9911796707
TMI Blog2023 (4) TMI 1096X X X X Extracts X X X X X X X X Extracts X X X X ..... rnaments found during survey vis- -vis stock recorded in stock register, and additions were made based on the incriminating material ( being excess stock) found during survey conducted u/s 133A. The orders of the authorities are set aside on this issue of silver ornaments, and matter so far as additions made based on silver ornaments found at Mirzapur HO during survey, is restored to the AO for denovo assessment on merit, after giving proper and adequate opportunity of being heard to the assessee. Gold jewellery at Mirzapur HO - Assessee claimed that stock as per books of accounts as on 24.02.2012 was 1033.80 gms but no working was submitted. Thus, we are restoring this matter back to the file of the AO for verification of the claim of the assessee on merit, after giving proper and adequate opportunity of being heard to the assessee. We order accordingly. Gold ornaments found during the survey on 24.02.2011 - As based on facts and circumstances of the case and in the interest of justice, the appellate order passed by ld. CIT(A) granting relief to the assessee w.r.t. 850 gms of gold ornaments found during survey allegedly belonging to his wife Mrs. Suman Agrawal is set asi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rial ( being excess stock) found during survey conducted u/s 133A. The orders of the authorities are set aside on this issue of silver bullion, and matter so far as silver bullion at Mirzapur HO is restored to the AO for denovo assessment, after giving proper and adequate opportunity of being heard to the assessee. Differences in Stock at Varansi B.O. - Explanation of alleged purchase of 177.50 kgs of artificial silver ornaments being Gillet Payal is merely an afterthought by the assessee to wriggle out of tax liability. Thus, we set aside the appellate order passed by ld. CIT(A) and uphold/sustain the addition as was made by the AO. So far as legal precedents relied upon by the assessee, it is not the case of the surrender of the undisclosed income during the course of survey proceedings, but incriminating material by way of excess stock of silver ornaments was found during survey vis- -vis stock recorded in stock register, and additions were made based on the incriminating material ( being excess stock) found during survey conducted u/s 133A. The orders of the ld. CIT(A) is set aside on this issue of excess silver ornaments and the assessment order is upheld. We order accord ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee, as the credibility of source of cash in the proprietary concern could not be proved - CIT(A) accepted the contentions of the assessee, as sources of cash receipts as entered in its cash book, were held to be substantiated by ld. CIT(A) - HELD THAT:- Both the concerns are proprietary concern and assessment was framed by the AO after including, inter-alia, income of both the concerns. The records were available before the AO during assessment proceedings, and these entries were made prior to the date of survey. Thus, We do not hold infirmity in the appellate order passed by ld. CIT(A) deleting addition with respect to cash received by one proprietary concern of the assessee namely M/s Raj Shree Jewellers from another proprietary concern of the assessee namely M/s Raj Shree Palace. The appellate order passed by ld. CIT(A) deleting addition is confirmed. Excess Cash found During Survey - HELD THAT:- As affidavits filed are self serving and are not corroborated with any evidence found during survey. Even, receipts which ought to have been issued at the time of receipt of cash were not issued( no such receipt found during survey) and no evidence whatsoever was found during surve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... heque issued by the lenders is preceded by cash deposit in their bank account, and hence onus is very heavy on the assessee. Thus, in the facts and circumstance of the case and in the interest of justice and in all fairness to both the parties, we are setting aside the appellate order passed by ld. CIT(A) and restore the matter back to the file of the AO for fresh adjudication of this issue on merits. Chargeability of Interest u/s 234B and 234C - HELD THAT:- Merely because there is an clerical error in the ITNS 150 will not vitiate the liability of the assessee to pay interest u/s 234B and 234C, which is mandatory and consequential to assessment framed by the AO. Reference is drawn to provisions of Section 292B of the 1961 Act. Thus, we do not find any merit in the contention of the assessee and uphold levy of interest u/s 234B and 234C and dismiss the ground raised by the assessee. - ITA No. 100/Alld./2017 And ITA No. 138/Alld./2017 - - - Dated:- 14-3-2023 - Shri Vijay Pal Rao, Judicial Member And Shri Ramit Kochar, Accountant Member For the Appellant : Shri. Divyanshu Agrawal, Adv., Shri Rajeev Ranjan Agrawal, Adv. And Shri Neeraj Agrawal (Assessee-in-Person) F ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ating the submissions made. 1.3 Hence, the addition on account of weight and purity of silver jewellery as confirmed by Ld. CIT(Appeals) on account of undisclosed investment is bad in law and is liable to be deleted. 1.4 That on the facts and the circumstances of the case and in law, the Ld. CIT (Appeals) grossly erred in holding that the affidavit of Smt. Poonam Tripathi in regard to the gold jewellery weighing 202 gm is an afterthought without considering the submissions filed, documents/affidavit filed on the issue and not considered the Hon'ble Supreme Court judgment in the case of CIT v. S.Khadar Khan Sons (254 CTR 228) on the issue. Hence, the addition on gold jewellery as confirmed by Ld. CIT(Appeals) on account of undisclosed investment is bad in law and is liable to be deleted. 1.5 That on the facts and the circumstances of the case and in law, the Ld. CIT (Appeals) grossly erred in not giving benefit of the opening stock of the silver bullion weighing 5.751 kg in Mirzapur premises without considering the submissions filed and evidences adduced on the issue. Hence, the addition on silver bullion as confirmed by Ld. CIT (Appeals) in regard to the openin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... liable to be deleted. 2.3 That on the facts and the circumstances of the case and in law, the Ld. CIT (Appeals) grossly erred in holding that the pleading of the appellant with respect to the stock of 4.958 kg of silver bullion is hereby rejected as being an afterthought without considering the submissions filed, documents submitted and also not considered the Hon'ble Supreme Court judgment in the case of CIT v. S.Khadar Khan Sons (254 CTR 228) on the issue. Hence, the addition of INR 78,059 on silver bullion as confirmed by Ld. CIT(Appeals) on account of undisclosed investment is bad in law and is liable to be deleted. 3. That on the facts and in the circumstances of the appellant's case, the Ld. CIT (Appeals) erred both in fact and in law in making addition of INR 5,87,424/- on account of undisclosed cash in Varanasi branch only on the basis of conjectures and surmises without considering the submission regarding source of the said cash along with evidence filed by the appellant and also not considered the Hon'ble Supreme Court judgment in the case of CIT v. S. Khadar Khan Sons (254 CTR 228) on the issue. Hence, the addition of INR 5,84,124 on excess cas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ddition of Rs. 42,00,560/- of unaccounted stock of Gold Jewellery by assumption of unaccounted jewellery of wife of Neeraj Agarwal and mere on the basis of affidavit filed and without appreciating the facts. 3. That the Ld. CIT(A), Allahabad has erred in law and on facts in deleting Rs. 56,32,361/- u/s 69B of unaccounted stock of Silver Jewellery found at Varanasi premises without the appreciating the facts stated by the Assessing Officer. 4. That the Ld. CIT(A), Allahabad has erred in law and on facts in deleting Rs. 56,32,361/- u/s 69B of unaccounted stock of Silver Jewellery found at Varanasi premises without providing opportunity to the Assessing Officer on the additional evidences filed during appellate proceedings. 5. That the Ld. CIT(A), Allahabad has erred in law and on facts in reducing Rs. 18,074/- out of Rs. 5,87,424/- on account of difference in the Cash Book without appreciating the finding of Assessing Officer. 6. That the Ld. CIT(A), Allahabad has erred on facts and in law in deleting Rs. 10,15,000/- which has been added by the Assessing Officer on account of undisclosed cash credit u/s 68 of the Income Tax Act, 1961 as the assessee had not produc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pated in the assessment proceedings. During the course of assessment proceedings, the assessee submitted details before AO as also produced books of accounts as maintained by it which were subjected to test check by the AO. It was observed by the AO that during the course of survey proceedings conducted by Revenue u/s 133A on 24.02.2012, the assessee s books of accounts were not found to be complete as on date of survey i.e. 24.02.2012. The valuation of physical stock was done by registered valuers at prevailing rates as on the date of survey viz. 24.02.2012, both at Mirzapur Head Office and Varanasi Branch office of the assessee. The AO observed on perusal of records, that the assessee habitually does not file any quantitative details of closing stock of various items, which has to be mandatorily part of the audited books of account as well as audit report/Form No. 3CD. The AO observed that it was seen during the course of survey proceedings conducted by Revenue u/s 133A, that the stock register has been prepared only for silver jewellery. The AO observed that the assessee did not kept stock register for silver bullion and gold jewellery .On reconciliation of physical stock and st ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly contending just to create a ground for unnecessary litigation in order to avoid payment of correct amount of taxes which he cannot be allowed to resort to. Merely saying that कुछ भूल ई है is not sufficient to admit the contention of the assessee. 3.2(c) It is imperative to mention that during the course of the survey proceedings, the valuation of stock was done by the registered valuer in front of Sri Sharad Agrawal, the employee of the assessee firm who did not point out any kind of mistake whatsoever. This also means the assessee is contending the issue with clear intention to mislead the Department. [Page 4, Question No. (iii) and concerned reply at Page 5, Reply No. (iii) of the statement recorded during the course of survey] 3.2(d). In the light of these facts of the case, the claim of the assessee cannot be treated to be reliable and is accordingly rejected and the differential amount of stock is treated as undisclosed stock. The value of investment is taken at the prevailing rates as on date of survey as specified by the registered valuer. Amount of undisclosed stock =3.32 K.G. Gro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Penalty proceedings u/s 271(1)(c) is being initiated separately for concealment of income. Addition of Rs. 42,00,560/- (iii) Regarding Silver Bullions: Likewise, the submissions regarding silver bullion is also grossly misleading because no such stock register or composite stock register has been either found during the course of survey or during the course of assessment proceedings. Therefore, the entire differential amount as already tabulated above, is being treated as undisclosed stock and the purity of the silver bullion is taken as valued by the registered valuer (as mentioned on the inventory concerned), i.e. Rs. 2,38,702/-. Accordingly, the addition of Rs. 2,38,702/-is being made to the total income of the assessee u/s 69B of the Act. Penalty proceedings u/s 271(1)(c) is being initiated separately for concealment of income. Addition of Rs. 2,38,702/- 4b. On reconciliation of physical stock and stock as per books of account/records kept by the assessee, the AO observed that the following differences were worked out in the case of Varanasi premises(Branch Office) of the assessee, detailed as under: Type of Stock ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Plain reading of the submission of the assessee on this issue, as quoted above, will make it sufficiently clear that the assessee has no concrete explanation to offer in this regard. The evidences filed by him at this stage cannot be relied upon, insofar as, it is a fact that no such bills of purchase have been ever found during the course of survey nor the same has been produced during the course of recording of statement. Even if for the sake of argument, the contention is considered to be true, the same should have been entered into the stock register concerned. In absence of these evidences, the claim of the assessee cannot be treated to be tenable and is accordingly being rejected. The addition of Rs. 2,68,800/- u/s 69B of the Act is hereby made to the total income of the assessee. The value is being taken as per the registered valuer's report at Varanasi premises i.e. Rs. 2,68,800/-. Penalty proceedings u/s 271(1)(c) is being initiated separately for concealment of income. Addition of Rs. 2,68,800/- (iii)Regarding Silver bullions: Plain reading of the submission of the assessee on this issue as quoted above, will again make it clear that the assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rs. 50,000/- Total Rs. 10,15,000/- The assessee was confronted on this issue by the AO to explain aforesaid cash deposits, and the assessee submitted as under: The AO considered the aforesaid reply of the assessee and observed that no such explanations have either been produced during the course of survey nor any such evidences have been produced during recording of statement. It was further observed that the same has not been adequately explained and substantiated by the assessee during the course of assessment proceedings. The AO observed that the assessee was required to substantiate the explanation submitted by it with credible evidences regarding the source of the aforementioned cash deposits in the cash book, and merely filing the copy of the account did not make good evidence for such claims to be accepted. The amount of Rs. 10,15,000/- with respect to aforesaid cash deposit in the cash books was treated by AO as cash credit u/s. 68 of the Act, in the absence of proper evidences and the same was added by AO to the income of the assessee. 