ASSISTANT COMMISSIONER OF INCOME TAX, MADURAI vs. M/S SENTHIL MURUGAN JEWELLERS PRIVATE LIMITED, MADURAI

ITA 1557/CHNY/2025Status: DisposedITAT Chennai17 March 2026AY 2017-18Bench: SHRI ABY T VARKEY (Judicial Member), SHRI INTURI RAMA RAO (Accountant Member)1 pages
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What did the Tribunal hold?

The Tribunal observed that the incidence of melting loss cannot be ruled out but the onus is on the assessee to prove it. The Tribunal found that the CIT(A) erred in deleting the addition without properly examining the accounting treatment and industry standards, and also erred in holding that no disallowance can be made without rejecting the books of accounts.

What were the facts?

The Revenue filed an appeal against the order of the CIT(A) concerning assessment year 2017-18. The assessee, a jeweller, purchased old gold (beaten gold) from customers, valued it, and used it to make new ornaments. The Revenue disallowed the claim for melting and purifying loss of this beaten gold.

What were the issues?

Whether the melting and purifying loss on 'beaten gold' purchased from customers is allowable, and if the CIT(A) erred in deleting the addition without proper verification of accounting treatment and industry standards.

Which sections of the Income-tax Act were involved?

Section 250,Section 143(3),Section 115JB

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, CHENNAI BENCHES “A” :: CHENNAI

Before: SHRI ABY T VARKEY & SHRI INTURI RAMA RAO

For Appellant: Mr. M.K.Rangasamy – CA
For Respondent: Mr. S. Senthil Kumaran – CIT
Hearing: 26/02/2026Pronounced: 17/03/2026

PER INTURI RAMA RAO, AM : This appeal filed by the Revenue directed against the order of ld.Commissioner of Income Tax(Appeal), Chennai-19 passed under section 250 of the Income Tax Act, 1961 for the A.Y.2017-18 dated 20.03.2025. 2. The Revenue raised the following grounds of appeal :

“1. The Order of the learned Commissioner of Income Tax (Appeals) is erroneous on facts and in law

ITA No.1557/CHNY/2025 [D]

2 The Ld CIT(A) has erred in not appreciating the fact that the assessee is purchasing the old gold from customers after taking into consideratio

The order continues below.

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