and 55 of the paper book clearly indicating that 490.50 grams valued at Rs.1,26,058/- has been offered under VDIS 1997 scheme and tax has been paid. Similarly for Gold Bonds, 1998, copy has been placed art pages 56 to 58 of the paper book which provides the details of 541 grams of Gold. However, all these details seems to have not been considered by the Assessing Officer prior to declining the claim of the assessee. We therefore deem it appropriate that under the given facts and circumstances the issue of verification of the assessee possessing 1031.50 grams of Gold at the time of survey, source of which has been claimed to have been from the VDIS 1997 Scheme and Gold Bond Scheme deserves to be restored to the file of ld. Juri ictional Assessing Officer for necessary verification of this fact and also the use of alleged gold in making of gold jewellery which forms part of closing stock found at the time of survey and thereafter decide in accordance with law. Needless to mention that ld. JAO shall provide reasonable opportunity of hearing to the assessee. Grounds raised by the assessee are allowed for statistical purposes.

In the result, the appeal of the assessee is allowed for statistical purposes.

The Pr. CIT concerned. विभ गीय प्रतितनधि, आयकर अपीलीय अधिकरण, न गपुर SMC बेंच, 4. न गपुर / DR, ITAT, “Nagpur SMC Bench, Nagpur ग र्ड फ़ इल / Guard File. 5. आिेश नुस र / BY ORDER,