DCIT, Trichur v. Sri.P.M.Sathyan, Trichur

ITA 490/COCH/2013 | 2009-2010
Pronouncement Date: 31-07-2014 | Result: Dismissed

Appeal Details

RSA Number 49021914 RSA 2013
Assessee PAN AMBPS2552E
Bench Cochin
Appeal Number ITA 490/COCH/2013
Duration Of Justice 1 year(s) 1 day(s)
Appellant DCIT, Trichur
Respondent Sri.P.M.Sathyan, Trichur
Appeal Type Income Tax Appeal
Pronouncement Date 31-07-2014
Appeal Filed By Department
Order Result Dismissed
Bench Allotted DB
Tribunal Order Date 31-07-2014
Date Of Final Hearing 17-06-2014
Next Hearing Date 17-06-2014
Assessment Year 2009-2010
Appeal Filed On 30-07-2013
Judgment Text
1 ITA NO. 429/COCH/2013 ITA 444&445/COCH/2013 ITAS 488-489/COCH/2013 ITA 490- 492/COCH/2013 ITA NO.498/COCH/2013 ITA NO.565/COCH/2013 CO NOS 20 & 26-28/COCH/2013 CO NO.64/COCH/2013 IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH COCHIN BEFORE SHRI N.R.S. GANESAN (JM) AND SHRI CHANDRA PO OJARI (AM) I.T.A NO. 429/COCH/2013 - A.Y. 2006-07 I.T.A NO. 488/COCH/2013 - A.Y. 2007-08 I.T.A NO. 489/COCH/2013 - A.Y. 2008-09 I.T.A NO. 490/COCH/2013 - A.Y. 2009-10 I.T.A NO. 565/COCH/2013 - A.Y. 2010-11 DY.CIT CENT.CIR. VS SHRI P.M. SATHIYAN S.T. NAGAR THRISSUR PROP AISWARYA JEWEL CRAFTS CHERPU TRICHUR 680 561 PAN : AMBPS2552E (APPELLANT) (RESPONDENT) I.T.A NO. 444COCH/2013 - A.Y. 2005-06 I.T.A NO. 445/COCH/2013 - A.Y. 2006-07 I.T.A NO. 491/COCH/2013 - A.Y. 2008-09 I.T.A NO. 492/COCH/2013 - A.Y. 2009-10 I.T.A NO. 498/COCH/2013 - A.Y. 2010-11 SHRI P.M. SATHIYAN VS DY.CIT CENT.CIR CHERPU TRICHUR THRISSUR (APPELLANT) (RESPONDENT) C.O. NO.20/COCH/2013 (ARISING OUT OF ITA NO.429/COCH/2013) (ASSESSMENT YEAR 2006-07) & 2 ITA NO. 429/COCH/2013 ITA 444&445/COCH/2013 ITAS 488-489/COCH/2013 ITA 490- 492/COCH/2013 ITA NO.498/COCH/2013 ITA NO.565/COCH/2013 CO NOS 20 & 26-28/COCH/2013 CO NO.64/COCH/2013 C.O. NOS.26 TO 28/COCH/2013 (ARISING OUT OF ITA NOS.488-490/COCH/2013) (ASSESSMENT YEAR 2007-08 TO 2009-10) & C.O. NO.64/COCH/2013 (ARISING OUT OF ITA NO.565/COCH/2013) (ASSESSMENT YEAR 2010-11) SHRI P.M. SATHIYAN VS DY.CIT CENT.CIR. CHERPU TRICHUR THRISSUR (CROSS OBJECTOR) (RESPONDENT) APPELLANT BY : SHRI M ANIL KUMAR CIT DR RESPONDENT BY : SHRI SIVARAMAKRISHNAN DATE OF HEARING : 17-06-2014 DATE OF PRONOUNCEMENT : 31-07-2014 O R D E R PER N.R.S. GANESAN (JM) ALL THE APPEALS OF THE ASSESSEE AND THE REVENUE AR ISE OUT OF THE RESPECTIVE ORDERS OF THE CIT(A). SINCE COMMON ISSU E ARISES FOR CONSIDERATION AS ALL THE ISSUES AGITATED IN THE APP EALS ARISE OUT OF THE SEARCH CONDUCTED IN THE CASE OF THE ASSESSEE ALL T HE APPEALS WERE HEARD TOGETHER AND ARE DISPOSED OF BY THIS COMMON ORDER. 3 ITA NO. 429/COCH/2013 ITA 444&445/COCH/2013 ITAS 488-489/COCH/2013 ITA 490- 492/COCH/2013 ITA NO.498/COCH/2013 ITA NO.565/COCH/2013 CO NOS 20 & 26-28/COCH/2013 CO NO.64/COCH/2013 2. LET US FIRST TAKE THE ASESSEES APPEAL FOR THE A SSESSMENT YEAR 2005- 06. 3. THE FIRST ISSUE ARISES FOR CONSIDERATION IS DISA LLOWANCE OF RS.2 LAKHS TOWARDS SUNDRY CREDITORS. SHRI SIVARAMAKRISHNAN T HE LD.REPRESENTATIVE FOR THE ASSESSEE SUBMITTED THAT THE ASSESSEE RECEIVED R S.1 LAKHS FROM SHRI CR MALLIKA AND ANOTHER RS.1 LAKH FROM SHRI C.V SURE SH. THE ASSESSEE FILED THE CONFIRMATION LETTER FROM THE ABOVE SAID S HRI C.R. MALLIKA COPY OF WHICH IS AVAILABLE AT PAGES 29 OF THE PAPER BOOK. TO PROVE THE IDENTITY THE ASSESSEE HAS ALSO FILED THE COPY OF IDENTITY CA RD ISSUED BY ELECTION COMMISSION OF INDIA COPY OF WHICH IS AVAILABLE AT P AGE 30 OF THE PAPER BOOK. SIMILARLY SHRI C.V. SURESH HAS ALSO CONFIRM ED THAT HE ADVANCED A SUM OF RS.1 LAKH TO THE ASSESSEE. THE IDENTITY CAR D OF SHRI C.V. SURESH IS ALSO FILED. COPIES OF CONFIRMATION AND IDENTITY CA RD ARE AVAILABLE AT PAGES 31 & 32 OF THE PAPER BOOK. HOWEVER THE LOWER AUTH ORITIES REJECTED THE CLAIM OF THE ASSESSEE WITHOUT ANY BASIS. 