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TMI Blog2012 (12) TMI 20X X X X Extracts X X X X X X X X Extracts X X X X ..... ses and sales of diamonds. The learned AO made an addition of Rs.33,53,384/- due to difference in valuation of closing stock citing the following reasons: (i) The assessee failed to maintain stock register containing details of purchases, sales and closing stock. (ii) The assessee valued the closing stock at the average rate. (iii) The assessee could not submit the details of lot-wise movement of goods from the stage of opening stock to purchase, sales and closing stock. (iv) The assessee also failed to produce complete details of opening and closing stock in terms of quantity and the basis of valuation. (v) The assessee also did not furnish quality-wise details of diamonds dealt with by him. (vi) The details of receipt and issue of r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rat High Court has held that as under: "The word "concealment" inherently carries with it the element of mens era. Therefore the mere fact that some figure or some particulars have been disclosed, even if takes out the case from the purview of non-disclosure, cannot itself take out the case from the purview of furnishing inaccurate particulars. In any case, disclosure which has been made in any part of the return which is incorrect or false to the knowledge of the assessee would not mean that there has been no concealment of particulars of income or furnishing of inaccurate particulars for purposes of levy of penalty. The process of inquiry into the correctness, truthfulness, or accuracy of particulars furnished by the assessee cannot be c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee had disclosed receipts in Part III of the return filed by him a conclusion cannot be reached that the assessee was not guilty of concealing particulars of his income or furnishing inaccurate particulars of income." (b) In the case of K. P. Madhusudan Vs. CIT, 251 ITR 99 decided by the Hon'ble Apex Court it was held that penalty u/s 271 (1) (c) is leviable even in case of agreed additions. 5. The assessee carried the matter before the learned CIT(A). The learned CIT(A) deleted the penalty with the following observations in Para 6 of his order: "6. I have considered the reasons given by Assessing Officer and also the submissions of the appellant. After carefully going through the facts of the case, it is evident that addition on ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ." 6. Now, the revenue is in appeal before us aggrieved by the order of the learned CIT(A) deleting the penalty levied by the learned AO. 7. The learned DR vehemently argued before us stating that the assessee had not produced stock register containing particulars of quality and quantity of diamonds purchased during the year along with details of opening stock and closing stock etc., and also particulars of diamonds issued for polishing and receipt of the same. The learned DR further submitted that the assessee had valued the closing stock in an arbitrary manner to suit its convenience. It was, therefore, prayed that the order of the learned AO is just and the same may be sustained. 8. The learned AR reiterated the same arguments made be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... truth prevailing in the diamond industry. It is pertinent to note that even a dust of diamond glitters and dazzles one's eyes, needless to mention that it has a significant value, and every prudent business man will have means and ways to ascertain its cost accurately and monitor its movement's right from the time it is purchased until it is sold. When the facts being so, the assessee has grossly erred and defied by not maintaining stock register in such a fashion so as to arrive at the correct value of the closing stock, or, did not produce the same before the Revenue, but has proceeded to value the closing stock in some method to suit its convenience. The learned AO had also made a clear finding that the assessee was valuing the closing ..... X X X X Extracts X X X X X X X X Extracts X X X X
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