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TMI Blog2023 (7) TMI 791X X X X Extracts X X X X X X X X Extracts X X X X ..... tual weight and purity and then applying the then prevailing rate of silver at that relevant point of time. AO had not allowed the opening stock of silver (stock of silver claimed to be available in the books of accounts on the date of survey) which was already declared in the books of assessee. Interest of justice would be sub served if the impugned order is set aside and the matters are remitted back to the ld. AO for consideration thereof afresh related valuation of silver silver jewellery for ascertain the rate of purity, as directed by us in the preceding para of this order. The opportunity for fresh valuation of silver silver jewellery should be allowed to assessee considering the books of accounts, as directed by us in this order. Decided in favour of assessee for statistical purposes. - I.T.A. No.199/Alld/2016 I.T.A. No. 216/Alld/2016 C.O. No.34/Alld/2016 (in I.T.A. No. 216/Alld/2016) - - - Dated:- 3-7-2023 - SH. RAMIT KOCHAR, ACCOUNTANT MEMBER AND SH. ANIKESH BANERJEE, JUDICIAL MEMBER For the Appellant : None For the Respondent : Sh. A.K. Singh, Sr. DR ORDER Per Bench. : - The instant appeals of the assessee and revenue and Cros ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... - That in any view of the matter the appellant reserves his right to take any fresh ground of appeal before hearing of the appeal. I.T.A. No. 216/Alld/2016 3. The revenue has taken the following grounds: 1. CIT(A) has erred in deleting the addition of Rs. 38,05,621/- when the assessee itself admitted during the survey that undisclosed silver amounts to Rs. 4,73,30,233/-. 2. The CIT(A) has erred in calculating the undisclosed stock of silver on average rate at Rs. 5,14,42,280/- 3. The CIT(A) has erred in ignoring the fact that assessee itself sold silver ornaments at 65% purity and the AO has quoted such details of sale in his assessment order. 4. The CIT(A) has erred in ignoring the fact that the assessee has not agitated the purity of silver adopted by the valuer during the course of survey. 5. The CIT(A) has erred in making comparison of other cases while valuing the stock of silver because each case has its own quality of ornaments and valuer is an expert in this matter and so his valuation cannot be interfered with, unless prejudice is not proved by the assessee. 6. The CIT(A) has erred in not giving opportunity of being heard to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rs.2,65,067/-. During survey assessee surrendered Rs.9 crore including the excess cash. The unexplained excess stock of silver silver jewellery was remained as not rendered amount to Rs.2,60,88,428/-. The assessee filed a return u/s 139(1) and surrendered the total gold and silver stock and excess cash amount to Rs.8,61,94,379/- which is in following break up as follows: - SL NO Unexplained Stock of Amount (Rs) 1 Gold 414,63,902/- 2 Silver 444,65,410/- 3 Cash 265,067/- Total 861,94,379/- The revenue claimed that the assessee retracted from his own statement and short declaration Rs.38,05,621/- (Rs. 9,00,00,000-Rs. 8,61,94,379) during filing of return. The assessment was framed u/s 143(3). The undeclared stock of gold and silver Rs.2,60,88,428/- was added back which is only related to the unexplained excess stock of silver. Furter addition was made for undisclosed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rage purity of silver @ 65%. In the statement recorded during the course of survey, partner Sri Mahesh Chandra Agarwal had objected to the value of silver ornaments as given by valuer and had surrendered the value of silver stock at Rs.47330233/-. The A.O. has added the difference between Rs.7,34,18,661/- and Rs.4,73,30,233/- which comes to Rs.2,60,88,428/- as undisclosed stock of silver articles found during the course of survey. It has been rightly argued by the Ld. A.R. that for deriving purity percentage, there is a specific process and there are purity centres where purity of silver/ gold can be found out but no such process was carried out by the departmental valuer. After the survey, the assessee had also filed an objection before the Ld. CIT, Allahabad regarding value determined by the department valuer and had also filed an affidavit vide letter dated 9-11-11. I have also gone through the valuation report of silver ornaments/ articles prepared during the course of survey proceedings in the case of M/s Ganesh Ornament Pvt ltd which is a sister concern of the assessee firm Where the purity of silver jewelry/ articles was taken by the same department valuer @ 52%, whereas i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of excess stock of silver and gold jewellery, the stock of gold and silver jewellery as per the books was not given effect to which totaled to Rs.41,54,000/-. If credit of the disclosed stock of Rs.41,54,000/- is given, there would be no discrepancy in the amount of additional income offered in the return and the income surrendered during the course of survey. The assessee cannot be subjected to prejudice because of his mistaken appreciation of facts. In this view of the matter, the assessee is entitled to the benefit of deduction on account of disclosed stock; as a result, addition made by the A.O. of Rs.38,05,621/- becomes unsustainable. The addition so made is, therefore, deleted. 