DCIT, UDAIPUR v. Shri Bhanwar Lal Jain, UDAIPUR

ITA 261/JODH/2013 | 2010-2011
Pronouncement Date: 31-07-2014 | Result: Dismissed

Appeal Details

RSA Number 26123314 RSA 2013
Assessee PAN ADYPJ8469P
Bench Jodhpur
Appeal Number ITA 261/JODH/2013
Duration Of Justice 1 year(s) 2 month(s) 29 day(s)
Appellant DCIT, UDAIPUR
Respondent Shri Bhanwar Lal Jain, UDAIPUR
Appeal Type Income Tax Appeal
Pronouncement Date 31-07-2014
Appeal Filed By Department
Order Result Dismissed
Bench Allotted DB
Tribunal Order Date 20-05-2014
Date Of Final Hearing 20-05-2014
Next Hearing Date 20-05-2014
Assessment Year 2010-2011
Appeal Filed On 02-05-2013
Judgment Text
IN THE INCOME TAX APPELALTE TRIBUNAL : JODHPUR BENCH : JODHPUR BEFORE SHRI HARI OM MARATHA JUDICIAL MEMBER AND SHRI N.K. SAINI ACCOUNTANT MEMBER. ITA NO. 2 4 1 /JODH/2013 (A.Y. 20 1 0 - 11 ) BHANWAR LAL JAIN VS. DCIT CENTRAL CIRCLE - 1 96 SARVRITU VILAS UDAIPUR . UDAIPUR. PAN NO. ADY PJ 8469 P (APPELLANT) (RESPONDENT) ITA NO. 261 /JODH/2013 (A.Y. 20 1 0 - 11 ) DCIT CENTRAL CIRCLE - 1 VS. BHANWAR LAL JAIN UDAIPUR. 96 SARVRITU VILAS UDAIPUR. PAN NO. ADYPJ 8469 P (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI AMIT KOTHARI . DEPARTMENT BY : SHRI A.K. KHANDELWAL - D.R. DATE OF HEARING : 20 / 0 5 /201 4 . DATE OF PRONOUNCEMENT : 31 /0 7 /201 4 . O R D E R PER N.K. SAINI A.M 2 TH ESE TWO CROSS APPEALS BY THE DEPARTMENT AND THE ASSESSEE ARE DIRECTED AGAINST THE ORDER DATED 23 /02 /2013 OF L D . CIT(A) (C) JAIPUR . IN THE DEPARTMENTAL APPEAL IN I.T.A.NO. 261/JODH/2013 THE FOLLOWING GROUNDS HAVE BEEN RAISED: - 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LD. CIT(A) CENTRAL JAIPUR HAS ERRED IN DELETING THE ADDITION OF RS. 11 64 000/ - MADE BY THE AO ON ACCOUNT OF UNEXPLAINED INVESTMENT IN THE JEWELLERY FOUND AT THE TIME OF SEARCH AND SEIZURE BY HOLDING THAT THE SAID JEWELLERY IS WITHIN THE LIMITS LAL D DOWN IN INS TRUCTION NO. 1916 DATED 11/05/ 1994 AND IGNORING THAT - (I) THE INVESTMENT IN JEWELLERY TO ABOVE EXTENT WAS DISCLOSED BY ASSESSEE U/S 132(4) OF THE I.T. ACT AS UNEXPLAINED INVESTMENT. (II) OTHERWISE ALSO THE INSTRUCTION NO. 1916 APPLIES ONLY TO SEIZURE AND DOES NOT AUTOMATICALLY EXPLAIN THE SOURCE OF JEWELLERY WHICH IS LEFT IN ACCORDANCE WITH THIS INSTRUCTION. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LD. CIT(A) CENTRAL JAIPUR HAS ERRED IN DELETING THE ADDITION OF RS. 12 87 576/ - OUT OF THE TOTAL ADDITION OF RS. 20 82 3 24/ - MADE BY THE AO ON ACCOUNT OF UNEXPLAINED STOCK. 3. THE APPELLANT CRAVES THE RIGHT TO AMEND ALTER OR ADD TO ANY OF THE GROUNDS OF APPEAL GIVEN ABOVE. IN THE ASSESSEES APPEAL THE FOLLOWING GROUNDS HAVE BEEN RAISED: - 1 . THE LD. CIT(A) CENTRAL ERRED IN LAW AS WELL AS ON THE FACTS AND CIRCUMSTANCES OF THE CASE IN HOLDING THAT THE ASSESSING OFFICER WAS JUSTIFIED IN REJECTING THE BOOKS OF ACCOUNTS INVOKING THE PROVISIONS OF SECTION 145(3) OF THE ACT AND IN CONFIRMING THAT ASSESSING OFFICER WAS JUSTIFIED FOR MAKING THE ALTERNATE ADDITION OF TRADING PROFIT IN LIEU OF SHORTAGE OF CASH AND EXCESS STOCK TO THE RETURNED INCOME OF THE APPELLANT. 3 2. THE LD. CIT(A) CENTRAL ERRED IN LAW AS WELL AS ON THE FACTS AND CIRCUMSTANCES OF THE CASE IN CONFIRM ING THE ADDITION OF UNEXPLAINED STOCK OF RS. 7 94 748/ - MADE BY THE ASSESSING OFFICER TO THE RETURNED INCOME OF THE APPELLANT. 3. THE APPELLANT RESERVES THE RIGHT TO ADD TO THE ABOVE GROUNDS OF APPEAL AND/OR AMEND MODIFY AND TO DELETE ANY OF THE M ON OR BEFORE THE HEARING OF APPEAL . 2 FIRST ISSUE RAISED IN THE DEPARTMENTAL APPEAL RELATES TO THE DELETION OF ADDITION OF RS. 11 64 000/ - MADE BY THE ASSESSING OFFICER ON ACCOUNT OF UNEXPLAINED INVESTMENT IN THE JEWELLERY FOUND AT THE TIME OF SEARCH AND SEIZURE . 3. FACTS RELATING TO THIS ISSUE IN BRIEF ARE THAT THE SEARCH AND SEIZURE PROCEEDINGS WERE CARRIED OUT AT THE RESIDENTIAL AND BUSINESS PREMISES OF THE ASSESSEES GROUP NAMELY I.E. M/S . RATAN LAL BHANWAR LAL JAIN GROUP ON 10/03/2010 . SIMULTANEOUSLY SURVEY PROCEEDINGS U/S 133A OF THE I.T. ACT 1961 (HEREINAFTER REFERRED TO AS THE ACT IN SHORT) WERE CARRIED OUT AT THE BUSINESS PREMISES OF THIS GROUP. THE ASSESSEE IS THE PROPRIETOR OF M/S. RATAN LAL BHANWAR LAL JAIN WHICH IS ENGAGED IN THE BUSINESS OF RETAIL TRADING OF TOBACCO PRODUCTS AND DECLARED INCOME FROM THIS BUSINESS AT RS. 14 48 397/ - . BESIDES THIS THE ASSESSEE DECLARED RENTAL INCOME OF RS. 8 056/ - INTEREST INCOME OF RS. 3 56 793/ - AND AFTER C LAL MING 4 DEDUCTION UNDER CHAPTER - VI A THE INCOME DECLARED WAS AT RS. 17 11 950/ - . DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE ASSESSING OFFICER POINTED OUT THAT DURING THE COURSE OF SEARCH JEWELLERY WAS FOUND AT THE RESIDENCE O F MAHENDRA KUMAR JAIN . THE VALUE OF THE SAID JEWELLERY WAS DONE BY THE REGISTERED VALUER AT RS. 3 77 056/ - . HE ALSO NOTICED THAT THE JEWELLERY AND UTENSILS WORTH RS. 19 26 005/ - W AS FOUND AT THE COMMON RESIDENCE SITUATED AT 96 SARVARITU VILAS UDAIPUR . JEWELLERY AND UTENSILS WORTH RS. 7 38 4 71 / - WAS FOUND FROM THE LOCKER NO. 162 WITH UNION BANK OF INDIA TOWN HALL BRANCH UDAIPUR MAINTAINED BY SHRI BHANWAR LAL JAIN SHRI MAHENDRA KUMAR JAIN AND SMT. SHEELA JAIN AND THE JEWELLERY & UTENSILS WORTH RS. 11 64 678/ - W ERE FOUND IN THE LOCKER NO. 207 WITH UNION BANK OF INDIA TOWN HALL BRANCH UDAIPUR MAINTAINED BY SHRI BHANWAR LAL JAIN AND SHRI RAMESH KUMAR JAIN. IN THIS MANNER TOTAL JEWELLERY WORTH RS. 42 06 480/ - WAS FOUND DURING THE COURSE OF SEARCH. SHRI MAHENDRA KUMAR JAIN OFFERED TO TAX AN AMOUNT OF RS. 11 64 000/ - AS UNDISCLOSED INVESTMENT IN JEWERRLY. HE ALSO STATED THAT THE AM OF RS. 11 64 000/ - WOULD BE OFFERED TO TAX IN THE HANDS OF HIS FATHER SHRI BHANWAR LAL JAIN I.E. THE ASSESSEE . THE ASSESSING OFFICER ASKED THE ASSESSEE ABOUT SOURCE OF ACQUISITION OF ABOVE JEWELLERY ALONG WITH 5 CORROBORATING EVIDENCE. THE SUBMISSIONS OF THE ASSESSEE AS MENTIONED IN PARA 8.7 OF THE ASSESSMENT ORDER DATED 15/12/2011 W ERE AS UNDER: - DURING THE COURSE OF SEARCH THE GOLD JEWELLERY/ORNAMENTS NET WEIGHTED 2668.87 GRAMS VALUED FOR RS. 41 11 6 73/ - WERE FOUND WITH THE ASSESSEE AND HIS FAMILY MEMBERS AT THEIR RESIDENCE AS WELL AS IN BANK LOCKERS WITH UNION BANK OF INDIA. OUT OF THE ABOVE TH E GOLD JEWELLERY/ORNAMENTS NET WEIGHTED 758.750 GRAMS WERE SEIZED DURING THE COURSE OF SEARCH. SMT. HERA BAI RECEIVED GOLD JEWELLERY/ORNAMENTS NET W E IGHTED ABOUT 350 GRA MS FROM HER FATHER LATE SHRI MOTI LAL JAIN AT THE TIME OF HER MARRIAGE. SMT. HEERA BAI IS INCOME TAX ASSESSEE AND THE GOLD JEWELLERY AND ORNAMENTS NET WEIGHTED 350 GRAMS RECEIVED BY HER IN MARRIAGE HAVE BEEN DECLARED IN RETURN OF INCOME . THE COPY OF BALANCE SHEET IS ENCLOSED HEREWITH. SHE HAS ALSO RECEIVED ANCESTRAL GOLD ORNAMENTS/JEWE LLERIES NET WEIGHTED ABOUT 291 GRAMS FROM WILL OF HER MOTHER IN LAW LATE SMT. DAKI BAI. THE COPY OF WILL OF DAKI BAI IS ENCLOSED HEREWITH. S HRI BHANWAR LAL JAIN HAS RECEIVED GOLD ORNAMENTS/JEWELLERY OF NET WEIGHTED ABOUT 220.92 GRAMS FROM HIS FATHER AT T HE TIME OF HIS MARRIAGE. THE AFFIDAVITS OF SHRI BHANWAR LAL JAIN AND HIS BROTHER SHRI ARJUN LAL JAIN ARE ENCLOSED HEREWITH. SHRI R A MESH KUMAR JAIN HAS RECEIVED GOLD ORNAMENTS/JEWELLERY NET WEIGHTED ABOUT 194.20 GR A MS FROM HIS GRAND FATHER LATE SHRI RATAN LAL JAIN AT THE TIME OF HIS MARRIAGE. THE AFFIDAVITS OF SHRI RAMESH KUMAR JAIN AND HIS FATHER SHRI BHANWAR LAL JAIN ARE ENCLOSED HEREWITH. SMT. MADHU JAIN HAS RECEIVED GOLD ORNAMENTS NET WEIGHTED ABOUT 340 GRAMS FROM HER FATHER LATE SHRI MITHA LAL MAROO AT THE TIME OF HER MARRIAGE. SHE HAS RECEIVED GOLD ORNAMENTS NET WEIGHTED ABOUT 51.90 GRAMS FROM HER FATHER AT THE TIME OF MARRIAGE OF HER BROTHER SHRI LALIT MAROO. THE AFFIDAVITS OF SMT. MADHU JAIN AND HER BROTHER SHRI LALIT MAROO ARE ENCLOSED HEREWITH . SHRI LALIT KUMAR HAS RECEIVED GOLD ORNAMENTS/JEWELLERY NET WEIGHTED AB OUT 105.38 GRAMS FROM HIS GRAND FATHER LATE SHRI RATAN LAL JAIN AT THE TIME OF HIS MARRIAGE. THE AFFIDAVITS OF SHRI LALIT KUMAR JAIN AND HIS FATHER SHRI BHANWAR LAL JAIN ARE ENCLOSED HEREWITH. SMT. KAVITA JAIN HAS RECEIVED GOLD ORNAMENTS NET WEIGHTED ABOUT 290 GRAMS FROM HER FATHER SHRI BAHADUR SINGH SARUPRIYA AT THE TIME OF HER MARRIAGE. SHE HAS RECEIVED GOLD ORNAMENTS NET WEIGHTED ABOUT 100.33 GRAMS FROM HER FATHER AT THE TIME OF M ARRIAGE OF HER BROTHER SHRI HARSH MITRA. THE AFFIDAVITS OF SMT. KAVITA JAIN AND HER FATHER SHRI BAHADUR SINGH SARUPRIYA ARE ENCLOSED HEREWITH. SHRI MAHENDRA KUMAR JAIN 6 HAS RECEIVED GOLD ORNAMENTS/JEWELLERY NET WEIGHTED ABOUT 188.30 GRAMS FROM HIS GRANDFA THER LATE SHRI RATAN LAL JAIN AT THE TIME OF HIS MARRIAGE. THE AFFIDAVITS OF SHRI MAHENDRA KUMAR JAIN AND HIS FATHER SHRI BHANWAR LAL JAIN ARE ENCLOSED HEREWITH. SMT. SHEELA JAIN HAS RECEIVED GOLD ORNAMENTS NET WEIGHTED ABOUT 305 GRAMS FROM HER FATHER SHRI GA UTAM LAL KHATOD AT THE TIME OF HER MARRIAGE. SHE HAS RECEIVED GOLD ORNMANETS NET WEIGHTED ABOUT 131.84 GRAMS FROM HER FATHER SHRI GAUTAM LAL KHATOD AT THE TIME OF MA R RIAGE OF HER BROTHER SHRI DHIRAJ. SHE HAS ALSO RECEIVED GO LD ORNAMENTS NET WEIGHTED ABOUT 100 GRAMS FROM HER FATHER AT THE TIME OF BIRTH OF HER CHILD. THE AFFIDAVITS OF SMT. SHEELA JAIN AND HER FATHER SHRI GAUTAM LAL KHATOD ARE ENCLOSED HEREWITH. IN VIEW OF THE FOREGOING REASON THE GOLD ORNAMENTS/JEWELLERY NET WEIGHED 2668.87 GRAMS (NET) KINDLY BE TREATED AS EXPLAINED . SILVER ORNAMENTS AND ARTICLES WEIGHED 4 150 GRAMS . THE SILVER ORNAMENTS AND ARTICLES WEIGHTED 4 150 GRAMS WERE FOUND AT THE RESIDENCE OF SHRI BHANWAR LAL JAIN AND HIS FAMILY MEMBERS DURING THE COURSE OF SEARCH. SHRI BHANWAR LAL JAIN HAS RECEIVED SILVER ARTICLES/COINS/UTENSILS OF NET WEIGHTED 16.750 KILOGRAMS FROM HIS FATHER DURING HIS MARRIAGE. THE ASS ESSEE HAS SOLD SILVER ARTICLES OF NET WEIGHTED 1 6.500 KILOGRAMS DURING THE ASSESSMENT YEAR 2008 - 09 (COPY OF SALE BILL ENCLOSED). THE BALANCE OF 250 GRAMS SILVER ARTICLES WERE FOUND IN THE RESIDENCE OF SHRI BHANWAR LAL JAIN DURING THE COURSE OF SEARCH. SMT. HEERA BAI HAS RECEIVED SILVER ORNAMENTS/UTENSILS NET WEIGHTED ABOUT 1500 GRAMS FROM HER FATHER LATE SHRI MOTI LAL JAIN AT THE TIME OF HER MARRIAGE. THE COPY OF WILL OF SMT. DAKI BAI IS ENCLOSED HEREWITH. SHRI RAMESH KUMAR JAIN HAS RECEIVED SILVER ORNAMENTS/UTENSILS NET WEIGHTED ABOUT 225 GRAMS FROM HIS GRANDFATHER LATE SHRI RATAN LAL JAIN AT THE T IME OF HIS MARRIAGE . THE AFFIDAVITS OF SHRI RA MESH KUMAR JAIN AND HIS FATHER SHRI BHANWAR LAL JAIN ARE ENCLOSED HER E WITH . SMT. MADHU JAIN HAS RECEIVED SILVER ORNAMENTS/UTENSILS NET WEIGHTED ABOUT 545 GRAMS FROM HER FATHER AT THE TIME OF MARRIAGE OF HER BROTHER SHRI LALIT MAROO. THE AFFIDAVITS OF SMT. MADHU JAIN AND HER BROTHER SHRI LALIT MAROO ARE ENCLOSED HEREWITH. SHR LALIT KUMAR JAIN HAS RECEIVED SILVER ORNAMENTS/UTENSILS NET WEIGHTED ABOUT 240 GRAMS FROM HIS GRANDFAT HER LATE SHRI RATAN LAL JAIN AT THE TIME OF HIS MARRIAGE. THE AFFIDAVITS OF SHRI LALIT KUMAR JAIN AND HIS FATHER SHRI BHANWAR LAL JAIN ARE ENCLOSED HEREWITH. SMT. KAVITA JAIN HAS RECEIVED SILVER ORNAMENTS/UTENSILS 7 NET WEIGHTED ABOUT 525 GRAMS FROM HER FA THER AT THE TIME OF MARRIAGE OF HER BROTHER SHRI HARSH MITRA . THE AFFIDAVITS OF SMT. KAVITA JAIN AND HER FATHER SHRI BAHADUR SINGH SARUPRIYA ARE ENCLOSED HEREWITH. SHRI MAHENDRA KUMAR JAIN HAS RECEIVED SILVER ORNAMENTS/UTENSILS NET WEIGHTED ABOUT 230 GRA MS FROM HIS GRANDFATHER LATE SHRI RATAN LAL JAIN AT THE TIME OF HIS MARRIAGE. THE AFFIDAVITS OF SHRI MAHENDRA KUMAR JAIN AND HIS FATHER SHRI BHANWAR LAL JAIN ARE ENCLOSED HEREWITH. SMT. SHEELA JAIN HAS RECEIVED SILVER ORNAMENTS/UTENSILS NET WEIGHTED ABOU T 475 GRAMS FROM HER FATHER SHRI GAUTAM LAL KHATOD AT THE TIME OF MARRIAGE OF HER BROTHER SHRI DIHRAJ. SHE HAS ALSO RECEIVED SILVER ORNAMENTS/UTENSILS NET WEIGHTED ABOUT 160 GRAMS FROM HER FATHER AT THE TIME OF BIRTH OF HER CHILD. THE AFFIDAVITS OF SMT. SHEELA JAIN AND HER FATHER SHRI GAUTAM LAL KHATOD ARE ENCLOSED HEREWITH. IN VIEW OF THE ABOVE THE TOTAL SILVER JEWELLERY/UTENSILS NET WEIGHTED 4150 GRAMS MAY KINDLY BE TREATED AS EXPLAINED . 