9911796707
TMI Blog2025 (3) TMI 296X X X X Extracts X X X X X X X X Extracts X X X X ..... on and brokerage, therefore the assessee declared "Sunari Work Gold Investment under the heading "Fixed Assets" in the Balance-Sheet as on 31.03.2016 and there was no closing stock shown. It is when the assessee started trading of jewellery from 17.08.2016 during current year after obtaining registration under VAT that the same jewellery held by assessee in the list of fixed assets as on 31.03.2016 became part of business stock of assessee and was declared as opening stock as on 01.04.2016 in Trading and P&L A/c.
Thus factum of purchases made by assessee in preceding AY 2016-17 which has given rise to holding of impugned closing stock as on 31.03.2016 / opening stock as on 01.04.2016. Even the AO has also mentioned in assessment-order that the assessee filed purchase bills. Ld. DR for revenue though relied upon orders of lower-authorities yet could not controvert the submissions made Ld. AR with are fully supported by documentary evidences. No justification in the addition made by AO. Accordingly, the AO is directed to delete this addition also. The assessee succeeds in this issue.
Assessee appeal is allowed. X X X X Extracts X X X X X X X X Extracts X X X X ..... e of gold bullion and ornaments has been deposited in the bank. 7. Therefore during the course of assessment proceeding, vide notices u/s 133(6) dated 28/11/2019 was issued to following persons to confirm purchase of gold ornaments and bullion from the assessee :- 1. Prakash Patidar, Susasara M.P. 2 Ankit Ji Bamniya Ratlam M.P. 3 Bansilal Gurjar Shyamgarh M.P. 4 Anandilal ji Dhakad Badahela mata ji Ratlam M.P. 5 Parasmal Ji Jain, Satrampur M.P. 6 Mukesh Ji Nayak, Sarwami Ratlam M.P. 7 Ashok Pawar, Badnawar Dhar M.P. 8 Mangilal Rathod, Dhar M.P. 9. Ishawer Lal Patidar, Bajna Ratlam M.P. 10 Sanjay Sisodiya, Rajod M.P. No compliance made by any person of above mentioned notices. 8. Again show cause notice with notice u/s 142(1) dated 07/12/2019, the assessee was asked to furnish confirmation letter from all customers to whom the assessee had made sale of Rs 1,00,000/- and above with supporting documents like copy of ITR, proof of identity, Copy of bank pass book, and source of cash deposit., The assessee was asked to furnish the reply on 12/12/2019. No compliance was made by the assessee. 9. xxxxx 10. The assessee had deposited cash of Rs 59,86,000/- in b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... shows the availability of cash balances on different dates as claimed by assessee as well as the entries of impugned deposits made in Bank A/c. So far as the source of deposits is concerned, the same was from sale of gold bullion and ornaments. The assessee was previously doing business of job work, commission and brokerage of jewellery but thereafter also started trading of Gold & Silver jewellery in the name of M/s V.N. Jewellers and for this purpose obtained registration under Madhya Pradesh VAT laws w.e.f. 17.08.2016, copy of Registration Certificate issued by VAT authorities is filed at Page 54 of Paper-Book. The assessee has obtained VAT registration prior to declaration of demonetization. The assessee also filed VAT return for the period 01.10.2016 to 31.12.2016 declaring a taxable sale of Rs. 56,04,173/- with output VAT of Rs. 56,041/- and taxable purchases of Rs. 66,17,389/- with input VAT of Rs. 34,412/- and paid balance VAT through bank. The copy of VAT return is filed at Page No. 55-60 of Paper-Book. A detailed statement of sales is also filed at Page 74-76 of Paper-Book giving party names, bill no., bill date, quantity, amount of sale, VAT 1% and gross amount of sale ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... jewellery does not exceed Rs. 2 lakhs as per Rule 114B of Income Tax Rules, 1962. In so far as compliance of KYC norms, it is mandatory under Prevention of Money Laundering Act, 2002, w.e.f. 04.05.2023 onwards and not applicable for the impugned assessment year. Therefore, in our considered view, when the assessee has furnished name and address of the persons from whom it has received trade advances for sale of jewellery, the assessee has satisfactorily discharged onus cast upon to furnish name and address of the persons. Therefore, the observation of the AO in light of provisions of Sec.68 of the Act, that the assessee has not satisfactorily explained cash receipts is unwarranted and devoid of merits. 15. Having said so, let us come back whether the assessee could able to explain source for cash deposits made during demonetization period or not. It is an admitted fact that the assessee was having sufficient cash balance as per cash book maintained for the relevant period. In fact, cash in hand as on the date of demonetization i.e. 08.11.2016 was at Rs. 48,84,03,169/- and said cash balance is backed by cash receipts recorded in the books of accounts before the date of demonetiza ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ioning that the assessee has claimed opening stock of Rs. 25,74,129/- as on 01.04.2016 and submitted copies of purchase bills but the closing stock shown by assessee was Rs. Nil in ITR of preceding AY 2016-17. Ld. AR, however, successfully demonstrated that in AY 2016-17, the assessee was engaged only in job work, commission and brokerage, therefore the assessee declared "Sunari Work Gold Investment of Rs. 25,74,129/-" under the heading "Fixed Assets" in the Balance-Sheet as on 31.03.2016 (Page 35 of Paper-Book) and there was no closing stock shown. It is when the assessee started trading of jewellery from 17.08.2016 during current year after obtaining registration under VAT (as discussed in earlier part of this order) that the same jewellery held by assessee in the list of fixed assets as on 31.03.2016 became part of business stock of assessee and was declared as opening stock as on 01.04.2016 in Trading and P&L A/c. Ld. AR has also shown, with the help of documents held in Paper-Book in the shape of Purchase Bills of M/s D.P. Jewellers, Purchase Bill of M/s Manohar Lal Ratan Lal & Company and Bank Statement of assessee at Pages 77, 78 and 28 of Paper-Book, the factum of purchases ..... X X X X Extracts X X X X X X X X Extracts X X X X
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