4 ITA NO. 429/COCH/2013 ITA 444&445/COCH/2013 ITAS 488-489/COCH/2013 ITA 490- 492/COCH/2013 ITA NO.498/COCH/2013 ITA NO.565/COCH/2013 CO NOS 20 & 26-28/COCH/2013 CO NO.64/COCH/2013 4. ON THE CONTRARY SHRI M. ANIL KUMAR THE LD.DR S UBMITTED THAT THE ASSESSING OFFICER CALLED FOR THE DETAILS OF CREDITO RS FROM THE ASSESSEE. THE ASSESSEE NEITHER PRODUCED THE DETAILS OF LOAN CREDI TORS NOR FILED ANY CONFIRMATION LETTERS FROM THEM. THE ADDRESSES AND OTHER DETAILS OF THE CREDITORS WERE NOT FILED BEFORE THE ASSESSING OFFIC ER. THEREFORE THE ASSESSING OFFICER HAD NO OTHER ALTERNATIVE EXCEPT T O MAKE THE ADDITION. BEFORE THE CIT(A) ALSO THE ASSESSEE HAS NOT FILED ANY DETAILS. THEREFORE THE CIT(A) HAS RIGHTLY CONFIRMED THE ADDITION MADE BY THE ASSESSING OFFICER HOWEVER BEFORE THE TRIBUNAL THE ASSESSEE HAS FILE D THE CONFIRMATION LETTERS FROM THE ABOVE SAID SMT. C.R. MALLIKA AND S HRI C.V. SURESH COPIES OF WHICH ARE AVAILABLE AT PAGES 29 TO 32 OF THE PAP ER BOOK. ACCORDING TO THE LD.DR THE CIT(A) CONFIRMED THE ADDITION MADE B Y THE ASSESSING OFFICER IN THE ABSENCE OF ANY MATERIAL TO PROVE THE IDENTIT Y OF THE CREDITORS THEIR CREDITWORTHINESS AND THE GENUINENESS OF THE TRANSAC TIONS. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE AND ALSO PERUSED THE MATERIAL AVAILABLE ON RECORD. THE ASSE SSEE CLAIMS THAT HE HAS RECEIVED RS.2 LAKHS FROM SMT C.R. MALLIKA AND S HRI C.V. SURESH. THE 5 ITA NO. 429/COCH/2013 ITA 444&445/COCH/2013 ITAS 488-489/COCH/2013 ITA 490- 492/COCH/2013 ITA NO.498/COCH/2013 ITA NO.565/COCH/2013 CO NOS 20 & 26-28/COCH/2013 CO NO.64/COCH/2013 CONFIRMATION LETTERS FROM THE ABOVE SAID PERSONS AR E AVAILABLE AT PAGES 29 AND 31 OF THE PAPER BOOK FILED BEFORE THIS TRIBUNAL . THE IDENTITY CARDS TO PROVE THE IDENTITY OF THE CREDITORS ARE ALSO AVAILA BLE AT PAGES 30 & 32 OF THE PAPER BOOK. THE ASSESSING OFFICER AND THE CIT(A) D ISALLOWED THE CLAIM OF THE ASSESSEE ON THE GROUND THAT THE ASSESSEE FAILED TO PRODUCE ANY MATERIAL TO PROVE THE IDENTITY OF THE CREDITORS TH EIR CREDITWORTHINESS AND THE GENUINENESS OF THE TRANSACTIONS. IT IS WELL SETTLE D PRINCIPLES OF LAW THAT TO PROVE THE CREDIT THE ASSESSEE HAS TO PROVE THE IDE NTITY OF THE CREDITORS THEIR CREDITWORTHINESS AND THE GENUINENESS OF THE T RANSACTIONS. THE ASSESSEE FILED THE COPY OF THE IDENTITY CARDS AND T HE CONFIRMATION LETTERS BEFORE THIS TRIBUNAL. THOUGH THE CREDIT IS ONLY RS .2 LAKHS THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THE MATERIALS FILED BY THE ASSESSEE NEED TO BE EXAMINED BY THE LOWER AUTHORITIES. SINCE THE LO WER AUTHORITIES HAD NO OCCASION TO EXAMINE THE CONFIRMATIONS LETTERS ISSUE D BY SMT. C.R. MALLIKA AND SHRI C.V. SURESH THIS TRIBUNAL IS OF THE CONSI DERED OPINION THAT THE MATTER NEEDS TO BE RE-EXAMINED BY THE ASSESSING OFF ICER. ACCORDINGLY THE ORDERS OF LOWER AUTHORITIES ON THIS ISSUE ARE SET A SIDE AND THE ISSUE IS REMITTED BACK TO THE FILE OF THE ASSESSING OFFICER. THE ASSESSING OFFICER 6 ITA NO. 429/COCH/2013 ITA 444&445/COCH/2013 ITAS 488-489/COCH/2013 ITA 490- 492/COCH/2013 ITA NO.498/COCH/2013 ITA NO.565/COCH/2013 CO NOS 20 & 26-28/COCH/2013 CO NO.64/COCH/2013 SHALL RE-EXAMINE THE ISSUE IN THE LIGHT OF THE CONF IRMATION LETTERS FILED AS ALSO THE COPIES OF THE IDENTITY CARDS FILED BY THE ASSESSEE AND THEREAFTER DECIDE THE SAME IN ACCORDANCE WITH LAW AFTER GIVING REASONABLE OPPORTUNITY OF HEARING TO THE ASSESSEE. 