4. THE ASSESSING OFFICER AFTER CONSIDERING THE SUBMISSIONS O F THE ASSESSEE O BSERVED THAT IT WAS ABUNDANTLY CLEAR FROM THE STATEMENT OF SHRI R A MESH KAUMAR JAIN THAT HE HAS OFFERED UNDISCLOSED INVESTMENT OF RS. 11 64 000 / - FOR TAXATION IN THE HANDS OF HIS FATHER SHRI BHANWAR LAL JAIN . HE ALSO OBSERVED THAT THE AFFIDAVITS OF THE VARIOUS FAMILY MEMBERS FURNISHED BY THE ASSESSEE DURING THE COURSE OF ASSESSMENT PROCEEDINGS WERE NOTHING BUT JUST TO FULFILLMENT OF DESIRED FIGURES FOR EXP L A I NING JEWELLERY FOUND AT THE TIME OF SEARCH AND TH AT MERE FILING OF AFFIDAVITS OF IN - LAWS SIDE COULD NOT PROVE THEIR CREDITWORTHINESS OF GIVING THE JEWELLERY TO THAT EXTENT AS CLAIMED . THE ASSESSING OFFICER OBSERVED THAT ALL THE STATEMENTS OF THE ASSESSEE AND HIS FAMILY MEMBERS WERE TAKEN ON OATH AND DULY CONSENTED BY RELATED PERSONS IN WHICH ASSESSEE HAD HIMSELF 8 SIGNED THE STATEMENT IN FULL CONSCIOUS AFTER READING CAREFULLY AND WITHOUT PRESSURE COERCION AND DURESS. THEREFORE THE S T AND OF THE AUTHORIZED PERSONS OF THE ASSESSEE ABOUT RETR ACTION WAS NOT TENABLE IN THE EYES OF LAW . RELIANCE WAS PLACED ON THE FOLLOWING CASE LAWS: - 1. KANTI LAL PARBHU DAS PATEL VS. DCIT (2005) 93 ITD 117 (INDORE) 2. RAMESH T. SALVE (75 ITD 75) 3. PARAMANAND BUILDERS PVT. LTD. 59 ITD 29 (MUMBAI) 4. DR. S.C. GUPTA VS. CIT (2001) 248 ITR 782 (ALL) THE ASSESSING OFFICER OBSERVED THAT THE ASSESSEE CLAIMED TO HAVE RECEIVED AND POSSESSED SILVER JEWELLERY TO THE EXTENT OF RS. 30 42 480/ - THEREFORE THE JEWELLERY ONLY TO THAT EXTENT COULD BE TREATED AS EXPLAINED AND REMAINING JEWELLERY WORTH RS. 11 64 000/ - AS OFFERED BY THE ASSESSEE FOR TAXATION U/S 132(4) OF THE ACT WAS TREATED AS UNEXPLAINED AND THE SAME WAS BROUGHT TO TAX IN THE HANDS OF THE ASSESSEE . 5. BEING AGGRIEVED THE ASSESSEE CARRIED THE MA TTER TO THE LD. CIT(A) AND FIL E D THE WRITTEN SUBMISSIONS WHICH IS REPRODUCED BY THE LD. CIT(A) IN PARA 7 .3 OF THE IMPUGNED ORDER AND READ AS UNDER: - 'DURING THE COURSE OF SEARCH THE GOLD JEWELLERY/ORNAMENTS NET WEIGHTED 2668.87 GRAMS VALUED FOR RS.41 11 673/ - WERE FOUND WITH THE APPELLANT AND HIS FAMILY MEMBERS AT THEIR RESIDENCE AS WELL AS IN BANK LOCKERS WITH UNION 9 BANK OF INDIA. 4.2. OUT OF THE ABOVE THE GOLD JEWELLERY/ ORNAMENTS NET WEIGHTED 758.750 GRAMS WERE SEIZED DURING THE COURSE OF SEARCH (COP IES OF RELEVANT ANNEXURE ARE ENCLOSED). 4.3. THE APPELLANT HAS EXPLAINED THE TOTAL GOLD JEWELLERY/ORNAMENTS NET WEIGHTED 2668.87 GRAMS VALUED FOR RS. 41 11.673/ - FOUND WITH HIM AND HIS FAMILY MEMBERS AT THEIR RESIDENCE AS WELL AS IN BANK LOCKERS WITH U NION BANK OF INDIA UDAIPUR. 4.4. SMT. HEERA BAI SOLEMNIZED HER MARRIAGE WITH SHRI BHANWAR LAL JAIN IN THE YEAR 1952. SHE HAS RECEIVED GOLD JEWELLERY/ ORNAMENTS NET WEIGHTED ABOUT 350 GRAMS FROM HER FATHER LATE SHRI MOTI LAL JAIN AT THE TIME OF HER MARRIAGE. SMT. HEERA BAI IS INCOME TAX ASSESSEE AND THE GOLD JEWELLERY AND ORNAMENTS NET WEIGHTED 350 GRAMS WAS RECEIVED IN HER MARRIAGE WHICH HAVE BEEN DECLARED IN HER RETURN OF INCOME (COPY OF BALANCE SHEET ENCLOSED). SHE HA S ALSO RECEIVED ANCESTRAL GOLD ORNAMENTS/JEWELLERY NET WEIGHTED ABOUT 291 GRAMS FROM WILL OF HER MOTHER IN LAW LATE SMT. DAKI BAI. (COPY OF WILL OF DAK BAI ENCLOSED). THUS THE GOLD JEWELLERY /ORNAMENTS NET WEIGHTED 641 GRAM BELONGS TO HER AS HER 'STRID HAN'. 4.5. SHRI BHANWAR LA L JAIN HAS RECEIVED GOLD ORNAMENTS/JEWELLERY OF NET WEIGHTED ABOUT 220.92 GRAMS FROM HIS FATHER AT THE TIME OF HIS MARRIAGE (AFFIDAVITS ENCLOSED). 4.6. SHRI RAMESH KUMAR JAIN SOLEMNIZED HIS MARRIAGE WITH SMT. MADHU JAIN ON DATED 08 - 12 - 1982. HE HAS RECEIVED GOLD ORNAMENTS / JEWELLERY NET WEIGHTED AB OUT 194.20 GRAMS FROM HIS GRAND FATHER LATE SHRI RATAN LAL JAIN AT THE TIME OF HIS MARRIAGE (AFFIDAVITS ENCLOSED). 10 4.7. SMT. MADHU JAIN SOLEMNIZED HER MARRIAGE WITH SHRI R AMESH KUMAR JAIN IN THE YEAR 1982. SHE HAS RECEIVED GOLD ORNAMENTS NET WEIGHTED ABOUT 340 GRAMS FROM HER FATHER LATE SHRI MITHA LAL MAROO AT THE TIME OF HER MARRIAGE (AFFIDAVITS ENCLOSED). SHE HAS RECEIVED GOLD ORNAMENTS NET WEIGHTED ABOUT 51.90 GRAMS FRO M HER FATHER AT THE TIME OF MARRIAGE OF HER BROTHER SHRI LALIT MAROO (AFFIDAVITS ENCLOSED). THUS THE GOLD JEWELLERY /ORNAMENTS NET WEIGHTED 391.90 GRAM BELONGS TO HER AS HER ' STRIDHAN'. 4.8. SHRI LALIT KUMAR JAIN SOLEMNIZED HIS MARRIAGE WITH SMT. KAVITA JAIN ON DATED 19 - 02 - 1988. HE HAS RECEIVED GOLD ORNAMENTS / JEWELLERY NET WEIGHTED ABOUT 105.38 GRAMS FROM HIS GRAND FATHER LATE SHRI RATAN LAL JAIN AT THE TIME OF HIS MARRIAGE (AFFIDAVITS ENCLOSED). 4.9. SMT. KAVITA JAIN SOLEMNIZED HER MARRIAG E WITH SHRI LALIT KUMAR JAIN IN THE YEAR 1988. SHE HAS RECEIVED GOLD ORNAMENTS NET WEIGHTED ABOUT 290 GRAMS FROM HER FATHER SHRI BAHADUR SINGH SARUPRIYA AT THE TIME OF HER MARRIAGE. SHE HAS RECEIVED GOLD ORNAMENTS NET WEIGHTED ABOUT 100.33 GRAMS FROM HER FATHER AT THE TIME OF MARRIAGE OF HER BROTHER SHRI HARSH MITRA THUS THE GOLD JEWELLERY /ORNAMENTS NET WEIGHTED 390.33 GRAM BELONGS TO HER AS 'STRIDHAN'. 4.10. SHRI MAHENDRA KUMAR JAIN SOLEMNIZED HIS MARRIAGE WITH SMT. SHEELA JAIN ON DATED 10 - 12 - 1994. HE HAS RECEIVED GOLD ORNAMENTS / JEWELLERY NET WEIGHTED ABOUT 188.30 GRAMS FROM HIS GRAND FATHER LATE SHRI RATAN LAL JAIN AT THE TIME OF HIS MARRIAGE. 11 4.11. SMT. SHEELA JAIN SOLEMNIZED HER MARRIAGE WITH SHRI MAHENDRA KUMAR JAIN ON DATED 10 - 12 - 1994. SHE HAS RECEIVED GOLD ORNAMENTS NET WEIGHTED ABOUT 305 GRAMS FROM HER FATHER SHRI GAUTAM LAL KHATOD AT THE TIME OF HER MARRIAGE. SHE HAS RECEIVED GOLD ORNAMENTS NET WEIGHTED ABOUT 131.84 GRAMS FROM HER FATHER SHRI GAUTAM LAL KHATOD AT THE TIME OF MARRIAGE OF HER BROTHER SHRI DHIRAJ. SHE HAS ALSO RECEIVED GOLD ORNAMENTS NET WEIGHTED ABOUT 100 GRAMS FROM HER FATHER AT THE TIME OF BIRTH OF HER CHILD. THUS THE GOLD JEWELLERY /ORNAMENTS NET WEIGHTED 536.84 GRAM BELONGS TO HER AS ' STRIDHAN'. 4.12. THE APPELLAN T VERY RESPECTFULLY FURTHER SUBMITS THAT THE CENTRAL BOARD OF DIRECT TAXES HAS ISSUED THE GUIDELINES IN INSTRUCTION NUMBER 1916 DATED 11 - 05 - 1994 THAT IN THE CASE IF PERSON NOT ASSESSED TO WEALTH TAX GOLD JEWELLERY AND ORNAMENTS TO THE EXTENT OF 500 GRAM PER MARRIED LADY 250 GRAMS PER UNMARRIED LADY AND 100 GRAMS PER MALE MEMBERS OF THE FAMILY NEED TO BE SEIZED. 4.13. THE APPELLANT IS HAVING IN HIS FAMILY FOUR MARRIED LADIES ONE UNMARRIED GIRL AND TEN MALE MEMBERS. THE PEDIGREE OF THE FAMILY OF THE ASSESSES Z'S STATED AS UNDER: SH. BHANWARLALJI JAIN (HEAD OF THE FAMILY) 1 HIS WIFE SMT. HEERA BAI 1 RAMESH JAIN LALIT JAIN MAHENDRA JAIN 1 1 1 SMT. MADHU JAIN SMT. KAVITA JAIN SMT. SHEILA JAIN (MARRIED) (MARRIED) (MARRIED) 1 1 1 THREE SONS TWO SONS ONE SON & ONE DAUGHTER (UNMARRIED) (UNMARRIED) (UNMARRIED) 12 4 .14. ACCORDINGLY THE GOLD JEWELLERY/ORNAMENTS NET WEIGHTED 2668.87 GRAMS FOUND WITH THE ASSESSEE AND HIS FAMILY MEMBERS AT HIS RESIDENCE IS UNDER PERMISSIBLE LIMITS OF THE GUIDELINES ISSUED BY THE CENTRAL BOARD OF DIRECT TAXES IN INSTRUCTION NUMBER 1916 D ATED 11 - 05 - 1994 MAY BE TREATED AS EXPLAINED AND CANNOT BE SUBJECTED TO ADDITION TO THE RETURNED INCOME OF THE APPELLANT. OUR RELIANCE HAS BEEN PLACED ON THE FOLLOWING JUDICIAL DECISIONS FOR THIS PURPOSE: SMT. SALOCHANA DEVI JAISWAL VS. DCIT (2004) 90TTJ 974 (JABALPUR). RAJENDRA C. SHAH VS. JCIT 158 TAXMAN 170 (MUM.) (MAG.) CIT VS. M.S. AGRAWAL (HUF) (2008) 11 DTR 169 (MP) DCIT VS. GORDHANDAS LACHAMMANDAS (2008) 16 DTR 26 (MUM.). CIT VS. RATAN LAL VYAPARILAL JAIN (2008) 45 DTR 290 (GUJ..). SMT P ATI DEVI VS. ITO (1999) 240 ITR 727 (KAR.) 4.15. THE APPELLANT VERY HUMBLY SUBMITS THAT HE IS MAINTAINING THE HIGH SOCIAL STATUS IN THE SOCIETY AND ACCORDING TO HIS SOCIAL STATUS THE JEWELLERY FOUND WITH HIM DURING THE COURSE OF SEARCH IS UNDER THE PERM ISSIBLE LIMITS OF THE CIRCULAR AND THE GOLD JEWELLERY/ORNAMENTS NET WEIGHTED 2668.87 GRAMS FOUND WITH THE APPELLANT DURING THE COURSE OF SEARCH STANDS EXPLAINED AND THEREFORE THE ADDITION OF THE GOLD JEWELLERY/ORNAMENTS MADE BY THE ASSESSING OFFICER IS UNWARRANTED AND LIABLE TO BE DELETED. 4.16. FOR THE VARIOUS REASONS STATED ABOVE THE APPELLANT VERY HUMBLY REQUEST YOUR HONOUR THAT THE ADDITION OF THE GOLD JEWELLERY/ORNAMENTS MADE BY THE ASSESSING OFFICER IS UNWARRANTED AND LIABLE TO BE DELETED. 4.17. IN VIEW OF THE FOREGOING GROUNDS OF DEFENCE THE APPELLANT VERY HUMBLY PAYS THAT THE ADDITION OF THE GOLD JEWELLERY/ORNAMENTS OF RS. 11 64 000/ - MADE BY THE ASSESSING OFFICER MAY KINDLY BE DELETED. 4.18. THUS THE APPELLANT HAD SATISFACTORY EXPLAINED NATURE AND SOURCE OF THE GOLD JEWELLERY AND ORNAMENTS BEFORE THE ASSESSING OFFICER FOUND DURING THE COURSE O F SEARCH ON THE BASIS OF AFFIDAVITS AND COUNTER AFFIDAVITS OF THE THIRD PARTY DURING THE COURSE OF ASSESSMENT AND THEREFORE THE ADDITION OF UNDISCLOSED INVESTMENT IN GOLD JEWELLERY/ORNAMENTS O F RS.11 64 000/ - IS UNWARRANTED AND UNSUSTAINABLE ON THE FACTS AND 13 CIRCUMSTANCES OF THE CASE. 4.19. THE APPELLANT VERY RESPE CTFULLY FURTHER STATES THAT THE SEARCH PARTY HAS ALSO RECORDED ON DATED 10 - 03 - 2010 THE STATEMENTS OF THE APPELLANT UNDER SECTION 132 OF THE ACT. 4.20. IN REPLY TO QUESTION 46 OF THE RECORDED STATEMENT UNDER SECTION 132(4) OF THE ACT SHRI RAMESH KUMAR J AIN HAS SURRENDERED THE AMOUNT OF JEWELLERY OF RS. 11 64 000 / - AND OFFERED THE SAME FOR TAXATION. 4.21. THE APPELLANT VERY RESPECTFULLY STATES THAT SHRI RAMESH KUMAR JAIN HAS SURRENDERED THE ALLEGED UNEXPLAINED JEWELLERY AND ORNAMENTS OF RS. 11 64 00 0 / - UNDER CONFUSED STATE OF MIND AS A RESULT OF THE MENTAL PRESSURE AND MISCONCEIVING THE FACTS BASED ON INCORRECT INFORMATION. 4.22. THE APPELLANT HAS RETRACTED AND/OR WITHDRAWN THE SURRENDER OF ALLEGED UNEXPLAINED GOLD JEWELLERY AND ORNA MENTS OF RS. 11 64 000 / - MADE BY HIM DURING THE COURSE OF SEARCH VIDE HIS LETTER DATED 04 - 10 - 2011 (COPY ENCLOSED) WITH CORROBORA TING EVIDENCES. 4.23. THE ASSESSING OFFICER HAS MADE THE ADDITION OF ALLEGED UNEXPLAINED JEWELLERY AND ORNAMENTS OF RS. 11 64 000 / - OF THE APPELLANT SOLELY RELYING ON THE STATEMENTS RECORDED ON DATED 10/11 - 03 - 2010 AT THE TIME OF SEARCH. THE COPY OF THESE STATEMENTS ARE ENCLOSED FOR YOU R KIND PERUSAL PLEASE. 4.24. THE APPELLANT FURTHER SU BMITS THAT IF THE ASSESSING OFFICER GIVES HIS ASSERTION ONLY TO THE STATEMENTS RECORDED DURING THE COURSE OF SEARCH THEN IT CANNOT BE USED AS CONCLUSIVE EVIDENCE OR FINAL ACCORD OF THE APPELLANT. OUR RELIANCE HAS BEEN PLACED ON THE FOLLOWING JUDICIAL DECIS IONS: GAURISHANKER ONKARMAL VS. ITO (1990) 37 TTJ 33 (AHD - T) 4.25. IT IS SETTLED POSITION OF LAW THAT THE STATEMENTS MADE UNDER OATH ARE NOT THE CONCLUSIVE EVIDENCE IN MAKING THE ADDITIONS OF INCOME IN THE ASSESSMENT UNLESS THEY ARE FURTHER SUPPORTED OR CORROBORATED BY ANY OTHER ADDITIONAL EVIDENCE. 