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TMI Blog2012 (10) TMI 87X X X X Extracts X X X X X X X X Extracts X X X X ..... ance of unexplained expenditure u/s 69C – Assessee is in jewelry business – AO made addition because assessee failed to explain labour expense - Assessee has submitted the wage register in which laborers put their signature – Held that:- Merely production of the wage register is not sufficient. Assessee failed to corroborate from other evidences as what kind of work was got done and also it was not acceptable that nobody would in for precious metal as gold to any person whose permanent address is not known. Therefore appeal decides in favour of revenue. - ITA No.2202 & 2253/Ahd/2006 - - - Dated:- 13-7-2012 - Shri, A.K.Garodia and Shri Kul Bharat, JJ. By Assessee Shri Chirag Shah, AR By Revenue Shri B.L. Yadav, SR-DR ORDER PER Kul Bharat, Judicial Member:- These are cross-appeals one by assessee and another by Revenue are directed against the common order of Ld. Commissioner of Income-tax (Appeals)-V, Surat dated 26-07-2006 for the assessment year 2003-04. Both the appeals are heard together and are being disposed of by a consolidate order for the sake of convenience. First we take up assessee s appeal in ITA No.2202/Ahd/2006 (A.Y. 03-04) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Subsequently, the case was selected for scrutiny assessment and the assessment u/s. 143(3) of the Act was framed thereby addition of Rs.24,36,693/- on account of unexplained investments in stocks, Rs.8,54,286/- on account of unaccounted ornament sales and Rs.4,07,134/- on account of labour expenditure treated as bogus. Against this order, assessee filed an appeal before Ld. CIT(A), who after considering the facts and submissions of assessee partly allowed the appeal of the assessee. 4. The assessee feeling aggrieved by this order of Ld. CIT(A) has filed second appeal before us. 5. First ground of appeal is against the confirmation of addition made on account of undisclose sales. Ld. Authorized Representative for the assessee submitted that Assessing Officer has erred in law by making addition of Rs.8,54,286/- only on the basis of the statement of one of the partner of the assessee-firm not concentrated of the evidence which is bad in law. He submitted that the statement on the basis of which addition made was obtained u/s. 133A(3)(iii) of the Act and such statement cannot be binding upon the assessee. He further submitted that authorities below failed to appreciate the fact th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are bound to pay tax on the said amount. He further admitted that out of Rs.40 lakh admitted by Rs.22,15,714/- is invested in purchase of stock and the balance amount of Rs.17,54,286/- are in the form of receivable which will record in books. We find that the entire basis of addition is on the aforesaid statement of one of the partner of the assessee-firm. Ld. CIT(A) has decided this issue in para-7.5 of his order, which is reproduced hereinbelow:- 7.5 I have perused the facts of the case as discussed by the Assessing Officer in his assessment order and also carefully gone through the submissions as made by the A.R After analyzing the facts as discussed by the Assessing Officer and also going through the findings of the Hon ble Allahabd High Court s decision in the case of Dr. S.C. Gupta V/s CIT (supra), I am of the view that the sub mission as made by the appellant has no merit at all. After analyzing the fact, it is seen that at the time of survey proceedings, whatever disclosure was made by the appellant against the unaccounted stock and unaccounted receivables was based on stock of unaccounted gold and silver items and also on the basis of details regarding unrecorded recei ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he above referred Jangad receipts and the statement of the Authorised Signatory of M/s. Shakti Exports was not taken into account on the plea that he failed to identify the jewellery items sent on Jangad basis to the premises of the appellant-firm. It is necessary to mention here that while rejecting the authenticity of the Jangad receipts as mentioned in Annexure BF-14-P No.28 29, the Assessing Officer did not give any convincing comments. I, therefore, keeping all the above referred facts into account, hold that the addition to the extent of the value of 4.280 kgs. of gold ornaments which represented the quantity of gold ornaments received by the appellant-firm on Jangad basis was not justified at all as thee were sufficient proofs to show that such quantity of gold ornaments were received by way of Jangad from M/s. Shakti Exports. I, therefore, direct the Assessing Officer to calculate the value of gold ornaments received on Jangad basis to the tune of 4.280 kgs and deduct the same from the total addition of Rs.24,36,693/- made on account of suppression of stock and in this way, confirm the rest of the addition on this count, holding the same as representing the suppression of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ble on record. We have given our thoughtful finding that it was incumbent upon the assessee to substantiate the expenditure incurred with the relevant evidence. We do not find any merit into the contention of the Ld. AR for the assessee that the wage register was produced before AO wherein the factum of receipt of the wage can be verified from the paper book. It is transpired that the assessee has submitted the wage register from that it can be noticed that labourers put their respective signature on the said wage register but merely production of the wage register is not sufficient in the present circumstances as the assessee failed to corroborate from other evidences as what kind of work was got done from the said labourers. It is not acceptable that nobody would in for precious metal as gold to any person whose permanent address is not known. In this view of the matter, we do not find any infirmity into the order passed by Ld. CIT(A). This ground of assessee s appeal is dismissed. 12. In the result, assessee s appeal is partly allowed. Coming to Revenue s appeal in ITA No.2253/Ahd/2006. 13. The Revenue has raised sole ground, which reads as under:- 1. On the facts and ..... X X X X Extracts X X X X X X X X Extracts X X X X
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