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TMI Blog2025 (4) TMI 154X X X X Extracts X X X X X X X X Extracts X X X X ..... ld jewellery, silver, diamonds etc. The assessee filed its return of income for AY 2017-18 on 30.10.2017, which was revised on 20.03.2018 admitting income of Rs. 19,28,420/-. The case was selected for scrutiny and notices u/s. 143(2) & 142(1) were issued calling for details. Assessee company was incorporated by takeover of existing business which was carried out by one Shri Nathmal with name & style of M/s.Parag Jewellery. This business was taken over as running business by the company and all the assets and liabilities were taken over by the assessee. Hence, the stock of gold jewellery was taken over as per the arrangement, the assessee had to pay hire charges for the stock of gold taken by the assessee. The cost are incurred for the purpo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hire gold interest paid amounting to Rs. 41,85,000/- and added the same to total income. 3. Aggrieved, the assessee challenged order of assessment passed u/s. 143(3) dated 31.12.2019, before the ld.CIT(A), who sustained the addition made by the AO by holding as under: "4.3 I have gone through the grounds of appeal, facts of the case, assessment order and the submissions of the appellant. It is submitted by the appellant that the company hired the stock from the directors and used for the purpose of its business. The stock was used for sale to the customers and again new stock was purchased. Considering the nature of business, hiring of gold is not necessary. On The other hand, the company shows the value of gold said to have been receive ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r contra, the ld.DR, Ms. Pushpa Hemachand, JCIT for the revenue strongly contested the submissions of the assessee. The ld. DR submitted that in the facts of the present case the orders of the lower authorities are reasonable and justified. 7. We have heard the rival submissions and perused the records of the case file. We have also gone through the paper book filed by the assessee containing pages 1-174 which is reproduced below: INDEX FOR PAPERBOOK S.No Particulars Page Nos 1. Copy of Gold Hire Agreement between M/s. Parag Jewelley Pvt Ltd and Shri. Nathmal dated 06.02.2013 1-2 2. Copy of Gold Hire Agreement between M/s. Parag Jewelley Pvt Ltd and Smt. Indra Bai dated 27.02.2016 3-5 3. Copy of Gold Hire Agreement between ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent of Shri. Nathmal for AY 2018-19 142 19 Copy of Financial Statements of Shri. Nathmal for the year ended 31.03.2018 143-148 20 Copy of ITR Acknowledgement of Smt. Indra Bai for AY 2016-17 149 21 Copy of Financial Statements of Smt. Indra Bal for the year ended 31.03.2016 150-152 22 Copy of ITR Acknowledgement of Smt. Indra Bai for AY 2017-18 153 23 Copy of Financial Statements of Smt. Indra Bai for the year ended 31.03.2017 154-156 24 Copy of ITR Acknowledgement of Smt. Indra Bai for AY 2018-19 157 25 Copy of Financial Statements of Smt. Indra Bai for the year ended 31.03.2018 158-160 26 Copy of ITR Acknowledgement of Smt. Tara Jain for AY 2016-17 161 27 Copy of Financial Statements of Smt. Ta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n. Pursuant to bench query, ld. AR for the assessee submitted that stock-in-trade is exempt from the Wealth Tax. It is undisputed fact that the company has closing stock of Rs. 9,76,12,546/-. We find force in the argument of the AR for the assessee that the company has to pay interest, if it has purchased stocks worth Rs. 9,76,12,546/- at least at 12% being bank rate which will be Rs. 1,08,00,000/-. We are of the view that assessee's decision to take on hire charges which requires payment of Rs. 41,85,000/- was better option than taking loan from the bank to purchase the stocks. Hence, in the light of our above view, we delete the addition made by the AO. 9. In result, the appeal of the assessee is allowed. Order pronounced in the open co ..... X X X X Extracts X X X X X X X X Extracts X X X X
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