4d. The AO further obse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The AO also observed that efforts were made by the Investigation Directorate to conduct enquiry from some of the sundry creditors by issuing summons u/s 131(1), but the summons issued in most of the cases have been reported to be returned undelivered. The AO in order to conduct necessary enquiries, called for following information from the assessee with respect to sundry creditors: (i) Complete postal address for correspondence to be made with them., Confirmation in the case above Rs. 1,00,000/-, (ii) copy of their accounts, (iii) PAN/ITR of the persons concerned. The AO observed that in response, the assessee neither provided complete postal address of the sundry creditors (the addresses provided by the assessee are incomplete and are absolutely vague and without proper house No. etc.) nor their PAN/ITR was furnished by the assessee. The AO observed that in the absence of the aforesaid information, it is not possible for AO to obtain necessary information either from returns of income or from the Departmental software i.e. AST for conducting physical verifications. The AO observed that confirmations also could not be given in the following cases :- The AO o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s treated as unsubstantiated credit in the books of account of the assessee. The capacity also of the lender is not established because total income shown by her is only 1,85,400/- Sri Sharad Agrawal 5,75,000/- No bank statement/ITR/PAN submitted The entire amount is treated as unsubstantiated credit in the books of account of the assessee. The capacity of the lender is not established because no details could be submitted. Shri PramodSoni 3,00,000/- 3,00,000/- No ITR/PAN has been submitted. The entire amount is treated as unsubstantiated credit in the books of account of the assessee. The capacity also of the lender is not established because no details could be submitted Smt. Suman Agrawal 4,00,000/- 3,10,000/- The amount to the extent of Rs. 3,10,000/- is treated as unsubstantiated credit in the books of account of the assessee. Sri Gowardhan Das Agrawal 4,95,000/- No details whatsoever ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... matters regarding such difference are now duly explained vide reply submitted before ld. CIT(A). The assessee submitted that during the survey proceedings, the assessee categorically objected to the valuation and on the purity. The assessee also submitted that the assessee has requested AO vide letter dated 01.04.2012 and 08.04.2012 to provide the departmental valuer basis for valuation of weight, value and purity certificate/tunch form which is very important for the jewellery industry, but the assessee was never provided with the same. The assessee also submitted that proper explanation was submitted supported with an affidavit during assessment proceedings, but the same was not considered by the AO. With respect to silver jewellery, the assessee submitted that the only pleadings of the AO was that the valuation was done by the independent valuer and merely signing the valuation sheet under protest does not exonerate the assessee from the onus to prove his contention. The assessee submitted before ld. CIT(A) that the AO had observed that the objections to the correctness of valuation are without any specification whatsoever regarding the type of mistake which has occurred durin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsidered the statement of the assessee. The assessee submitted that quantitative details of the stock is available at page no. 208 of the paper-book-1 filed by the assessee, and value wise stock is available at page 213 of the paper book-1 filed by the assessee, and the contention of the AO that the quantitative stock record is not maintained by the assessee is not correct. It was also submitted that the assessee duly filed during the course of assessment proceedings before the AO, all the documents like computation of Income, ITR, copy of audited books of account, bank statements, bank book and the tax audit report. The assessee also submitted before ld. CIT(A) that the affidavit of Smt. Suman Agrawal and Smt. Poonam Tripathi were duly filed before the AO, and the assessee had discharged its onus as the assessee is of the belief that an affidavit is a piece of evidence which along with other material on record has been taken into consideration before arriving at a finding. The assessee submitted that it is entitled to assume that the AO is satisfied with the affidavit, unless the same is discredited in the cross examination or the assessee had failed to produce other supporting ev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sales/transfer and closing stock for the financial year. The reasons for difference was also explained before the AO, was the contention of the assessee before ld. CIT(A). It was also submitted that the assessee had produced certified copies of impounded books of accounts along with supporting evidences for verification during the assessment proceeding, but no discrepancy was pointed out by the AO but additions of Rs. 45,63,994/- was made by the AO on account of differential amount of stock and treated as undisclosed investment merely on conjecture and surmises that the assessee does not keep proper and adequate records to substantiate the quantity of stock. It was also submitted that copy of statement recorded during the course of survey under Section 133A was not provided to the assessee by the AO before the conclusion of assessment proceedings, and the same was provided after completion of the assessment which was unfair and against the principles of natural justice. It was also submitted by assessee before ld. CIT(A) that the statement recorded under Section 133A has no evidentiary value, and the admission made during the course of recording of statement during survey proceedin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t from making general averments. Accordingly, the objection raised by the assessee on account of weighment has no merit and is, therefore, rejected. As regards the purity of these silver articles, the departmental valuer has adopted the purity of silver articles at varying percentages, avg. of which comes to about 65%. I agree with the submissions of the assessee that the valuer has adopted the percentages of purity of the silver articles on no scientific basis. The assessee has filed certain tunch certificates, but these certificates are much after the date of survey and, therefore, not much reliance can be placed for evaluating the purity of the silver articles found during the course of survey. The Ld. AR has strongly relied on the quantitative details which had allegedly been filed along with the return of the income. I have gone through the said quantitative details and I find that there is no mention of the purity % of silver in silver articles. Thus, as far as purity of silver is concerned, no reliance can be placed on these quantitative details too. I had requested the assessee to file tunch certificates obtained for the silver articles purchased or sold during the year and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tioned about this fact during the course of the survey proceedings itself and thus, cannot be discarded as an afterthought. Accordingly, the AO is directed to accept further 850 gm of gold jewellery as explained. As far as the affidavit of Poonam Tripathi is concerned, it appears to be totally an afterthought as this fact was never mentioned by the assessee during the course of the survey, nor any slip or any noting in this regard was found nor the said jewellery was segregated. Thus, the contention of the assessee in this regard is not accepted. In this regard, reference is made to the decision of the Hon'ble Supreme Court in the cases of Durga Prasad More (82 ITR 540) wherein it was held by the Hon'ble Supreme Court that- the taxing authorities were not required to wear blinkers while looking at the documents produced before them. They were entitled to look into the surrounding circumstances to find out the reality of the recitals made in these documents. Further, in the case of DIT vs. Bharat Diamond Bourse [(2003) 179 CTR SC225], the Hon'ble Supreme Court held that- the story rings false from beginning to end, and yet, the tribunal accepted it by s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hese submissions made before the ld. CIT(A). The assessee submitted that the AO has not considered the submissions of the assessee made during the course of assessment proceedings. It was submitted that the assessee raised categorical objection on valuation and on purity of the jewellery/ornaments. The assessee also submitted that the assessee has requested AO vide letter dated 01.04.2012 and 08.04.2012 to provide departmental valuer basis for valuation of weight, value and purity certificate/tunch form which is very important for the jewellery industry, but the assessee was never provided with the same. The assessee also submitted that proper explanation was submitted supported with an affidavit during assessment proceedings, but the same was not considered by the AO. With respect to silver jewellery, the assessee submitted that the only reason of the AO for making the additions was that the valuation was done by the independent valuer, and that the assessee plea cannot be accepted because the same was based on afterthought as such no such bills were either found during the course of survey or were produced during recording of statement, therefore evidences produced by the assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rder was passed by the AO. So far as addition made w.r.t. Gold Jewellery, the assessee submitted before ld. CIT(A) that the AO has not considered submissions filed during assessment proceedings and had not verified the same. The assessee submitted that the AO is only relying on survey proceedings without appreciating that the books of accounts impounded were not updated and the reason for not updating the same was already mentioned during survey. It was submitted that the assessee submitted before the AO that stock register was not maintained but the AO is still considering the stock register and not the impounded books of accounts on the date of survey. The assessee submitted that the AO has not considered the statement of the assessee. It was also submitted by assessee before ld. CIT(A) that the assessee duly filed during assessment proceedings before the AO all the documents like computation of Income, ITR, copy of audited books of account, bank statements, bank book and the tax audit report. The assessee further submitted before ld. CIT(A) that the allegation of the Ld. AO that stock register and other documents were not found during the survey or were not been explained during ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e ld. CIT(A). It was also submitted that the assessee had produced certified copies of impounded books of accounts along with supporting evidences for verification during the assessment proceeding, but no discrepancy was pointed out by the AO, but, however, additions of Rs. 59,79,220/- was made by the AO on account of differential amount of stock by treating the same as undisclosed investment merely on conjecture and surmises that the assessee does not keep proper and adequate records to substantiate the quantity of stock. It was also submitted that copy of statement recorded during the course of survey under Section 133A was not provided to the assessee by the AO before the conclusion of assessment proceedings, and the same was provided after completion of the assessment which was unfair and against the principles of natural justice. It was also submitted by assessee before ld. CIT(A) that the statement recorded under Section 133A has no evidentiary value, and the admission made during the course of recording of statement during survey proceedings could not be made basis of addition without any corroborative material, and the additions so made by the AO is not justified. The asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Agarwal, Assessee himself. Oath Administered Oath Taken sd- Sd/- CIT(A), Allahabad (Ramashrey Yadav) (RajkumarLachhiramka) Q. (1) Please tell what do you do? Ans. I work for the shop of Sri Niraj Agarwal ji at Varanasi. I work at shop and also outstation work for him. Q. (2) Did you ever travel to Mathura for the shop-work? Ans. 3-4 times. Q. (3) Did you go to Mathura in February 2012? Ans. Yes, I had gone to Mathura on 22 February by night train Magadh Express which reached Tundla in the morning and then next to Mathura by bus and reached Mathura at 12 noon. Q. (4) What did you do at Mathura ? Ans. I reached the shop and handed over the cheque to the owner of the shop who handed me payals in 6 bags weighing about 177 kg. The shopkeeper also gave me the bill for the same. Q.