6. THE NEXT ISSUE ARISES FOR CONSIDERATION IS WITH REGARD TO ADDITION OF RS.4 85 000 TOWARDS SECURITY DEPOSIT SAID TO BE COL LECTED FROM STAFF. SHRI SIVARAMAKRISHNAN THE LD.REPRESENTATIVE FOR THE ASS ESSEE SUBMITTED THAT THE ASSESSEE IS ENGAGED IN THE BUSINESS OF MANUFACT URING GOLD JEWELLERY. IN THE COURSE OF ITS BUSINESS ACTIVITY THE ASSESSE E ENGAGED SEVERAL PEOPLE FOR MANUFACTURING JEWELLERIES. THE ASSESSEE ACCOR DING TO THE LD.REPRESENTATIVE USED TO SUPPLY GOLD TO THE EMPLO YEES FOR THE PURPOSE OF MAKING JEWELLERIES. IN ORDER TO ENSURE THE SECURIT Y AND SAFETY OF THE GOLD GIVEN TO THE STAFF THE ASSESSEE USED TO COLLECT SE CURITY DEPOSIT FROM THE STAFF. THE LD.REPRESENTATIVE SUBMITTED THAT IN THI S LINE OF BUSINESS IT IS THE CUSTOMARY PRACTICE OF COLLECTING SECURITY DEPOSIT F ROM THE STAFF AGAINST THE GOLD GIVEN TO THEM FOR MAKING JEWELLERIES. REFERRI NG TO THE REMAND REPORT SAID TO BE FILED BY THE ASSESSING OFFICER BEFORE TH E CIT(A) THE 7 ITA NO. 429/COCH/2013 ITA 444&445/COCH/2013 ITAS 488-489/COCH/2013 ITA 490- 492/COCH/2013 ITA NO.498/COCH/2013 ITA NO.565/COCH/2013 CO NOS 20 & 26-28/COCH/2013 CO NO.64/COCH/2013 LD.REPRESENTATIVE SUBMITTED THAT THE CIT(A) DURING THE COURSE OF FIRST APPELLATE PROCEEDINGS CALLED FOR REMAND REPORT FROM THE ASSESSING OFFICER. THE ASSESSING OFFICER CONFIRMED THAT THE ASSESSEE C OLLECTED SECURITY DEPOSIT FROM THE STAFF MEMBERS. THE ASSESSING OFFI CER REPORTED THAT COLLECTION OF SECURITY DEPOSIT IS PREVAILING AMONGS T THE JEWELLERY MANUFACTURERS. THEREFORE ACCORDING TO THE LD.REPR ESENTATIVE THERE IS NO REASON FOR REJECTING THE CLAIM OF THE ASSESSEE. RE FERRING TO THE ORDER OF THE CIT(A) THE LD.REPRESENTATIVE SUBMITTED THAT TH E SECURITY DEPOSIT WAS COLLECTED FROM THE VERY SAME STAFF AGAIN IN THE IMM EDIATELY SUCCEEDING ASSESSMENT YEAR SINCE THE VERY SAME QUANTITY OF GOL D WAS GIVEN TO THEM FOR JEWELLERY MAKING. ACCORDING TO THE LD.REPRESEN TATIVE THE SECURITY DEPOSIT IS TAKEN FROM THE EMPLOYEES WHILE GIVING GO LD FOR JEWELLERY MAKING AS A SECURITY. IN THE SUCCEEDING ASSESSMENT YEARS ALSO WHENEVER MORE GOLD WAS GIVEN TO THE VERY SAME STAFF MEMBER FOR MA KING ORNAMENTS MORE SECURITY AMOUNT WAS COLLECTED. THEREFORE THE OBSE RVATION OF THE CIT(A) THAT SECURITY DEPOSIT WAS COLLECTED FROM THE VERY S AME STAFF IN THE SUCCEEDING YEARS CANNOT BE A REASON TO DISALLOW THE CLAIM OF THE ASSESSEE. 8 ITA NO. 429/COCH/2013 ITA 444&445/COCH/2013 ITAS 488-489/COCH/2013 ITA 490- 492/COCH/2013 ITA NO.498/COCH/2013 ITA NO.565/COCH/2013 CO NOS 20 & 26-28/COCH/2013 CO NO.64/COCH/2013 7. ON THE CONTRARY SHRI M ANIL KUMAR THE LD.DR SU BMITTED THAT THOUGH THE ASSESSING OFFICER REPORTED THAT COLLECTION OF S ECURITY DEPOSIT IS PREVALENT IN THIS LINE OF BUSINESS THERE IS NO PRA CTICE PREVALENT TO TAKE DEPOSIT FROM THE VERY SAME STAFF AGAIN AND AGAIN IN THE SUCCEEDING YEARS. ACCORDING TO THE LD.DR THE SECURITY DEPOSITS COLLE CTED FROM ASHA JEENA JOSEPH AND KRISHNARAJ WERE CONSIDERED AND ALLOWED B Y THE ASSESSING OFFICER. HOWEVER IN RESPECT OF RS.4 85 000 WHICH WAS SAID TO BE COLLECTED FROM THE VERY SAME EMPLOYEE FOR THE SUCCEEDING YEAR WAS DISALLOWED. THEREFORE ACCORDING TO THE LD.DR THE CIT(A) HAS R IGHTLY CONFIRMED THE ADDITION OF RS.4 80 000. 8. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE AND ALSO PERUSED THE MATERIAL AVAILABLE ON RECORD. IT IS AN ADMITTED FACT THAT IN THIS LINE OF BUSINESS COLLECTION OF SECURITY DEPOSIT IS PREVALENT. THE CIT(A) ALLOWED THE CLAIM OF THE ASSESSEE PARTLY. HOWEVER IN RESPECT OF THE SAME EMPLOYEES FROM WHOM SECURITY DEPOSIT WAS CLAIMED TO HAVE BEEN COLLECTED FOR THE SECOND TIME THE CIT(A) DISALLOWE D THE CLAIM OF THE 9 ITA NO. 429/COCH/2013 ITA 444&445/COCH/2013 ITAS 488-489/COCH/2013 ITA 490- 492/COCH/2013 ITA NO.498/COCH/2013 ITA NO.565/COCH/2013 CO NOS 20 & 26-28/COCH/2013 CO NO.64/COCH/2013 ASSESSEE. THE CIT(A) FOUND THAT THERE IS NO PRACTI CE PREVALENT OF TAKING SECURITY DEPOSIT FROM VERY SAME