M/S MOHANLAL MADHAWJEE JEWELLERS PVT LTD.,KOLKATA vs. I.T.O WD - 9(1),KOLKATA., KOLKATA

Though the assessee has raised as many as grounds of appeal, but it filed the following concise grounds of appeal:-

Brief facts of the case are that the assesseea is a company engaged in trading and job work in jewelries. The assessee filed its return for the assessment year under consideration declaring total income of Rs.4,01,417/- on 30-09-2007. The case was selected for scrutiny and issued notices u/s. 143(2)/142(1) of the Act. In response to said notices the Ld.AR of the assessee appeared and submitted all the details relating to the case. During the assessment proceedings u/s. 143(3) the AO found that the assessee purchased gold bar weighing one kg for Rs.1,54,015/- from M/s. Magna Projects P.Ltd vide Invoice No. 253 dated 13/05/2005 and said transaction was not recorded in the books of the assessee. The AO called upon M/s. Magna Projects P.Ltd for verification of the same, wherein he found that the assessee purchased the said gold bar in cash in its records. Since no evidence was produced and for not recording in the books of account, the AO added the said amount of Rs.1,54,015/- to the total income of the assessee u/s. 69C of the Act.

Before the CIT-(A) the contention of the assssee was that all their business payments made through account payee cheques. It did not purchase any material in cash and the observation of the AO is a mistake. The CIT-(A) found that the assessee could not produce any convincing evidence to substantiate its claim. Finally, he confirmed the order of the AO in making addition u/s. 69C of the Act.

Aggrieved, now the assessee is in appeal before us.

Regarding ground no-1The Ld.AR contended that the cash memo as submitted before the AO was not signed by its staff nor anyone representing the assessee. During the assessment proceedings the AO could not confront with the said cash memo with the assessee and such evidence cannot be sufficient to make any addition u/s. 69C of the Act. The CIT-(A) was also not justified in confirming the impugned addition made u/s. 69C of the Act. However, the Ld. Counsel for the assessee prayed to remand the matter to the file of the AO to substantiate its claim.

On the other hand, the Ld. DR submits that the business of the assessee was going on 5 years. The assessee has escaped assessment for all these years.

Heard both the parties and perused the material available on record. The question before us as to whether the addition u/s. 69C of the Act could be made on such cash memo or not. It is observed from the order of CIT-A that the assessee has produced all the details showing its business transactions were made through account payee cheques and the same have been recorded in its stock ledger. It is also noticed from the record that the assessee paid such consideration of gold bar on the day of purchase itself in cash. It was also recorded by the AO that the same transaction has also been reflected in the Sales Tax Return of said M/s. Magna Projects Pvt. Ltd. The AO did not confront with the said cash memo to the assessee in assessment proceedings. In view of the above and as per submission of the assessee, in the interest of justice, we deem it fit and appropriate to remand the matter to the file of the AO to decide the issue afresh in accordance with law after giving adequate opportunity of being heard

The Ld.AR submits that the Ground no-2 is depends on the result of ground no-1, therefore, since we have remitted the ground no-1 to the file of the AO, the ground no.2 of concise grounds of appeal is consequential in nature and requires no adjudication.

In the result, the appeal of the assessee is allowed for statistical purpose as stated above.