4.26. SIMILARLY MERE STATEMENTS CANNOT BE THE BEDROCK OR FOUNDATION OF 14 ASSESSMENT. IT IS ALWAYS OPEN TO THE ASSESSES TO SHOW THAT THE STATEMENTS MADE BY A PERSON WERE NOT CORRECT. THE INCORRECT STAT EMENTS DO NOT FORM THE BASIS OF THE ASSESSMENT. OUR SUBMISSIONS ARE WELL SUPPORTED BY THE FOLLOWING JUDICIAL DECISIONS: PULLANGODA RUBBER PRODUCE COMPANY LTD. VS STATE OF KERALA 91 ITR 18 (S.C.) IN THIS CASE THE APEX COURT OBSERVED THAT STATEMENTS MADE BY A PERSON ARE AN EXTREMELY IMPORTANT PIECE OF EVIDENCE BUT IT CANNOT BE SAID THAT IT IS CONCLUSIVE. IT IS ALWAYS OPEN TO THE ASSESSEE OF SHOW THAT THE STATEMENTS MADE BY A PERSON ARE NOT CORRECT. NARAIN BHAGAWANT RAO GOSAVI BALAJI WALE VS GOPAL VINAYAL GOSAIR AIR 1960 SUPREME COURT 100 IN THIS CASE IT WAS OBSERVED BY THE APEX COURT THAT STATEMENTS ARE THE BEST EVIDENCE THAT AN OPPOSITE CAN RELY UPON AND THOUGH NOT CONCLUSIVE COULD BE DECISIVE OF THE MATTER UNLESS SUCCESSFULLY PROVED ERRO NEOUS. AVADHKISHORE DASS VS. RAM GOPAL AIR 1979 SUPREME COURT 861. IN THIS CASE THE APEX COURT HAS OBSERVED THAT EVIDENTIARY ADMISSIONS ARE NOT THE CONCLUSIVE PROOF OF FACTS ADMITTED AND MAY BE EXPLAINED OR SHOWN TO BE WRONG. KRISHANLAL SHIVCHAND RAI VS. CIT (1973) 88 ITR 293 (PUNJ) IN THIS CASE THE HON'BLE PUNJAB HIGH COURT HAS OBSERVED THAT IT IS ESTABLISHED PRINCIPLE OF LAW THAT A PARTY IS ENTITLED TO SHOW AND PROVE THAT THE ADMISSION MADE BY HIM IS PROBABLY IS IN FACT NOT CORRECT AND TRUE. 4.27. THE APPELLANT HAS SATISFACTORILY PROVED THAT THE GOLD JEWELLERY ORNAMENTS OF RS. 41 11 673/ - REPRESENTS DECLARED AND EXPLAINED GOLD JEWELLERY AND ORNAMENTS OF THE APPELLANT AND HIS FAMILY MEMBERS AND THEREFORE THE ADDITION OF ALLEGED UNEXPLAINED JEWE LLERY OF RS. 11 64 000 / - MADE BY THE ASSESSING OFFICER TO THE RETURNED INCOME OF THE APPELLANT IS TOTALLY INCORRECT AND PATENTLY ERRONEOUS AND THE SAME IS LIABLE TO BE DELETED. 4.28. IT IS WELL SETTLED POSITION OF LAW THAT THAT RETRACTED STATEMENTS O F ANY PERSON CANNOT BE MADE THE BASIS FOR ADDITION OF UNDISCLOSED INCOME 15 BECAUSE IT CANNOT BE STATED THAT THEY ARE CONCLUSIVE. OUR RELIANCE HAS BEEN PLACED ON THE FOLLOWING JUDICIAL DECISIONS: C1T VS BHANWARLAL MURWATIYA (2008) XXXIX TAX WORLD 214 (RA J. - HC). CIT VS. ARIHANT BUILDERS (2008) XXXIX TAX WORLD 223 (RAJ. - HC). 4.29. NO RELIANCE CAN BE VALIDLY PLACED ON SURRENDER / ADMISSION MADE IN STATEMENTS RECORDED DURING COURSE OF SEARCH PARTICULARLY WHEN THOSE STATEMENTS ARE RETRACTED. 4.30. NO REL IANCE CAN BE VALIDLY PLACED ON A RETRACTED STATEMENT RECORDED DURING SEARCH UNLESS THEY ARE SUPPORTED BY RELIABLE AND CLINCHING EVIDENCE. OUR RELIANCE HAS BEEN PLACED ON THE FOLLOWING JUDICIAL DECISIONS FOR THIS PURPOSE: NARAYAN DASS SINGHVI VS. ITO (20 04) 31 TAX WORLD 191(LTAT - JD.). ACIT VS. SATYA NARAYAN AGARWALLA (2002) 255 ITR 69 (KOLKOTA) PAUL MATHEWS & SONS VS. CIT (2003) 129 TAX MAN 416 (KER.) ACIT VS. PODDAR PROJECTS LTD. 275 ITR 1 (AT) - CCE. VS. INDIAN OIL CORP. LTD. & ORS. (2004)187 CTR (S C) 297 NAVNITLAL C. JAVERI VS. CIT(1995) 56ITR 198 (S.C.) TANNA AND MODI VS. CIT292 ITR 209 (S.C.) MAHESHWARI INDUSTRIES VS. ACIT (2003) 81 TTJ (JD)914. MS. ASHWARYA K. RAI VS. DCIT. 104 ITD 166 (MUM.). THE RELEVANT EXTRACT OF THE ABOVE JUDICIAL DECISION ARE ENCLOSED HEREWITH FOR YOUR REFERENCE PLEASE. 4.31. THE CENTRAL BOARD OF DIRECT TAXES HAS ALSO ISSUED INSTRUCTION F NO.286/2/2002IT (INV.) DATED MARCH 23 2003 WHICH STATES AS UNDER: 'INSTANCES HAVE COME TO THE NOTICE OF THE BOARD WHERE ASSESSES HAVE CLAIMED THAT THEY HAVE BEEN FORCED TO CONFESS UNDISCLOSED INCOME DURING THE COURSE OF THE SEARCH AND SEIZURE AND SURVEY OPERATION. SUCH CONFESSION IF NOT BASED ON CREDIBLE EVIDENCE ARE TAKEN/ RETRACTED BY TH E CONCERNED ASSESSEES WHILE FILING RETURN OF INCOME. IN THESE CIRCUMSTANCES CONFESSIONS DURING THE SEARCH AND SEIZURE AND SURVEY OPERATION DO NOT SERVE ANY USEFUL PURPOSE. IT IS THEREFORE ADVISED THAT THERE SHOULD BE FOCUS AND 16 CONCENTRATION ON COLLECTIO N OF EVIDENCE OF INCOME WHICH LEADS TO INFORMATION ON WHAT HAS NOT BEEN DISCLOSED OR IS NOT LIKELY TO BE DISCLOSED BEFORE THE INCOME - TAX DEPARTMENT. SIMILARLY WHILE RECORDING STATEMENT DURING THE COURSE OF SEARCH AND SEIZURE OPERATION NO ATTEMPTS SHOULD BE MADE TO OBTAIN CONFESSION AS TO THE UNDISCLOSED INCOME'. 4.32. THE ASSESSING OFFICER HAS NOT ADDUCED ANY CORROBORATIVE EVIDENCE TO SUPPORT THE SURRENDER OF GOLD JEWELLERY MADE BY THE APPELLANT AND THEREFORE THE ADDITION OF GOLD JEWELLERY OF RS. 11 64 000/ - MADE BY HIM TO THE RETURNED INCOME OF THE APPELLANT IS UNWARRANTED AND LIABLE TO BE DELETED IN VIEW OF THE ABOVE INSTRUCTIONS OF CENTRAL BOARD OF DIRECT TAXES NEW DELHI . 4.33. THE ASSESSING OFFICER HAS OBSERVED THAT THE AFFIDAVITS FILED BY THE APPELLANT ARE NOTHING BUT MERELY FOR FULFILLMENT OF DESIRED FIGURES FOR EXPLAINING JEWELLERY FOUND AT THE TIME OF SEARCH. 4.34. THE ASSESSING OFFICER HAS FURTHER OBSERVED THAT SHRI RAMESH KUMAR AFTER DISCUSSING THE AVAILABILITY/OWNERSHIP OF THE JEWELLERY WITH FAMILY MEMBERS HAS SURRENDERED THE JEWELLERY OFRS.11 64 000/ - IN HIS STATEMENT. 4.35. THE OBSERVATION FINDINGS AND/OR INFERENCES CONCLUSION DRAWN BY THE ASSESSING OFFICER ON THESE FINDINGS ARE TOTALLY INCORRECT AND PATENTLY ERRONEOUS . SHRI RAMESH KUMAR JAIN HAS SURRENDERED THE ALLEGED UNEXPLAINED JEWELLERY AND ORNAMENTS OF RS. 11 64 000 / - UNDER UNDER CONFUSED STATE OF MIND AS A RESULT OF THE MENTAL PRESSURE AND MISCONCEIVING THE FACTS BASED ON INCORRECT INFORMATION. 4.36. THE ASS ESSING OFFICER HAS FURTHER OBSERVED THAT THE APPELLANT AND MEMBERS OF HIS FAMILY HAS HAVING ONLY GOLD JEWELLERY WEIGHTED 1925.09 GRAMS WHEREAS GOLD JEWELLERY WEIGHTED 2668.87 GRAMS WERE FOUND AT THE TIME OF SEARCH WITH THE APPELLANT AND HIS FAMILY MEMBERS. 4.37. THE APPELLANT VERY HUMBLY SUBMITS THAT THE OBSERVATION AND /FINDINGS OF THE ASSESSING OFFICER ARE SOLELY BASED ON STATEMENTS OF THE APPELLANT AND HIS FAMILY MEMBERS WHICH ARE NOT CONCLUSIVE FOR THE PURPOSE OF ASSESSMENT. 17 4.38. THE ASSESSING OF FICER HAS NOT PLACED ANY CORROBORATIVE MATERIAL AND/OR CONCRETE EVIDENCE IN SUPPORT OF HIS ABOVE FINDINGS. 4.39. THE APPELLANT HAS EXPLAINED THE NATURE AND SOURCE OF GOLD JEWELLERY FOUND WITH HIM AND HIS FAMILY MEMBERS BY FILING THE AFFIDAVITS AND COUNTER AFFIDAVITS DULY NOTARIZED OF THE PERSONS FROM WHOM SUCH JEWELLERY AND GOLD ORNAMENTS RECEIVED BY THE APPELLANT AND HIS FAMILY MEMBERS .AND THEREFORE THE AUTHENTICITY AND VERACITY OF THE EVIDENCES FILED BY THE APPELLANT CANNOT BE DOUBTED. 4.40. THE ASSESSING OFFICER HAS ALSO OBSERVED THAT THE GUIDELINES ISSUED BY THE CENTRAL BOARD OF DIRECT TAXES IN INSTRUCTION NUMBER 1916 DATED 1 1 - 05 - 1994 DO NOT PROHIBIT THE ASSESSING OFFICER TO MAKE ENQUIRY ABOUT THE NATURE AND SOURCE OF ACQUISITION OF GOLD JEWELLERY BY THE PERSON. 4.41. INSTRUCTION NUMBER 1916 DATED 11 - 05 - 1994 WHICH LAYS DOWN THE GUIDELINES FOR SEIZURE OF JEWELLERY IN THE COURSE OF SEARCH TAKES INTO ACCOUNT THE QUANTITY OF JEWELLERY WHICH WOULD GENERALLY BE HELD BY THE FAMILY MEMBERS OF AN ASSESSEE AND THEREFORE UNLESS UNTIL CONTRARY IS SHOWN IT CAN BE SAFELY PRESUMED THAT THE SOURCE TO THE EXTENT OF THE JEWELLERY STATED IN THE CIRCULAR STANDS EXPLAINED . 4.42. THE ASSESSING OFFICER HAS OBSERVED THAT THE AFFIDAVITS FILED BY THE A PPELLANT AND HIS FAMILY MEMBERS ARE JUST FOR FULFILLMENT OF EXPLAINING JEWELLERY FOUND AT THE TIME OF SEARCH. 4.43. THE APPELLANT VERY HUMBLY SUBMITS THAT THE AFFIDAVITS ARE THE ADMITTED AND VALID PIECE OF EVIDENCE HAVING EVIDENTIARY VALUE IN THE EYE OF LAW TO PROVE THE FACTS STATED THEREIN. OUR RELIANCE HAS BEEN PLACE ON THE JUDICIAL DECISION OF SMT. GUNWANTI BAI VS . CIT (1984) 146ITR 140(MP). 4.44. THE AFFIDAVITS FILED BY THE APPELLANT HAVE BEEN CONFIRMED BY THE COUNTER AFFIDAVITS OF THE T HIRD PERSON WHO HAS GIVEN THE GOLD JEWELLERY AND ORNAMENTS TO THE APPELLANT AND/OR HIS FAMILY MEMBERS. 4.45. THE FACTS AND THE CONTENTS STATED IN THE AFFIDAVITS CANNOT BE BRUSHED ASIDE SIMPLY ON THE BASIS OF GENERAL FINDINGS GIVEN BY THE ASSESSING OFFI CER THAT AFFIDAVITS FILED BY THE APPELLANT ARE JUST FOR FULFILLMENT OF EXPLAINING 18 JEWELLERY FOUND AT THE TIME OF SEARCH. 4.46. THE APPELLANT VERY HUMBLY FURTHER SUBMITS THAT THE CONTENTS OF THE AFFIDAVITS FILED BY THE APPELLANT HAVE BEEN CONFIRMED BY THE COUNTER AFFIDAVITS OF THE THIRD PARTY AND AFFIDAVIT FILED BY THE APPELLANT CANNOT BE REJECTED STRAIGHT WAY BY THE ASSESSING OFFICER WITHOUT ESTABLISHING THE FACT THAT THE CONTENTS OF THE AFFIDAVITS AND COUNTER AFFIDAVITS ARE FALSE. OUR RELIANCE HAS BEE N PLACED ON THE FOLLOWING JUDICIAL DECISIONS FOR THIS PURPOSE: PARAS COTTON COMPANY VS. CIT (2003) 30 TAX WORLD 168 (JOD. - T) BALRAM MATORIA VS. ITO (2010) 43 TAX WORLD 56 (JOD. - T) 4.47. IT IS SETTLED PRINCIPLE OF LAW THAT UNLESS THE CONTENTS OF TH E AFFIDAVITS FILED BY THE PERSON ARE SPECIFICALLY REBUTTED BY THE ASSESSING OFFICER BY EXAMINING OR CALLING UPON THE PERSON FILING THE AFFIDAVIT THE CONTENTS OF THE AFFIDAVIT SHALL DEEMED TO HAVE BEEN ACCEPTED BY THE ASSESSING OFFICER. OUR RELIANCE HAS B EEN PLACED ON THE FOLLOWING JUDICIAL DECISIONS FOR THIS PURPOSE: MEHTA PARIKH & CO. VS. CIT (1956) 30ITR 181 (SC) DILIP KUMAR ROY VS. VIT (1974) 94 ITR 1 (BOM.) RAJSHREE SYNTHETICS (P) LTD. VS. CIT (2002) 256 ITR 331 (RAJ.) SOHAN LAL GUPTA VS. CIT (1958) 33 ITR 786 (ALL.) 4.48. IN THE PRESENT CASE THE ASSESSING OFFICER HAS NOT SPECIFICALLY CONTROVERTED OR REBUTTED THE CONTENTS OF THE AFFIDAVITS ON THE BASIS OF CORROBORATIVE AND CONCRETE EVIDENCE THE CONTENTS OF THE AFFIDAVIT SHALL DEEMED TO H AVE BEEN ACCEPTED BY THE ASSESSING OFFICER. 4.49. THE APPELLANT VERY RESPECTFULLY SUBMITS THAT THE DEPONENTS HAS DECLARED THE CONTENTS OF THE AFFIDAVIT AND COUNTER AFFIDAVITS ON OATH WHICH CANNOT BE DISCREDITED MERELY GIVING A SIMPLE FINDINGS IN THE AS SESSMENT ORDER BY THE ASSESSING OFFICER THAT THE AFFIDAVITS HAVE BEEN FILED BY THE APPELLANT JUST FOR OR FULFILLMENT OF EXPLAINING JEWELLERY FOUND AT THE TIME OF SEARCH. 4.50. THE ASSESSING OFFICER HAS NOT BROUGHT ON RECORD ANY WORTHWHILE AND CORROBORATIVE MATERIAL AND/OR CONCRETE AND TANGIBLE AND POSITIVE EVIDENCE OF DEFINITE LEGAL CHARACTER TO SUBSTANTIATE HIS ALLEGATIONS OF UNEXPLAINED 19 INVESTMENT IN GOLD JEWELLERY AND ORNAMENTS MADE BY THE APPELLANT. 4.51. IN THE ABSENCE OF ANY COGENT AND WORTHWHILE CORROBORATIVE MATERIAL OR CONCRETE AND CORROBORATING EVIDENCE TO PROVE THE ALLEGATION MADE BY THE ASSESSING OFFICER THAT THE DECLARATION MADE BY THE DEPONENTS IN THE AFFIDAVIT IS BOGUS OR UNRELIABLE AND INVESTMENT IN GOLD JEWELLERY AND ORNAMENTS MADE BY THE APPELLANT IS ARBITRARY FICTITIOUS UNWARRANTED AND NOT SUSTAINABLE IN LAW AS WELL AS ON THE FACTS OF THE CASE. OUR RELIANCE HAS BEEN PLACED ON TH E FOLLOWING JUDICIAL DECISIONS FOR THIS PURPOSES: P.R. METRANI VS. CIT (2008) 287ITR 209 (SC) ASWANI KUMAR BHARDWAS VS. DCIT (1998) 21 TAX WORLD 358 (JP - T) JAGDAMBA RICE MILLS VS. ACIT (2000) 67 TTJ 839 (CHD - T) 4.52. THE ASSESSING OFFICER HAS FUR THER OBSERVED THAT THE CREDITWORTHINESS OF THE PERSONS FROM WHOM THE JEWELLERY AND ORNAMENTS CLAIMED TO BE RECEIVED HAS NOT BEEN PROVED BY THE APPELLANT. 4.53. THE APPELLANT VERY RESPECTFULLY SUBMITS THAT THE ASSESSING OFFICER IS NOT PERMITTED UNDER THE PROVISIONS OF LAW TO PROVE THE SOURCE OF SOURCE OR ORIGIN OF ORIGIN OF THE GOLD JEWELLERY AND GENUINENESS OF THE AFFIDAVITS OR OTHER DOCUMENTS CANNOT BE DOUBTED MERELY ON THIS GROUND. OUR RELIANCE HAS BEEN PLACED ON THE FOLLOWING JUDICIAL DECISIONS FOR TH IS PURPOSE: S. HASTIMAL VS. CIT (1963) 49 ITR 273 (MAD.) DAULAT RAM RAWATMULL VS. CIT (1973) 87 ITR 349 (SC) SAROGI CREDIT CORPN. VS. CIT 103 ITR 344 (PAT.) SHRI SURINDRA SINGH (1993) 113 TAXATION 11 (JP AT) TOLARA M DAGA VS. CIT (1966) 59 IT R 632 (ASSAM) 4.54. THE ASSESSING OFFICER HAS NOT BROUGHT ANY CONCRETE AND CORROBORATING EVIDENCE TO PROVE THE VERACITY OR CORRECTNESS OF THE SURRENDER OF INCOME MADE BY THE APPELLANT AND THEREFORE THE ADDITIONS OF UNEXPLAINED INVESTMENT IN JEWELLERY MADE BY THE ASSESSING OFFICER IS LIABLE TO BE DELETED. 