2020 (4) TMI 684 - AT - Income Tax

Unexplained investment in gold - Purchase of gold outside the books of accounts - gold has been received on challan, but expressed his inability to produce challans after gap of 4 years - CIT (A) has admitted additional evidence under Rule 46A(1)(b) of Income-Tax Rules, 1962 and deleted the addition - HELD THAT - CIT (A) has called for a remand report from the AO on these additional evidences and allowed admission thereof. Thus, we are of the view that these additional evidences were very much necessary for admission under Rule 46A (1)(b) of Income-Tax Rules, 1962. We find that the CIT (A) has forwarded the same to the AO. CIT (A) observed that the AO made enquiry from M/s. Shri Guru Jewellers, who replied confirming that it had issued 7 kg of gold bar of purity 0.995 vide delivery challans and 6 Kg of gold bar of purity 0.995 to M/s. Raja Co. and submitted copy of challan, copy of account statement of M/s. Raja Co., ITR of Shri Guru Jeweler, PAN Card, as required by the AO. Thus, the AO himself accepted the identity and proof of having transaction with M/s. Shri Guru Jeweler. Assessee had purchased gold stock of 13 kg vide delivery challans no. DC3 and DC4 dated 01.04.2011, out whichsales of 7596.58 grams were made during 01.04.2011 to 04.04.2011. Therefore, after considering all facts, we do not find any infirmity in the order of CIT (A), accordingly, same is upheld. Decided against revenue.

Summary

Issues:
Appeal against deletion of addition on account of purchase of gold outside books of accounts.

Detailed Analysis:
1. The appeal by the Revenue challenged the order of the Commissioner of Income Tax (Appeals) concerning the addition made by the Assessing Officer (AO) on account of purchase of gold outside the books of accounts for the Assessment Year 2012-13.
2. The AO observed discrepancies in the stock of gold, leading to the addition of a substantial amount to the total income of the assessee.
3. The assessee contended that the stock of gold was received through challans, but due to various reasons, including being in police custody, faced challenges in providing immediate evidence during assessment proceedings.
4. Additional evidence, including delivery challans and account details, were submitted by the assessee before the Commissioner of Income Tax (Appeals) for admission under Rule 46A of Income Tax Rules, 1962.
5. The Commissioner of Income Tax (Appeals) admitted the additional evidence and called for a remand report from the AO, who confirmed the transactions with the seller but had doubts regarding the delivery process.
6. The Commissioner of Income Tax (Appeals) found the evidence provided by the assessee, including VAT returns supporting the existence of a branch in Delhi, to be satisfactory in establishing the delivery of gold stock and subsequent sales, leading to the deletion of the addition.
7. The Tribunal upheld the decision of the Commissioner of Income Tax (Appeals) based on the established facts and evidence presented, dismissing the appeal of the Revenue.

This detailed analysis outlines the key arguments, evidence submitted, and the decision-making process leading to the dismissal of the Revenue's appeal in the case concerning the addition on account of purchase of gold outside the books of accounts.