(5) When did you reach Varanas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he came with these payals? Ans. I and him put the payals in the almirahs and show case alongwith other and then I asked him to go and freshen up. Q. (6) Did you take the bill from him? Ans. No, I did not remember and the bill was with him. Q. (7) Why did not you call him to the shop when Survey party came ? Ans. The police did not allow anyone to come inside. Q (8) When there was excess of Silver jewellery found, why did you not tell the survey party that the payals were received just in the morning 7. Ans. I was frightened by the Group of I.T. Officers and Police and I was all alone. I did not know how to react. Q (9) You maintain stock register for silver. Why did you not make entry of these goods? Ans. The Munimji was not coming for the last two days. He only maintains all the register account. Q (10) When the valuation was being done, why did you not say that these payals were not silver but gillet? Ans. I had told the valuer that these were gillet but he did not consider it. I was also very frightened and I did not know how to react. That is why I told the survey party that only Sri Nirajji owner can explain. I was real ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he A.O. is thereby directed to exclude this weight i.e. from the excess weight of silver jewellery computed by him. If there is any excess weight beyond this, the same will be computed @ 55% of silver purity. Before parting with the issue, I would like to mention here that this transaction is being accepted by me for the reason that it is backed by a pucca bill/ invoice from the supplier and the payment was made through cheque which was dated 23.02.2012 and the same had also been cleared on 02.04.2012(sic. 02.03.2012). These facts support the contention of the assessee. It is a well-known dictum that the income tax proceedings operate on the theory of preponderance of probability, which works for both the parties i.e. in favour of the assessee as well as in favour of the department, depending upon a given factual matrix. In the instant case, the factual matrix supports the case of assessee. 5.2.2 In case of Gold jewellery, the dispute is with respect to difference of stock of 0.128 gm. The assesse has failed to explain the source of this stock. The opening stock credit has already been given to the gold jewellery found in the Mirzapur shop. Accordingly, this ground of appeal i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Cash Found (Rs.) 1 Varanasi 6,05,000/- 2 Mirzapur 2,900/- Total 6,08,300/- The assessee submitted that cash book was not updated as on the date of survey operation which was confirmed at the time of survey as well as during the course of assessment proceedings along with reasons for the non updatation of cash book, as mentioned below: Sl. No. Address Date of last entry in cash book Cash Book balance during the time of survey Cash Found (Rs.) 1 Varanasi 20.02.2012 20,876/- 6,05,000/- 2 Mirzapur 23.02.2012 18,074/- 2,900/- Total 6,08,300/- It was also submitted by assessee before ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee duly explained the sources of cash found in the course of survey operations conducted by Revenue on 24.02.2012, during assessment proceedings, and submitted that cash found during the course of survey operations u/s 133A was as per books of accounts of the business concern of the assessee. It was submitted by the assessee before ld. CIT(A) that the copies of relevant portion of cash book of the assessee showing cash balance on the date of survey operations were duly filed. Thus, it was claimed that all relevant evidences were submitted, but the AO failed to appreciate the submissions made by the assessee along with evidences and made addition of Rs. 5,87,424/- as undisclosed cash only on the basis of surmises and conjectures. The assessee submitted that the AO did not provide proper and adequate opportunity of being heard to the assessee and the AO never called for further evidences. The assessee claimed that the AO made additions to the income of the assessee in a very general manner ignoring explanations and evidences submitted by the assessee. It was also claimed that no show cause notice(SCN) was issued by the AO before making additions. It was also submitted by assessee bef ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... evenue during survey operations but no question s were raised on the aforesaid cash deposits of Rs. 10,15,000/-. It was submitted by assessee before ld. CIT(A) that during the course of assessment proceedings, the assessee was asked by AO to explain the sources of cash deposit for the first time. The assessee, in response, submitted before the AO that the cash deposited of Rs. 7,00,000/- was from M/s Shamboo Nath Agrawal Saraff (partnership firm) in which the assessee is also a partner and the same was taken as an advance for sale jewellery. It was also submitted that the assessee, after the date of survey, has sold jewellery to M/s ShambooNath Agrawal Saraff and the same is booked under the category of sale in the books of accounts of the assessee. It was also submitted by assessee before ld. CIT(A) that copy of accounts and the sale bills were duly submitted before the AO. It was also submitted that Rs. 3,15,000/- was deposited from the other proprietary concern of the assessee namely M/s Rajshree Palace, and both M/s Raj Shree Jewellers as well M/s Rajshree Palace are proprietary concerns of the assessee, and income is taxable in the hands of the assessee. The assessee submitted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d during survey proceedings without any corroborative material, and the additions so made by the AO is not justified. The assessee relied upon judgment and order of Hon ble Supreme Court in the case of (2012) CIT v. S. Khader Khan Sons (2012) 254 CTR 228(SC). 8b. The learned CIT(A) allowed the appeal of the assessee on this ground and deleted the additions to the tune of Rs. 10,15,000/-, by holding as under: 7.2 Discussion Decision: The Assessing officer had made an addition of INR 10,15,000 on account of cash deposits in the cash book, which was purportedly received from (i) ShambhooNath Agarwal Saraf - Rs.7,00,000/- (ii) Rajshree Palace - Rs.3,15,000/- 7.2.1 These amounts were shown as advance deposits in the books prior to the date of survey. As regards advance/ deposits of INR Rs.3,15,000/- from M/s Rajshree Palace', it is seen that it is another proprietary concern of the assessee The copy of accounts of M/s Raj Shri Palace in the books of M/s Rajshree Jewellers and Raj shree Jewellers in the books of M/s Raj Shri Palace have been seen by me which were submitted during the course of assessment proceedings. I observe that all these pap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... during the survey proceedings. The assessee submitted before ld. CIT(A) that reasons for non completion of books of accounts were duly explained. It was submitted that during assessment proceedings, the audited accounts as well audit report was duly submitted before the AO. The assessee submitted before ld. CIT(A) that the AO was biased against the assessee and made assessment hurriedly. The AO is relying on the same books of accounts while making additions, which were rejected by the AO. It was submitted that the AO failed to appreciate the submissions along with all evidences furnished by the assessee, while rejecting books of accounts. It was submitted that assessee is maintaining books of accounts for last several years which were also subjected to tax audit u/s 44AB. The AO did not provide sufficient reasons for rejecting books of accounts and wrong allegations are levied by the AO while making assessment without considering evidences filed by the assessee during assessment proceedings. It was submitted that proper and adequate opportunity of being heard was not granted by the AO to the assessee before rejecting assessee s books of accounts .The AO also alleged that quantitati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4,82,707/- on account of unexplained sundry creditors under Section 68 of the Act. The assessee explained before learned CIT(A) that the assessee has duly submitted all the details of sundry creditors before the AO during the course of assessment proceedings. The assessee submitted that even books of account along with tax audit report were duly submitted before the AO. The copy of account of all the sundry creditors were also furnished. It was submitted that the AO issued summons under Section 131(1) to all the sundry creditors. In case where the summons under Section 131(1) returned unserved, the assessee was not informed by AO about the same and the reasons were not communicated to the assessee. It was submitted that it is only after the assessment order was passed, the assessee came to know about the same. It was submitted that the AO was having all the details but the assessee was again instructed to submit all the details which were submitted by the assessee during the course of assessment proceedings. The additions were made by AO without giving opportunity of being heard to the assessee. It was submitted by assessee before ld. CIT(A) that AO mentioned reason of addition mad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6,243/- Shri Sati Ram, JituDustakpur, Varanasi Rs 4,32,710/- Shri VariPayals, 216, Moongapadi, Street, Gugai, Salesm Rs 73,770/- Total Rs. 34,82,707/- 9.2.1 I have seen the list of sundry creditors. It has been informed to me that all the confirmations had already been called for by the survey team (after the survey proceedings) and all the trade creditors had already submitted the confirmations to the department directly. However, since these submissions were in the realm of speculation, I directed the assessee to file the confirmations duly signed by the trade creditors. Such Confirmations are already on the assessment records, but these have been signed only by the assessee and not by the vendors. The assessee filed these confirmations duly signed by the creditors as well. I discuss each of these trade creditors as under- i) D.D. Industries - Rs.9,49,700-Before the AO., the assessee had filed a copy of account of the said party, on perusal of which it is seen that the impugned credit appears in these accounts. This copy of accou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al address and the copy of accounts of these lenders, for the first time during the course of assessment which was submitted by the assessee. It was also submitted that the assessee submitted all the details from the relative and others. It was submitted that even the audited books of accounts along with the tax audit report was submitted before the AO, and inspite of having all the details in the file, the AO asked assessee to submit the details again which was again submitted along with copy of account and complete postal address, ITR acknowledgement of all the lenders, along with copy of bank statements of the two lenders. It was also submitted that all the loans were taken through account payee cheque s and hence the assessee discharged the onus. It was also submitted that the AO had issued letters under Section 133(6) to various lenders which the assessee came to know after the assessment order is passed. It was also submitted that the AO did not inform the assessee that he is still in doubt and few of the documents were not provided to him by the lenders. The assessee contended that the AO has not given proper and adequate opportunity of being heard to the assessee. It was su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... i. Gopi Nath Agrawal - Details are at page 20-21 of the Paper Book 2. No Confirmation and bank statements received as he was not well as per the letter of his son Shri Sharad Agrawal. But account number, bank name and branch was shared. In this view of the matter, the addition made is confirmed as the identify, creditworthiness and the genuineness of the transaction has not been proved. e. Smt. Shilpa Khaitan - details at Page 25-28 of the Paper Book 2. Confirmation and bank statements filed on 17/03/2015. Copy of ITR is at Page 22 of the Paper Book 1. The AO should send the confirmation letter filed by her to her A.O. for him to verify the transactions. The addition so made is hereby deleted. f. Shri Pramod Soni - Details @ Page 22-24 of the Paper Book 2. Confirmation and bank statements filed on 18/03/2015. Copy of ITR is at Page 21 of the Paper Book 1. The AO, should send the confirmation letter filed by him to his AO for him to verify the transactions. The addition so made is hereby deleted. g. Shri Goverdhan Das Agrawal - Details at Page 31-32 of the Paper Book 2. Copy of the ITR submitted by the appellant. The AO. should send the confirmation letter filed by hi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are of the view that the facts of the present case are squarely covered by the decision contained in Kalyankumar Ray's case in as much as it is undisputed that contained a calculation of Interest payable on the tax assessed. This being the case, it is clear that as per the said judgment, this Form must be treated as part of the assessment order in the wider sense in which the expression has to be understood in the context of Section 143, which is referred to in Explanation 1 to Section 234B. 11.2.1 In the present case, I have verified that the ITNS 150 for this assessment year has been filled up and interest u/s 234A/234B/234C has been duly charged in that form. The form has also been signed by the A.O. Thus, the levy of interest u/s 234A/234B/ 234C is perfectly justified and is in order. The Ld. A.R. of the assessee has cited various High Court decisions, but with due respect, they are irrelevant in face of the categorical decision of the Hon'ble Supreme Court which lays down the law of the land under Article 141 of the Constitution. In this view of the matter, this ground of appeal is hereby dismissed. 