EMPLOYEE IN THE SUC CEEDING YEAR ALSO. THE ASSESSEE CLAIMS THAT WHEN MORE GOLD WAS GIVEN I N THE SUCCEEDING YEAR SECURITY DEPOSIT WAS AGAIN COLLECTED AGAINST MORE GOLD GIVEN FOR ORNAMENT MAKING. IN THE REMAND REPORT FILED BY THE ASSESSING OFFICER THERE IS NO REFERENCE ABOUT THE COLLECTION OF SECUR ITY DEPOSIT FROM THE VERY SAME STAFF AGAIN IN THE IMMEDIATELY SUCCEEDING YEAR . THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT COLLECTION OF SECURITY DEPOSIT IS ONLY TO SECURE THE GOLD GIVEN TO THE STAFF FOR MANUFACTURING ORNAM ENTS. THEREFORE WHEN THE ASSESSEE GAVE MORE GOLD THE SECURITY DEPOSIT S HALL HAVE TO BE TREATED AS THE AMOUNT OBTAINED TO SECURE THE GOLD GIVEN TO THE STAFF FOR ORNAMENT MAKING. THEREFORE THE CIT(A) MAY NOT BE CORRECT I N SAYING THAT THERE IS NO PRACTICE PREVALENT IN THIS LINE OF BUSINESS TO T AKE SECURITY DEPOSIT FROM THE VERY SAME STAFF AGAIN IN THE IMMEDIATELY SUCCEE DING YEAR. THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT WHEN THE ASSESSEE GAVE MORE GOLD THE CLAIM OF THE ASSESSEE THAT HE COLLECTED M ORE SECURITY DEPOSIT CANNOT BE DOUBTED. THEREFORE THERE IS NO REASON T O DISALLOW THE CLAIM OF THE ASSESSEE TO THE EXTENT OF RS.4 80 000. ACCORDI NGLY THE ORDERS OF THE 10 ITA NO. 429/COCH/2013 ITA 444&445/COCH/2013 ITAS 488-489/COCH/2013 ITA 490- 492/COCH/2013 ITA NO.498/COCH/2013 ITA NO.565/COCH/2013 CO NOS 20 & 26-28/COCH/2013 CO NO.64/COCH/2013 LOWER AUTHORITIES ON THIS ISSUE ARE SET ASIDE AND T HE ADDITION OF RS.4 80 000 CONFIRMED BY THE CIT(A) IS DELETED. 9. NOW COMING TO THE APPEAL OF THE ASSESSEE FOR ASS ESSMENT YEAR 2006-07 IN ITA NO.445/COCH/2013 THE FIRST GROUND PERTAINING TO ADDITION OF RS.3 25 000 ON ACCOUNT OF SECURITY DEPOSIT FROM STAFF IS IDENTICAL TO GROUND NO.2 RAISED FOR THE ASSESSMENT YEAR 2005-06. WHILE DEALING WITH THIS GROUND FOR THE ASSESSMENT YEAR 2005-06 THIS TR IBUNAL HAVE FOUND THAT WHENEVER THE ASSESSEE GAVE MORE QUANTITY OF GOLD FO R JEWELLERY MAKING MORE SECURITY DEPOSITS WERE TAKEN FROM THE STAFF T HEREFORE THE CLAIM OF THE ASSESSEE CANNOT BE REJECTED AND ACCORDINGLY THE ADD ITION WAS DELETED. THE FACTS AND CIRCUMSTANCES FOR THE ASSESSMENT YEAR 2006-07 ARE NOT DIFFERENT FROM THAT OF ASSESSMENT YEAR 2005-06. TH EREFORE CONSISTENT WITH THE DECISION ARRIVED AT FOR THE ASSESSMENT YEAR 200 5-06 WE SET ASIDE THE ORDERS OF LOWER AUTHORITIES AND DELETE THE ADDITION OF RS. 3 25 000 CONFIRMED BY THE CIT(A). 11 ITA NO. 429/COCH/2013 ITA 444&445/COCH/2013 ITAS 488-489/COCH/2013 ITA 490- 492/COCH/2013 ITA NO.498/COCH/2013 ITA NO.565/COCH/2013 CO NOS 20 & 26-28/COCH/2013 CO NO.64/COCH/2013 10. THE NEXT ISSUE IS WITH REGARD TO ADDITION OF RS .1 35 000 TOWARDS LOAN CREDITORS. THE LD.COUNSEL FOR THE ASSESSEE SUBMITT ED THAT THIS GROUND OF APPEAL IS NOT PRESSED. IN VIEW OF THE ABOVE THE AD DITION OF RS.1 35 000 TOWARDS LOAN CREDITORS IS CONFIRMED AND THIS GROUND OF APPEAL OF THE ASSESSEE DISMISSED. 11. THE NEXT GROUND OF APPEAL IS WITH REGARD TO THE VALUE OF GOLD INTRODUCED IN THE BUSINESS TO THE EXTENT OF RS.6 42 000. SHRI SIVARAMAKRISHNAN THE LD.REPRESENTATIVE FOR THE ASS ESSEE SUBMITTED THAT THE MAIN SOURCE OF INCOME ORIGINALLY IS FROM MAKING CHARGES OF ORNAMENTS. FROM THE FINANCIAL YEAR 2005-06 ACCORDING TO THE L D.REPRESENTATIVE THE ASSESSEE STARTED TRADING IN GOLD JEWELLERY. DURING THE FINANCIAL YEAR 2004- 05 THE ASSESSEE HAS PURCHASED GOLD IN ADVANCE IN A NTICIPATION OF COMMENCEMENT OF TRADING IN THE NEXT FINANCIAL YEAR. THEREFORE ACCORDING TO THE LD.REPRESENTATIVE THE VALUE OF GOLD WHICH W AS PURCHASED DURING THE FINANCIAL YEAR 2004-05 WAS ADDED TO THE VALUE OF TH E STOCK WITH PROPRIETORY BUSINESS. THIS WAS SHOWN AS CLOSING STOCK IN THE B ALANCE-SHEET FOR THE YEAR ENDED 