4.55. THE APPELLANT VERY HUMBLY FURTHER SUBMITS THAT HE HAS DISCHARGE HIS ONUS CAST UPON HIM TO PROVE THAT GOLD AND SILVER JEWELLERY FOUND WITH HIM AT THE TIME OF SEARCH ARE EXPLAINED AND NO PART OF IT IS UNEXPLAINED . 20 4.56. THE ASSESSING OFFICER MISERABLY FAILED TO DISCHARGE HIS ONUS CAST UPON HIM TO PLACE ON RECORD ANY CONCRETE EVIDENCE TO PROVE THAT THE APPELLANT HAS MADE UNEXPLAINED INVESTMENT IN THE GOLD AND SILVER JEW ELLERY FOUND WITH HIM AT THE TIME OF SEARCH. 4.57. THUS THE APPELLANT HAVE SATISFACTORILY EXPLAINED THE GOLD JEWELLERY AND ORNAMENTS FOUND WITH HIM AND HIS FAMILY MEMBERS AT THE TIME OF SEARCH BASED ON THE BASIS OF AFFIDAVITS AND OTHER D OCUMENTARY EVIDENCES SUBMITTED BY HIM. 4.58. IN THE PRESENT CASE THE ASSESSING OFFICER HAS MADE THE ADDITION OF UNACCOUNTED INVESTMENT IN GOLD JEWELLERY AND ORNAMENTS OF RS. 11 64 000/ - SOLELY BASED ON MERE ASSUMPTION AND PRESUMPTION SURMISES AND CONJECTURES PURELY ON GUESS AND DOUBTS AND UNCORROBORATED STATEMENTS OF THE APPELLANT. 4.59. IT IS WELL SETTLED POSITION OF LAW THAT NO ADDITION OF INCOME AND DISALLOWANCES CAN BE MADE MERELY ON THE BASIS OF ASSUMPTION AND PRESUMPTION SURMISES AND CON JECTURES PURELY ON GUESS AND DOUBTS AND HYPOTHETICAL GROUNDS WITHOUT ANY CORROBORATING CONCRETE AND TANGIBLE EVIDENCE. OUR ABOVE SUBMISSIONS ARE WELL SUPPORTED BY THE FOLLOWING JUDICIAL DECISIONS: DHAKESWARI COTTON MILLS LIMITED VS. CIT (1954) 2 6ITR 775(SC) DHIRAJLAL GIRDHARILAL VS. CIT (1959) 26 ITR 736 (SC) OMARSALAY MOHAMMED SAIT VS. CIT (1959) 3 7 ITR 151. (S.C.) LAL CHAND BHAGAT AMBIKA RAM VS. CIT (1959) 37 ITR 288. (S. C.) 4.60. THE APPELLANT VERY HUMBLY FURTHER SUBMITS THAT ADD ITION AND/OR DISALLOWANCE OF INCOME OR EXPENSES MADE ON THE BASIS MERE PRESUMPTION OR ESTIMATE HOWEVER STRONG AND WELL FOUNDED IT MAY BE CAN NOT SUSTAINED IN THE EYE OF LAW AND BY ITSELF WOULD NOT TAKE THE PLACE OF EVIDENCE AND CONSTITUTE MATERIAL FOR HO LDING THE VALIDITY OF SUCH ADDITION AND/OR DISALLOWANCE. OUR RELIANCE HAS BEEN PLACED ON THE FOLLOWING JUDICIAL DECISION FOR THIS PURPOSE: UMA CHAR AN SHAW & BROS. VS. CIT (1959) 37 ITR 271 (S.C.) 21 4.61. THE ASSESSING OFFICER HAS NOT BROUGHT ON RECORD ANY WORTHWHILE AND CORROBORATIVE MATERIAL AND/OR CONCRETE AND TANGIBLE AND POSITIVE EVIDENCE OF DEFINITE LEGAL CHARACTER TO SUBSTANTIATE HIS ALLEGATIONS O F UNACCOUNTED INVESTMENTS IN GOLD JEWELLERY AND ORNAMENTS OF RS. 1 1 64 000/ - MADE BY THE APPEL LANT. 4.62. THE ASSESSING OFFICER HAS RELIED THE VARIOUS JUDICIAL DECISION MENTIONED IN THE ORDER OF ASSESSMENT WHILE MAKING THE ADD ITION OF UNEXPLAINED JEWELLERY FOR RS. 41 1 L 673/ - IN THE HANDS OF THE APPELLANT SOLELY BASED ON THE STATEMENT OF THE APP ELLANT. 4.63. THE APPELLANT VERY RESPECTFULLY SUBMITS THAT THE RATIO OF THE JUDICIAL DECISIONS RELIED BY THE ASSESSING OFFICER ARE NOT APPLICABLE ON THE FACTS OF THE CASE AS THE ASSESSING OFFICER HAS NOT ADDUCED ANY CORROBORATING MATERIAL AND/OR CONCRE TE EVIDENCE OF DEFINITE LEGAL NATURE TO SUPPORT THE SUCH STATEMENTS. 4.64. THE APPELLANT HAS SATISFACTORY PROVED WITH THE CORROBORATIVE MATERIAL AND CONCRETE EVIDENCES THAT GOLD JEWELLERY/ORNAMENTS NET WEIGHTED 2668.87 GRAMS VALUED FOR RS. 41 11 673/ - FOUND WITH THE APPELLANT AND HIS FAMILY MEMBERS WAS OUT OF THE DECLARED INVESTMENT/ INCOME. 4.65. FOR THE VARIOUS REASONS STATED ABOVE THE ADDITION OF UNACCOUNTED INVESTMENT IN GOLD JEWELLERY AND ORNAMENTS OF RS. 11 64 000 / - MADE BY THE ASSESSIN G OFFICER ON THE BASIS OF RETRACTED STATEMENTS IS LIABLE TO BE DELETED. 4.66. IN VIEW OF THE FOREGOING GROUNDS OF DEFENCE STATED ABOVE THE APPELLANT VERY HUMBLY PRAYS THE ADDITION OF UNACCOUNTED INVESTMENT IN GOLD JEWELLERY AND ORNAMENTS OF RS. 1 1 64 000 / - MADE BY THE ASSESSING OFFICER MAY KINDLY BE DELETED.' 6 . THE LEARNED CIT(A) AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE DELETED THE ADDITION BY OBSERVING IN PARA 7.4 OF THE IMPUGNED ORDER WHICH READS AS UNDER: - 22 7.4 I HAVE CAREFULLY CONSIDERED THE SUBMISSIONS OF THE APPELLANT AS ALSO THE FINDINGS OF THE AO. IT MAY BE NOTED THAT DURING THE COURSE OF SEARCH THE GOLD JEWELLERY/ ORNAMENTS WEIGHING 2668.87 GRAMS (NET WEIGHT) AND VALUED FOR RS. 4111673/ - WERE FOUND FROM TH E ASSESSEE AND HIS FAMILY MEMBERS AT THEIR RESIDENCE AS WELL AS IN THEIR BANK LOCKERS. OUT OF THE ABOVE THE GOLD JEWELLERY/ ORNAMENTS WEIGHING 758.50 GRAMS WERE SEIZED DURING THE COURSE OF SEARCH. IT MAY ALSO BE MENTIONED THAT THE APPELLANT IN HIS FAMILY I S HAVING FOUR MARRIED LADIES ONE UNMARRIED GIRL AND 10 MALE MEMBERS. THE PEDIGREE OF THE FAMILY OF THE ASSESSEE IS STATED AS UNDER: SH. BHANWARLALJI JAIN (HEAD OF THE FAMILY) 1 HIS WIFE SMT. HEERA BAI 1 RAMESH JAIN LALIT JAIN MAHENDRA JAIN 1 1 1 SMT. MADHU JAIN SMT. KAVITA JAIN SMT. SHEILA JAIN (MARRIED) (MARRIED) (MARRIED) 1 1 1 THREE SONS TWO SONS O NE SON & ONE DAUGHTER (UNMARRIED) (UNMARRIED) (UNMARRIED) THE AO'S CASE IS THAT DURING THE COURSE OF SEARCH ACTION ON THE BASIS OF STATEMENT OF THE FAMILY MEMBERS GOLD ORNAMENTS WEIGHING 758.750 GRAMS AND VALUED FOR RS. 1164678/ - WERE PRIMA FACIE FOUND TO BE OF UNEXPLAINED NATURE AND THESE WERE SEIZED. THE AO HAS ALSO STATED THAT AS REGARDS SUCH SEIZED GOLD ORNAMENTS SH. RAMESH KUMAR JAIN ADMITTED SUCH AMOUNT OF RS. 1164678/ - AS HIS UNDISCLOSED INVESTMENT AS PER QUESTION NO. 46 OF HIS STATEMENT RECORDED DURING THE COURSE OF SEARCH AND SH. RAMESH KUMAR ALSO ADMITTED THAT SUCH INCOME WILL BE OFFERED TO TAX IN THE HANDS OF HIS FATHER SH. BHANWAR LAL JAIN HOWEVER SUBSEQUENTLY WHILE FILING RETURN OF INCOME SUCH UNDISCLOSED INCOME WAS NOT SHOWN. THE AO HAS ALSO STATED THAT AS SUCH INCOME WAS SURRENDERED DURING THE COURSE OF SEARCH THERE FOR SUCH RETRACTION WAS NOT ACCEPTABLE AND THAT STATEMENT RECORDED U/S 132(4) OF IT ACT AND SURRENDER MADE ACCORDINGLY ARE TO B E TREATED AS VALID SURRENDER. 23 FOR SUCH PROPOSITION OF LAW THE AO HAS ALSO REFERRED VARIOUS CASE LAWS AS DISCUSSED IN THE ASSESSMENT ORDER. THE AO HAS ALSO HELD THAT THE FILING OF SUBSEQUENT AFFIDAVIT BY VARIOUS FAMILY MEMBERS AND THEIR IN - LAWS IN RESPECT O F EXPLANATION OF THE SEIZED JEWELLERY MAY NOT COME TO THE RESCUE OF THE ASSESSEE IN AS MUCH AS SUCH AFFIDAVITS ARE NOT SUPPORTED BY ANY DOCUMENTARY EVIDENCES AND THAT THE ASSESSEE CLAIMED JEWELLERY IN AFFIDAVITS MORE THAN THE JEWELLERY CLAIMED AS PER STATE MENTS RECORDED DURING SEARCH. AS REGARDS CLAIM OF THE APPELLANT THAT SUCH JEWELLERY FOUND FROM THE PREMISES OF THE APPELLANT WAS BROADLY AS PER THE GUIDELINES OF CBDT CIRCULAR NO. 1916 DATED 11.5.1994 THE AO HAS STATED THAT THE SAID CIRCULAR IS IN RESPECT OF SEIZURE OF THE JEWELLERY AND THE ASSESSEE CANNOT ESCAPE FROM HIS RESPONSIBILITY TO EXPLAIN THE SOURCE OF ACQUISITION BY MAKING REFERENCE OF CBDT CIRCULAR. ON THE OTHER HAND THE APPELLANT'S CASE IS THAT THE GOLD JEWELLERY FOUND DURING THE COURSE OF SEARCH WAS WELL WITHIN THE LIMITS LAI D DOWN AS PER CBDT'S CIRCULAR NO. 1916 DATED 11.5.1994. THE APPELLANT HAS FILED AFFIDAVITS OF VARIOUS FAMILY MEMBERS AND AS ALSO FURNISHED DETAILS AS TO HOW MUCH GOLD ORNAMENTS WERE OWNED / POSSESSED BY INDIVIDUAL MEMBERS. AS REGARDS STATEMENT OF SH. RAMESH KUMAR AND SURRENDER OF RS. 1164000/ - ON ACCOUNT OF SEIZED JEWELLERY THE APPELLANT HAS CONTENDED THAT SUCH SURRENDER OF INC OME AS ALSO RECORDING OF THE STATEMENT WAS UNDER CONFUSED STATE OF MIND AND AS A RESULT MENTAL PRESSURE AND MISCONCEIVING THE FACTS BASED ON THE INCORRECT INFORMATION. THE APPELLANT ALSO CONTENDED THAT RETRACTION WAS IMMEDIATELY MADE FOR SUCH SURRENDER OF INCOME. THE APPELLANT FURTHER CONTENDED THAT NO ADDITION CAN BE MADE SIMPLY ON THE BASIS OF STATEMENT RECORDED DURING THE COURSE OF SEARCH PARTICULARLY IN THE CIRCUMSTANCES WHEN SUCH STATEMENT HAS BEEN RETRACTED. FOR SUCH PROPOSITION OF LAW THE APPELLANT H AS ALSO PLACED ON VARIOUS CASE LAWS AS MENTIONED IN THE WRITTEN SUBMISSION OF THE APPELLANT. ON CAREFUL CONSIDERATION OF RELEVANT FACTS AND CIRCUMSTANCES IT IS NOTED THAT THERE IS NO DISPUTE ON THE FACT THAT THE APPELLANT FAMILY CONSIST OF FOUR MARRIED LADIES ONE UNMARRIED GIRLS AND 10 UNMARRIED MALE MEMBERS. IT IS ALSO UNDISPUTED FACT THAT THE AO HAS MADE SUCH ADDITION MAINLY ON ACCOUNT OF THE STATEMENT OF SURRENDER MADE BY SH. RAMESH KUMAR JAIN AND THAT SUCH SURRENDER WAS SUBSEQUENTLY RETRACTED. IT IS ALSO UNDISPUTED FACT THAT THE JEWELLERY FOUND FROM THE PREMISES OF THE APPELLANT WAS OTHERWISE WITHIN 24 THE LIMIT LAI D DOWN BY CBDT VIDE INSTRUCTION NO. 1916 DATED 11.5.1994. IT MAY BE STATED THAT THE ISSUE AS TO WHETHER WHEN THE JEWELLERY HELD BY THE ASSESS EE AND HIS FAMILY MEMBERS AS PER THE LIMIT LA I D DOWN UNDER THE CBDT CIRCULAR WILL BE TREATED AS UNEXPLAINED JEWELLERY OR NOT CAME BEFORE THE HON'BLE GUJARAT HIGH COURT IN THE CASE OF CIT VS. RATANLAL VAYAPARI LAL JAIN (2011) 339 ITR 351 AND HON'BLE HIGH CO URT HELD AS UNDER: 'THOUGH IT IS TRUE THAT THE CBDT CIRCULAR NO. 1916 DATED 11.5.94 LAYS DOWN GUIDELINES FOR SEIZURE OF JEWELLERY AND ORNAMENTS IN THE COURSE OF SEARCH THE SAME TAKES INTO ACCOUNT THE QUANTITY OF JEWELLERY WHICH WOULD GENERALLY BE HELD BY FAMILY MEMBERS OF AN ASSESSEE BELONGING TO AN ORDINARY HINDU HOUSEHOLD. THE APPROACH ADOPTED BY THE TRIBUNAL IN FOLLOWING THE SAID CIRCULAR AND GIVING BENEFIT TO THE ASSESSEE EVEN FOR EXPLAINING THE SOURCE IN RESPECT OF THE JEWELLERY BEING HELD BY THE FAMILY IS IN CONSONANCE WITH THE GENERAL PRACTICE IN HINDU FAMILIES WHEREBY JEWELLERY IS GIFTED BY THE RELATIVES AND FRIENDS AT THE TIME OF SOCIAL FUNCTIONS VIZ. MARRIAGES BIRTHDAYS MARRIAGE ANNIVERSARY AND OTHER FESTIVALS. THESE GIFTS ARE CUSTOMARY AN D CUSTOMS PREVAILING IN A SOCIETY CANNOT BE IGNORED. THUS ALTHOUGH THE CIRCULAR HAD BEEN ISSUED FOR THE PURPOSE OF NON - SEIZURE OF JEWELLERY DURING THE COURSE OF SEARCH THE BASIS FOR THE SAME RECOGNIZE CUSTOMS PREVAILING IN HINDU SOCIETY. IN THE CIRCUMSTAN CES UNLESS THE REVENUE SHOWS ANYTHING TO THE CONTRARY IT CAN SAFELY BE PRESUMED THAT THE SOURCE TO THE EXTENT OF THE JEWELLERY STATED IN THE CIRCULAR STANDS EXPLAINED . THUS THE APPROACH ADOPTED BY THE TRIBUNAL IN CONSIDERING THE EXTENT OF JEWELLERY SPECIFIED UNDER THE SAID CIRCULAR TO BE A REASONABLE QUANTITY CANNOT BE FAULTED WITH. IN THE CIRCUMSTANCES IT IS NOT POSSIBLE TO STATE THAT THE TRIBUNAL HAS COMMITTED ANY LEGAL ERROR SO AS TO GIVE RISE TO A QUESTION OF LAW.' IT MAY BE NOTED THAT THE HO N'BLE HIGH COURT HAS LA I D DOWN THAT THOUGH THE CIRCULAR HAS BEEN ISSUED FOR THE PURPOSE OF NON - SEIZURE OF JEWELLERY DURING THE COURSE OF SEARCH HOWEVER THE BASIS FOR THE SAME RECOGNIZE CUSTOMS PREVAILING IN HINDU SOCIETY AND IN THE CIRCUMSTANCES UNLESS THE REVENUE SHOWS ANYTHING TO THE CONTRARY IT CAN SAFELY BE PRESUMED THAT SOURCE TO THE EXTENT OF THE JEWELLERY STATED IN THE CIRCULAR STANDS EXPLAINED . THE HON'BLE COURT HAS ACCORDINGLY HELD THAT IF THE JEWELLERY SO FOUND IS WITHIN THE LIMIT AS PER CBDT'S CI RCULAR IT CANNOT SAID TO BE OF UNEXPLAINED NATURE. FURTHER RELIANCE IS ALSO MADE ON THE FOLLOWING CASE LAWS: 25 I) SMT. PATI DEVI VS. ITO (2000) 159 CTR 28 II) SMT. SULOCHNA DEVI JAYASWAL VS. DCIT (2004) 90 TTJ JAB. 974 THE APPELLANT FAMI LY CONSISTED OF FOUR MARRIED LADIES ONE UNMARRIED GIRL AND 10 MALE MEMBERS AND THEREFORE JEWELLERY TO THE EXTENT OF RS. 3250 GRAMS WAS WITHIN THE LIMITS LA I D DOWN BY THE CBDTS INSTRUCTION NO. 1916 DATED 11.5.1994. AS AG AINST THIS THE TOTAL JEWELLERY FOU ND FROM THE APPELLANT'S PREMISES WAS ONLY 2668.87 GRAMS. THEREFORE THE GOLD JEWELLERY/ ORNAMENTS FOUND FROM THE PREMISES OF T HE APPELLANT ARE DEFINITELY WITHIN THE LIMIT LAI D DOWN BY THE CBDT INSTRUCTION