13. Thus, the ld. CIT(A) partly allowed the appeal of the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssment order was received on 01.04.2015. It was submitted that additions to the tune of more than Rs. 1.84 crores were made by the AO. It was submitted that books of accounts were not updated at the time of survey viz. 24.02.2012. Our attention was drawn to various additions made by the AO in the assessment order. It was submitted that no SCN was issued by the AO prior to making of assessment. It was submitted that two paper books were filed by assessee before ld. CIT(A), first carrying 248 pages and second carrying 147 pages, which are also now filed before the tribunal and the same shall be referred to in these proceedings before tribunal. It was submitted that written submissions were filed before ld. CIT(A) on 09.06.2016. It was submitted that ld. CIT(A) passed an appellate order on 07.03.2017, and appeal of the assessee was partly allowed, wherein partial relief was granted by ld. CIT(A). It was submitted that now both assessee as well Revenue are in appeal before tribunal. It was submitted by ld. Counsel for the assessee that stock register was maintained for silver jewellery, while no stock register was maintained for gold jewellery as well silver bullion. It was submitted t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... deleted. It was submitted that while recording statement during survey, the assessee stated about 850 gms of gold of wife lying in Mirzapur premises(HO). With respect to remaining difference, it was submitted that 202 gms of the gold jewellery which was physically found during survey, belonged to Mrs. Poonam Tripathi who left her jewellery in the Mirzapur premises(HO) on 24.02.2012 at 10.30AM for getting it valued. It was submitted that this explanation regarding 202 gms of gold jewellery of Poonam Tripathi lying in Mirzapur premises(HO) at the time of survey, was submitted by assessee before AO during assessment proceedings. This explanation about 202 gms of gold jewellery belonging to Mrs. Poonam Tripathi was not given during survey proceedings while recording statement. It was submitted that affidavit dated 12.02.2015 of Mrs. Poonam Triptahi is placed at page 61 of the paper book, and was submitted before AO during assessment proceedings, wherein she owned up said Gold Jewellery weighing 202 gms. It was submitted that the AO never recorded statement s of Mrs. Suman Agrawal and Mrs. Poonam Tripathi. Our attention was drawn to statement of Mr. Neeraj Agrawal recorded on 24.02.201 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t purity was 40%, while at page 79/PB-II, the purity was 60%, and it was submitted that these are purchases made by the assessee. The assessee relied upon the judgment and order passed by Hon ble Delhi High Court in the case of CIT v. Balaji Wire Private Limited reported in 304 ITR 393( Del. HC). With respect to difference in Silver Bullion, the ld. Counsel for the assessee submitted that the ld. CIT(A) did not consider the opening balance of silver ingots of 5.751 kg.. Our attention was drawn to page 12 of ld. CIT(A) order and Ground No. 1.5 raised before the tribunal. Thus, it was submitted that ld. CIT(A) erred in not considering opening stock of Silver Bullion of 5.751 Kg.. Regarding difference in stock at Varanasi, our attention was drawn to the order passed by ld. CIT(A) para 5.2.1. It was submitted that no bill of artificial silver jewellery was found during survey. It was submitted that artificial jewellery being Gillet Payal was purchased from Mathura. It was submitted that no bill of Gillet Payal was found during survey. Our attention was drawn to page 63/PB-1, wherein bill issued by M/s R S Bullion and Jewellers, dated 23.02.2012 for 177.500 kg of Gillet Payal for Rs. 2, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 23.02.2012. Our attention was drawn to statement of Mr. Neeraj Agrawal, recorded during survey proceedings, which is placed in PB-1/page 219228. Regarding difference in Silver Bullion at Varanasi Branch Office(BO), it was submitted that difference was 4.958 Kg, and it was submitted that the same was received from Mr. Gharau Yadav for selling the same to assessee and was later returned to Mr. Gharau Yadav on 27.02.2012 as no sale deal materialized. It was submitted that AO never issued SCN before making addition. It was further submitted that department never recorded statement of Mr. Gharau Yadav. The ld. Counsel for the assessee relied upon the judgment and order of Hon ble Supreme Court in the case of S. Khader Khan Sons(supra). Regarding cash found during survey proceedings, it was submitted that there was difference of Rs.5.87 lacs in physical cash found and cash balance in the cash book. It was submitted that there was difference in cash both at Mirzapur(U.P.) HO and At Varanasi, Branch office. It was submitted that ld. CIT(A) deleted additions of Rs. 0.18 lacs, while confirmed additions to the tune of Rs. 5.69 lacs. Our attention was drawn to page 18 of assessment order. I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Mr. Gopi Nath Agrawal and the reply dated 18.03.2015 submitted by his son Mr. Sharad Agrawal intimating AO that his father is unwell and seeking further time to submit reply. It was submitted that Mr. Gopi Nath Agrawal passed away on 01.04.2015. The copy of death certificate dated 06.04.2015 bearing registration number 476 issued by Registrar of Birth and Death ( stamp not clear ), Government of Uttar Pradesh was submitted by ld. Counsel for the assessee before the Bench, certifying death of Shri Gopi Nath Agrawal s/o Late Mr. Tek Chand Agrawal, which is placed on record in file. Our attention was drawn to page 196 /PB-1 wherein bank statement of the assessee is placed, where this loan received from Mr. Gopi Nath Agrawal is credited. Our attention was also drawn to Page 200/PB-1 which is the Axis Bank book in the assessee s book, where the above amount is reflected. Our attention is drawn to page 212 of PB-1(PB filed by the assessee), which is audited accounts of the assessee, where this amount is reflected as unsecured loan received from Mr. Gopi Nath Agrawal. Our attention was drawn to page 44 of ld. CIT(A) appellate order and it was submitted that the assessee had raised additio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... drawn to Para 2.2 of written submissions filed by department. It was submitted that two summons u/s 131 dated 27.02.2012 and 29.02.2012 were issued by ADIT(Inv.) to the assessee, and a subsequent letter dated 06.03.2012 was also sent to the assessee by ADIT(Inv.), but the assessee did not responded to these summons u/s 131 and letter sent by ADIT(Inv) which clearly indicates that the assessee did not want to extend co-operation to the department. It was submitted that the assessee avoided investigation. Our attention was also drawn to para 2.3 of written submissions filed by department. It was submitted that ADIT(Inv.) report, dated 16.04.2012 is enclosed in paper book-2 filed by department at page 67-72, and these are by way of post survey enquiries conducted by department. It was submitted that, however, department has not made any additions on the basis of seizure of silver ornaments by Railway Protection Force(RPF) on 29.11.2011, nor any additions have been made based on report of ADIT(Inv.). It was submitted that the AO made additions based on Survey conducted by Revenue u/s 133A on 24.02.2012 and on the basis of the assessment proceedings conducted by Revenue u/s 143(3) read ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gold jewellery claimed by them to belonging to Mrs. Suman Agrawal and Mrs. Poonam Tripathi. It was submitted that even in survey proceedings, the assessee never stated that which particulars items belonged to Mrs. Suman Agrawal. It was submitted that the assessee never stated during survey, that gold ornaments contained some items belonging to Mrs. Poonam Tripathi, as it is only at the stage of assessment, that the assessee came out with explanation that 202 gms of gold ornaments belonged to Mrs. Poonam Tripathi. There was no entry in books of accounts/stock records that the gold ornaments belonged to these two ladies, nor any slip etc was found during survey stating that these gold jewellery belonged to Mrs. Suman Agrawal and/or Mrs. Poonam Tripathi. It was submitted that it was merely an afterthought which the assessee is now coming out to explain excess stock of gold ornaments found during survey at Mirzapur HO. It was submitted by ld. Sr. DR that excess stock was unearthed during Survey. It was also submitted that unsubstantiated statement was made by the assessee during survey. It was submitted that name of Mrs. Poonam Tripathi was not referred to by the assessee during survey ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... never traded in artificial silver jewellery in the past and as well in future, and this is the solitary transaction of alleged purchase of artificial silver ornaments viz. Gilet Payal which the assessee is trying to explain to justify unexplained stock of silver ornaments found during survey. It was submitted by ld. Sr. DR that the assessee is not engaged in the trading of artificial jewellery, and this fact was admitted by assessee itself that the assessee never dealt in artificial jewellery in the past prior to survey nor post survey, and this is the alleged sole transaction of artificial silver jewellery being Gilet Payal claimed to be entered into by the assessee. Our attention was drawn to page 47-48 of PB-2 filed by assessee, and it was submitted that the entry w.r.t. 177.500 kgs of Gillet Payal was passed post survey. It was submitted that the assessee mixed up so called artificial silver jewellery with real silver jewellery in the display of jewellery in Varanasi premises (BO) which itself evidences that 177.500 Kgs of silver jewellery which is sought to be explained as artificial jewellery was in fact real silver jewellery. It was submitted that the assessee is manufacture ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with assessee for sale on 23.02.2012 but the transaction did not materialize, and it was later returned to Mr. Ghurahu Yadav on 27.02.2012. Thus, it was submitted that ld. CIT(A) rightly upheld the addition on this ground. With respect to cash physically found during survey at Varanasi, U.P. in excess of that recorded in cash book, the ld. Sr. DR submitted that it remained unexplained during survey, and while recording statement during survey. The ld. Sr. DR would rely on appellate order passed by ld. CIT(A). With respect to sources of cash deposits of Rs. 10.15 lacs in cash book of Mirzapur, HO, it was submitted that the cash was allegedly received from 2 related parties, namely M/s Shambhu Nath Agrawal Sarraf and M/s Raj Shree Palace. Our attention was drawn by ld. Sr. DR to page 94-95/PB-1 filed by department. It was submitted that two different accounts were opened in the books of the assessee of M/s Shambhu Nath Agrawal Jewellers and M/s Shambhu Nath Agrawal Saraph(sic. Sarraf). In the first account, there was sale of 47,793/- of Silver Jewellery on 26.05.2011, for which payment of Rs. 47,800/- was received on 06.05.2011 through banking channel (credited on 11.05.2011 in bank ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dated 27.02.2012 and 29.02.2012 as well letter dated 06.03.2012 were never received by the assessee. It