7.6. The ld. DR respectfully relied on the catena of judgment which are as follows: - 7.6.1.Dr. S.C. Gupta v. Commissioner of Income-tax, [2001] 118 Taxman 252 (Allahabad) 6. As regards the assessee s contention that the statement having been retracted, the Assessing Officer should have independently come to a conclusion that there was additional income as sought to be assessed and that there was no material to support that there was such income, this contention in our view is not correc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al so as to be ruled out of consideration in totality of facts, particularly in the absence of regular books of account. The Tribunal rightly followed the observations of the Allahabad High Court in Dr. S.C. Gupta[2001] 248 ITR 782 and of this court in Surinder Kumar [2006] 282 ITR 78 (P H). Thus, having regard to the facts and circumstances of the case, the view taken by the Tribunal cannot be held to be perverse or illegal. 7.6.4. Hiralal Maganlal Co. v. Deputy Commissioner of Income-tax, SR- 52, [2005] 96ITD113 (ITAT-MUM.) Whether further since retraction was not supported by any independent or reliable evidence to prove incorrect nature of facts confessed in statement, Assessing Officer was justified in basing impugned addition on basis of confessional statement made at time of search - Held, yes . 8. We heard the rival submission and relied on the documents available in the record. There is no discrepancy in cash or gold ornaments. The only difference is valuation of stock of silver ornaments of assessee during survey. We are unable to agree with the reasoning and the decisions of the learned CIT (Appeals). We need not mention that survey under section 133A is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee raising no objection during the survey operations as to weight and purity of the stock of silver inventoried by departmental valuer in the presence of the assessee. However, we are of the considered view that when the departmental valuer ( who is an approved valuer) in his valuation report prepared on the date of survey has identified and inventoried each and every item of stock of silver found during the survey on 20.10.2011 with defined purity which is not disputed by assessee, there is no rational of applying any average rate of purity and valuing the stock based on average rate of purity, when every item of silver ornaments is inventoried with weight and purity by departmental valuer, rather every item of stock of silver item found during survey need to be valued based on the actual purity as well the rate of silver on the date of survey. The departmental valuer applied average rate of purity @65% and valued silver items, which was adopted by AO while framing assessment. The assessee has during survey stated that the value of silver is on higher side in a general manner. The departmental valuer ought to have valued each and every item of silver items based on actual wei ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fresh valuation of silver silver jewellery should be allowed to assessee considering the books of accounts, as directed by us in this order. The benefit of opening balance of silver and silverjewellery (stock claimed to be available in the books of accounts on the date of survey), be given during calculation of undisclosed stock by the AO after due verification of the claim of the assessee and if so found correct by the AO . Needless to say, that the ld. AO shall provide proper and adequate opportunity of being heard to the assessee in set aside proceedings. The evidence/explanations submitted by assessee in its defence shall be admitted by the ld.AO and adjudicated by the ld. AO on merits in accordance with law. We order accordingly. 9. The bench has noticed that the issues raised by the revenue and assessee in the above appeals are equally similar on set of facts and grounds. Therefore, it is not imperative to repeat the facts and various grounds raised by the assessee. Hence, the bench feels that the decision taken by us in ITA No. 199/Alld/2016 for the Assessment Year 2012-13 shall apply mutatis mutandis in the above listed appeals. 10. In the result, the appeal of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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