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TMI Blog2022 (11) TMI 974X X X X Extracts X X X X X X X X Extracts X X X X ..... of total addition of Rs. 28,70,000/- by not appreciating the fact that the lKg Gold Bar found from the possession of the assessee during Search & Seizure proceedings was a foreign made Gold Bar and assessee failed to explain the source of his investment. 1(b).Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in ignoring the fact that cost of Jewellery/Bullion mentioned is Schedule AL of his returns of income for the A.Yrs. 2013-14 to 2015-16 was not explained by the assessee vis a vis the value of Gold at market rate during the relevant assessment year nor could he explain the value of Gold at cost price. 1(c). Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in not appreciating the fact that Notification No.347 (E) dated 20.05.1973 backed by Instruction No. 1916 dated 11.05.1994 is applicable only in the case of Jewellery/Ornaments and not in case of bullion found from the possession of assessee during the search proceedings. 2(a). Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in deleting addition of Rs. 18,00,000/- on account of unexplained cash, as assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce in stock. 3. That the appellant craves, leaves to alter, amend and add to substitute any ground of appeal before or at the time of hearing." 3. First, we discuss the ITA No. 449/Asr/2019. The brief fact of the case is that the appellant is a proprietor of M/s Royal Technologies and Trader of Computers Laptop Including Accessories and Spare Parts. The return was filed for A.Y. 2017- 18 with a total income of Rs.1,28,44,540/-. A survey was conducted u/s 131(1A) on the business premises of the assessee on 19.01.2017. The appellant was unable to present during survey due to his illness and was in Delhi for his treatment. The assessment was completed u/s 143(3) and addition was made in different heads. Aggrieved assessee filed an appeal before the ld. CIT(A) but the ld. CIT(A) had partly allowed the appeal of the assessee. Only in point of addition of jewellery and bullion and in difference of stock were partly upheld. 4. Being aggrieved by the order of the ld. CIT(A) both revenue and assessee had filed appeal before us. 5. At the outset, we are simultaneously adjudicating both the appeals of the revenue and the assessee. Ground no. 1 of the revenue. The ld. CIT DR first pointe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... duly signed by her and handover the cash to her daughter-in-law along with such documents before dying. Therefore, to expect documentary evidence in support of the contention that the cashin possession of Smt. Rama Kant Gupta at the time of her death, passed over to Smt. Madhu Gupta after her (Smt. Rama Kant Gupta) death is most absurd. It is but natural that after the death of Smt. Rama Kant Gupta, such cash would be passed on/ handled by her daughter-in-law, Smt. Madhu Gupta the only adult female member in the family. It is difficult to comprehend as to the documentary proof for such transfer at the time or after the death of Smt. Rama Kant Gupta. It is a tradition and generally no documentation is done and the eldest surviving female member of the household automatically takeover the responsibility which were earlier performed by the deceased. And most importantly the assessee has already disclosed a cash of Rs. 19,59,650/- (as non business cash) in his return filed before the date of search. There is further merit in the argument of the AR that the AO has given benefit of past savings only in respect of Sh. Rajesh Gupta and Smt. Madhu Gupta whereas no benefit in respect of pas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pted as such or relied upon by the AO. This also strengths the arguments of the AR on this point. On the basis of facts and documents filed on behalf of the assessee, the contention of the AR is found acceptable. Accordingly, this ground of appeal is allowed." 5.1 The ld. Counsel submitted a paper book with brief note which is kept in the record. The ld. Counsel explained that the assessee is eligible to maintain the jewellery under the CBDT Notification No. 347(E), dated 20.05.1978 backed by Instruction No. 1916 dated 11thMay, 1994. As per this Notification "the person not assessed to the wealth tax can retain gold jewellery and ornamentsto the extent of 500 grams per married lady, 250 grams per an unmarried lady and 100 grams per male member of the family should not be seized".Accordingly, the assessee's wife Late Smt. Rama Kanta Gupta, son, Sh. Rajesh Gupta&daughter in law Smt. Madhu Gupta total gold was calculated 1200 gms under possession. Further, the assessee's wife was died on 29.10.2015 and all her gold ornaments are also in the hands of the family. The ld. Counsel further replied that the assessee declared the gold in the return of income in historic value amount of Rs. