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Income Tax Appellate Tribunal, “C” BENCH: KOLKATA
Before: Shri Mahavir Singh, JM & Shri M. Balaganesh, AM]
M/s. B. M. Chandra Jewellers Vs. Income-tax Officer, Wd-50(1), Kolkata (PAN: AADFB1925C) (Appellant) (Respondent) Date of hearing: 09.10.2015 Date of pronouncement: 15.10.2015 For the Appellant: N o n e For the Respondent: Shri D. Lahiri, JCIT ORDER Per Shri Mahavir Singh, JM:
This appeal by assessee is arising out of order of CIT(A)-XXXII, Kolkata in Appeal No. 06/XXXII/10-11/50(1)/Kol dated 30.11.2012. Assessment was framed by ITO, Wd-50(1), Kolkata u/s. 143(3)/147 of the Income-tax Act, 1961 (hereinafter referred to as “the Act”) for AY 2007-08 vide its order dated 26.02.2010.
The first issue in this appeal of assessee is against the order of CIT(A) confirming the addition made by AO on account of bogus purchases of Rs.8,52,556/-. For this, assessee has raised following ground no.1:
1. The learned Assessing officer is biased in calculating gold at 18 carets which is not practicable. He did not consider that the purchase price of 22 carets gold is as per the rate specified in news paper. So the revised the cost of purchase of gold is not applicable in our case. The calculation of old gold at 18 carets is impractical and wrong. Therefore the addition of Rs. 8, 52,556.00 is not correct and requested to be rectified. The Commissioner of Income Tax Appeal in his order mentioned that no evidence in support of our claim was submitted. In fact no evidence was asked for. It is the normal business practice to deduct 10% to 20% in weight from the old ornaments for impurities. In the relevant case we have followed the same practice then paid to the individual seller at the rate prevailing on the date of purchase. Therefore the addition made by the AO and confirmed by CIT Appeal is not justified. The CIT Appeal in his order noted that no seller could be produced before the AO at the time of assessment. The sellers are mainly house wives from home old gold ornaments were purchased and payment for their ornament gold was made long back it become irrelevant to trace out them. So this should not be a ground of rejection in our case.”
Briefly stated facts of the case are that the assessee is having a jewellery shop at Habra, District North 24 Parganas, West Bengal. The assessee purchased gold ornaments from individuals as well as from registered dealers. The assessee purchased gold ornaments which are of 22 ct. gold and the rates of this are given in the bullion exchange. But the AO valued this gold ornaments at 18 ct. instead of 22 ct. disclosed by the assessee. Assessee claimed before the AO that it had already
B.M.Chandra Jewellers AY 2007-08 claimed certain deductions varying from 10 to 20% in the weight but the AO despite this fact taken purchase price of gold ornaments at 18 ct. and differential was treated as bogus purchases. Aggrieved, assessee preferred appeal before CIT(A), who simply confirmed the addition by observing as under: “I duly considered the assessment order and submission of the appellant. The appellant taken the argument that the quantity of copper & silver already deducted from the weight. The appellant accepted in the submission that there are 10 to 15% of copper and silver components in the gold. The appellant failed to file any evidence which prove that the appellant already deducted from the weight of copper and silver from the gross weight. The assessing officer had given detail finding in the assessment order. In the spot enquiry made by the Inspector about 25% persons are not in the given addresses. The appellant also failed to produce the single person from whom the old gold ornaments was purchased. All the purchases are in cash. The purchases are not fully verifiable. The onus on the appellant to prove the genuineness of the purchases but appellant failed to prove the genuineness of the purchases. Considering the above finding and facts of the case, I am of the view that the addition made by the AO of Rs.8,52,556/- is as per law. Hence, I confirm the addition made by the AO of Rs.8,52,556/- as bogus purchases. This ground is not allowed.”
Aggrieved, assessee is in appeal before us 4. We have gone through the order of CIT(A) and found that the order of CIT(A) is cryptic one and non-speaking. There is no iota of merits discussed in the orders by CIT(A). The duty of the CIT(A) is to pass a speaking order after controverting all the facts given by assessee and decide the issue with reasons. Hence, we quash the order of CIT(A) and remit the appeals back to his file for fresh adjudication with the above direction. We order accordingly. The appeal of assessee is allowed for statistical purposes.
The next issue in this appeal of assessee is against the order of CIT(A) confirming the disallowance on account of sundry expenses of Rs.6707/- for non-reconciliation of account of Manna Stores. For this, assessee has raised following ground no.3: “3. For that the CIT(A) erred in law in confirming the disallowance of rs.6707/- being sundry expenses for alleged non reconciliation of account of Manna Stores when the entire expenditure was proved with vouchers & bills.”
6. We have heard rival submissions and gone through facts and circumstances of the case. We find that the AO disallowed the sundry expenses claimed by assessee being the difference in sales shown by Manna Stores at Rs.1,27,968/- and shown by the assessee at Rs.1,34,675/- being difference of Rs.6,707/-.The assessee now before us filed reconciliation of payments made to Manna Stores at Rs.1,34,675/- along with bills. We
B.M.Chandra Jewellers AY 2007-08 find that reconciliation filed by assessee seems alright and this being a small issue, we delete the addition. 7. In the result, the appeal of assessee is partly allowed for statistical purposes. 8. Order is pronounced in the open court on 15.10.2015. Sd/- Sd/- (M. Balaganesh) (Mahavir Singh) Accountant Member Judicial Member
Dated : 15th October, 2015 Jd. Sr. P.S Copy of the order forwarded to: