9911796707
TMI Blog2020 (1) TMI 399X X X X Extracts X X X X X X X X Extracts X X X X ..... had made an addition u/s.69C by treating the purchases of 823.57 carats of diamonds made during the year as unexplained expenditure. It would be pertinent to note that the second round of proceedings had emanated out of the directions given by the Tribunal as reproduced supra. Admittedly, in the first round of proceedings, there was no addition made u/s.69C by the revenue. AO could not have made any addition u/s.69C in the second round of proceedings. Even otherwise, we find that the assessee had duly offered to tax in the return of income, the value of purchase of 823.57 carats of diamonds in consonance with the declaration made by him at the time of survey and hence there is no need to make any further addition thereon. We find that the revenue had raised an additional ground challenging the deletion of addition u/s.69C. No arguments were advanced by the ld. DR at the time of hearing before us in this regard. We find that even the written submissions filed by the ld. DR, does not make any mention about the addition made u/s.69C of the Act. We hold that the ld. CIT(A) had rightly deleted the addition made u/s.69C of the Act in the sum of ₹ 1,59,53,910/- on which, we do ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /2004. The assessee filed a return of income for the A.Y.2005-06 on 28/10/2005 declaring total income of ₹ 1,09,86,750/-. During the course of survey proceedings stock of diamonds of 1089.70 Crores belonging to assessee were found alongwith Jangad Memo (Approval Memo). The said stock of diamonds of 1089.70 Crores were valued by the approved valuer at the time of survey at ₹ 2,55,41,800/-. There was no retraction made by the assessee subsequently with regard to the said disclosure and the same was duly considered by the assessee while filing return of income also. There was certain stock of diamonds belonging to the assessee which was found with Sunjyot Gems also. In order to verify the accountability of stock of diamonds of assessee found with Sunjyot Gems, Shri Narendra Sanghvi, partner of assessee firm was asked to explain above stock of diamond with respect to the books of accounts. He explained 278.04 Crores as opening stock as on 01/04/2004 and the rest of 823.57 Crores as purchases made from four parties amounting to ₹ 1,59,53,910/- during the F.Y.2004-05 as under:- S.No. Date of Bill Name of the party ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ================= 3.2. The assessee disputed the valuation report of the department valuer on various parameters by stating that the valuation has been done on the basis of estimating the loss and samples and the valuer did not consider the aspects of mixed diamonds whose value would be lesser comparatively. The ld. AO however, disregarded this objection of the assessee by holding that the assessee itself had obtained the invoices on the basis of average rate and hence, it cannot state that the valuer has done valuation on an estimation basis without considering the element of mixed diamonds. The ld. AO also observed that assessee quoted high price indicating that the diamonds were of high quality and in view of this the assessee s plea that the rate per carat is approximately ₹ 17,000/- to ₹ 21,000/- has no basis. The ld. AO also observed that the rate adopted by the valuer is approximately 25% lesser than that of the rate as per Jangad Memo (Approval Memo). 3.3. Hence, it could be seen that the ld. AO made addition of ₹ 52,64,584/- in the original assessment over and above the amount offered by the assessee purs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... additional ground pointing out the CIT(A) has erred in not increasing the purchase cost while making addition to the valuation of unexplained investment in stock. r\ Since this issue of 'not increasing the consequential purchase cost of the alleged diamonds' has not been raised during the first appellate proceedings, the AO or CIT(A) has not accession to deal with the same. Considering the merits of the issue, we proceed to admit the same and refer the same to the files of the AO for fresh adjudication after giving reasonable opportunity of being heard. Accordingly, the additional ground is set aside. 4. In the second round of proceedings, the ld AO made addition of ₹ 1,59,53,910/- being the value of purchase of diamonds made during the year as unexplained expenditure u/s.69C of the Act, ignoring the fact that this sum was already offered to tax by the assessee in the return of income in consonance with the declaration made during the course of survey. 4.1. Further, the ld AO observed that addition on account of unexplained expenditure shall be the difference of income declared and valuation as per paragraph 3 of the assessment order. Accordingly, the additio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... amonds made during the year as unexplained expenditure. It would be pertinent to note that the second round of proceedings had emanated out of the directions given by the Tribunal as reproduced supra. Admittedly, in the first round of proceedings, there was no addition made u/s.69C of the Act by the revenue. Hence, the ld. AO could not have made any addition u/s.69C of the Act in the second round of proceedings. Even otherwise, we find that the assessee had duly offered to tax in the return of income, the value of purchase of 823.57 carats of diamonds in consonance with the declaration made by him at the time of survey and hence there is no need to make any further addition thereon. We find that the revenue had raised an additional ground challenging the deletion of addition u/s.69C of the Act. No arguments were advanced by the ld. DR at the time of hearing before us in this regard. We find that even the written submissions filed by the ld. DR, does not make any mention about the addition made u/s.69C of the Act. 7.1.1. In view of our aforesaid observations, we hold that the ld. CIT(A) had rightly deleted the addition made u/s.69C of the Act in the sum of ₹ 1,59,53,910/- o ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
