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TMI Blog2017 (2) TMI 545X X X X Extracts X X X X X X X X Extracts X X X X ..... naccounted purchase of finished goods - Held that:- We notice that the assessing officer has made his own computation on the basis of statement of stock given to the bank and accordingly came to the conclusion that there is unaccounted purchase of finished goods. We notice that the assessing officer did not examine the quantity details of raw materials and finished goods furnished by the assessee by referring the books of accounts. The question of making own estimate, in our view, would arise only if the AO finds faults and deficiencies in the books of account and consequently come to the conclusion that the quantity details furnished by the assessee is not reliable. Before the AO, the assessee has submitted that the stock statement furnished to the bank is a provisional one and the value shown therein was average value. We notice that the AO did not examine the said explanation at all. Thus CIT(A) was justified in coming to the conclusion that the AO has computed the value of undisclosed purchases on surmises and conjectures and justified in deleting the impugned addition relating to undisclosed purchases and accordingly we uphold the same. - I.T.A. No. 3676/Mum/2014, I.T.A. No. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nue, relief granted by the learned CIT(A) in respect of additions relating to unaccounted sales and unaccounted purchases are being challenged by the Revenue. 5. Facts relating to the above said issues are discussed in brief. The assessee is engaged in business of manufacture and sale of gold jewellery, diamond and colour stone studded jewellery. Present assessment order was passed by the Assessing Officer to give effect to the revision order passed by the learned CIT u/s. 263 of the Act. From the quantity details of raw materials furnished by the assessee, it was noticed that consumption of gold was shown at 172782.86 grams. However, the actual quantity of finished goods manufactured out of the above said gold worked out to 142578.36 grams only and the same resulted in difference of 30240.50 grams (172782.86 - 142578.36). The Assessing Officer initially took the view that the above said difference represents gold sold outside the books or it may be a case of inflation of purchases. When questioned, the assessee submitted that there was typographical error in furnishing the quantity details of finished goods, i.e. in case of 18 carat Stone studded jewellery, the quantity detai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... parties 22390.89 19648.29 3007.54 10607.44 11.93 crores 12.03 crores Issue to karigar/breaking/remaking/ melting/setting 41509.59 40950.66 458.39 2287.71 Total 63900.47 60598.95 3465.93 12895.15 11.93 crores 12.03 crores The Assessing Officer noticed that the quantity of 40950.66 grams of gold issued to the Karigars has not been shown any value. Accordingly, he rejected various quantity details furnished by the assessee. The Assessing Officer took the view that the ratio of stones to gold should be in the range of 5 to 10 times only. Since the assessee has used 1783.10 carat of stones in manufacture of jewellery, the Assessing Officer took the view that corresponding gold should be approximately 12000 grams only. Since the assessee has shown consumption of gold of 42055.76 grams, the Assessing Officer took the view that the assessee has shown un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tice that the assessee filed those evidences before Ld CIT(A), but the first appellate authority declined to admit them. We notice that the AO had asked for IT return copy and financial statements of M/s Quardant Communication, to whom the assessee had paid the legal and professional fee. It is quite natural that it may take some time, since the assessee herein had to obtain those details from the above said party. Hence, in the interest of natural justice, we are of the view that the additional evidences should be admitted and this issue needs to be re-examined. Accordingly, we set aside the order passed by Ld CIT(A) on this issue and restore the same to the file of the AO with the direction to examine this issue afresh by duly considering the additional evidences and such other information and explanations that may be furnished by the assessee before him. Thereafter, the AO may take appropriate decision in accordance with the law. 11. We shall now take up the appeal filed by the revenue. The first issue relates to undisclosed sales. At the time of hearing, the Ld A.R reiterated that the difference has arisen on account of typographical error occurred in not entering the quanti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... relating to finished goods, the sales quantity is shown at 60598.95 grams, which consist of following items:- Sales made to various parties 19648.29 gms Issued to Karigars etc. 40950.66 gms 60598.95 gms Before Ld CIT(A), the assessee has offered following explanations:- The appellant submits that the gold, diamonds and colour stones issued to Karigars/breaking/remaking/melting/setting included in sales with no value which have received back as manufactured gold jewellery and diamond studded jewellery with no value. It is the normal practice followed by the appellant of showing issues to Karigars for processing as sales with no value. There was no shortage whatsoever in manufacturing process of 40950.66 gram as alleged by the Learned. AO. We notice that the assessee has not furnished the break-up details of manufactured jewellery to substantiate its contentions that the 40950.66 grams of gold was included in manufactured item at NIL value. 13. Hence, what is required to be proved by the assessee is that it has included 40950.66 grams o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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