Loading judgment…
No AI summary yet for this case.
Income Tax Appellate Tribunal, ‘SMC’ BENCH, KOLKATA
Before: Sri J. Sudhakar Reddy
order : November 10, 2017 ORDER This appeal by the assessee is directed against the order of the ld. Commissioner of Income Tax (Appeals)-11, (hereinafter the ‘ld. CIT(A)’), dated 31.03.2017 passed u/s 143(3) of the Income Tax Act, 1961 (the ‘Act’) for the assessment year 2013-14.
The facts of the case as brought out at Para 3 Page 2 of the ld. CIT(A) Order is extracted below for ready reference: “The assessee is a trader of gold jewellery. The business of the assessee is undertaken in proprietorship firm named and styled as Jamuna Gold House. During the year under consideration, specifically on 2nd April, 2012 the assessee has shown to have converted bullion weighing 1152.54 gms of gold as stock in trade from investment. The value of this conversion is declared at Rs.13,18,282/-. The market value of the said gold jewellery assuming the purity of 99.5% as on 03/04/2012 is Rs.32,47,463/-. The AO have found that there is no cogent evidence to justify that the said bullion was held by the assessee as investment in any of earlier year. He has added this amount of undisclosed income in the form of unexplained investment in the current year.”
2 Sukdeb Pan Assessment Year: 2013-14 3. As per the comments of the auditor, as extracted by the AO in his order, gold and bullion amounting to Rs.13,18,282/- was in earlier year acquired by the assessee as a capital assets and latter this capital asset was converted during the year into stock-in-trade at the same price. On enquiry as to the source of acquisition of this gold as capital asset, the assessee submitted that he declared the same under the Voluntary Disclosure Scheme (VDIS) of 1997. The AO asked for evidence of VDIS. The assessee failed to substantiate this claim with evidence despite repeated opportunities. A verification of the assessee’s preceding year’s balance-sheet by the AO did not disclose this as an asset. On being confronted by the ld. AO, the assessee furnished revised balance-sheet as on 31.03.2012 wherein the said amount of gold was included as an asset and correspondingly the capital of the assessee was increased. There was no other change in the Balance Sheet. The AO came to the conclusion that the assessee did not possess 1152.40 gms of gold as a capital asset as claimed by him. Thus, he made an addition u/s 69 of the Income Tax Act, 1961 at the prevailing rate of gold as on 02.04.2012, for gold bullion of 1152.40 grams, as undisclosed investment.
The ld. CIT(A) confirmed the same.
5. Aggrieved the assessee is in appeal before us on the following grounds: “
1. That addition of unexplained investment of Rs.32,47,463.00 u/s 69 is unwarranted because such bullion was acquired in earlier years.
2. That even otherwise, once AO having accepted that capital gains is taxable on conversion there cannot be simultaneous taxation of undisclosed investment.
3. That the addition u/s 69 is not sutainable in the absence of any cogent evidence out of mere surmise and conjecture.
3 Sukdeb Pan Assessment Year: 2013-14 4. That, without prejudice to above, the amount of undisclosed investment, if any, may be restricted to the cost and not to an artificial value.
That appellant reserves right to raise additional grounds.”
The ld. Counsel for the assessee filed an affidavit which reads as follows: A F F I D A V I T “I, Sri Sukanta Sinha Ray, son of Late Gopal Ch. Sinha Ray, aged about 43 years, by faith Hindu, by occupation Chartered Accountant, residing at 125/B, A.K. Dutta Sarani, Kolkata – 700006, do hereby solemnly affirm and declare as follows:
1. 1. That I am the partner of an Audit Firm, namely, M/s. Das sinha Ray and Associates, Chartered Accountants (FRN 326376E), having its registered office at 125A, A. K. Dutta Sarani, Kolkata – 700 006, West Bengal, India. Being the partner of said Audit Firm, I do carry out practice in the field of taxation and I do also conduct tax audit of various accounts and prepare Tax Audit Report as per provisions of relevant Tax Laws of the land.
2. That on behalf of the aforesaid Audit Firm, I have conducted Tax Audit of the relevant account of M/s. Jamuna Gold House, situated at 2, Jogendra Kaviraj Row, 3rd Floor, Room No.301, Kolkata - 7OOOO7, West Bengal and prepared its Tax Audit Report under section 44AB of the Income Tax Act, 1961 by way of filing Form No.3CB and 3CD for the Assessment Year 2013-14.
3. While filling up the said Form No.3CD, in the point No.12A of Form No.3CD of Tax Audit report of M/s. Jamuna Gold House, 2, Jogendra Kaviraj Row, 3rd Floor Room No 301, Kolkata-7OOOO7, West Bengal for the Assessment Year 2013-14, I have erroneously mentioned the date of conversion of Gold Bullion in the column of date of acquisition.
4. By way of affirming this affidavit I say and declare that such wrong entry of the date of conversion in the column of date of acquisition under Point No.12A of Form No.3CD was made owing to inadvertent mistake and non-application of mind.
5. I say that correct date of acquisition of 822.300 gram Gold Bullion is 01.11.2008 and 425.850 gram Gold Bullion is 12.11.2008 and such date would be disclosed and/or recorded in the Tax Audit report in place of and/or instead of 02.04.2012 in the column of Date of Acquisition.
6. That the statements made in foregoing paragraphs are true to my knowledge and belief and I have not suppressed any material facts.” Tax Invoices dated 12.11.2008 for Rs.5,00,000/- and dated 01.11.2008 for Rs.9,85,000/- from Shree Mandev Bullion were also attached with this Affidavit. The fresh claim is that this gold was purchased in November 2008. The assessee has not stated that his earlier version of having declared this gold under VDIS is wrong. Hence, I am unable to accept this submission of the assessee. Before the AO as well as CIT(A), the assessee was arguing that this gold was lying with him and he declared the same