31-03-2005. HOWEVER THERE WAS NO MENTI ON IN THE PROFIT & 12 ITA NO. 429/COCH/2013 ITA 444&445/COCH/2013 ITAS 488-489/COCH/2013 ITA 490- 492/COCH/2013 ITA NO.498/COCH/2013 ITA NO.565/COCH/2013 CO NOS 20 & 26-28/COCH/2013 CO NO.64/COCH/2013 LOSS ACCOUNT. THE ACCUMULATION OF GOLD AS ON 31-03 -2005 IS EVIDENT FROM THE BALANCE-SHEET FILED BEFORE THE LOWER AUTHORITIE S. ACCORDING TO THE LD.REPRESENTATIVE THE INTRODUCTION OF 1 000 GMS OF GOLD IS NOTHING BUT THE STOCK OF GOLD AS PER THE BALANCE-SHEET AS ON 31-03- 2005. THEREFORE ACCORDING TO THE LD.REPRESENTATIVE THERE IS NO REA SON FOR MAKING ADDITION TO THE EXTENT OF RS.6 42 000. 12. ON THE CONTRARY SHRI M ANIL KUMAR THE LD.DR S UBMITTED THAT THE ASSESSEE FILED PROFIT & LOSS ACCOUNT AND BALANCE-SH EET RIGHT FROM FINANCIAL YEAR 2003-04. THE CLAIM OF THE ASSESSEE THAT HE PU RCHASED GOLD IN ADVANCE IN ANTICIPATION OF TRADING TO BE STARTED IN THE NEXT YEAR WAS CONSIDERED AND ACCEPTED BY THE CIT(A) WHILE CONSIDE RING THE UNEXPLAINED INTRODUCTION OF GOLD TO THE EXTENT OF RS.4 00 225. THEREFORE THE VERY SAME ARGUMENT CANNOT BE RAISED FOR INTRODUCTION OF ANOTH ER ITEM OF GOLD TO THE EXTENT OF RS.6 42 000. ON VERIFICATION OF BALANCE- SHEET CLOSING STOCK OF JEWELLERY WAS SHOWN AT RS. 54 04 025 AND THAT OF TH E EARLIER YEAR WAS RS.50 03 800. THE DIFFERENCE WAS RS.4 25 000 WHICH WAS ACCEPTED CONSIDERING THE EXPLANATION OF THE ASSESSEE. THERE FORE THE CONTENTION OF 13 ITA NO. 429/COCH/2013 ITA 444&445/COCH/2013 ITAS 488-489/COCH/2013 ITA 490- 492/COCH/2013 ITA NO.498/COCH/2013 ITA NO.565/COCH/2013 CO NOS 20 & 26-28/COCH/2013 CO NO.64/COCH/2013 THE ASSESSEE THAT THE VERY SAME GOLD WAS AVAILABLE FOR INTRODUCTION TO THE EXTENT OF RS.6 42 000 CANNOT BE CORRECT. THEREFORE THE CIT(A) HAS RIGHTLY SUSTAINED THE ADDITION. 13. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EIT HER SIDE AND ALSO PERUSED THE MATERIAL AVAILABLE ON RECORD. THE CLAI M OF THE ASSESSEE THAT THE GOLD WAS PURCHASED DURING THE ASSESSMENT YEAR 2 004-05 IN ANTICIPATION OF STARTING OF TRADING FROM THE YEAR U NDER CONSIDERATION WAS CONSIDERED BY THE CIT(A) WITH REGARD TO UNEXPLAINED INTRODUCTION OF STOCK TO THE TUNE OF RS.4 00 225 AND THE ADDITION WAS DEL ETED VIDE PARAGRAPH 11 OF THE IMPUGNED ORDER OF CIT(A). THEREFORE THIS T RIBUNAL IS OF THE CONSIDERED OPINION THAT THE VERY SAME CONTENTION CA NNOT BE A BASIS FOR SUPPORTING THE INTRODUCTION OF JEWELLERY TO THE EXT ENT OF RS.6 42 000. HENCE THIS TRIBUNAL IS OF THE CONSIDERED OPINION T HAT THE CIT(A) HAS RIGHTLY SUSTAINED THE ADDITION TO THE EXTENT OF RS.6 42 000 ; AS SUCH THIS TRIBUNAL DO NOT FIND ANY REASON TO INTERFERE WITH THE ORDER OF THE LOWER AUTHORITIES. ACCORDINGLY THE ORDER OF THE CIT(A) ON THIS ISSUE IS CONFIRMED. 14 ITA NO. 429/COCH/2013 ITA 444&445/COCH/2013 ITAS 488-489/COCH/2013 ITA 490- 492/COCH/2013 ITA NO.498/COCH/2013 ITA NO.565/COCH/2013 CO NOS 20 & 26-28/COCH/2013 CO NO.64/COCH/2013 14. NOW COMING TO THE APPEAL FILED BY THE DEPARTMEN T IN ITA NO.429/COCH/2013 FOR THE ASSESSMENT YEAR 2006-07 S HRI M ANIL KUMAR THE LD.DR SUBMITTED THAT THE FIRST GROUND OF APPEAL IS WITH REGARD TO ADDITION OF RS.1 50 000 ON ACCOUNT OF FIXED DEPOSIT. ACCORD ING TO THE LD.DR IN THE CASH FLOW STATEMENT FILED FOR THE YEAR UNDER CONSID ERATION NO OUTFLOW OF CASH FPOR FIXED DEPOSIT WAS SHOWN. NO EXPLANATION WAS OFFERED BEFORE THE ASSESSING OFFICER. THEREFORE THE INVESTMENT IN TH E FIXED DEPOSIT TO THE EXTENT OF RS.1 50 000 WAS ADDED BY THE ASSESSING OF FICER. HOWEVER THE CIT(A) WHILE ADMITTING THE FRESH EVIDENCE IN VIOLA TION OF RULE 46A OF THE I.T. RULES 1962 DELETED THE ADDITION. ACCORDING TO THE LD.REPRESENTATIVE THE SEIZED MATERIAL EVIDENCE SHOWS THE REMITTANCE OF RS .1 50 000 WHICH WAS NOT REFLECTED IN THE CASH FLOW STATEMENT. THEREFOR E THE CIT(A) IS NOT JUSTIFIED IN DELETING THE ADDITION MADE BY THE ASSE SSING OFFICER. 