was submitted by ld. Counsel for the assessee that the assessee duly co-operated during assessment proceedings as well during investigation proceedings conducted by department post survey. It was submitted that on 21.01.2012 i.e. prior to survey on 24.02.2012, statement of the assessee was recorded by department u/s 131. So far as summons sent u/s 131(1A) dated 27.02.2012 and 29.02.2012, and letter dated 06.03.2012 which were sent to assessee by investigation wing post survey, it was submitted by ld. Counsel for the assessee that these summons/letters were never received by the assessee. On the other hand, the ld. Sr. DR drew our attention to Annexure A-3 challan book for recording movement of goods from Mirzapur HO to Branch office at Varanasi(page 30-36 of PB-3 filed by department). Our attention was drawn to Annexure A-5, which is stock register of silver ornaments(page 4354/PB-3 filed by department). Our attention was drawn by ld. Sr. DR to entry dated 29.11.2011, which shows that 183.080 kg ( net weight) of silver ornaments were seized by RPF. Our attention was drawn to page ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ependent evidence which was filed by the assessee. Our attention was drawn by ld. Sr. DR to the impounded ledger and the account of M/s Shambhu Nath Agrawal Saraff, which is placed at page 60 and 62 of paper book-3 filed by department. It was submitted that the assessee is claiming the same to be advances received in cash at various dates to the tune of Rs. 7.00 lacs which were all received in cash on different dates as advance against alleged sale of jewellery, as under: S.No. Date Concerned Perons/Firm name Amount 1 01.04.2011 Shambhoo Nath Agrawal Sarraf Rs.1,00,000/- 2 20.05.2011 Shambhoo Nath Agrawal Sarraf Rs.1,00,000/- 3 30.06.2011 Shambhoo Nath Agrawal Sarraf Rs.1,00,000/- 4 15.09.2011 Shambhoo Nath Agrawal Sarraf Rs. 4,00,000/- 5 24.05.2011 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... provision of Section 68. Our attention was drawn to page 63/PB-3 filed by the department, and it was submitted that this is impounded ledger of Silver Bullion showing balance of Rs. 83,380/- and there is no mention of quantitative details. Our attention was drawn to Page 34-35 of Paper Book-2 filed by department, and it was submitted this is a valuation report of registered valuer valuing Silver Bullion found at Mirzapur HO, where in stock found was 6.180kg which was valued at Rs. 2,38,702/- by registered valuer on the date of survey. Our attention was drawn to Page M of written submissions filed by department in PB2, and it was submitted that no quantitative details of Silver Bullion was maintained by the assessee, and hence additions were made by the AO of the excess stock of Silver Bullion found during survey was justified. Our attention was drawn to page 64. Our attention was drawn to Page 64,65 and 67 of PB-3 filed by department, which are impounded ledger accounts of stock. Our attention was drawn to Page 67/PB-3 filed by department, which is impounded ledger account of gold ornaments, and value comes to Rs. 7.33 lacs, while as per PB-2/page 35(PB filed by department), physi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h Silver Art Private Limited and M/s. Sati Ram, and it was submitted that additions were made by the AO by invoking provisions of Section 68. Our attention was drawn to cash book found during survey, which was impounded, placed at page 92-95 /PB-3 filed by department. Our attention was also drawn to Annexure A-8, which is journal impounded during survey, placed in PB-3/page 96-98 filed by department. Our attention was also drawn to Annexure A-10/page 114-141, which are loose papers impounded during survey, and it was submitted that no evidence was found regarding gold ornaments claimed to be belonging to Mrs. Suman Agrawal and Mrs. Poonam Tripathi. Our attention was also drawn to documents impounded from Varanasi BO. It was submitted that there was no direct purchases by Varanasi Branch Office from any party, and there are only transfers from Mirzapur HO to Varanasi BO. Our attention was drawn to stock register of silver ornaments, which was impounded by Revenue(Page 145-148/PB-3 filed by department). It was submitted that the stock of 453.900 Kgs was the stock shown in stock register, while physical stock found on date of survey on 24.02.2012 was 665.93Kgs. .It was submitted by ld ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ies. It was submitted that it is only on 13.02.2015 during assessment proceedings, the assessee explained that the excess stock of silver ornaments of 177.500 kgs found during survey was artificial jewellery being Gillet Payal allegedly purchased from R S Bullions and Jewellers. It was submitted that the assessee claimed to have allegedly purchased these artificial silver Jewellery Gillet Payal only on 23.02.2012 and was brought on the Varanasi shop on the date of survey in the morning before the start of survey proceedings. It was submitted that the assessee is claiming that the person/employee of the assessee went to Agra to purchase these alleged artificial jewellery. It was submitted that it was an afterthought and even no documents substantiating that this transaction took place, was found during the course of survey proceedings .The ledger account of shop expenses was maintained until 07.01.2012, and no bill was found for journey undertaken for visiting Agra and return to Allahabad. It was submitted that it was merely an afterthought and purchase of artificial silver jewellery viz. Gillet Payal was merely an accommodation entry, and it was the undisclosed /unexplained stock o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the audited Balance Sheet. Our attention was drawn to question number 8 of statement recorded on 24.02.2012 u/s 133A(3)(iii) of the 1961 Act, of Mr. Neeraj Agrawal, wherein he explained the source of these silver ornaments (page 225/PB-1 filed by assessee). On being asked by the Bench, the ld. Counsel for the assessee submitted that there was no VAT form issued for movement of goods from U.P. to Tamil Nadu, to cover aforesaid movement of silver ornaments on 28/29.11.2011. Thus, the claim of the assessee that movement of Silver Ornaments on 29.11.2011 from U.P. to Salem, TN for repairs was not recorded with the VAT department at U.P. as well at Tamil Nadu. It was, however, submitted that silver ornaments seized by RPF were later released under the orders of the Court dated 07.09.2012, subject to furnishing of Bond. The silver ornaments were released by RPF in pursuant to court orders, and were received in stock on 25.09.2012. These silver ornaments were sent to Salem, TN on 13.01.2013. The silver ornaments were sent back from Salem to Mirzapur after repairs, on 19.01.2013. The entry was made for receipt of silver ornaments in stock register, on 23.01.2013. It was submitted that sur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... parties have deposited cash in their bank accounts before issung cheque to the assessee, but their confirmation/ ITR, bank statements etc were duly filed. The ld. Counsel for the assessee drew attention to each of the loan confirmation given by these parties as well bank statements, ITR filed by them. It was submitted that ld. CIT(A) rightly deleted additions, except in the case of Mr. Gopi Nath Agrawal. It was prayed that even in the case of Mr. Gopi Nath Agrawal, keeping in view facts and circumstances explained above, the addition is not sustainable. It was submitted that no interest u/s 234B and 234C could be levied as notice of demand is dated 24.03.2015, which is not part of assessment order dated 20.03.2015. On the other hand, the ld. Sr. DR relied upon decision of Hon ble Supreme Court in the case of Kalyan Kumar Ray(supra). Both the ld. Counsel for the assessee as well ld. Sr. DR reiterated gist of their contentions. 15. We have carefully considered rival contentions and perused the material on record including cited case laws. We have observed that the assessee is engaged in the business of Trading and Manufacturing of Silver Jewellery, Trading of Gold Jewellery, uten ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... emises, was got valued by department through registered valuer. Before proceeding further, it will be relevant to mention here that there was seizure by Railway Authorities by Railway Protection Force of silver ornaments aggregating to 188.220 kgs(gross weight) (net weight 183.293 kgs) from the possession of two persons on 29.11.2011 while travelling in the train Jodhpur-Howrah Express at Allahabad Junction, without proper documents. The assessee claimed ownership of these silver ornaments, which silver ornaments were seized by RPF. The assessee also claimed that the persons who were carrying silver ornaments in the train on 29.11.2011 are his employees. This information was passed on by Railway Authorities to Income-tax department. Statement of the assessee u/s 131(1)(d) was recorded by Department on 21.01.2012. Survey u/s 133A was conducted by Revenue on 24.02.2012. However, no addition to the income of the assessee was made by the AO with respect to the aforesaid seizure of 188 kgs(gross weight) (net weight 183.293 kgs) of silver ornaments on 29.11.2011 by RPF, and the matter rested there. The ld. CIT(A) also did not invoked his enhancement powers as are vested u/s 251(1)(a) of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion sheet 'under protest' does not exonerate the assessee from the onus to prove his contention. The objections to the correctness of valuation are without any specification whatsoever regarding the type of mistake which has occurred during the course of valuation. The relevant portion of the statement given on this issue is reproduced hereunder for the sake of clarity: 3.2(b) Actually, no specification regarding the kind of mistake has been given, therefore, it becomes clear that the assessee is apparently contending just to create a ground for unnecessary litigation in order to avoid payment of correct amount of taxes which he cannot be allowed to resort to. Merely saying that कुछ भूल ई है is not sufficient to admit the contention of the assessee. 3.2(c) It is imperative to mention that during the course of the survey proceedings, the valuation of stock was done by the registered valuer in front of Sri Sharad Agrawal, the employee of the assessee firm who did not point out any kind of mistake whatsoever. This also means the assessee is contending the issue with clear intention to mi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of 1033.180gms in the books of account is grossly incorrect as per the findings transpired in the survey proceedings. No stock register or other documents were either found during the course of the survey, nor could the same be explained during the course of the assessment proceedings. In these circumstances, the contention of the assessee cannot be accepted. The value of investment as worked out by the registered valuer i.e. Rs. 42,00,560/-is being added to the total income of the assessee u/s 69B of the Income Tax Act, 1961. Penalty proceedings u/s 271(1)(c) is being initiated separately for concealment of income. Addition of Rs. 42,00,560/- (iii) Regarding Silver Bullions: Likewise, the submissions regarding silver bullion is also grossly misleading because no such stock register or composite stock register has been either found during the course of survey or during the course of assessment proceedings. Therefore, the entire differential amount as already tabulated above, is being treated as undisclosed stock and the purity of the silver bullion is taken as valued by the registered valuer (as mentioned on the inventory concerned), i.e. Rs. 2,38,702/.Accordingl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aking general averments. Accordingly, the objection raised by the assessee on account of weighment has no merit and is, therefore, rejected. As regards the purity of these silver articles, the departmental valuer has adopted the purity of silver articles at varying percentages, avg. of which comes to about 65%. I agree with the submissions of the assessee that the valuer has adopted the percentages of purity of the silver articles on no scientific basis. The assessee has filed certain tunch certificates, but these certificates are much after the date of survey and, therefore, not much reliance can be placed for evaluating the purity of the silver articles found during the course of survey. The Ld. AR has strongly relied on the quantitative details which had allegedly been filed along with the return of the income. I have gone through the said quantitative details and I find that there is no mention of the purity % of silver in silver articles. Thus, as far as purity of silver is concerned, no reliance can be placed on these quantitative details too. I had requested the assessee to file tunch certificates obtained for the silver articles purchased or sold during the year and before ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bout this fact during the course of the survey proceedings itself and thus, cannot be discarded as an afterthought. Accordingly, the AO is directed to accept further 850 gm of gold jewellery