AND KEEPING IN VIEW THE RATIO LA I D DOWN BY VARIOUS C OURTS AS DISCUSSED ABOVE SUCH TOTAL JEWELLERY INCLUDING SEIZED JEWELLERY VALUED FOR RS. 1164000/ - IS TO BE TREATED AS OF EXPLAINED NATURE . AS REGARDS THE CONTENTION OF THE AO THAT THE STATEMENT RECORDED DURING THE COURSE OF SEARCH U/S 132(4) IS HAVING EVIDENTIARY VALUE AND THAT ADDITION MADE ON THE BASIS OF SUCH STATEMENT CANNOT BE RETRACTED. IT MAY BE NOTED THAT IT IS A SETTLED LAW THAT THE STATEMENT RECORDED U/S 132(4) ARE DEFINITELY HAVING EVIDENTIARY VALUE BUT THE SAME CANNOT SAID TO BE A CONCLUSIVE EVIDENCE AND THE ASSESSEE HAS RIGHT TO RETRACT FROM THE SAME IN SPECIFIC CIRCUMSTANCES. RELIANCE IS PLACED FOR SUCH PROPOSITION ON THE FOLLOWING CASE LAWS: I) ALAPATY VENKATA RAMIAH VS. CIT 57 ITR 185 (SC) IN THIS CASE THEIR LORDSHIPS OF THE SUPREME C OURT THAT THE ASSESSEE CANNOT BE TIED DOWN TO AN INADVISABLY MADE WRONG STATEMENT. IT WAS FURTHER HELD BY THEIR LORDSHIPS THAT THE FUNCTION OF THE ITO BEING A QUASI JUDICIAL AUTHORITY IS TO ESTIMATE THE INCOME ON THE BASIS OF MATERIAL AND NOT ON THE BASIS OF ALLEGED ALLEGATION OR WRONG ADMISSION. II) PULLANGODE RUBBER PRODUCE COMPANY LTD. V. STATE OF KERALA AND ANOTHER 91 ITR 0018 (SC) ADMISSION IS AN EXTREMELY IMPORTANT PIECE OF EVIDENCE BUT IT CAN'T BE SAID THAT IT IS CONCLUSIVE. IT IS OPEN TO THE ASSESSEE WHO MADE ADMISSION TO SHOW THAT IT IS INCORRECT AND THE ASSESSEE SHOULD BE GIVEN PROPER OPPORTUNITY TO 26 SHOW THE CORRECT STATE OF AF FAIRS. III ) CIT VS. ASHOK KUMAR SONI 291 ITR 1 72 (RAJ.) (HC) ADMISSIONS ARE RELEVANT & STRONG PIECE OF EVIDENCE THAT MAY BE USED AGAINST THE PERSON MAKING SUCH ADMISSION BUT THEY ARE NOT CONCLUSIVE PROOF OF THE STATEMENT CONTAINED IN THE ADMISSI ON & CAN ALWAYS BE EXPLAINED . IV) SH. DHANRAJ SONI VS. ACIT BIKANER - JAIPUR BENCH ITA NO. 1722/JP/94 DATED 22.7.1996 - IN THIS CASE THE HON'BLE TRIBUNAL OBSERVED AS UNDER AT PAGE 3 PARA (V) OF THE ORDER. 'WE HAVE GIVEN OUT CAREFUL CONSIDERATION TO THE RIVAL CONTENTION. THE' ORDER U/S 132 MADE BY THE REVENUE AUTHORITIES AFTER THE SEARCH IS A SUMMARY ORDER FOR THE PURPOSE OF RETENTION OF ASSETS. THE ASSESSES HAS NOT SURRENDERED THE ADDITIONS DURING THE COURSE OF ASSESSMENT PROCEEDINGS. THE ADDITIONS WERE CONTESTED AT THE STAGE OF ASSESSMENT AS ALSO AT THE APPELLATE STAGE. THOUGH THE FACT THAT THE ASSESSEE HAD OFFERED THE INCOME FOR ASSESSMENT IS A FACTOR TO BE TAKEN IN ACCOUNT YET IT IS NOT CONCLUSIVE. IT WAS OPEN TO THE ASSESSE E AT THE STAGE OF ASSESSMENT TO ESTABLISH THAT THE SURRENDER MADE AT THE TIME OF PROCEEDINGS U/S 132(4) WAS UNDER COMPULSION AND NOT WITH A FREE MIND OR THAT ADDITION IS NOT WARRANTED ON THE BASIS OF AVAILABLE MATERIAL. CONSIDERING THE FACTS AND CIRCUMSTAN CES OF THE CASE WE ARE OF THE VIEW THAT THE ADDITIONS MADE BY THE AO SHOULD BE CONSIDERED ON MERITS RATHER THAN ON THE SURRENDER MADE BY THE ASSESSEE IN THE PROCEEDINGS UNDER SEC. 132(4). V) M/S MAHESHWARI INDUSTRIES JODHPUR VS. ACIT ITA NO. 845/JP/95 D ATED 6.10.2003 (JODHPUR BENCH) - IN THIS CASE THE HON'BLE ITAT JODHPUR BENCH OBSERVED AS UNDER: 'AFTER HEARING BOTH THE SIDES AND CONSIDERING THE MATERIAL ON RECORD AS WELL AS PRECEDENT REFERRED I FIND THAT THE ASSESSEE HAS SURRENDERED THE AMOUNT DURING THE COURSE OF SEARCH PROCEEDINGS. THE ADDITION WAS CONTESTED IN APPELLATE STAGE. THE FACT THAT THE ASSESSEE OFFERED THE INCOME IS ADMITTEDLY TAKEN INTO ACCOUNT. THEREFORE IT WAS OPEN TO THE ASSESSEE AT THE STAGE OF ASSESSMENT TO ESTABLISH THAT SURRENDER M ADE AT THE TIME OF SEARCH PROCEEDINGS WAS UNDER THE COMPULSION AND NOT WITH PRE - MIND OR THAT THE 27 ADDITION IS NOT WARRANTED ON THE BASIS OF AVAILABLE MATERIAL. CONSIDERING THE FACTS AND CIRCUMSTANCES OF THE CASE I AM OF THE OPINION THAT THE ADDITION MADE B Y THE AO SHOULD BE CONSIDERED ON MERITS RATHER THAN THE SURRENDER MADE BY THE ASSESSEE IN THE SEARCH PROCEEDINGS. COMING TO THE MERITS OF THE ADDITION IT IS SEEN THAT THE ASSESSEE HAS BEEN ABLE TO SUBSTANTIATE THAT THE DIFFERENCE AS FOUND OUT IS THE RESUL T OF RATE DIFFERENCE AND THIS FACT HAS BEEN REFUTED EITHER BY THE AO OR BY THE CIT(A) WHICH HAVE GONE ONLY ON THE SOLE GROUND OF SURRENDER MADE DURING THE SEARCH PROCEEDINGS. THEREFORE KEEPING IN VIEW ENTIRETY OF FACTS AND CIRCUMSTANCES I DO NOT FIND ANY JUSTIFICATION IN MAKING THE ADDITION WHICH IS DIRECTED TO BE DELETED.' VI) JINDAL STAINLESS LTD. VS. ACIT (2009) 120 ITD 301 - THE HON'BLE ITAT DELHI G BENCH OBSERVED THAT: '.......THE AO HAD DRAWN CONCLUSION ON THE BASIS OF PRESUMPTIONS THAT SB DID NO T WANT TO APPEAR BEFORE HIM AND WITHOUT VERIFYING OR WITHOUT MAKING FURTHER EFFORT THE AO REJECTED THE AFFIDAVIT ON THE GROUND OF ITS BEING AFTERTHOUGHT. THIS APPROACH OF THE AO IS CLEARLY IN VIOLATION OF PRINCIPLE OF NATURE OF JUSTICE. NO DOUBT THE STAT EMENT GIVEN DURING THE COURSE OF SEARCH HAS EVIDENTIARY VALUE BUT SUCH EVIDENTIARY VALUE IS ATTACHED TO THE PERSON WHO HAS BEEN SEARCH. EVEN IN THE CASE OF A PERSON WHO HAS BEEN SEARCHED THE STATEMENT GIVEN BY HIM CAN BE REBUTTED BY PRODUCING EVIDENCE THAT SUCH STATEMENT IS CONTRARY TO THE EXISTING FACTS........' REFERENCE MAY ALSO BE MADE OF THE CBDT'S INSTRUCTION NO. 286/2003 - IT (INV) DATED 10 - 3 - 2003 WHEREIN IT HAS BEEN CLARIFIED THAT WHILE RECORDING THE STATEMENT DURING THE COURSE OF SEARCH OPERATION N O ATTEMPT SHOULD BE MADE TO OBTAIN THE CONFESSION AS TO UNDISCLOSED INCOME. IN ASSESSMENT PROCEEDING ALSO AO SHOULD RELY ON EVIDENCE / MATERIAL GATHERED DURING THE COURSE OF SEARCH OPERATION WHILE FRAMING THE ASSESSMENT. KEEPING IN VIEW OF THE ABOVE FACT S AS ALSO PLACED RELIANCE ON THE ABOVE MENTIONED CASE LAWS THE ADDITION OF RS. 1164000/ - MADE BY THE AO ON ACCOUNT OF SEIZED JEWELLERY WHICH IS WITHIN THE LIMITS LA I D DOWN IN THE CBDT CIRCULAR CANNOT BE SUSTAINED. ACCORDINGLY THE ADDITION MADE BY THE A O AMOUNTING TO RS. 1164000/ - DELETED. NOW THE DEPARTMENT IS IN APPEAL. 28 7 . LEARNED D.R. STRONGLY SUPPORTED THE ASSESSMENT ORDER PASSED BY THE ASSESSING OFFICER AND REITERATED THE OBSERVATIONS IN THE ASSESSMENT ORDER DATED 15/12/2011 . 8 . IN HIS RIVAL SUBMISSIONS LEARNED COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE THE LD. CIT(A) AND STRONGLY SUPPORTED THE IMPUGNED ORDER. 9 . WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE PARTIES AND CAREFULLY GONE THROUGH THE MATERIAL AVAILABLE ON RECORD. IN THE PRESENT CASE IT APPEARS THAT THE ASSESSING OFFICER MADE THE IMPUG N ED ADDITION ON THE BASIS OF STATEMENT OF SHRI RAMESH KUMAR JAIN WHO ADMITTED THAT A SU M OF RS. 11 64 678/ - W AS HIS UNDISCLOSED INVESTMENT . T HE ASSESSING OFFICER DID NOT ACCEPT THE CLAIM OF THE ASSESSEE THAT SUCH JEWEL LERY FOUND FROM THE PREMISES OF THE ASSESSEE WAS BROADLY AS PER THE GUIDELINES OF CBDT CIRCULAR N O . 1916 DATED 11/05/1 994 . THE ASSESSEE FILED THE AFFIDAVITS OF VARIOUS FAMILY MEMBERS AND ALSO FURNISHED DETAILS AS TO HOW THOSE GOLD ORNAMENTS ARE OWNED/POSSESSED BY IN DI VIDU A L MEMBERS. H E ALSO EXP LAIN ED THAT THE STATEMENT OF SHRI R A MESH KUMAR JAIN AND SURRENDER OF INCOME WAS UNDER CONFUSED STATE OF MIND AND THE RETRACTION WAS IMMEDIATELY MADE FOR SUCH SURRENDER OF INCOME. ON A SIMILAR ISSUE 29 THE HON'BLE GUJRAT HIGH COURT IN THE CASE OF CIT VS. RATAN LAL VYAPARI LAL JAIN (2011) 339 ITR 351 (SUPRA) HELD AS UNDER: - 'THOUGH IT IS TRUE THAT THE CBDT CIRCULAR NO. 1916 DATED 11.5.94 LAYS DOWN GUIDELINES FOR SEIZURE OF JEWELLERY AND ORNAMENTS IN THE COURSE OF SEARCH THE SAME TAKES INTO ACCOUNT THE QUANTITY OF JEWELLERY WHICH WOULD GENERALLY BE HELD BY FAMILY MEMBERS OF A N ASSESSEE BELONGING TO AN ORDINARY HINDU HOUSEHOLD. THE APPROACH ADOPTED BY THE TRIBUNAL IN FOLLOWING THE SAID CIRCULAR AND GIVING BENEFIT TO THE ASSESSEE EVEN FOR EXPLAINING THE SOURCE IN RESPECT OF THE JEWELLERY BEING HELD BY THE FAMILY IS IN CONSONANC E WITH THE GENERAL PRACTICE IN HINDU FAMILIES WHEREBY JEWELLERY IS GIFTED BY THE RELATIVES AND FRIENDS AT THE TIME OF SOCIAL FUNCTIONS VIZ. MARRIAGES BIRTHDAYS MARRIAGE ANNIVERSARY AND OTHER FESTIVALS. THESE GIFTS ARE CUSTOMARY AND CUSTOMS PREVAILING I N A SOCIETY CANNOT BE IGNORED. THUS ALTHOUGH THE CIRCULAR HAD BEEN ISSUED FOR THE PURPOSE OF NON - SEIZURE OF JEWELLERY DURING THE COURSE OF SEARCH THE BASIS FOR THE SAME RECOGNIZE CUSTOMS PREVAILING IN HINDU SOCIETY. IN THE CIRCUMSTANCES UNLESS THE REVENU E SHOWS ANYTHING TO THE CONTRARY IT CAN SAFELY BE PRESUMED THAT THE SOURCE TO THE EXTENT OF THE JEWELLERY STATED IN THE CIRCULAR STANDS EXPLAINED . THUS THE APPROACH ADOPTED BY THE TRIBUNAL IN CONSIDERING THE EXTENT OF JEWELLERY SPECIFIED UNDER THE SAID C IRCULAR TO BE A REASONABLE QUANTITY CANNOT BE FAULTED WITH. IN THE CIRCUMSTANCES IT IS NOT POSSIBLE TO STATE THAT THE TRIBUNAL HAS COMMITTED ANY LEGAL ERROR SO AS TO GIVE RISE TO A QUESTION OF LAW.' 10 . FROM THE RATIO LAID DOWN IN THE AFORESAID CASE IT IS CLEAR THAT IF THE JEWELLERY FOUND IS WITHIN THE LIMIT AS PER THE CBDT CIRCULAR I T CANNOT SAID TO BE OF UNEXPLAINED NATURE. THE SAID VIEW HAS BEEN FOLLOWED BY THIS BENCH OF THE TRIBUNAL IN THE CASE OF M/S. MAHESHWARI IND USTRIES JODHPUR VS. ACIT (SUPRA) IN I.T.A.NO. 845/JP/1995 ORDER DATED 06/ 1 0/2003 . WE THEREFORE CONSIDERING THE TOTALITY OF THE FACTS AND THE VARIOUS JUDICIAL 30 PRONOUNCEMENTS AS DISCUSSED BY THE LD. CIT(A) IN THE IMPUGNED ORDER DO NOT SEE ANY MERIT IN THE APPEAL OF THE DEPARTMENT ON THIS ISSUE. 1 1 . THE NEXT ISSUE VIDE GROUND NO. 2 OF THE DEPARTMENTAL APPEAL AND THE ONLY GROUND RAISED IN THE ASSESSEES APPEAL RELATES TO THE DELETION/ SUSTENANCE OF THE ADDITION MADE BY THE ASSESSING OFFICER ON ACCOUNT OF UNEXPLAINED STOCK. 1 2 FACTS RELATING TO THIS ISSUE IN BRIEF ARE THAT A S URVEY WAS CONDUCTED IN TWO SHOP S AND TWO GO DOWNS OF M/S. RATAN LAL BHANWAR LAL PROPRIETORY CONCERN OF THE ASSESSEE U/S 133A OF THE ACT AND INVENTORY WAS PREPARED WHICH ON PHYSICAL VERIFICATION STOOD AT RS. 53 94 637/ - . THE FIG URE OF STOCK AS PER THE PHYSICAL VERIFICATION HAD BEEN TAKEN AT RS. 53 64 413/ - IN THE STATEMENTS RECORDED DURING THE COURSE OF SEARCH. AS REGARDS TO THE CLAIM OF THE ASSESSEE THAT THE RATES ADOPTED BY THE ASSESSING OFFICER WERE ARBITRARY AND THE ENTRIES WERE REPEATED ENTRIES IN INVENTORY WHILE TAKING STOCK WAS NOT A CC E P TED BY THE ASSESSING OFFICER BY OBSERVING THAT DURING THE COURSE OF SEARCH/SURVEY CONCERN ED PERSONS OF THE ASSESSEES GROUP WERE PRESENT THERE WHILE TAKING VALUATION OF THE STOCK AND THEY HAD INTIMATED ABOUT THE COST OF GOODS WHICH HA D BEEN TAKEN INTO CONSIDERATION BY THE AUTHORIZED OFFICER . THE ASSESSING OFFICER 31 MADE THE ADDITION OF RS. 20 82 324/ - BY MAKING OBSERVATION IN PARA 9.14 OF THE A SSESSING ORDER WHICH READ AS UNDER: - FROM THE ABOVE FACTS STATEMENTS U/S 132(4) AND DISCUSSION MADE THE POSITION OF EXPLAINED STOCK AND UNACCOUNTED STOCK IS AS UNDER AND THE UNEXPLAINED EXCESS STOCK IS BROUGHT TO TAX IN THE HANDS OF THE ASSESSEE AS HIS UNDISCLOSED INVESTMENT OUT OF UNDISCLOSED INCOME FOR A.Y. 2010 - 11 . PARTICULARS AMOUNT (RS.) VALUE OF STOCK PHYSICALLY FOUND AS PER INVENTORY PREPARED AND VALUED BY THE AUTHORIZED OFFICER AT THE TIME OF SEARCH 5394627 LESS: APPARENT MISTAKES IN THE TOTALS OF STOCK INVENTORY PREPARED BY THE DEPARTMENT ( - ) 215676 CORRECT AMOUNT OF STOCK PHYSICALLY FOUND AS VALUED AND PREPARED BY THE AO 5178951 LESS: ACTUAL STOCK AS PER BOOKS AS ON DATE OF SURVEY - 3096627 UNACCOUNTED EXCESS STOCK 2082324 1 3 BEING AGGRIEVED THE ASSESSEE CARRIED THE MATTER TO THE LD. CIT(A) AND SUBMITTED AS UNDER: - 'THE APPELLANT IS ENGAGED IN THE BUSINESS OF WHOLESALE AND RETAIL TRADING OF TOBACCO PRODUCTS IN THE NAME AND STYLE OF M/S RATAN LAL BHANWAR LAL JAIN AT LAKHARA CHO WK DHAN MANDI UDAIPUR. 