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the returns of income filed by Sh. Rajesh Gupta and filed the copy of the cash ledger account showing balance of Rs. 4,15,963/- as on 19th January, 2017. On the basis of the documents filed and in view of the facts that Sh. Rajesh Gupta was a regular Income Tax assessee who has been depositing huge amounts of cash in the bank account during the preceding years also, the cash balance as per the books of accounts of M/s. Prime Computers is to be taken as explained. The AO has not rejected the books of accounts of Sh. Rajesh Gupta. The arguments on this point are found acceptable. As regards, the cash-in-hand of Rs. 15,09,349/- in the possession of Sh. Madhu Gupta after the death of her mother-in-law, the AR has argued that she was a regular income tax assessee who expired on 29.10.2015 and thereafter the household cash passed on to Smt. Madhu Gupta. It is also submitted that the assessee has shown a cash of Rs. 19,95,650/- as 'cash other than business cash' in his return for assessment year 2015-16 and as per the AR, there cannot be any stronger evidence than this to justify the cash found at the time of search. The AR has filed the copy of the income tax return of the as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Rs. 2000/- or Rs. 500/- may be through legal means or in violation of RBI notification etc. but this will not make the cash found in new denomination of Rs. 2000/- as unaccounted or justify making addition of the same in the hands of the assessee since the assessee has declared this much of cash in hands 'other than the business cash' in the returns filed before the date of search. The assessee is entitled for the benefit of personal cash declared by him in his returns of income filed before the date of search since this has to be considered as disclosed cash. Under the facts and the circumstances of the case and in view of the documents filed by the AR during the appellate proceedings, the addition of Rs. 18,00,000/- made by the AO is not found sustainable and hence deleted. There is merit in the contention of the appellant that his statement was not recorded at the time of search and the declaration made by Sh. Rajesh Gupta u/s 132(4) who was an employee in assessee's concern is not binding on the assessee, especially in view of the fact that the assessee retracted from the declaration made by Sh. Rajesh Gupta through a letter filed on the very next day before th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y the A.O., arguments of the AR during the course of assessment as well as appellate proceedings have been considered. The AR has argued that immediately after search/survey, a detailed chart was furnished to the DDIT pointing out the mistake committed by the departmental team. The AR gave a chart showing the item-wise valuation as done by the search/survey team and the amount as per purchase bill which shows that the total value of stock found was Rs. 3,08,37,484/- as against value arrived at Rs. 3,50,86,411/- by the survey team. The AR has stated that the apparent mistake committed were that the MRP stands applied to the stock instead of the purchase price; defective units were counted; sold stock but lying at the premises was counted and other difference in VAT and counting. The AR further submitted that out of valuation of Laptops at Rs. 57,17,882/- the AO gave credit for demo laptops for Rs. 1,67,416/- as against actual value of Rs. 11,08,664/-, for defective laptops the credit of Rs. 8,34,360/- was given as against eligible credit of Rs. 12,54,280/-. In respect of laptops sold to M/s. Asia IT Solutions, as per the AR, the actual cost was Rs. 4,38,571/- against which credit gi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eclaration was made by Sh. Rajesh Gupta u/s 132(4). The presumption u/s 292C is a rebuttable presumption and the AR has argued that the assessee has successfully rebutted the presumption. On the basis of facts and documents filed on behalf of the assessee, this contention of the AR is found acceptable. Therefore, to sum-up, the addition on account of difference in stock to the extent of Rs. 10,89,016/- is confirmed and appellant gets relief of the balance amount. Accordingly, these grounds of appeal are partly allowed." 9.2. In support of the assessee's own claim, the ld. Counsel first filed a reconciliation which is annexed in APB page 151. The reconciliation is reproduced as below: 9.3. The ld. Counsel further argued that during hearing before ITAT the item and stock-wise statement and details of goods return, un-dispatched stock was submitted in APB page no. 148 to 330. The ld. Counsel specifically mentioned that there is no difference in between quantity and item of stock which was produced before the revenue authorities. Only, the difference in the valuation of the stock related to laptops. The purchased bills with tax invoice are also annexed from APB pages 152 to 198as p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n of Rs. 1,87,02,000/- made by the AO is not found sustainable and hence deleted. 11.2. The ld. Counsel further argued that it is pertinent to state that, when the sales have been duly accounted for in the books of accounts against the stocks in hand and which has been duly verified. Then how can be the cash received on account of sales, be treated as unexplained cash in the hands of the appellant. The Ld. A.O is very much unjustified in comparing the cash sales during the month of October 2016 and up to 8th November 2016 with the average cash sales of the previous months. The addition was fully on basis of comparison. The ld. AO also stated in his order in the last lines of Para 5.1 of his order that even in the year 2015-16 in august 2015 the cash in hand as per books was Rs. 7,03,9438/-. In August 16 also, the Ld. AO verified that cash in hand in books was amount of Rs. 20,65,556. Even when demonetization period was over the cash in hand duly verified and accepted is at Rs 28,45,667/. Lastly when sales are around Rs 24 Crores in a financial year, then to object the old sales through employees and recovered due to pressure of demonetization that to less than the figure of Rs 2 c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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