15. ON THE CONTRARY SHRI SIVARAMAKRISHNAN THE LD. REPRESENTATIVE FOR THE ASSESSEE SUBMITTED THAT THE ASSESSEE HAS TAKEN SEVE RAL MONEY BACK INSURANCE POLICIES AND PAID PREMIUMS. THE ASSESSEE HAS ALSO AVAILED OVERDRAFT FACILITY FROM UNION BANK OF INDIA. THE L IC POLICIES WERE PLEDGED 15 ITA NO. 429/COCH/2013 ITA 444&445/COCH/2013 ITAS 488-489/COCH/2013 ITA 490- 492/COCH/2013 ITA NO.498/COCH/2013 ITA NO.565/COCH/2013 CO NOS 20 & 26-28/COCH/2013 CO NO.64/COCH/2013 WITH BANK AND THE MONIES RECEIVED ON THE LIC POLICI ES BY THE BANK WERE NOT KNOWN TO THE ASSESSEE. THE FIXED DEPOSIT OF RS .1 50 000 WAS THE AMOUNT RECEIVED FROM LIC MONEY BACK POLICY WHICH WA S COLLECTED AND KEPT IN FIXED DEPOSIT IN UNION BANK OF INDIA DIRECT LY ON BEHALF OF THE ASSESSEE. THEREFORE THE AMOUNT COLLECTED BY THE B ANK DIRECTLY FROM LIC MONEY BACK POLICY WAS NOT SHOWN AS INFLOW AND OUTFL OW IN THE CASH FLOW STATEMENT. WHEN SEVERAL FUNDS WERE AVAILABLE FOR M AKING INVESTMENT TO THE EXTENT OF RS.1 50 000 NO ADDITIONAL EVIDENCE W AS FILED BEFORE THE CIT(A). 16. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EIT HER SIDE AND ALSO PERUSED THE MATERIAL AVAILABLE ON RECORD. IT IS NO T IN DISPUTE THAT THE ASSESSEE PAID PREMIUM ON SEVERAL INSURANCE POLICIES INCLUDING MONEY BACK POLICIES. IT IS ALSO NOT IN DISPUTE THAT THE MONEY BACK POLICY WAS PLEDGED WITH THE BANK. THE BANK RECEIVED THE MONEY FROM MONEY BACK INSURANCE POLICY. THE CLAIM OF THE ASSESSEE IS THA T THE AMOUNT RECEIVED BY THE BANK FROM MONEY BACK INSURANCE POLICY WAS DE POSITED IN THE FIXED DEPOSIT. WHEN THE MONEY WAS RECEIVED BY THE BANK I T MAY BE CREDITED IN 16 ITA NO. 429/COCH/2013 ITA 444&445/COCH/2013 ITAS 488-489/COCH/2013 ITA 490- 492/COCH/2013 ITA NO.498/COCH/2013 ITA NO.565/COCH/2013 CO NOS 20 & 26-28/COCH/2013 CO NO.64/COCH/2013 THE ACCOUNT OF THE ASSESSEE. THEREFORE THE ASSESS EE MAY NOT SHOW THAT AS IT WAS NOT WITHIN HIS KNOWLEDGE. HOWEVER THE F ACT REMAINS IS THAT THERE WAS A CREDIT ON RECEIPT OF MONEY FROM LIC FROM MONE Y BACK POLICY BY THE BANK AND THAT FUND IS AVAILABLE FOR MAKING INVESTME NT TO THE EXTENT OF RS.1 50 000. WE FIND THAT THERE IS NO ADDITIONAL E VIDENCE FILED BEFORE THE CIT(A) EXCEPT EXPLAINING THE SOURCE OF FUNDS AND ME THOD OF DEPOSIT MADE BY THE ASSESSEE. SINCE THE AMOUNT RECEIVED BY THE BANK ON MONEY BACK INSURANCE POLICY IS AVAILABLE WITH THE ASSESSEE THE SAME WAS INVESTED IN THE FIXED DEPOSIT. THIS TRIBUNAL IS OF THE CONSIDE RED OPINION THAT THE CIT(A) HAS RIGHTLY DELETED THE ADDITION. THEREFORE THIS TRIBUNAL FINDS NO REASON TO INTERFERE WITH THE ORDER OF THE LOWER AUTHORITY. A CCORDINGLY THE ORDER OF THE LOWER AUTHORITY IS CONFIRMED. 17. THE NEXT GROUND OF APPEAL IS WITH REGARD TO ADD ITION OF RS.1 44 000. IT WAS CLARIFIED BY THE LD.DR AND THE LD.REPRESENTA TIVE FOR THE ASSESSEE DURING THE COURSE OF HEARING THAT THE ADDITION IS O NLY RS.1 44 000 AND NOT RS 14 40 000. SHRI M ANIL KUMAR THE LD.DR SUBMITT ED THAT IN THE FINANCIAL STATEMENT FILED BEFORE THE ASSESSING OFFICER THE A SSESSEE HAS NOT SHOWN 17 ITA NO. 429/COCH/2013 ITA 444&445/COCH/2013 ITAS 488-489/COCH/2013 ITA 490- 492/COCH/2013 ITA NO.498/COCH/2013 ITA NO.565/COCH/2013 CO NOS 20 & 26-28/COCH/2013 CO NO.64/COCH/2013 ANY OUTFLOW OF CASH TOWARDS KURI / CHITTI PAYMENTS. THEREFORE THE INVESTMENT IN KURI / CHITTI WAS TREATED AS UNDISCLO SED INVESTMENT TO THE EXTENT OF RS.1 44 000. HOWEVER THE CIT(A) FOUND T HAT ALL THE KURIES / CHITTIES WERE ACCOUNTED FOR IN THE BOOKS OF ACCOUNT EVEN THOUGH IT WAS NOT SHOWN SEPARATELY IN THE CASH FLOW STATEMENT. ACCOR DING TO THE LD.DR WHEN THE AMOUNT WAS NOT SHOWN IN THE CASH FLOW STAT EMENT THE CIT(A) IS NOT JUSTIFIED IN DELETING THE ADDITION. 