5.2. A SURVEY WAS CARRIED OUT ON DATED 10 - 03 - 2010 ON THE BUSINESS PREMISES OF THE APPELLANT. 5.3. DURING THE COURSE OF SURVEY PHYSICAL INVENTORY OF STOCK OF RS. 53 94 627/ - WAS ALLEGED TO BE FOUND ON THE BUSINESS PREMISES OF APPELLANT AS AGAINST THE STOCK OF INVENTORY OF RS. 30 96 62 7 / - DECLARED IN HIS BOOKS THUS THERE WAS EXCESS STOCK OF RS. 22 98 000/ - . 5.4. THE ALLEGED DIFFERENCE IN PHYSICAL STOCK FOUND DURING THE COURSE OF 32 SURVEY HAD ARISEN FOR THE REASON THAT THE FIGURES OF ALLEGED STOCK FOUND DURING SURVEY HAVE BEEN GROSSLY INFLATED BY THE SURVEY OFFICERS AT THE TIME OF SURVEY AND THE STOCK INVENTORY PREPARED BY THEM AT THE TIME OF SURVEY SUFFERS FROM VARIOUS GLARING AND APPARENT MISTAKES. 5.5. THERE WAS AN APPARENT MISTAKE OF RS. 2 15 676/ - IN TOTALS OF STOCK INVENTORY PREPARED BY THE SURVEY TEAM WHICH HAS BEEN RECTIFIED BY THE ASSESSING OFFICER DURING THE COURSE OF ASSESSMENT. 5.6. THUS THE CORRECT AMOUNT OF PHYSICAL INVENTORY OF STOCK COMES TO RS. 5 1 71 951/ - FOUND DURING THE COURSE OF SURVEY ON THE BUSINESS PREMISES OF APPELLANT. 5.7. THE APPELLANT VERY RESPECTFULLY SUBMITS THAT IT IS RECOGNIZED PRINCIPLE OF ACCOUNTING THAT THE VALUATION OF STOCK SHOULD BE MADE AT COST OR MARKET P RICE WHICHEVER IS LOWER. 5.8. THE APPELLANT IS CONSISTENTLY FOLLOWING THE ABOVE METHOD OF VALUATION STOCK SINCE SEVERAL YEARS. 5.9. IN THE PRESENT CASE THE RATES ADOPTED BY THE AUTHORIZED OFFICER FOR VALUATION OF STOCK FOUND DURING THE COURSE OF S URVEY WERE ARBITRARY AND HYPOTHETICAL. 5.10. THE APPELLANT HAS APPLIED CORRECT RATES FOR VALUATION OF INVENTORY ON THE BASIS OF ACTUAL PURCHASE INVOICES WHICH SHALL REDUCE THE VALUATION SO MADE BY THE AUTHORIZED OFFICER. 5.11. APART FROM THIS THE AUTH ORIZED OFFICER HAS ALSO TAKEN TWICE THE ITEMS OF STOCK AT SERIAL NUMBER 74 TO 81 OF THE SAME INVENTORY AT SERIAL NUMBER 82 TO 89. 5.12. THE OVERALL EFFECT OF THE ABOVE APPARENT MISTAKES WILL RESULT IN REDUCTION OF VALUATION OF INVENTORY BY RS. 12 87 576/ - PREPARED BY THE AUTHORISED OFFICER AT THE TIME OF SURVEY. THE PHOTOCOPIES OF PURCHASE INVOICES ARE ENCLOSED HEREWITH TO CORROBORATE THE CORRECTNESS OF STOCK VALUATION. 33 5.13. IT IS FURTHER SUBMITTED THAT THE STOCK OF M/S SWASTIK AGENCIES OF RS. 24 500/ - HAS ALSO BEEN INCLUDED IN THE STOCK INVENTORY OF APPELLANT. THIS MISTAKE WILL ALSO REDUCE THE VALUATION OF INVENTORY BY RS. 24 500/ - PREPARED BY THE AUTHORISED OFFICER. 5.14. AFTER RECTIFICATION OF THE AFORESAID APPAREN T MISTAKES IN VALUATION PREPARED BY THE AUTHORIZED OFFICER THE ACTUAL VALUATION OF INVENTORY PHYSICALLY FOUND DURING SURVEY AT THE BUSINESS PREMISES OF APPELLANT COMES TO RS. 38 66 875/ - ONLY. 5.15. IT IS FURTHER SUBMITTED THAT THE STOCK AS PER BOOKS HAS BEEN COMPUTED AT THE TIME OF SURVEY BY APPLYING GP RATE OF 3.22% AS PER PRECEDING YEAR. 5.16. HOWEVER THE G.P. RATE DECLARED BY THE ASSESSEE COMES 5.01% AFTER TAKING INTO CONSIDERATION THE DIFFERENCE IN STOCK FOUND DURING THE COURSE OF SURVEY. 5. 17. IF THE FIGURE OF STOCK AS PER BOOKS AS ON THE DATE OF SURVEY IS COMPUTED BY APPLYING G.P. RATE OF 5.01% THE FIGURE OF STOCK AS PER BOOKS COMES TO RS. 38 66 875/ - . 5.18. THIS PROVES THE CORRECTNESS OF THE STOCK FOUND DURING SEARCH. THE COPY OF REC ASTED TRADING ACCOUNT UP TO THE DATE OF SURVEY (I.E. 1 - 4 - 2009 TO 10 - 3 - 2010) IS ANNEXED HEREWITH. 5.19. THE AFORESAID FACTS CONCLUSIVELY AND CONVINCINGLY PROVE THAT NO PART OF STOCK FOUND DURING SEARCH CAN BE REGARDED AS ALLEGED UNEXPLAINED STOCK. 5.2 0. IT IS WELL SETTLED LAW THAT PROFITS DO NOT ACCRUE FROM DAY TO DAY OR EVEN FROM MONTH TO MONTH. THE PROFITS HAVE TO BE ASCERTAINED BY A COMPARISON OF ASSETS AT THE TWO STATED POINTS OF TIME. 5.21. THE PROFITS CAN BE ORDINARILY DETERMINED ONLY AT THE CLOSE OF THE ACCOUNTING YEAR. RELIANCE IS PLACED ON SUPREME COURT JUDGMENT IN THE CASE OF CIT VS. ASHOK BHAI CHIMAN BHAI (1965) 56ITR 42 (SC). 5.22. WITHOUT PREJUDICE TO OUR SUBMISSION THAT NO DIFFERENCE IN STOCK OF APPELLANT WAS FOUND EVEN IF ANY SMA LL DIFFERENCE WAS FOUND THE APPELLANT 34 HAS ACCOUNTED FOR THE FIGURE OF CLOSING STOCK AT A HIGHER FIGURE AND HAS DECLARED SUBSTANTIALLY MORE GP RATE IN THE YEAR UNDER CONSIDERATION WHICH ADEQUATELY COVERS THE ALLEGED DIFFERENCE. 5.23. THE GP RATE DECLAR ED BY THE ASSESSEE AT 5.01% IS SUBSTANTIALLY MORE THAN THE GP RATE OF THE PRECEDING YEAR WHICH ADEQUATELY AND FULLY COVERS THE ALLEGED DIFFERENCE IN THE AMOUNT OF STOCK FOUND DURING SEARCH. 5.24. SINCE THE APPELLANT HAS ITSELF DECLARED HIGHER GP AND HI GHER INCOME THE ALLEGED DIFFERENCE IN THE FIGURE OF STOCK IS FULLY AND ADEQUATELY COVERED BY THE BETTER GP DECLARED BY THE APPELLANT. 5.25. THE ABOVE POSITION OF STOCK CAN BE SUMMARIZED AS FOLLOWS: S.NO . PARTICULARS AMOUNT (RS.) 1. CORRECT AMOUNT OF STOCK PHYSICALLY FOUND AS VALUED AND PREPARED BY THE AUTHORISED OFFICER 51 78 951 2. THE RATES ADOPTED BY AUTHORISED OFFICER WERE ARBITRARY. THE APPELLANT HAS APPLIED CORRECT RATE ON THE BASIS OF ACTUAL PURCHASE INVOICES. THE VALUATION SO MADE BY THE AUTHORISED OFFICER HAS BEEN SHOWN AT INFLATED FIGURE BY A SUM OF RS. 12 87 576/ - IN THE CASE OF APPELLANT AS PER DETAILS ANNEXED. PHOTOCOPIES OF PURCHASE INVOICES ARE ALSO ANNEXED TO CORROBORATE THE CORRECTNESS OF STOCK VALUATION. THE DIFFERENCE ON ACCOUNT OF SUCH RATE DIFFERENCE COMES TO RS. 12 87 576/ - WHICH ALSO INCLUDES ITEMS AT SERIAL NO. 74 TO 81 WHICH HAVE BEEN TAKEN TWICE BY THE AUTHORISED OFFICER IN THE STOCK INVENTORY. THE SAME ITEMS HAVE BEEN ONCE AGAIN REPEATED AT S. NO. 82 TO 89 OF THE SAME INVENTORY WHICH IS INCLUDED IN THE AFORESAID SUM OF RS. 12 87 576/ - . ( - )12 87 576 3. STOCK OF M/S SWASTIK AGENCIES INCLUDED IN THE STOCK INVENTORY OF APPELLANT. ( - ) 24 500 4. ACTUAL VALUATION OF STOCK PHYSICALLY FOUND DURING SEARCH AFTER RECTIFICATION OF AFORESAID APPARENT MISTAKES. 38 66 875 5. DIFFERENCE ON ACCOUNT OF INCREASE IN THE RATE OF GROSS PROFIT FROM 3.22% TO 5.01% ON THE DATE OF SURVEY AS PER RECASTED TRADING AC COUNT. ( - ) 7 70 248 6. ACTUAL STOCK AS PER BOOKS AS ON DATE OF SURVEY 30 96 627 FROM THE ABOVE IT BECOMES OSTENSIBLY CLEAR THAT THERE WAS NO EXCESS 35 PHYSICAL STOCK AT THE BUSINESS PREMISES OF THE APPELLANT. 5.26. THE ASSESSING OFFICER HAS MADE THE ADDITION OF EXCESS STOCK OF RS. 20 82 324/ - TO THE RETURNED INCOME WITHOUT RECTIFYING THE ABOVE APPARENT MISTAKES IN THE VALUATION OF PHYSICAL STOCK FOUND DURING THE COURSE OF SURVEY. 5.27. THE APPELLANT VERY HUMBLY FURTHER SUBMITS THAT IN THE PRES ENT CASE THE RATES ADOPTED BY THE AUTHORIZED OFFICER FOR VALUATION OF STOCK FOUND DURING THE COURSE OF SURVEY WERE ARBITRARY AND HYPOTHETICAL. 5.28. THE APPELLANT HAS APPLIED CORRECT RATES FOR VALUATION OF INVENTORY ON THE BASIS OF ACTUAL PURCHASE INVO ICES WHICH SHALL REDUCE THE VALUATION SO MADE BY THE AUTHORIZED OFFICER. 5.29. APART FROM THIS THE AUTHORIZED OFFICER HAS ALSO TAKEN TWICE THE ITEMS OF STOCK AT SERIAL NUMBER 74 TO 81 OF THE SAME INVENTORY AT SERIAL NUMBER 82 TO 89. 5.30. THE OVERAL L EFFECT OF THE ABOVE APPARENT MISTAKES WILL RESULT IN REDUCTION OF VALUATION OF INVENTORY BY RS. 12 87 576/ - PREPARED BY THE AUTHORISED OFFICER AT THE TIME OF SURVEY. THE PHOTOCOPIES OF PURCHASE INVOICES ARE ENCLOSED HEREWITH TO CORROBORATE THE CORRECTNES S OF STOCK VALUATION. 5.31. THE APPELLANT VERY RESPECTFULLY SUBMITS THAT SURVEY PARTY HAS ALSO RECORDED ON DATED 10 - 03 - 201 0 THE STATEMENTS OF SHRI LALIT JAIN (COPY ENCLOSED) UNDER SECTION 133A OF THE ACT DURING THE COURSE OF SURVEY. 5.32. IN REPLY TO QUESTION 19 OF THE RECORDED STATEMENT SHRI LALIT KUMAR JAIN HAS STATED THAT THE TOTAL PHYSICAL STOCK OF RS.53 64 413/ - WAS FOUND DURING THE COURSE OF SURVEY WHICH WAS IN EXCESS OF RS. 22 67 786/ - AS COMPARED TO THE STOCK SHOWN IN THE BOOKS OF ACCOUNTS OF THE APPELLANT. 5.33. SHRI LALIT KUMAR JAIN HAS CONFIRMED THAT THE VALUATION OF THE ALLEGED STOCK HAS BEEN MADE WITH HIS CONSENT WITH THE CONDITION THAT THE APPELLANT (SHRI BHANWAR LAL JAIN) CAN EXPLAIN THE REASON FOR SUCH EXCESS PHYSICAL STOCK FOUND DU RING THE COURSE OF SURVEY. NO FURTHER QUESTION HAS BEEN 36 RAISED TO THE APPELLANT IN RESPECT OF VALUATION PHYSICAL STOCK FOUND DURING THE COURSE OF SURVEY. 5.34. SIMILARLY THE SEARCH /SURVEY PARTY HAS ALSO RECORDED ON DATED 10 - 03 - 2010 THE STATEMENTS OF S HRI RAMESH KUMAR JAIN UNDER SECTION 132 OF THE ACT DURING THE COURSE OF SEARCH /SURVEY. 5.35. IN REPLY TO QUESTIONS 31 32 AND 45 OF THE RECORDED STATEMENT DATED 10 - 03 - 2010 SHRI KUMAR JAIN HAS STATED THAT HE IS AGREEABLE WITH THE VALUATION OF THE ALLEGE D STOCK WITH THE CONDITION THAT THE APPELLANT (SHRI BHANWAR LAL JAIN ) SHOULD CONFIRM THE SAME. 5.36. SHRI RAMESH KUMAR JAIN HAS OFFERED THE SAID STOCK FOR TAXATION AND THEREFORE THERE CAN BE NO MISTAKE IN VALUATION OF ALLEGED STOCK FOUND DURING THE COU RSE OF SURVEY. 5.37. THE ASSESSING OFFICER HAS MADE THE ADDITION OF THE STOCK OF RS. 12 87 576/ - SOLELY BASED ON THE STATEMENTS OF SHRI LALIT KUMAR JAIN AND SHRI RAMESH KUMAR JAIN . 5.38. IT IS FURTHER SUBMITTED THAT THE ASSESSING OFFICER HAS NOT BROU GHT ON RECORD CORROBORATIVE AND CONCRETE EVIDENCE OF DEFINITE LEGAL CHARACTER IN SUPPORT OF THE ADDITION MADE BY HIM AND THEREFORE THE ADDITION OF VALUE OF SURVEY STOCK OF RS. 12 87 576/ - MADE BY THE ASSESSING OFFICER IS LIABLE TO BE DELETED. 5.39. THE ASSESSING OFFICER HAS MADE THE ADDITION OF THE VALUE OF STOCK OF M/S SWASTIK AGENCIES OF RS. 24 500/ - ALREADY INCLUDED IN THE VALUE OF STOCK OF THE APPELLANT BASED ON THE STATEMENTS OF SHRI LALIT JAIN AND RAMESH KUMAR JAIN. 5.40. THE APPELLANT VERY HUM BLY FURTHER SUBMITS THAT THE STATEMENTS RECORDED UNDER SECTION 133A OF THE ACT ARE HAVING NO EVIDENTIARY VALUE FOR THE PURPOSE OF ASSESSMENT. 5.41. THE APPELLANT VERY HUMBLY FURTHER SUBMITS THAT THE STOCK OF RS. 24 500/ - BELONGS TO M/S SWASTIK AGENCIES ON THE DATE OF SURVEY (COPY OF BILL ENCLOSED) AND NOT RELATED TO THE APPELLANT ON THE DATE OF SURVEY AND 37 THEREFORE THE ADDITION OF THE VALUE OF THE STOCK OF RS. 24 500/ - MADE BY THE ASSESSING OFFICER IS LIABLE TO BE REDUCED OUT OF THE TOTAL VALUE OF THE PHYSICAL STOCK TAKEN BY THE SURVEY TEAM. 5.42. IT IS FURTHER SUBMITTED THAT THE ASSESSING OFFICER HAS NOT BROUGHT ON RECORD CORROBORATIVE AND CONCRETE EVIDENCE OF DEFINITE LEGAL CHARACTER IN SUPPORT OF THE ADDITION MADE BY HIM AND THEREFORE THE ADDITION OF THE VALUE OF EXCESS STOCK OF RS. 24 500/ - IS LIABLE TO BE DELETED. 5.43. THE ASSESSING OFFICER HAS MADE THE ADDITION OF THE VALUE OF EXCESS STOCK OF RS.7 70 248/ - REPRESENTING THE DIFFERENCE ON ACCOUNT OF INCREASE IN THE RATE OF GROSS PROFIT FROM 3.22% TO 5.01% ON THE DATE OF SURVEY AS PER RECASTED TRADING ACCOUNT. 5.44. THE GP RATE DECLARED BY THE ASSESSEE AT 5.01% IS SUBSTANTIALLY MORE THAN THE GP RATE OF THE PRECEDING YEAR WHICH ADEQUATELY AND FULLY COVERS THE AL LEGED DIFFERENCE IN THE AMOUNT OF STOCK FOUND DURING SEARCH. 5.45. SINCE THE APPELLANT HAS ITSELF DECLARED HIGHER GP AND HIGHER INCOME THE ALLEGED DIFFERENCE IN THE FIGURE OF STOCK IS FULLY AND ADEQUATELY COVERED BY THE BETTER GP DECLARED BY THE APPELL ANT AND THEREFORE THE ADDITION OF EQUIVALENT VALUE OF EXCESS STOCK OF RS. 7 70 248/ - MADE BY THE ASSESSING OFFICER IS LIABLE TO BE DELETED. 5.46. THE APPELLANT VERY HUMBLY FURTHER SUBMITS THAT THE STATEMENTS RECORDED UNDER SECTION 133A OF THE ACT A RE HAVING NO EVIDENTIARY VALUE FOR THE PURPOSE OF ASSESSMENT. OUR RELIANCE HAS BEEN PLACED ON THE FOLLOWING JUDICIAL DECISION FOR THIS PURPOSE: CIT VS. S. KADARKHAN SONS (2012) 210 TAXMAN 248 (SC) PAUL MATHEWS & SONS VS. CIT (2003) 129 TAX MAN 416 (KER .) 