as explained. As far as the affidavit of Poonam Tripathi is concerned, it appears to be totally an afterthought as this fact was never mentioned by the assessee during the course of the survey, nor any slip or any noting in this regard was found nor the said jewellery was segregated. Thus, the contention of the assessee in this regard is not accepted. In this regard, reference is made to the decision of the Hon'ble Supreme Court in the cases of Durga Prasad More (82 ITR 540) wherein it was held by the Hon'ble Supreme Court that- the taxing authorities were not required to wear blinkers while looking at the documents produced before them. They were entitled to look into the surrounding circumstances to find out the reality of the recitals made in these documents. Further, in the case of DIT vs. Bharat Diamond Bourse [(2003) 179 CTR SC 225], the Hon'ble Supreme Court held that- the story rings false from beginning to end, and yet, the tribunal accepted it by sayings, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... elry determined by registered valuer. The assessee did ask department for weighing again the silver jewelry during the course of survey, in his statement recorded on 24.02.2012. The department did not get the weighment as well valuation done again on the date of survey. The assessee has claimed that plastic boxes were also weighed along with the silver ornaments, which led to excess weight of 3.32 kgs, and for purity the assessee is contending that Tunch certificates were not provided while determining purity of silver ornaments, and the purity determined by registered valuer was not done by adopting scientific method rather it was done by estimation. The AO rejected the objections and adopted the weight as well purity computed by the registered valuer who was an independent expert in the field valuing the silver articles. The ld. CIT(A) rejected the objection of the assessee so far as weighment is concerned, but estimated purity @55% of silver ornaments as against the purity of average of 65% as per version of ld. CIT(A) adopted by registered valuer. The ld. CIT(A) referred to purity prevailing in this part of U.P. and the same purity followed by him in some other case, although h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt, and merely general and balled statement is not sufficient. The assessee did not produce any valuation report of approved/registered valuer, prepred at his behest immediately after conclusion of survey, as no such valuation report by approved /registered valuer done at the behest of the assssee was ever filed by the assessee. The assessee never filed any evidentiary documents to substantiate its objections as to the weightment and purity of silver ornamnets, immediately after survey. The assessee was called upon by authorities to explain the differences, at three different stages, firstly by the investigation wing of the department, wherein the summons dated 27.02.2012 and 29.02.2012 as well letter dated 06.03.2012, were issued wherein the assessee had opportunity to explain the differences in the stock. The ld. Counsel for the assessee Advocate Shri Divyanshu Agrawal, being officer of the Court made statement before the Bench, that these summons and letter dated 06.03.2012 were never received by the assessee and hence there is no question of compliance by the assessee. On perusal of the Survey Report dated 16.04.2012, which is placed on record, in Departmental Paper Book filed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... time of survey itself. It is also claimed that even statements recorded during survey were not provided to the assessee before the conclusion of assessment. The ld. CIT(A) did not grant opportunity of hearing to the AO, to rebut the average rate of purity 55% adopted by ld. CIT(A) based on purity rate adopted in some other survey(name of that tax-payer not revealed by ld. CIT(A)) in this part of U.P.. There are two parties before ld. CIT(A) and principles of nature justice demand that fair hearing be granted to both the parties. Reference is drawn to Section 250(1) and 250(2) of the 1961 Act, as well Rule 46A of the Income-tax Rules, 1962. In our considered view based on facts and circumstances of the case and in the interest of justice, one more opportunity is required to be granted to the assessee to rebut through cogent evidences the valuation report of the registered valuer as to both weighment of the silver ornaments found during survey as also as to the purity of silver ornaments adopted by the registered valuer. So far as legal precedents relied upon by the assessee, it is not the case of the surrender of the undisclosed income during the course of survey proceedings, but in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce before the AO that even the stock of gold ornaments to the tune of 1033.80 gms was as per books of accounts. The ld. CIT(A) granted the benefit of 1033.80 gms of gold ornaments as available as per books of accounts, on the date of survey, by holding that during the year, the assessee had 10 gms of gold jewellery as the opening balance as on 01.04.2011, the assessee made purchases of the following gold jewellery viz. 225.8gms from Mr. Om Prakash Tiwari on 12.10.2011 ; 311.10 gms from one Shri Santosh Kumar Singh on 14.10.2011 and 936.480 gms from Sati Developers n Tower Private Limited on 07.02.2012, and as per ld. CIT(A) all these purchases entries were found entered in the books impunded during the year course of survey proceedings. The ld. CIT(A) observed that copy of Khata Bahi is produced before him. The ld. CIT(A) further observed that the assessee has sold 450.1gms of gold ornaments to one Dhiraj Jewellers on 01.02.2012, and the bill was impunded on 24.02.2012(page 75/PB-2 filed by assessee/PB-3 filed by department at page 28). We have gone through ledger account of gold ornaments (page 67/PB-3 filed by department) and as contended by ld. Sr. DR that there were three entri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n Agrawal, by the assessee at the time of survey nor it was done at any stage of proceedings including before us. The affidavit which is filed after three years of survey also does not identify as to which items of gold jewellery were claimed to be belonging to and owned Mrs. Suman Agrawal. No evidence is filed to corroborate the statement made during the survey and also to substantiate the affidavit, by way of wealth tax returns of Mrs. Suman Agrawal or declarations in the ITR of Mrs. Suman Agrawal or purchase bills for purchasing personal jewelry by Mrs. Suman Agrawal, nor even photographs etc. to substantiate that the said jewelry was used by her on various occasions/cermenoy to identify and prove ownership of such gold jewellery belonging to and/or owned by Mrs.Suman Agrawal. However, the contention of the assessee at the time of survey that 850 gms of the gold ornaments belonged to her wife which was kept for safekeeping, is not completely out of preponderance of human probabilities as it is claimed that she went to her parental house at Satna, M.P. to see her ailing father and thus left the personal jewellery for safe keeping at the Mirzapur HO, as it is in the realm of possi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the affidavit, no inventorisation of the items of gold ornaments belonging to Mrs Poonam Tripathi was done. There is no other evidence apart from the self serving affidavit of Mrs. Poonam Tripathi filed by the assessee to support its contentions, and this affidavit is dated 12.02.2015 while survey u/s 133A took place on 24.02.2012. The reliance of assessee on the case law cited before us is misconceived, firstly it is not the case of surrender of income during survey rather incriminating material by way of excess stock of gold ornaments were found during survey on 24.02.2015. Secondly, the affidavit filed by the assessee of Mrs. Poonam Tripathi is a self serving documents without any corroboration with any evidences. It is incomprehensible to believe that Mrs. Poonam Tripathi will leave 202 gms of gold ornaments with the employee of the assessee for valuation without any receipt. No such receipt was found / impounded during survey. It is also incomprehensible to believe that the assessee will keep gold ornaments of 202 gms in his business premises, without making entries in the record. No such entry or noting was found during survey or in the impounded material. It is further inco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... valued by the Registered valuer M/s Pankaj s Jewel Art Creation, Allahabad on 24.02.2012. The valuer have identified two items, Silver Bullion of 4.556 Kgs valued at Rs. 1,44,835/-, and secondly Silver Bullion(Fine) of 1.624kgs which is valued at Rs. 93,867/-, totaling 6.180 kgs.(page 34 of PB-2 filed by department). The assessee during survey proceedings has raised objections with respect to weight and purity. The valuation is done by registered valuer who is an expert in the field. The department has discharged its onus, and now the onus shifted to the assessee to demonstrate that there are specific flaws in the valuation done by the registered valuer both in terms of purity as well weighment, and merely general and balled statement is not sufficient. The assessee did not produce any valuation report of approved valuer, done at his behest immediately after conclusion of survey, as no such valuation report by approved valuer was ever filed by the assessee. The assessee was called upon by authorities to explain the differences, at three different stages, firstly by the investigation wing of the department, wherein the summons dated 27.02.2012 and 29.02.2012 as well letter dated 06 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ornaments, leaving old stock of Silver Ingot of 5.751 kgs which was there as on 01.04.2011. This requires verification of facts. Further, as per impounded ledger A-6, the Silver Fine is reflected as opening balance as on 01.04.2011 of Rs. 83,390/- (without mentioning quantity)(page 63/PB -3 filed by department). This stock of Rs. 83,390/- is reflected as Silver Ingot as on 01.04.2011 as opening stock in audited statement for 2011-12. The corresponding quantity of silver ingot is 5.751 kgs. (page 26 and 37/PB-1 filed by department). Similar corresponding figures both valuation wise of Rs. 83,390/- of silver ingotas well stock of silver ingot of 5.751 kgs were there in the preceding year audited accounts for financial year 2010-11 (page 153 and 155/PB-1 filed by assessee). It is admitted position that no stock register was maintained by the assessee for Silver Bullion. This claim made by assessee as to opening stock of 5.751 kgs of Silver ingot(silver bullion) requires verification as to looking into dealing of the assessee in Silver Bullion viz. purchase, consumption for manufacturing silver ornaments during the year, as both the authorities rejected claim of the assessee at thresh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The AO considered the reply of the assessee and observed as under: (i) Regarding Silver Items: The assessee's contention that the bills regarding purchases made on 21.02.2012 and on 23.02.2012 have been produced during the course of assessment proceedings, cannot be accepted because the same are based on after thought as no such bills (except the bill regarding purchase of the jewellery to the extent of 34.826 K.G.) were either found during the course of survey or were produced during the recording of statement, therefore, the evidences produced before the undersigned cannot be treated to be reliable because they are nothing but evidences created after being caught on wrong footing. On perusal of the statement recorded, during the course of survey, it is seen that billsregarding purchase of jewellery to the extent of 34.826 K.G. have been produced, hence the benefit of the same, is being given to the assessee and the rest of the stock i.e. 212.03 - 34.826=177.174 is being treated as undisclosed investment in stock and accordingly addition of the value of investment i.e. 56,32,361/- is being made to the total income of the assessee u/s 69B of the Act. The rate has be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e u/s 69B of the Act is being made as consequence of the above facts. The value is being taken as per the registered valuer's report at Varanasi premises i.e. Rs. 78,059/-. Penalty proceedings u/s 271(1)(c) is being initiated separately for concealment of income. Addition of Rs. 78,059/-/ The ld. CIT(A) gave partial relief to the assessee, by holding with respect to the three aforesaid additions w.r.t. differences in stock at Varanasi B.O., by holding as under:- 5.2 Discussion: The Assessing officer has made addition on account of excess stock found in Varanasi premises in three categories, i.e. Silver jewellery, Gold Jewellery and Silver Bullions. I deal with each of these as under: 5.2.1 Decision: In case of Silver jewellery, the dispute is mainly on account of silver jewellery allegedly purchased from Mathura which was physically available at the time of survey but the bill wasn't available nor the same was entered in the stock register. It is the case of the appellant that the same stock had reached on