18. ON THE CONTRARY SHRI SIVARAMAKRISHNAN THE LD. REPRESENTATIVE FOR THE ASSESSEE SUBMITTED THAT CASH FLOW STATEMENT IS NOTH ING BUT AN EXTRACT OF BOOKS OF ACCOUNT MAINTAINED BY THE ASSESSEE. WHEN THE INFLOW AND OUTFLOW OF CASH IS RECORDED IN THE BOOKS OF ACCOUNT MERELY BECAUSE THERE WAS AN OMISSION IN THE CASH FLOW STATEMENT THAT CA NNOT BE A REASON TO MAKE THE ADDITION. ACCORDING TO THE LD.REPRESENTAT IVE OUTFLOW OF RS.1 44 000 WAS RECORDED IN THE BOOKS OF ACCOUNT T HEREFORE THE CIT(A) HAS RIGHTLY DELETED THE ADDITION. 18 ITA NO. 429/COCH/2013 ITA 444&445/COCH/2013 ITAS 488-489/COCH/2013 ITA 490- 492/COCH/2013 ITA NO.498/COCH/2013 ITA NO.565/COCH/2013 CO NOS 20 & 26-28/COCH/2013 CO NO.64/COCH/2013 19. WE HAVE CONSIDERED THE RIVAL SUBMISSION ON EITH ER SIDE AND ALSO PERUSED THE MATERIAL AVAILABLE ON RECORD. THE ONLY OBJECTION OF THE LD.DR IS THAT IN THE CASH FLOW STATEMENT THE OUTFLOW OF RS.1 44 000 WAS NOT DISCLOSED. IT IS NOT IN DISPUTE THAT THE OUTFLOW O F RS.1 44 000 WAS RECORDED IN THE BOOKS OF ACCOUNT. WHEN THE ASSESSEE CLAIMS THAT IT WAS RECORDED IN THE BOOKS OF ACCOUNT AND IT IS NOT DISPUTED BY THE REVENUE THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT MERELY BECAUSE THERE WAS AN OMISSION TO DISCLOSE THE AMOUNT IN THE CASH FLOW STATEMENT THE RE CANNOT BE ANY ADDITION OF THE SAME. THEREFORE THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THE CIT(A) HAS RIGHTLY MADE THE ADDITION MADE BY THE ASSESSING OFFICER. ACCORDINGLY THE ORDER OF THE LOWER AUTHO RITY ON THIS ISSUE IS CONFIRMED. 20. NOW COMING TO THE APPEAL FILED BY THE REVENUE F OR THE ASSESSMENT YEAR 2007-08 IN ITA NO.488/COCH/.2013. THE FIRST G ROUND OF APPEAL IS WITH REGARD TO ADDITION ON ACCOUNT OF INVESTMENT IN THE IMMOVABLE PROPERTIES. 19 ITA NO. 429/COCH/2013 ITA 444&445/COCH/2013 ITAS 488-489/COCH/2013 ITA 490- 492/COCH/2013 ITA NO.498/COCH/2013 ITA NO.565/COCH/2013 CO NOS 20 & 26-28/COCH/2013 CO NO.64/COCH/2013 21. SHRI M ANIL KUMAR THE LD.DR SUBMITTED THAT THE ASSESSING OFFICER MADE ADDITION ON THE BASIS OF THE MATERIAL FOUND DU RING THE COURSE OF SEARCH OPERATION. ACCORDING TO THE LD.DR THE INVE STMENT FOUND DURING THE COURSE OF SEARCH OPERATION WAS NOT REFLECTED IN THE CASH FLOW STATEMENT FILED BY THE ASSESSEE. ACCORDING TO THE LD.DR THE CIT(A) ADMITTED FRESH EVIDENCE CONTRARY TO THE PROVISIONS OF RULE 46A OF I.T. RULES 1962. THEREFORE ACCORDING TO THE LD.DR CIT(A) IS NOT JU STIFIED IN MAKING ANY ADDITION. REFERRING TO THE ASSESSMENT ORDER MORE PARTICULARLY PAGE 4 THE LD.DR SUBMITTED THAT THE ASSESSING OFFICER HAS RIGH TLY TREATED THE INVESTMENT FROM UNDISCLOSED INCOME FOR THE YEAR UND ER CONSIDERATION. 22. ON THE CONTRARY SHRI SIVARAMAKRISHNAN THE LD. REPRESENTATIVE FOR THE ASSESSEE SUBMITTED THAT FOR THE ASSESSMENT YEAR 200 7-08 THE INVESTMENT MADE BY THE ASSESSEE IN IMMOVABLE PROPERTY WAS ACCO UNTED FOR IN THE BOOKS OF ACCOUNT OF BUSINESS OF THE ASSESSEE VIZ. AISWARYA JEWEL CRAFTS. IN RESPECT OF CHOVUR LAND AND THE FLAT AT TRICHUR W ERE SHOWN AS FIXED ASSET IN THE BALANCE-SHEET OF M/S AISWARYA JEWEL CRAFT AS ON 31-03-2007. SINCE THESE WERE ACCOUNTED FOR IN THE BOOKS OF ACCOUNT OF THE BUSINESS CONCERN 20 ITA NO. 429/COCH/2013 ITA 444&445/COCH/2013 ITAS 488-489/COCH/2013 ITA 490- 492/COCH/2013 ITA NO.498/COCH/2013 ITA NO.565/COCH/2013 CO NOS 20 & 26-28/COCH/2013 CO NO.64/COCH/2013 THE SAME WAS NOT REPEATED IN THE PERSONAL CASH FLOW STATEMENT OF THE ASSESSEE. ACCORDING TO THE LD.REPRESENTATIVE THE INVESTMENT AS PER THE BOOKS OF ACCOUNT OF M/S AISWARYA JEWEL CRAFT IS TO THE EXTENT OF RS.25 21 005. HOWEVER THE ASSESSING OFFICER