5.47. THE APPELLANT FURTHER SUBMITS THAT IF THE ASSESSING OFFICER GIVES HIS ASSERTION ONLY TO THE STATEMENTS RECORDED DURING THE COURSE OF SURVEY THEN IT CANNOT BE USED AS CONCLUSIVE EVIDENCE OR FINAL ACCORD OF THE APPELLANT. OUR RELIANCE HAS BEEN PL ACED ON THE FOLLOWING JUDICIAL DECISIONS: GAURISHANKER ONKARMAL VS. ITO (1990) 37 TTJ 33 (AHD - T) 38 5.48. IT IS SETTLED POSITION OF LAW THAT THE STATEMENTS MADE BY THE ASSESSEE UNDER OATH ARE NOT THE CONCLUSIVE EVIDENCE UNLESS THEY ARE FURTHER SUPPORTED BY ANY OTHER ADDITIONAL EVIDENCE. THE INCORRECT STATEMENTS DO NOT FORM THE BASIS OF THE ASSESSMENT. OUR SUBMISSIONS ARE WELL SUPPORTED BY THE FOLLOWING JUDICIAL DECISIONS: PULLANGODA RUBBER PRODUCE COMPANY LTD. VS STATE OF KERALA 91 ITR 18 (S.C.) IN THIS CASE THE APEX COURT OBSERVED THAT AN ADMISSION IS AN EXTREMELY IMPORTANT PIECE OF EVIDENCE BUT IT CANNOT BE SAID THAT IT IS CONCLUSIVE. IT IS ALWAYS OPEN TO THE ASSESSEE WHO MADE THE ADMISSION TO SHOW THAT IT IS INCORRECT. AVADH KISHORE DASS VS. RA M GOPAL AIR 1979 SUPREME COURT 861. IN THIS CASE THE APEX COURT HAS OBSERVED THAT EVIDENTIARY ADMISSIONS ARE NOT THE CONCLUSIVE PROOF OF FACTS ADMITTED AND MAY BE EXPLAINED OR SHOWN TO BE WRONG. 5.49. SIMILARLY MERE ADMISSION CANNOT BE THE BED - ROCK OR FOUNDATION OF ASSESSMENT. IT IS ALWAYS OPEN TO THE APPELLANT WHO MADE THE ADMISSION TO SHOW THAT WHAT HE ADMITTED WAS NOT CORRECT. 5.50. THE PERSON WHO ADMITS A FACT IS ALWAYS AT LIBERTY TO EXPLAIN OR CLARIFY THE CIRCUMSTANCES AND NATURE OF STATE AND A LSO THE CORRECT CIRCUMSTANCES IN WHICH IT HAS BEEN MADE. OUR RELIANCE HAS BEEN PLACED ON THE FOLLOWING JUDICIAL DECISIONS FOR THIS PURPOSE: KISHAN LAL VS. SMT. CHALTIBAI AIR 1959 (S.C.) 504. 5.51. THE APPELLANT HAS RETRACTED /WITHDRAWN THE ABOVE STATEMENTS RECORDED DURING THE COURSE OF SEARCH /SURVEY VIDE HIS LETTER DATED 04 - 10 - 2011 BEING INCORRECT AND THEREFORE NO VALID RELIANCE CAN BE PLACED ON THE RETRACTED STATEMENT FOR MAKING THE ADDITIONS IN THE ASSESSMENT. 5.52. THE APPELLANT VERY HUM BLY SUBMITS THAT THE ADDITION OF EXCESS VALUE 39 OF STOCK MADE BY THE ASSESSING OFFICER IS TOTALLY INCORRECT AND PATENTLY ERRONEOUS AND BASED ON MERE ASSUMPTION AND PRESUMPTION SURMISES AND CONJECTURES PURE GUESS DOUBTS AND SUSPICION CONT RARY TO THE FACTS AND BASED ON IRRELEVANT AND EXTRANEOUS CONSIDERATIONS MALAFIDE AND /OR HYPOTHETICAL GROUNDS AS WELL AS IRRATIONAL IN LAW AND LOGIC AND THEREFORE THE SAME ARE NOT SUSTAINABLE IN LAW AS WELL AS ON THE FACTS OF THE CASE. 5.53. IN TH E PRESENT CASE APPELLANT HAS SATISFACTORILY EXPLAINED THAT THERE WAS NO EXCESS STOCK FOUND DURING THE COURSE OF SURVEY AND THEREFORE THE ADDITION OF EXCESS STOCK OF RS. 20 82 324/ - MADE BY THE ASSESSING OFFICER IS UNWARRANTED AND UNSUST AINABLE IN LAW AS WELL AS ON THE FACTS A N D CIRCUMSTANCES OF THE CASE AND THE SAME IS LIABLE TO BE DELETED. 5.54. FOR THE VARIOUS REASONS STATED ABOVE THE ADDITION OF UNEXPLAINED EXCESS STOCK OF RS. 20 82 324/ - MADE BY THE ASSESSING OFFICER ON THE BASIS OF RETRACTED STATEMENTS IS LIABLE TO BE DELETED. 5.55. IN VIEW OF THE FOREGOING GROUNDS OF DEFENCE STATED ABOVE THE APPELLANT VERY HUMBLY PRAYS THE ADDITION OF UNEXPLAINED EXCESS STOCK OF RS. 20 82 324/ - MADE BY THE ASSESSING OFFICER MAY KINDLY BE DELET ED.' 14 LD. CIT(A) FORWARDED THE SUBMISSIONS AND DOCUMENTS FURNISHED BY THE ASSESSEE TO THE ASSESSING OFFICER AND DIRECTED HIM TO VERIFY THE CONTENTION AFTER MAKING NECESSARY ENQUIRIES FROM THE REGULAR BOOKS OF ACCOUNTS. IN HIS REPORT DATED 03/01/2013 THE ASSESSING OFFICER STATED THAT THE CONTENTION S RAISED WERE FILED DURING THE COURSE OF ASSESSMENT PROCEEDINGS AND NO NEW MATERIAL/CONTENTION HAD BEEN BROUGHT ON RECORD. IT WAS FURTHER STATED THAT THERE WAS NO POSSIBILITY IN TAKING / USING 40 RATES ADOPTED BY THE ASSESSING OFFICER BECAUSE THE SAME WAS GIVEN BY THE RESPONSIBLE PERSON OF THE ASSESSEE GROUP. AS REGARDS TO THE CLAIM OF THE ASSESSEE THAT STOCK OF M/S. SWASTIK AG ENCY WAS ALSO TAKEN INTO CONSIDERATION IN THE STOCK OF THE ASSESSEE I T WAS STATED THAT IF SUCH MISTAKE HAD BEEN DONE BY THE THEN ASSESSING OFFICER THE ASSESSEE MUST HAVE BEE N INTIMATED AND BROUGHT IT TO THE KNOWLEDGE OF THE AUTHORIZED OFFICER AS THE SAME HAD NOT BEEN DONE THEREFORE SUCH CONTENTION COULD NOT BE ACCEPTED. THE ASSESSIN G OFFICER STATED IN HIS REMAND REPORT THAT THE RE WERE DISCREPA NCIES LIKE CASH BOOK WAS NOT COMPLETED STOCK REGISTER HAD NOT BEEN MAINTAINED TO THE CONCLUSION THAT THE BOOKS OF ACCOUNTS OF THE ASSESSEE WERE NOT RELIABLE AND PROVISIONS OF SECTION 145(3) OF THE ACT WERE CLEARLY APPLICABLE. THE REPORT RECEIVED FROM THE ASSESSING OFFICER WAS MADE AVAILABLE TO THE ASSESSEE WHO FILED REJOINDER. IT WAS STATED THAT THE STATEMENT S RECORDED U/S 133A OF THE ACT WAS HAVING NO EVIDENTIARY VALUE FOR THE PURPOSE OF ADDITION IN THE ASSESSMENT UNLESS THEY WERE SUPPORTED BY ANY CORROBORATIVE EVIDENCES. RELIANCE WAS PLACED ON THE JUDGMENT OF THE HON'BLE APEX COURT IN THE CASE OF CIT VS. S. KADAR KHAN SONS (2012) 210 TAXMAN 248 . I T WAS FURTHER STATED THAT THE COPIES OF ACTUAL PURCHASE INVOICES HAVE BEEN PLACED ON RECORD WHICH WERE BEFORE THE ASSESSING 41 OFFICER AT THE TIME OF COMPLETING THE ASSESSMENT AND SUCH ACTUAL PURCHASE INVOICES REFLECT ED CORRECT RATES FOR VALUATION OF THE STOCK . IT WAS ALSO STATED THAT THE ASSESSEE HAD FILED COMPARATIVE STATEMENT INDICATING THE DIFFERENCE BETWEEN THE RATES OF VALUATION ADOPTED BY THE SURVEY PARTY AND ACTUAL RATE OF PURCHASE S AS INDICATED IN THE ORIGINAL PURCHASE INVOICES OF THE ASSESSEE . IT WAS CONTENDED THAT REDUCTION OF VA L UATION AMOUNTING TO RS. 12 87 573/ - MAY BE ALLOWED AND THAT THE EXCESS STOCK OF 98 MATCH BOXES OF RS. 30 184/ - APPLY ING THE RATE OF RS. 108 PER BOX WHICH WAS INCLUDED IN THE EXCESS STOCK OF M/S. SWASTIK AGENCIES WAS FURTHER INCLUDED IN THE STOCK INVENTORY OF THE ASSESSEE . IT WAS STATED THAT EXCESS STOCK OF M/S. SWASTIK AGENCIES HAD BEEN TAXED AND THEREFORE THE SAME COULD NOT BE TAXE D TWICE. THE ASSESSEE CONTENDED THAT ON THE DATE OF SURVEY I.E. ON 10/03/ 2010 WHILE RECASTING THE TRADING ACCOUNT AND APPLYING GROSS PROFIT RATE 3.23% BOOK STOCK WAS SHOWN AT RS. 30 96 627/ - BUT SUBSEQUENTLY THE ASSESSEE REVISED THE ABOVE TRADING ACCOUNT AND VOLUNTARILY DECLARED THE BOOK STOCK OF RS. 38 66 875/ - I N THE REVISED TRADING ACCOUNT AND ACCORDINGLY INCREASED THE VA L UE OF BOOK STOCK AMOUNTING TO RS. 7 70 248/ - WHICH WAS OFFERED FOR TAXATION. HOWEVER THE ASSESSING OFFICER HAD NOT CONSIDERED THE VALUE OF STOCK OF RS. 42 7 70 248/ - INCREASED ON THE DATE OF SURVEY AND OFFERED FOR TAX WHILE CALCULATING THE VALUE OF EXCESS STOCK . 1 5 THE LD. CIT(A) AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE AND REMAND REPORT OF THE ASSESSING OFFICER SUSTAINED THE ADDITION OF RS. 7 94 748/ - BY OBSERVING IN PARA 8.5 OF THE IMPUGNED ORDER WHICH READ AS UNDER: - 8.5 I HAVE CAREFULLY CONSIDERED THE SUBMISSIONS OF THE APPELLANT AS ALSO THE FINDINGS OF THE AO. IT MAY BE NOTED THAT THE VALUE OF STOCK PHYSICALLY FOUND AS PER INVENTORY PREPARED AND VALUED BY THE AUTHORIZED OFFICER AT THE TIME OF SURVEY/ SEARCH WAS AT RS. 5 3 94627/ - . HOWEVER WHILE RECORDING THE STATEMENT DURING COURSE OF SEARCH THE VALUE OF STOCK PHYSICALLY FOUND WAS STATED TO BE RS. 5364413/ - . THE STOCK AS ON DATE OF SURVEY/ SEARCH WAS DETERMINED AT RS. 3096627/ - . SUCH VALUE WAS ARRIVED AT BY PREPARING A TRADING ACCOUNT AS ON DATE OF SURVEY BY APPLYING THE GP RATE WHICH HAS BEEN SHOWN BY THE ASSESSEE IN THE IMMEDIATE PRECEDING YEAR. THE EXCESS STOCK WAS ACCORDINGLY ARRIVED AT RS. 2298000/ - (5394627 - 3096627). HOWEVER AFTER REMOVING SOME ERROR IN CALCULATION OF STOCK THE APPELLANT MADE SURRENDER OF STOCK AMOUNTING TO RS. 2267786/ - . HOWEVER SUC H SURRENDER OF INCOME WAS NOT SHOWN IN RETURN OF INCOME FILED BY ASSESSEE AND DURING THE ASSESSMENT PROCEEDINGS THE APPELLANT TRIED TO EXPLAIN THE STOCK FOUND VIS - A - VIS SHOWN IN THE BOOKS OF ACCOUNTS AS UNDER: S.NO. PARTICULARS AMOUNT (RS.) 1. VALUE OF STOCK PHYSICALLY FOUND AS PER INVENTORY PREPARED AND VALUED BY THE AUTHORIZED OFFICER AT THE TIME OF SEARCH. 53 94 627 2. LESS: APPARENT MISTAKES IN THE TOTALS OF STOCK INVENTORY PREPARED BY THE DEPARTMENT (AS PER REVISED STOCK INVENTORY WITH CORRECT PAGE WISE TOTALS ANNEXED HEREWITH) ( - ) 2 15 676 3. CORRECT AMOUNT OF STOCK PHYSICALLY FOUND AS 51 78 951 43 VALUED AND PREPARED BY THE AO THE RATES ADOPTED BY AO WERE ARBITRARY. THE. ASSESSEE HAS APPLIED CORRECT RATE ON THE BASIS OF ACTUAL PURCHASE INVOICES. THE VALUATION SO MADE BY THE AO HAS BEEN SHOWN AT INFLATED FIGURE BY A SUM OF RS. 12 87 576/ - IN THE CASE OF M/S RAT AN LAL BHANWAR LAL JAIN AS PER DETAILS ANNEXED. PHOTOCOPIES OF PURCHASE INVOICES ARE ALSO ANNEXED TO CORROBORATE THE COR RECTNESS OF STOCK VALUATION. THE DIFFERENCE ON ACCOUNT OF SUCH RATE DIFFERENCE COMES TO RS. 12 87 576/ - WHICH ALSO INCLUDES ITEMS AT SERIAL NO. 74 TO 81 WHICH HAVE BEEN TAKEN TWICE BY THE AO IN THE STOCK INVENTORY. THE SAME ITEMS HAVE BEEN ONCE AGAIN REP EATED AT S. NO. 82 TO 89 OF THE SAME INVENTORY WHICH IS INCLUDED IN THE AFORESAID SUM OF RS. 12 87 57 6/ - . ( - )12 87 576 5. STOCK OF SH. SWASTIK AGENCIES INCLUDED IN THE STOCK INVENTORY OF RATAN LAL BHANWAR LAL JAIN. ( - ) 24 500 6. ACTUAL VALUATION OF STOCK PHYSICALLY FOUND DURING SEARCH AFTER RECTIFICATION OF AFORESAID APPARENT MISTAKES. 38 66 875 7. DIFFERENCE ON ACCOUNT OF INCREASE IN THE RATE OF GROSS PROFIT FROM 3.22% TO 5.01% ON THE DATE OF SURVEY AS PER RECASTED TRADING ACCOUNT. ( - )7 70 248 8. ACTUAL STOCK AS PER BOOKS AS ON DATE OF SURVEY 30 96 627 AN APPARENT MISTAKE OF STOCK OF RS. 215676/ - WAS ACCEPTED BY THE AO AND ACCORDINGLY AO MADE ADDITION OF RS. 2082324/ - (5394627 - 215676=5178951 - 3096627). IT MAY BE NOTED THAT THE APPELLANT HAS EXPLAINED SUCH EXCESS STOCK DETERMINED BY THE AO AS UNDER: I) AMOUNT ON ACCOUNT OF EXCESS VALUATION MADE BY THE SURVEY TEAM BY ADOPTING W RONG RATES OF INDIVIDUAL ITEMS RS. 1287576/ - II) STOCK OF M/S SWASTIC AGENCIES WRONGLY ENTERED INTO THE STOCK OF THE APPELLANT RS. 24500/ - III) VARIATION I N STOCK BECAUSE OF CHANGE IN GP RATE IN AS MUCH AS AT THE TIME OF SURVEY THE STOCK AS PER BOOKS OF ACCOUNTS WAS DETERMINED BY APPLYING GP 44 RATE OF 3.22% BUT WHEN THE VALUE OF STOCK IS INCREASED BY CORRECTION VALUATION AMOUNTING TO RS. 1287576/ - THE GP WILL INCREASE TO 5.01% AND ACCORDINGLY THE STOCK AS PER BOOKS OF ACCOUNTS WILL INCREASE BY RS. 770248/ - . AS REGARDS ADDITION ON ACCOUNT OF EXCESS STOCK THE AO'S CASE IS THAT THE VALUATION WAS DONE IN THE PRESENCE OF SH. LALIT KU MAR JAIN WHO IS A FAMILY MEMBER AND ALSO HAPPENED TO EMPLOYEE OF M/S RATANLAL BHANWARLAL AND THAT THE RATES OF EACH ITEM WERE TAKEN AS STATED BY SH. LALIT JAIN AND THEREFORE THERE CANNOT BE ANY VARIATION IN THE VALUATION OF THE STOCK. IT IS ALSO STATED THA T EVEN SH. RAMESH KUM A R JAIN WHO IS PARTNER OF M/S SWASTI K AGENCY AND SALARIED EMPLOYEE OF M/S RATANLAL BHANWARLAL IN HIS STATEMENT ADMITTED SUCH UNDISCLOSED STOCK OF RS. 2267786/ - AS ALSO THAT THE VALUATION HAS BEEN GOT DONE BY HIS BROTHER SH. LALIT JAIN AND HE AGREED WITH SUCH VALUATION. AS REGARDS THE RECASTI NG OF THE TRADING ACCOUNT AND INCREASE OF STOCK AS PER BOOKS OF ACCOUNTS BY RS. 770248/ - THE AO'S CASE IS THAT AS PER STATEMENT OF SH. RAMESH KUMAR JAIN NO STOCK REGISTER WAS MAINTAINED BY THE ASSESSEE IN THE FIRM NAMELY M/S RATANLAL BHANWARLAL AND THAT IN THE END OF THE F.Y. ON THE BASIS OF PRE - DETERMINED GP THE CLOSING STOCK IS DERIVED. AS PER AO AS THE ASSESSEE HAS NOT MAINTAINED PROPER STOCK