the date of survey but the bill had not been received. The copy of the bill (by which the said artificial payals were allegedly purcha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... over the cheque to the owner of the shop who handed me payals in 6 bags weighing about 177 kg. The shopkeeper also gave me the bill for the same. Q. (5) When did you reach Varanasi ? Ans. From Mathura, I took the taxi to Tundia and then took the train to MathuraLichavi Express and reached Varanasi Cantt. At 8:30 am on 23 February and by auto reached the shop at Varanasi. The Manager was waiting for me at the shop and I took out the payals from these bags and alongwith the Manager took these payals in the counters/ Almirahs. After that I left to have tea and when I returned I found Police at the shop and they did not allow me to enter the shop. So I could not go inside. Q. (6) Where was the bill? Ans. The bill was with me only as I could not hand it over to manager in the morning. Whatever I have stated above is truly to best of my knowledge and belief. Recorded by -sd- CIT(A), Allahabad 5.2.1.1 Since the Manager at the shop at Varanasi is an important witness to this event, I had requested/ directed the assessee to present him for examination. His statement was recorded u/s 131 of the Act by the undersigned. The relevant part of the statemen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... That is why I told the survey party that only Sri Nirajji owner can explain. I was really frightened. Q. (11) Your statement was recorded also. You could have said that in your statement? Ans. I was really frightened and I had repeatedly asked the survey party to make me talk to Sri Nirajji but they did not let me talk to him. I did not know what to say and what not to say. Q. (12) Why did you not say that 177 kg. of payals were gilletpayal. Ans. As I said I was very frightened so I did not know what to say and what not to say. I also did not want to say about gilletpayals as I was afraid that our reputation will be at stake so I kept telling that only Nirajji can answer all the differences. Q. (13) Why did you not call Ramashrey Yadav to present the bill? Ans. The police did not allow anyone to enter the Katra and the shop. Q. (14) I am showing you the cheque no. 003094 of Axis Bank. Please identify the signature? Ans. The signature is that of Neerajji. Q (15) Ramashrey Yadav had stated that this cheque was given to him by you. Was Mr. Niraj present in Varanasi on 22 February? Ans. No, he was not there. But we keeps some signed cheques ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the gold jewellery found in the Mirzapur shop. Accordingly, this ground of appeal is dismissed and the addition so made is confirmed. 5.2.3 In case of Silver bullions, the dispute is with regard to difference of stock of 4.958 kg. It is seen from the statement recorded during the course of survey that no reason for such difference had been stated. During the time of assessment proceedings, for the first time, the details of Gharau Yadav were produced. The same is clearly an afterthought as there was no mention about him during the course of survey proceedings nor any entry or slip of paper in respect of this transaction was found. In this view of the matter, the pleading of the appellant with respect to the stock of 4.958 kg of silver bullion is hereby rejected as being an afterthought. In this regard, reference is made to the decision of the Hon'ble Supreme Court in the cases of Durga Prasad More (82 ITR 540) wherein it was held by the Hon'ble Supreme Court that- the taxing authorities were not required to wear blinkers while looking at the documents produced before them. They were entitled to look into the surrounding circumstances to find out the reality of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion w.r.t. aforesaid discrepancy and stated that he is not feeling well and the details will be given through his counsel-advocate. The assessee did not filed any details with department immediately after conclusion of survey. The assessee was called upon by authorities to explain the differences, at three different stages, firstly by the investigation wing of the department, wherein the summons dated 27.02.2012 and 29.02.2012 as well letter dated 06.03.2012, were issued wherein the assessee had opportunity to explain the differences in the stock. The ld. Counsel for the assessee Advocate Mr. Divyanshu Agrawal, being officer of the Court made statement before the Bench, that these two summons and letter dated 06.03.2012 were never received by the assessee and hence there is no question of compliance by the assessee. On perusal of the Survey Report dated 16.04.2012, which is placed on record, in Departmental Paper Book filed on 09.11.2021 at Page 1-10, it is clearly mentioned at Para 5 that the assessee namely Mr. Neeraj Agrawal was duly issued Summon dated 27.02.2012 u/s 131(1A) by ADIT(Inv.), for appearance before him on 28.02.2012 but the assessee did not comply with the summons. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from bank on 02.04.2012(sic. 02.03.2012). Thus, in nutshell the explanation put forth by the assessee was accepted by ld. CIT(A) and the entire additions stood deleted. Revenue is aggrieved by the decision of ld. CIT(A), while the assessee is aggrieved as ld. CIT(A) deleted additions to the tune of 177 kgs while he ought to have deleted the entire addition of 177.174 kgs as was made by the AO. After carefully considering the entire factual matrix, we are afraid that the decision of ld. CIT(A) cannot be sustained and liable to be set aside on this issue. The assessee s Varanasi BO was also surveyed u/s 133A on 24.02.2012. The Manager of the assessee namely Mr. Shiv Bachan Yadav was present at the time of survey on 24.02.2012. There was difference of 212.03 kgs in the physical stock of silver ornaments found during survey and the stock as per stock register. Mr Shiv Bachan Yadav statement was recorded on 24.02.2012, and he instantly explained the difference of 34.826 kgs of silver ornaments being purchased from M/s D. D. Industries, Agra on 21.02.2012, which was not entered in the stock register. The AO accepted the explanation of Mr. Shiv Bachan Yadav, Manager and no addition was m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dly issued to supplier of these Gillet Payal, prior to the date of survey. Even the invoice No. 16 dated 23.02.2012 of R S Bullion Jewellers, Mathura was not found during survey nor the same is part of impunded material. It is pertinent to mention that this is the first alleged dealing of the assessee in artificial silver ornaments being Gillet Payal, as the assessee had never in the past purchased artificial silver ornaments and also the assessee has never purchased artificial silver ornaments in future. This alleged inventory of artificial silver jewellery being Gillet Payal also remained unsold. The ld. CIT(A) recorded the statements of Mr. Ramashray Yadav(employee) who brought the alleged material of artificial silver ornaments from Mathura to Varanasi as well of Mr Shiv Bachan Yadav, Branch Manager of Varanasi BO, wherein both of them affirmed the stand of the assessee. The statements of both Mr. Shiv Bachan Yadav as well Ramashrey Yadav are reproduced by ld.CIT(A) in his order(reproduced by us as above) .First of all statement was recorded in 2017 while survey took place in 2012, and there is a gap of more than five years. Secondly, these persons are interested witnesses be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ry found in the records at the time of survey with respect to this 128 gms of gold jewellery found during survey at Varanasi B.O. .There is no purchase invoices found during survey. Thus, there is no evidence which is part of impounded material to substantiate that this gold ornaments were out of disclosed and declared sources. The assessee was called upon by authorities to explain the differences, at three different stages, firstly by the investigation wing of the department, wherein the summons dated 27.02.2012 and 29.02.2012 as well letter dated 06.03.2012, were issued wherein the assessee had opportunity to explain the differences in the stock. The ld. Counsel for the assessee Advocate Mr. Divyanshu Agrawal being officer of the Court made statement before the Bench, that these two summons and letter dated 06.03.2012 were never received by the assessee and hence there is no question of compliance by the assessee. On perusal of the Survey Report dated 16.04.2012, which is placed on record, in Departmental Paper Book filed on 09.11.2021 at Page 1-10, it is clearly mentioned at Para 5 that the assessee namely Mr. Neeraj Agrawal was duly issued Summon dated 27.02.2012 u/s 131(1A) by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessee is held to be mere after thought to wriggle out of tax liability. So far as legal precedents relied upon by the assessee, it is not the case of surrender of the undisclosed income during the course of survey proceedings, but incriminating material by way of stock of gold ornaments was found during survey for which no satisfactory explanation could be given by the assessee, and additions were made based on the incriminating material ( being excess stock) found during survey conducted u/s 133A. The order passed by ld. CIT(A) on this issue is upheld. We order accordingly. With respect to 4.958 kgs of silver Bullion found during survey u/s 133A on 24.02.2012 at Varanasi BO vis- -vis no stock shown in the stock register. It is an admitted position that the assesee is not maintaining stock register so far as gold jewellery and silver bullion is concerned. No explanation explaning source of acquisition of this silver bullion of 4.958 kgs was given by Shri Shiv Bachan Yadav, Manager of the assessee while recording statement during the course of survey. Even, the assessee could not give any explanation while recording of his statement during the course of survey on 24.02.2012. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee. The ld. CIT(A) also rejected the contentions of the assessee, as source of the said silver bullion could not be explained, and the explanation offered by assessee was held to be an afterthought. The assessee has produced affidavit of Mr. Ghurahu Yadav which aver that he brought 4.958 kgs of silver bullion to assessee premises for sale on 23.02.2012, but the sale did not materialize and the same was returned to him by assessee on 27.02.2012.(page 85 of PB-1 filed by department). No such entry was found in the impounded material which could substantiate that Mr. Ghurahu Yadav deposited 4.958 kgs of silver bullion with assessee on 23.02.2012 for sale. It is incomprehensible to believe that Mr. Shiv Bachan Yadav, Manager of the assessee of Varanasi BO could not disclose these material facts during survey on 24.02.2012 (i.e. one day after alleged receipt of 4.958 kgs of Silver Bullion from Mr. Ghurahu Yadav on 23.02.2012), to the department official who conducted survey as well to the valuer who weighed and valued the silver bullion on 24.02.2012 that this silver bullion belonged to and owned by Mr Ghurahu Yadav. No ledger account of Silver Bullion was found during survey proceedi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reply of the assessee and observed that no such explanations have either been produced during the course of survey nor any such evidences have been produced during recording of statement. It was further observed that the same has not been adequately explained and substantiated by the assessee during the course of assessment proceedings. The AO observed that the assessee was required to substantiate the explanation submitted by it with credible evidences regarding the source of the aforementioned cash deposits in the cash book, and merely filing the copy of the account did not make good evidence for such claims to be accepted. The amount of Rs. 10,15,000/- with respect to aforesaid cash deposit in the cash books was treated by AO as cash credit u/s. 68 of the Act, in the absence of proper evidences and the same was added by AO to the income of the assessee. The ld. CIT(A) deleted the additions of Rs. 10,15,000/- with respect to cash recorded in the cash book, by holding as under: 7.2 Discussion Decision: The Assessing officer had made an addition of INR 10,15,000 on account of cash deposits in the cash book, which was purportedly received from (i) Shambhoo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 011 Shambhoo Nath Agrawal Sarraf Rs. 4,00,000/- 5 24.05.2011 Raj Shree Palace Rs.1,00,000/- 6 01.06.2011 Raj Shree Palace Rs.1,00,000/- 7 13.12.2011 Raj Shree Palace Rs. 65,000/- 8 30.01.2012 Raj Shree Palace Rs. 50,000/- Total Rs. 10,15,000/- During assessment proceedings, the assessee explained that an amount of Rs. 3,15,000/-was received from the properitory concern namely M/s Raj Shree Palace on different dates, and the assessee is the properitor of M/s Raj Shree Palace. The said properitory concern namely M/s Raj Shree Palace is running Cinema Hall. The account of the assessee in the books of Raj Shree Palace as well account of M/s Raj Shree Palace in the books of the assessee were submitted, vide page 78-79 of PB-1 filed by the assessee. