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TMI Blog2018 (6) TMI 276X X X X Extracts X X X X X X X X Extracts X X X X ..... ers - CIT(A) has taken a correct view of the matter by into the stock records , reconciliation etc and thus deleted the addition - we do not find any reason to interfere with the order of the CIT(A) and thus addition is deleted. - Decided against revenue X X X X Extracts X X X X X X X X Extracts X X X X ..... er. It is observed that during the survey proceedings, copies of nine gift deeds are found, where the donees were found to be closely related to the appellant. In order to ascertain further facts, the AO has made the necessary enquiry by issuing summons u/s 131 of the Act. As observed in the preceding paragraphs, three of the summons had been returned back unserved by the postal authorities' with a remark "left/not known" and balance donees either did not attend or no any reply filed. Once the summons are returned back or the concerned persons did not attaind, the onus shifts on the appellant to prove the transactions as not belonging to him since the documents were found from his premises and not established to be a dump paper. From the assessment order as well as from the reply of the appellant, I find that the onus of coming clean on this aspect, by producing the donees before the AO for verification, is not discharged during the assessment proceedings. The appellant has also admitted that loans were immediately taken in the books of the appellant from some of the donees. The act of the AO in not disallowing interest paid on such loans will not act as a facilitator ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of gifts etc. The learned AR also brought to our attention reply, dated 12.12.2007, filed before the AO, which is placed at pages 3 to 8 of the paper-book, wherein at para 9 it has been stated that in none of the cases the gift is received by the assessee but have been received by other persons. It was also stated that summons u/s. 131 were issued to them and donees and in compliance thereto, the donees have submitted respective gift deeds, copy of acknowledgments of returns and details as required by the AO. The learned AR reiterated that none of the gifts were received by the assessee and all the donees were identified and the AO even passed on the information to the AO concerned, who exercised jurisdiction over donees and in some cases notice u/s. 143(2) were also issued. The learned AR contended that when the assessee is not involved in any way in these gift deeds, the addition made by the AO was purely on the basis of presumptions, surmises and conjectures, which is not permissible under the Act and, therefore, deserved to be deleted. 5. The learned DR, on the other hand, opposing the arguments of the learned AR, contended that undoubtedly the gift deeds belonged to the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... findings of the learned CIT(A) and his order is accordingly set aside on the issue. The AO is directed to delete the addition. 8. Now coming to the Revenue's appeal ITA No.597/Mum/2016, wherein it has raised the following grounds: "1. On the facts and in the circumstances of the case and in law, the Ld CIT(A) erred in deleting the addition of ₹ 54,76,827/- on account of unexplained stock of gold. 2. On the facts and in the circumstances of the case and in law, the Ld CIT(A) failed to appreciate the fact that excess stock of gold of 8862.18 gms was determined from documents, books and incriminating material found during the course of survey on the assessee. 3. On the facts and in the circumstances of the case and in law, the Ld CIT(A) failed to appreciate the fact that the onus is on the assessee to explain and substantiate the correctness of stock of gold ornaments. 4. The appellant prays that the order of the CIT(A) on the above grounds be reversed and that of the AO be restored. 5. The appellant craves leave to amend or alter any ground or add a new ground which may be necessary." 9. The issue involved in all these grounds is against the deletion of additi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appellant to provide complete address of the person from whom the stock of gold amounting to 8862.18 grams found during the course of survey was received by him for manufacturing of gold ornaments. The Assessing officer after examining the explanation of the appellant which is mentioned in page 2 of the order held that the stock of 8862.18 grams of gold has not been explained by the appellant. He stated that appellant has adjusted the stock and submitted wrong details. The value of gold of 8862.18 grams found during the course of survey amounting to ₹ 54,76,827/- was accordingly, added by the Assessing officer as unexplained stock. From, the above, it can be seen that the stock relating to the appellant himself related to 2392.890 grams. This figure of 12392.890 grams has been stated in statement dated 25/11/2004. 4.11. It is further observed that according to a computer generated printout found the stock of gold relating to customer was stated to be 8862.6 grams whereas the actual stock difference found during the course of survey found was 5935.37 grams. The Assessing Officer has examined the explanation of the appellant in page No.2 of the assessment order. The appellan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .18 grams of gold. Hence the AO is directed to delete the addition of ₹ 54,76,827/-. Ground No.1 is accordingly allowed." 11. The learned DR argued before us that the first appellate authority has wrongly deleted the addition made on account of unexplained stock. The ld DR submitted that 8862.18 gms of gold belonged to the customers, which was received by him for manufacturing gold ornaments though the actual stock belonging to the customers found by the survey team was 5935.37 gms. The learned DR submitted that even during the statements recorded post survey, the addresses of the persons from whom the gold was received by the assessee were not co-relating with the facts on record and thus, the AO has rightly added the same to the income of the assessee as unexplained stock. The assessee tried to explain the difference by submitting that the stocks were delivered to Shefali Art and Manibhadra Jewellers were entered twice, which was rectified. The AO found the reconciliation filed by the assessee as unbelievable and held that the entire exercise was undertaken to tally the stock discrepancies which were found during the course of survey. The learned DR submitted that even in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... available on record. The undisputed facts of the assessee case are that the assessee was subjected to survey u/s. 133A during the course of which discrepancy was found in the stocks as per the stock register and stock physically found at the assessee's premises. As per stock register, the stock belong to the customers was 8862.18 gms whereas the actual stock found was 5925.79 gms. From the facts before us we observe that the AO confused the stock of 8862.18 gms and 5925.37 gms i.e. 5935.37 gms were found physically during the course of survey and 8862.18 gms was as per the computer print out at the time of survey as belonging to the customers. We also find that the assessee has filed reconciliation, which was not accepted by the AO. The first appellate authority after examination of records and submissions of the assessee has reached the conclusion that the AO has not correctly understood the issue and made the addition on wrong appreciation of facts. A perusal of the order of CIT(A) reveals that he has taken a correct view of the matter by into the stock records , reconciliation etc and thus deleted the addition. The operative part of the said order has been reproduced by us herei ..... X X X X Extracts X X X X X X X X Extracts X X X X
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