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TMI Blog2024 (7) TMI 1369X X X X Extracts X X X X X X X X Extracts X X X X ..... purchases and only profit has to be added and their Lordships have also held that, once the sales have not been doubted against the said purchases and there is no dispute regarding the quantitative details of stock as per books then the ld. A.O. cannot add the entire purchase and only GP rate is to be applied. Similar view has also been taken in the case Rishabhdev Technocable Ltd. [ 2020 (2) TMI 662 - BOMBAY HIGH COURT ] Moreover, we find that in case of the assessee for A.Y. 2007-08, 2008-09 and 2009-10, this Tribunal had applied GP rate of 3% over and above the GP rate declared by the assessee. Accordingly, in the facts and circumstances of the case, the gross profit of 3% is applied over and above the GP rate declared by the assessee on the bogus purchase. Accordingly, the assessee gets part relief. - Shri Amit Shukla, JM And Shri Gagan Goyal, AM For the Assessee : Ms. Ridhisha Jain For the Respondent : Shri P. D. Chougule ORDER PER AMIT SHUKLA, J M: The aforesaid appeals have been filed by the assessee against the order dated 19.09.2023, passed by National Faceless Appeal Centre ( NFAC for short), Delhi for a quantum of assessment passed u/s. 143(3) r.w.s. 147 of the Income ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly came late post passing of the order. The ld. A.O. after incorporating all the details and replies held that the assessee is in the business of trading and manufacturing of jewellery since last 25 years and the assessee why was inactive to recover the materials even after 4-1/2 years of embezzlement. This explanation is not acceptable as in the normal business this not done as there was a casualness of the assessee in lodging FIR as assessee has filed two FIR for different quantum. Thus, without taking into FIR and explanation he disallowed the claim of embezzlement of Rs. 1,32,14,143/-. 4. Before the ld. CIT (A), the assessee filed additional evidence which was the reply/ report filed by the Police Department before the M.M. Court. However, the ld. CIT (A) held that the investigation report of the Sr. Police Inspector is not admissible as additional evidence. Further, he observed that the Police Officials have merely send recovery of the property report which was recovery of cash and few sets of jewellery. Finally, the claim of theft to the tune of Rs. 1,32,14,143/- has not been established. Accordingly, he confirm the order of the ld. A.O. in a very flimsy manner and without co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e quantity which was missing after tallying each and every details of the stock recorded in stock register and also explained the reason for filing of two FIRs. We failed to understand what else according to the AO and CIT (A) assessee should have filed. Whether the FIR, enquiry by the police and case filed before the M.M. Court is a cover up story by the assessee to make a false claim. 6. Before the ld. CIT (A), the assessee has filed its rebuttal on ld. A.O. s contention, which for the sake of read reference is reproduced hereunder: Ld AO's Contention Our Submission The Ld AO's contention that assessee maintains stock register on daily basis as stated in the Audit report and certified by the Auditor then how it took 15 days to determine the value of Embezzlement. Therefore the Ld AO doubted the genuineness of the claim by holding that it is not justified when the stock register and a/c s are maintained on daily basis. It is true that stock is maintained on daily basis but to ascertain which item is stolen it was taking lot of time. Moreover seeing the size of stock which is between 15 Crs to 20 Crs comprising of en number of items weight wise, design wise, gold carat wise ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t's partner has put forth no effort to recover the jewellery from Police - Department indicates that the loss is not genuine is not true but mere her presumption. In this regard appellant firm vide its letter dated 23/12/2013 had apprised of efforts put forth by them. The said reply is self explanatory discussed above in para 2.1. As regards non receipt of reply from the Police Department it was submitted that it was not in appellant's hands. However we were provided with the copy of report dated 18/03/2014 by the Police Department on 24/03/2014 i.e after completion of assessment. By the time we approached with report we were told by the Ld AO that assessment has already been completed on 23/03/2014. Hence it was told that the same is of no use at present. However we understand that the Ld AO also must have received the same in response to her letter to the Police Department. The copy of the said report received by us is enclosed hereto as per Ex-A. Since the evidence submitted now goes to the root of the matter and is essential in adjudicating the matter in appeal we are herewith submitting the same as an additional evidence under Rule 46A of the Act. We therefore request ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d. CIT (A) has confirmed the said addition. 10. Before us, the ld. counsel submitted that all the purchases have been made through banking channels, wherein the entire quantity of purchases and corresponding sales has not been disputed. The assessee had submitted the entire details of the parties, ledger account, confirmation, corresponding sales of the purchase made from such parties, the purchase and sale bills, bank statements, etc. Out of all the purchases, the ld. A.O. has only doubted the purchases made from the above parties and had added the entire amount. Once the assessee had submitted all the details, then, without disputing the purchase quantities recorded in books and the corresponding sale, the entire addition on account of purchases cannot be made. On the other hand, the learned Departmental Representative relied on the order of the ld. CIT (A). 11. On perusal of the material placed on record before us, it is seen that the assessee had filed the details of the purchase made from M/s. Aadi Impex and M/s. Kalash Enterprises which have been placed at pages 34 to 51 of the paper book, which shows the quantity of the purchases and the payment made through banking channels ..... X X X X Extracts X X X X X X X X Extracts X X X X
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