REGISTER AND DECLARED GP COMPLETELY ON ESTIMATE BASIS THEREFORE SUCH ALLEGED RECASTED TRADING ACCOUNT FURNISHED BY THE ASSESSEE WAS HAVING NO SANCTITY. ON THE OTHER HAND THE APPELLANT HAS DISPUTED THE VALUATION OF THE STOCK FOUND DURING THE COURSE OF SURVEY. IT IS CONTENDED THAT THE STOCK SO FOUND IS TO BE VALUED ON THE BASIS OF COST PRICE OR MARKET PRICE WHICHEVER IS EARLIER. THE APPELLANT'S CASE IS THAT THE STATEMENT RECORDING DURING SURVEY DOES NOT HAVE ANY EVIDENTIARY VALUE AND THAT THE STOCK SHOULD HAVE BEEN VALUED NOT ON THE BASIS OF RATE OF INDIVIDUAL ITEMS AS STATED BY THE EMPLOYEE OR FAMILY MEMBER OF THE AP PELLANT BUT ON THE COST PRICE OR MARKET PRICE WHICHEVER IS EARLIER. DURING THE ASSESSMENT PROCEEDINGS THE APPELLANT HAS FILED DETAILED VALUATION SHEET OF EACH AND EVERY ITEM ALONG WITH A DETAILED BASIS FOR VALUATION OF EACH ITEM OF STOCK. THE APPELLANT HAS ALSO FILED COPIES OF SUPPORTING PURCHASE VOUCHERS/ INVOICES BEFORE THE AO AND ACCORDINGLY THE STOCK WAS VALUED ON THE BASIS OF COST PRICE AND VARIATION OF RS. 1287576/ - WAS DETECTED. HOWEVER THE AO COMPLETING THE ASSESSMENT DID NOT GIVE ANY COGNIZANCE TO SUCH VALUATION MADE BY THE APPELLANT SUPPORTED BY ITS PURCHASE VOUCHERS/ INVOICES. THE SAME DOCUMENTS WERE ALSO FORWARDED TO 45 THE PRESENT AO AND HE WAS ALSO REQUESTED TO EXAMINE THE SAME AND TO DETERMINE THE CORRECT VALUE OF STOCK FOUND DURING THE COURSE SE ARCH. HOWEVER THE PRESENT AO ALSO SIMPLY RELIED ON THE FINDINGS OF THE PREDECESSOR AO. IT MAY BE MENTIONED THAT THERE CANNOT BE ANY DISPUTE ON THE FACT THAT THE STOCK OF THE APPELLANT DURING THE COURSE SURVEY WAS TO BE VALUED ON THE BASIS OF COST PRICE OR MARKET PRICE WHICHEVER IS EARLIER. DEFINITELY THERE IS MERIT IN THE CONTENTION OF THE APPELLANT THAT THE STOCK CANNOT BE VALUED SIMPLY ON THE BASIS OF STATEMENT OF ANY EMPLOYEE. EVEN IF THE STOCK IS BEING VALUED AS PER STATEMENT OF ANY EMPLOYEE OR RESPECTF UL PERSONS FROM THE SIDE OF APPELLANT THE AUTHORIZED OFFICER/ AO HAS TO VERIFY FROM THE RELEVANT RECORD WHETHER SUCH VALUATION IS FACTUALLY CORRECT AND BASED ON COST PRICE OR MARKET PRICE EVIDENCED FROM THE RELEVANT PURCHASE OF SALE VOUCHERS. THE APPELLAN T HAS FILED DETAILED VALUATION OF EACH AND EVERY ITEMS ALONG WITH ITS BASIS BY WAY OF SUPPORTING PURCHASE VOUCHERS/ INVOICES. THE AO COMPLETING THE ASSESSMENT AS WELL AS THE PRESENT AO TO WHOM SUCH DOCUMENTS HAVE BEEN SENT FOR VERIFICATION HAVE NOT POINTED OUT ANY DEFECT IN SUCH VALUATION OF STOCK. THEREFORE PRIMA FACIE IT IS FOUND THAT THE STOCK AT THE TIME OF SURVEY WAS VALUED INCORRECTLY AND EXCESSIVELY BY AN AMOUNT OF RS. 1287576/ - . THEREFORE THE ASSESSEE DESERVES TO GET CREDIT FOR THE SAME IN AS MUCH A S THE PHYSICAL STOCK TO SUCH AN EXTENT WILL BE REDUCED. AS REGARDS FURTHER REDUCTION IN THE VALUE OF UNDISCLOSED STOCK DETERMINED BY THE AO IT IS NOTED THAT AT THE TIME OF SURVEY THE STOCK PHYSICAL FOUND WAS DETERMINED BY PREPARING A TRADING ACCOUNT AS O N 10.3.2010 AS UNDER: OPENING STOCK 5699375 TO SALES 41616664 43050115 (1.3.10 TO 8.3.10) 1402813 PURCHASE 37711564 39018259 (1.3.10 TO 8.3.10) 30638 (1.3.10 TO 8.3.10) 1245985 (1.3.10 TO 8.3.10) 60710 39018259 TO CLO. STOCK 3096627 TRANSPORTATION 38589 Y. GROSS PROFIT 1390519 (3.23%) AS PER LAST YEAR __________________________________________________ 46146742 46146742 46 IT MAY BE MENTIONED WHILE PREPARING SUCH TRADING ACCOUNT THE POSITION OF OPENING STOCK PURCHASES TRANSPORTATION EXPENSES AND SALES WAS TAKEN BASED ON THE BOOKS OF ACCOUNTS AND APPLYING GP RATE 3.23% SHOWN IN PER LAST YEAR ACCORDINGLY THE GP WAS DETERMINED AT RS. 1390519/ - AND ACCORDINGLY OF CLOSING STOCK/ AS PER BOOKS OF ACCOUNTS WAS DETERMINED AT RS. 3096627/ - . DURING THE ASSESSMENT PROCEEDINGS RECASTED TRADING ACCOUNT ON THE DATE OF SURVEY AS UNDER: PARTICULARS AMOUNT (RS) PARTICULARS AMOUNT (RS) BY OPENING STOCK 5699375 TO SALES 43045100 BY PURCHASES 39017266 TO CLOSING STOCK 3866875 BY TRANSPORTATION 38774 BY GROSS PROFIT @ 5.01% 2156560 TOTAL (RS.) 46911975 TOTAL (RS) 46911975 NOTE: STOCK AS PER RECASTED TRADING ACCOUNTS 3866875 STOCK AS PER TRADING ACCOUNT GIVEN TO IT DEPT. 3096627 INCREASE IN GROSS PROFIT 770248 ON CAREFUL CONSIDERATION OF FACTS RELATING TO RECASTING OF TRADING ACCOUNT IT IS NOTED THAT THE APPELLANT HAS APPLIED GP RATE OF 5.01% BUT THERE IS NO BASIS FOR SUCH APPLICATION. IN FACT DURING SURVEY/ SEARCH PROCEEDINGS THE RESPONSIBLE REPRESENTATIVE OF THE APPELLANT SH. RAMESH JAIN ADMITTED THAT THE STOCK IS GENERALLY VALUED BY APPLY ING PER DETERMINED GP RATE. THEREFORE DETERMINATION OF PHYSICAL STOCK AS ON DATE OF SURVEY ON THE BASIS OF GP SHOWN IN THE EARLIER YEAR AT 3.23% WAS MORE REASONED. IN VIEW OF THESE FACTS THE CONTENTION OF THE APPELLANT FOR INCREASE IN STOCK AS PER BOOKS OF ACCOUNTS BY APPLICATION OF GP RATE OF 5.01% FOR RS. 770248/ - CANNOT BE ACCEPTED. AS REGARDS ANOTHER ITEM OF VARIATION FOR RS. 24500/ - THE APPELLANT'S CASE IS THAT STOCK OF M/S SWASTIC AGENCIES WAS WRONGLY INCLUDED IN THE STOCK INVENTORY OF M/S RATANLAL BHANWARLAL JAIN. HOWEVER REGARDING THIS OBJECTION THE APPELLANT HAS NOT SUBSTANTIATED AS TO HOW THE STOCK OF M/S SWASTIC AGENCIES HAS BEEN INCLUDED IN THE STOCK INVENTORY OF THE APPELLANT. 47 THE APPELLANT HAS FAILED TO POINT OUT AS TO WHICH SPECIFIC STOCK EN TERED IN THE LIST OF STOCK OWNED BY THE ASSESSEE PERTAIN TO M/S SWASTIC AGENCY AND THEREFORE SUCH CONTENTION IS WITHOUT ANY BASIS. KEEPING IN VIEW THESE FACTS THE ADDITION ON ACCOUNT OF UNDISCLOSED STOCK AMOUNTING TO RS. 79474S/ - (770248+24500) IS CONFIRMED . THE APPELLANT ACCORDINGLY GETS RELIEF OF RS. 1287576/ - . THE GROUND OF APPEAL IS PARTLY ALLOWED. 16. NOW BOTH THE PARTIES ARE IN APPEAL. THE DEPARTMENT IS IN APPEAL AGAINST THE RELIEF ALLOWED TO THE ASSESSEE WHILE THE ASSESSEE IS IN APPEAL AGAINST THE SUSTENANCE OF ADDITION. 17 LEARNED D.R. REITERATED THE OBSERVATIONS MADE IN THE ASSESSMENT ORDER DATED 15/12/2011 AND STRONGLY SUPPORTED THE ORDER OF THE ASSESSING OFFICER . HE FURTHER SUBMITTED THAT THE ASSESSEE HAD NOT MAINTAIN ED THE STO CK REGISTER THEREFORE CORRECTNESS OF THE STOCK AS PER BOOKS OF ACCOUNTS WAS NOT VERIFIABLE. HE FURTHER SUBMITTED THAT THE MISTAKE POINTED OUT BY THE ASSESSING OFFICER HAD BEEN ACCEPTED WHILE MAKING THE ADDITION AND SINCE THERE WAS A DIFFERENCE IN THE STOCK FOUND ON PHYSICAL VERIFICATION AND AS PER THE BOOKS OF ACCOUNTS THE ADDITION WAS RIGHTLY MADE BY THE ASSESSING OFFICER AND LD. CIT(A) WAS NOT JUSTIFIED IN REDUCING THE DISALLOWANCE. IT WAS FURTHER STATED THAT THE LD. CIT(A) WITHOUT APPRECIATING THE FACTS ALLOWED THE RELIEF TO THE ASSESSEE THEREFORE THE ADDITION MADE BY THE ASSESSING OFFICER MAY BE RESTORED. 48 18 IN HIS RIVAL SUBMISSIONS LEARNED COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE THE AUTHORITIES BELOW AND FURTHER SUBMITTED THA T DURING THE COURSE OF SURVEY CERTAIN ITEMS WERE VALUED TWICE AND HIGHER GROSS PROFIT OF 5.01% WAS APPLIED IN THE TRADING ACCOUNT PREPARED AT THE TIME OF SURVEY. IT WAS FURTHER STATED THAT CERTAIN ITEMS CONSIDERING THE SMALLNESS WERE VALUED ON ESTIMATE BASIS THEREFORE THE VALUE OF THE STOCK PREPAR ED AT THE TIME OF SURVEY WAS ON HIGHER SIDE AS SUCH THE ASSESSEE DESERVE D FOR THE RELIEF BUT LD. CIT(A) SUSTAINED THE ADDITION. IT WAS PRAYED THAT THE ADDIT ION SUSTAINED BY THE LD. CIT(A) MAY BE DELETED . 19 WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE PARTIES AND CAREFULLY GONE THROUGH THE MATERIAL AVAILABLE ON RECORD. IN THE PRESENT CASE INVENTORY OF THE STOCK PHYSICALLY FOUND DURING THE COURSE OF SURVEY/SEARCH WAS PREPARED AND THE VALUE OF THE STOCK WAS DETERMINED AT RS. 53 94 627/ - AND THE VALUE AS PER THE BOOKS OF ACCOUNTS WAS ARRIVED AT RS. 30 96 627/ - BY PREPARING THE TRADING ACCOUNT AS ON THE DATE OF SURVEY BY APPLYING THE GROSS PROFIT RATE OF 3.23% WHICH HAD BEEN SHOWN BY THE ASSESSEE IN THE IMMEDIATELY PRECEDING YEAR. IN THE PRESENT CASE IT IS NOTICED THAT T HE ASSESSING OFFICER ACCEPTED THE MISTAKE IN THE INVENTORY 49 OF THE TOTAL STOCK FOR A SUM OF RS. 2 15 676/ - AND VALUE OF THE STOCK PHYSICALLY FOUND DURING THE COURSE OF SURVEY WAS TAKEN AT RS. 51 78 951/ - (RS. 53 94 627/ - ( - ) RS. 2 15 676/ - ) . THE ASSESSING OFFICER MADE THE ADDITION OF RS. 20 82 324/ - (RS. 51 78 951/ - ( - ) RS. 30 96 627/ - ) . A SSESSEE EXPLAINED BEFORE THE LD. CIT(A) THAT THERE WAS A MISTAKE IN VALUATION ON ACCOUNT OF WRONG RATES TAKEN FOR THE INDI VID UAL ITEMS AND EXCESS VALUATION WAS DONE BY RS. 12 87 576/ - . IT WAS ALSO EXPLAINED THAT THE STOCK OF M/S SWASTIK AGENCY AMOUNTING TO RS. 24 500/ - WAS WRONGLY TAKEN IN THE STOCK OF THE ASSESSEE AND THE GROSS PROFIT RATE WILL INCREASE TO 5.01% ON ACCOUNT OF CORRECTION OF VALUATION AMOUNTING TO RS. 12 87 576/ - AND IF THE GROSS PROFIT RATE OF 5.01% IS AP PLIED INSTEAD OF 3.23% OF THE EARLIER YEAR IS TO BE APPLIED THE EXCESS STOCK TAKEN INTO CONSIDERATION WAS OF RS. 7 70 248/ - . IN THE PRESENT CASE THE LD. CIT(A) VERIFIED FROM THE COPIES OF SUPPOR T ING PURCHASE VOUCHERS/INVOICES FURNISHED BEFORE THE ASSESSING OFFICER AND ACCEPTED THIS CONTENTION OF THE LD. CIT(A) THAT VARIATION IN THE VALUE OF THE STOCK WAS OF RS. 12 87 576/ - . IN OUR OPINION THE LD. CIT(A) RIGHTY ALLOWED THE RELIEF TO THE SAID EXTENT BECAU SE THERE WAS A MISTAKE IN THE VALUATION OF THE STOCK WHICH WAS TO BE VALUED ON THE BASIS OF C OST PRICE OR MARKET PRICE WHICHEVER WAS LESS. THE SAID METHOD WAS ADOPTED BY THE ASSESSEE 50 CONSISTENTLY AND SINCE THE LD. CIT(A) HIMSELF VERIFIED FROM THE COPIES O F THE PURCHASE VOUCHERS/INVOICES AND ACCEPTED THE VARIATION IN THE VALUATION O F THE STOCK FOR A SUM OF RS. 12 87 576/ - . AS REGARDS TO THE GROSS PROFIT RATE OF 5.01% APPLIED BY THE ASSESSEE IN RECAST E TRADING ACCOUNT IS CONCERNED THE LD. CIT(A) CATEGORICALLY STATED THAT THE GROSS PROFIT RATE SHOWN IN THE EARLIER YEAR AT 3.23% WAS MORE REASONED. IN THE INSTANT CASE THE ASSESSEE HAD NOT GIVEN ANY COGENT REASON FOR INCREASING GROSS PROFIT RATE FROM 3.23 % TO 5.01%. IT IS AN ADMITTED FACT THAT THE GROSS PROFIT RATE DECLARED BY THE ASSESSEE IN THE PRECEDING YEAR WAS AT 3.23% AND AS TO HOW IT INCREASED TO 5.01% WAS NOT EXPLAINED . IT APPEARS THAT THE GROSS PROFIT RATE OF 5.01% WAS ADOPTED BY THE ASSESSEE ON LY AFTER THE SEARCH/SURVEY AND NOTHING WAS BROUGHT ON RECORD THAT HOW SUCH GROSS PROFIT RATE WAS ACHIEVED DURING THE YEAR UNDER CONSIDERATION . THEREFORE CONSIDERING THE TOTALITY OF THE FACTS WE ENDORSE THE OBSERVATION OF THE LD. CIT(A) THAT THE GROSS PROFIT RATE SHOWN IN THE EARLIER YEAR AT 3.23% WAS MORE REASONED AND APPLICATION OF GROSS PROFIT RATE OF 5.01% CANNOT BE ACCEPTED. 20 AS REGARDS TO THE SUBMISSIONS OF THE ASSESSEE THAT STOCK OF RS. 24 500/ - WAS WRONGLY ADDED IN THE VALUE OF THE ASSESSEE S STOCK BECAUSE SAID STOCK PERTAINED TO M/S. SWASTIK AGENCY H OWEVER NOTHING 51 WAS BROUGHT ON RECORD TO SUBSTANTIATE THAT AS TO HOW THE STOCK OF M/S. SWASTICK AGENCY HAD BEEN INCLUDED IN THE STOCK INVENTORY OF THE ASSESSEE . T HEREFORE THE LD. CIT(A) RIGHTLY DENIED THE BENEFIT OF THE SAID STOCK AND WAS JUSTIFIED IN CONFIRMING THE ADDITION ON ACCOUNT OF UNDISCLOSED STOCK AMOUNTING TO RS. 7 94 748/ - . WE DO NOT SEE ANY INFIRMITY IN THE O RDER OF THE LD. CIT(A) ON THIS ISSUE. 21 IN THE RESULT APPEAL OF THE DEPARTMENT AS WELL AS OF THE ASSESSEE ARE DISMISSED . ( ORDER PRONOUNCED IN THE COURT ON 31 ST JULY 201 4) . SD/ - SD/ - ( HARI OM MARATHA ) (N.K.SAINI) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 31 ST JULY 201 4 . VR/ - COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE LD. CIT 4. THE CIT(A) 5. THE D.R SR. PRIVATE SECRETARY ITAT JODHPUR .