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rehensible to believe that advance cash was received on 01.04.2011 onwards, while sale is made on 16.03.2012 for Rs. 7,07,002/- i.e. almost after one year and that too of a highly volatile item of gold ornaments where prices of gold are fluctuating on day to day basis. There is one more account of Shambhoo Nath Jewellers in the books of the assessee, and transaction through banking channel of Rs. 47800/- received on 06.05.2011 and sale having made within short time gap of Rs. 47,793/- on 26.05.2011 for sale of silver jewellery by assessee to the said party (page 9495/PB-1 filed by department). The ld. CIT(A) accepted the contentions of the assessee, without seeing whether mandate of Section 68 is satisfied or not, rather ld. CIT(A) invoked Section 269SS to take suitable measures against M/s Shambhoo Nath Agrawal Saraf, without appreciating that even if Section 269SS r.w.s. 271D is to be invoked, it is to be invoked against receipient who was the assessee in the instant case who infact received said cash of Rs. 7,00,000/- from M/s Shambhoo Nath Agrawal Saraf, and Section 269SS cannot be invoked against the lender namely from M/s Shambhoo Nath Agrawal Saraf for making payments to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The AO confronted the assessee with this issue, and the assessee submitted before the AO as under: The AO considered the reply of the assessee and observed that the reply/explanation submitted by the assessee is not substantiated properly with support of credible evidences. The AO observed that merely filing of an affidavit which is not substantiated with any material information or for that matter, filing of copy of account/bills and vouchers etc. which were neither found during the course of survey nor demonstrated/produced during the course of recording of statement at both the places i.e. Mirzapur and in Varanasi cannot be treated to be sufficient in any manner. The AO observed that differences of the cash could not be corroborated with cash book/other relevant documents, during the course of survey or during the course of assessment proceedings., and hence, the AO added the same i.e. Rs. 5,87,424/- to the total income of the assessee under Section 68 of the Act. The ld. CIT(A) granted part relief to the assessee, by holding as under: 6.2 Discussion Decision: The Assessing officer has made an addition on account of difference in amount ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g of cash receipt of Rs. 5,45,000/- as cash advances from 4 persons ( 7 entries from 4 persons) against future supplies of silver/gold ornaments, as detailed above, all cash received between 21.02.2012 to 23.02.2012 just prior to survey on 24.02.2012. The affidavits of these four parties were submitted during assessment proceedings(page 93-100/PB-1 filed by assessee). No such explanation was furnished during survey that cash found during survey at Varanasi BO constituted advance cash given by these parties against future supplies of silver/gold ornaments. No entry was found recorded in the cash book/ledger or any other records, prior to date of survey, with respect to alleged cash receipts from these persons aggregating to Rs. 5,45,000/-. Cash of Rs. 6,05,400/- was found at Varanasi BO on the date of survey on 24.02.2012. The cash book was completed until 20.02.2012, and balance recorded was Rs. 20,876/-. These cash receipts from all the four persons (7 entries) have taken place between 21.02.2012 and 23.02.2012 just prior to date of survey on 24.02.2012, which is highly improbable, and these entries/cash receipts were introduced in the books of accounts/cash book as the assessee w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessee, or where the method of accounting provided in sub-section (1) of Section 145 of the 1961 Act has not been regularly followed by the assessee, or income has not been computed in accordance with the standards notified under sub-section (2), the AO may make an assessment in the manner provided in Section 144 of the 1961 Act, wherein Section 144(1) stipulates that the AO can then make assessment of the total income of the assessee to the best of his judgment after taking into all relevant material which the AO has gathered. First Proviso read with Second Proviso to Section 144(1) stipulates that there is no requirement of issuing SCN when notice u/s 142(1) is already issued by the AO prior to making of an assessment u/s 144. The AO in the instant case duly issued notices both u/s 143(2) and 142(1), which are found recorded in assessment order. Reference is drawn to three judge bench decision of Hon ble Supreme Court in the case of CIT v. Devi Prasad Vishwanath reported in (1969) 72 ITR 194(SC), wherein Hon ble Apex Court held as under: There is nothing in law which prevents the Income-tax Officer in an appropriate case in taxing both the cash credit, the source and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ditors to the Assessing Officer for reaching at right conclusion or to provide adequate information to conduct necessary enquiries for finding out correct position of the facts of the case, which the assessee failed to do. The AO observed that the assessee has only filed unconfirmed copies of account of these sundry creditors. The AO made addition of Rs. 34,82,707/- to the income of the assessee. The ld. CIT(A) deleted the entire addition of Rs. 34,82,707/- as was made by the AO on account of unexplained sundry creditors under Section 68 of the Act, by holding as under: 9.2 Discussion Decision: As per the Assessing Officer, the assessee had failed to file the confirmations in regard to the credit balances from the following parties- D.D. Industries, Mandi Ram Das, Mathura Rs. 9,49,700/- R.G. Ornaments, Namakki Mandi, Agra Rs 6,00,284/- Dashrath Silver Art Pvt. Ltd., Redak Road Near, Arya Nagar, SantKabir Road, Rajkot Rs 14,26,243/- Shri Sati Ram, JituDustakpur, Varanasi Rs 4,32,71 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , it had been informed to me by the appellant that the same is the opening balance for the FY 2011-12. It has been also informed that the person was no more and the appellant had booked the same as his income in the next year. I have seen all the papers and based on that I am also deleting the addition of INR 4,32,710/- in regard to Shri Sati Ram. v) Shri Vani Payals - Rs.73,770 - the assessee had filed a copy of account of the said party, on perusal of which it is seen that the impugned credit appears in these accounts. This copy of account has also been confirmed by the said party. The A.O. is directed to send this copy of confirmation of account to the A.O. of the party for his verification. The addition made by the A.O. is hereby deleted. Analysis and Decisions: We have carefully gone through the material on record. It is observed that the investigation department issued summons u/s 131 to sundry creditors to verify their genuineness, but the summons returned back. In order to verify these sundry creditors, the AO asked assessee to furnish complete details, but the same were not furnished by the assessee. Unsigned copies of their ledger accounts in the books of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... taxation in the next year, but, however no evidence to that effect is filed on record. Under these facts and circumstances and in the interest of justice, the entire matter regarding unexplained sundry creditor to the tune of Rs. 34,82,707/- need to be restored back to the AO for fresh adjudication on merits, after giving opportunity of being heard to the assessee. The appellate order passed by ld. CIT(A) is set aside, and the issue is restored to the file of the AO for denovo assessment on merits in accordance with law, after giving opportunity of being heard to the assessee. We order accordingly. 15G. Addition on account of Unsecured loans raised by assessee to the tune of Rs. 28,12,000/- The AO observed that the assessee has raised unsecured loan to the extent of Rs. 33,70,000/- which have been shown to be obtained from various persons during the year under consideration. The details are as under: The AO issued letters/notice under Section 133(6) to these persons for obtaining, inter-alia, copy of the bank statements apart from the other documents. The AO observed that in some of the cases, Bank statements were submitted and on the perusal of the same, it wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 00/- is treated as unsubstantiated credit in the books of account of the assessee. Sri Gowardhan Das Agrawal 4,95,000/- No details whatsoever could be submitted The entire amount is treated as unsubstantiated credit in the books of account of the assessee, as the same could not be substantiated by the lender. The capacity also of the lender is not established because no details could be submitted. Sri Gowardhan Das Agrawal (HUF) 5,00,000/- 5,00,000/- The entire amount is treated as unsubstantiated credit in the books of account of the assessee, as the same could not be substantiated by the lender. The capacity also of the lender is not established because no details could be submitted. Thus, the AO made additions of Rs. 28,12,000/- in the hands of the assessee towards unsecured loans raised by the assessee, by treating it as undisclosed income of the assessee . The ld. CIT(A) partly allowed the relief to the assessee, by holding as under: 10.2 Discussion Decision: I have seen the list of Lo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nfirmation and bank statements filed on 18/03/2015. Copy of ITR is at Page 21 of the Paper Book 1. The AO, should send the confirmation letter filed by him to his AO for him to verify the transactions. The addition so made is hereby deleted. g. Shri Goverdhan Das Agrawal - Details at Page 31-32 of the Paper Book 2. Copy of the ITR submitted by the appellant. The AO. should send the confirmation letter filed by him to his AO for him to verify the transactions. The addition so made by the A.O. is hereby deleted. h. Shri Goverdhan Das Agrawal (HUF) - Details at Page 33-34 of the Paper Book 2. Copy of the ITR submitted by the appellant. The AO. should send the confirmation letter filed by it to its A.O. for him to verify the transactions. The addition so made is deleted. Analysis and Decision: We have carefully considered the material on record. We have observed that the assessee raised total unsecured loan of Rs. 33,70,000/- from the aforesaid eight lenders. They are described as friends and relatives. The unsecured loans are reflected in the books of the assessee and onus is on the assessee to prove its genuineness as well establish identity and creditworthiness ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... taxpayer of that previous year. The burden/onus is cast on the taxpayer and the taxpayer is required to explain to the satisfaction of the AO cumulatively about the identity and capacity/creditworthiness of the creditors along with the genuineness of the transaction to the satisfaction of the AO. All the constituents are required to be cumulatively satisfied. If one or more of them is absent, then the AO can make additions u/s. 68 of the Act as an income of the tax-payer. It is true that the assessee received loans from the aforesaid persons vide cheques which stood credited in his bank account and confirmations were filed, ITR etc. were filed (except in the case of Mr. Gopi Nath Agrawal) but the cheque issued by the lenders is preceded by cash deposit in their bank account, and hence onus is very heavy on the assessee. Thus, in the facts and circumstance of the case and in the interest of justice and in all fairness to both the parties, we are setting aside the appellate order passed by ld. CIT(A) and restore the matter back to the file of the AO for fresh adjudication of this issue on merits. So far as unsecured loan raised from Mr. Gopi Nath Agrawal, who had expired, his son has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment order dated 20.03.2015. It is well settled that the assessee does not have any vested right in procedures, and merely because the notice of demand u/s 156 was issued on 24.03.2015 while assessment order was dated 20.03.205 will not vitiate the liability to pay interest u/s 234B and 234C which is mandatory and consequential to the total income computed by the AO vide assessment order. The ld. Counsel has also pointed out that the date of assessment order mentioned in ITNS 150 is 24.03.2015, while correct date of assessment order is 20.03.2015. Merely because there is an clerical error in the ITNS 150 will not vitiate the liability of the assessee to pay interest u/s 234B and 234C, which is mandatory and consequential to assessment framed by the AO. Reference is drawn to provisions of Section 292B of the 1961 Act. Thus, we do not find any merit in the contention of the assessee and uphold levy of interest u/s 234B and 234C and dismiss the ground raised by the assessee. We order accordingly. 16. In the result, appeal filed by the assessee in ITA Nos. 100 appeal filed by Revenue in ITA no. 138Alld/2017 for ay: 2012-2013 are partly allowed for statistical purposes. Order pr ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
