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TMI Blog2016 (1) TMI 168X X X X Extracts X X X X X X X X Extracts X X X X ..... r valuation of stock up to the date of survey by further deducting 18.55% for gross profit from the value of stock computed by the Assessing Officer and, thus, valuing the stock below the cost price when in fact the Assessing Officer had already deducted 15% from the valuation of the Departmental Valuer for Gross Profit to arrive at the cost price of the assessee. (b) Under the fact and in the circumstances of the case, the Ld. CIT(A) was not justified in deleting the addition of Rs. 1,52,68,732/- being under valuation of stock up to the date of survey by taking the value of closing stock at Rs. 4,30,93,290/- instead of Rs. 3,63,05,575/- as taken by the Assessing Officer because the assessee had considered the wt. of diamond at 2880 carat and gold at 13552.367 gms. Whereas the diamonds including loose diamonds found during the course of survey as per valuation report of Departmental Valuer dated 1/2/2008 was 2269.85 carat and Total Net wt. of gold at 13122.47 gms. and the assessee admitted during the course of survey that no stock of his was lying any where with any other party, or the Karigars." 3. Briefly stated facts are that the assessee is a manufacturer/dealer of gold an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7,272/- (Rs.5,15,74,306/- minus Rs. 95,67,034/-). On the other hand, the appellant has recorded in its books of account, the value of stock as on the date of the survey at Rs. 4,30,93,290/- (in addition to the stock of Rs. 17,62,820/- lying with the karigars). The AO has taken the value of the stock as per the books of account at Rs. 3,63,05,575/- which is factually incorrect. I find that the relevant details of stock as on 31.01.2008 were filed in course of the assessment proceedings (available at page 485 of the assessment record) showing the value of stock at Rs. 4,30,93,290/- (comprising gold jewellery of Rs. 3,63,05,575/- and diamonds of Rs. 67,87,715/- in addition to the stock of Rs. 17,62,820/- lying with the karigars. In this factual background, there was actually no under valuation of stock as on 31.01.2008; and consequently, no addition on this account was Justified. The addition of Rs. 1,52,68,732/- is deleted. Ground no.1 is allowed." Aggrieved, revenue is in second appeal before Tribunal. 4. We have heard rival submissions and gone through facts and circumstances of the case. We find that the only dispute relates to valuation of stock as on the date of survey and no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e by the survey party and valued the stock after reducing approximately 10%. In view of the above explanation given by assessee's counsel, which was never negated by Ld. Sr. DR, we find that the reduction made by CIT(A) at 18.5% of G.P. rate from the date of survey in consonance with the facts of the case. Actually, the value of stock on the date of survey as per books of account Rs. 4,30,93,290/- and in addition to the stock of Rs. 17,62,820/- was lying with the Karigars. This stock as per books of account of the assessee at Rs. 4,30,93,290/- comprises of gold jewellery of Rs. 3,63,05,575/- and separate diamond stock of Rs. 67,87,715/-. Even otherwise, if we go by rate of gold on the date of survey taken by valuation officer at Rs. 11,965/- as against the rate of Rs. 9395/- the increase is almost 28%. In term of the above facts, we find that the CIT(A) has rightly applied the gross profit rate of 18.55% for reduction of the value of stock and we confirm the same. This ground of revenue's appeal is dismissed. 5. The next issue in this appeal of revenue is against the order of CIT(A) deleting the addition being difference between the undisclosed income recorded in the impounded doc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or disproved by the AO. I find merit in the argument that the entire sales cannot be treated as undisclosed income of the appellant. Even if the transactions recorded on pages 6, 7, 11 and 13 are included, then all the transactions recorded in MJ/4 total to Rs. 38,57,105/- as also mentioned by the AO. If gross profit rate of 18.55% is applied on total sales of Rs. 38,57,105/-, then the gross profit should work out at Rs. 7,15,493/- whereas the appellant has already declared undisclosed income of Rs. 13,50,000/- in the return. In view of the above, no addition on account of transactions recorded in MJ/4 is called for. The addition of Rs. 25,07,105/- is deleted. Ground no. 3 is allowed." Aggrieved, revenue came in second appeal before Tribunal. 7. We have heard rival submissions and gone through facts and circumstances of the case. We find that the assessee has analysed pages 1 to 54 being impounded papers marked as MJ-4 found during the course of survey and the assessee's proprietary concern M/s. Mukut Jewellers. According to ld. Counsel, the transactions recorded in these papers involving monetary value are the sales and purchases, which were not recorded in the regular books of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as not deducted as requisite form No. 15G was submitted by the said party before him. This reply is in response to notice dated 03.12.2010. The letter is enclosed at pages 41 and 42 of assessee's paper book. Ld. Counsel for the assessee now before us stated that form No. 15G from one Mrs. Narayani Devi Agarwal is received that no TDS is to be deducted u/s. 194A of the Act being interest payment of Rs. 1,62,612/-. As the assessee has received form No. 15G he was prevented from deducting the TDS. The CIT(A) also deleted the disallowance only on the premise and the relevant finding of CIT(A) has given in para 14, which reads as under: "..... I find merit in the submissions. As the person to whom interest was paid had submitted a declaration in Form No. 15G in accordance with the provisions of section 197A, the appellant was not liable to deduct tax u/s. 194A; and consequently, the provisions of section 40(a)(ia) have no application. The addition of Rs. 1,62,612/- is deleted. Ground no. 7 is allowed." 10. We find that the assessee has received declaration in form No. 15G from the payee of the interest i.e. Smt. Narayani Devi Agarwal and once the assessee received form no. 15G he is ..... X X X X Extracts X X X X X X X X Extracts X X X X
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