COMPU TED THE INVESTMENT AT RS.30 18 340. ACCORDING TO THE LD.REPRESENTATIVE AS PER THE SEIZED DOCUMENT AT PAGE 159 THE AMOUNT PAID FOR CHOVUR PR OPERTY AS ON 23-11- 2006 WAS RS.40 000. HOWEVER THE ASSESSING OFFICER HAS TAKEN THE SAME AT RS.4 LAKHS. DUE TO THIS MISTAKE THE ASSESSING OFFICER COMPUTED THE INVESTMENT IN EXCESS OF RS.3 60 000. IN THE SAME P AGE AT 159 THERE WAS A REFUND OF RS.9 08 068 WHICH WAS NOT CONSIDERED BY THE ASSESSING OFFICER. THE CIT(A) AFTER CONSIDERING THE EXPLANATION OF THE ASSESSEE FOUND THAT THERE IS A DIFFERENCE OF RS.3 60 000 AS EXCESS INVE STMENT. THE CIT(A) FURTHER FOUND THAT THE EXPENSES SUCH AS FANS TILES LOAN PROCESSING FEE ETC. WERE TRANSFERRED TO THE ACCOUNTS OF THE BUSINE SS CONCERN M/S AISWARYA JEWEL CRAFT. ACCORDING TO THE LD.REPRESEN TATIVE SINCE THE ENTIRE INVESTMENT AS FOUND IN THE SEIZED RECORD IS REFLECT ED IN THE RECORDS OF M/S AISWARYA JEWEL CRAFT IT WAS NOT SHOWN SEPARATELY IN THE CASH FLOW STATEMENT. ACCORDING TO THE LD.REPRESENTATIVE THE ASSESSEE HAS NOT FILED 21 ITA NO. 429/COCH/2013 ITA 444&445/COCH/2013 ITAS 488-489/COCH/2013 ITA 490- 492/COCH/2013 ITA NO.498/COCH/2013 ITA NO.565/COCH/2013 CO NOS 20 & 26-28/COCH/2013 CO NO.64/COCH/2013 ANY ADDITIONAL EVIDENCE OR FRESH EVIDENCE. THE ASS ESSEE HAS SIMPLY EXPLAINED THE SEIZED MATERIAL AND THE MISTAKE COMMI TTED BY THE ASSESSING OFFICER. THEREFORE ACCORDING TO THE LD.REPRESENTA TIVE THERE IS NO VIOLATION OF RULE 46A OF THE ACT. 23. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EIT HER SIDE AND ALSO PERUSED THE MATERIAL AVAILABLE ON RECORD. THE ASSE SSING OFFICER FOUND THAT THERE WAS AN UNDISCLOSED INVESTMENT OF RS.30 80 340 AS PER THE SEIZED RECORDS. THE ASSESSEE EXPLAINED BEFORE THE CIT(A) THAT THE INVESTMENT MADE IN THE LANDED PROPERTIES ARE REFLECTED IN THE BOOKS OF ACCOUNT ON AISWARYA JEWEL CRAFT THEREFORE IT WAS NOT SHOWN I N THE CASH FLOW STATEMENT. THE MAIN ADDITION WAS MADE BY THE ASSES SING OFFICER ONLY ON THE GROUND THAT THE ASSESSEE HAS NOT SHOWN ANY OUTF LOW OF CASH TOWARDS INVESTMENT IN THE LANDED PROPERTY. CASH FLOW STATE MENT IS NOTHING BUT AN EXTRACT OF BOOKS OF ACCOUNT. IT IS NOT THE CASE OF THE REVENUE THAT THE INVESTMENTS MADE IN THE LANDED PROPERTIES WERE NOT REFLECTED IN THE BOOKS OF ACCOUNT OF AISWARYA JEWEL CRAFT. WHEN THE INVES TMENT IS REFLECTED IN THE BUSINESS CONCERN VIZ. AISWARYA JEWEL CRAFT TH IS TRIBUNAL IS OF THE 22 ITA NO. 429/COCH/2013 ITA 444&445/COCH/2013 ITAS 488-489/COCH/2013 ITA 490- 492/COCH/2013 ITA NO.498/COCH/2013 ITA NO.565/COCH/2013 CO NOS 20 & 26-28/COCH/2013 CO NO.64/COCH/2013 CONSIDERED OPINION THAT MERELY BECAUSE THERE WAS AN OMISSION TO MENTION THE SAME IN THE CASH FLOW STATEMENT THERE CANNOT BE ANY ADDITION. FURTHER IN THE SEIZED RECORDS THE INVESTMENT IS RS.40 000 HOWEVER THE ASSESSING OFFICER HAS TAKEN THE INVESTMENT AT RS.4 LAKHS. TH E CIT(A) AFTER TAKING INTO CONSIDERATION THE EXPENDITURE SUCH AS PURCHASE OF PHONE SALARY LOAN PROCESSING FEE ETC. FOUND THAT THERE WAS NO D IFFERENCE IN THE AMOUNT BETWEEN THE SEIZED RECORDS AND THE BOOKS OF ACCOUNT MAINTAINED IN THE REGULAR COURSE OF BUSINESS. IN THOSE CIRCUMSTANCES THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THE CIT(A) HAS RIGHTLY DELE TED THE ADDITION OF RS. 30 18 340. THERE IS NO JUSTIFIABLE REASON TO INTER FERE WITH THE ORDER OF THE LOWER AUTHORITY. ACCORDINGLY THE SAME IS CONFIRME D. 24. THE NEXT GROUND OF APPEAL IS WITH REGARD TO ADD ITION OF UNEXPLAINED BANK DEPOSIT TO THE EXTENT OF RS.1.5 LAKHS. 25. SHRI M ANIL KUMAR THE LD.DR SUBMITTED THAT THE ASSESSING OFFICER MADE ADDITION ON THE BASIS OF THE SEIZED RECORDS. THE REMITTANCE OF RS.1.5 LAKHS IN THE BANK ACCOUNT WAS NOT REFLECTED IN THE CASH FLOW 23 ITA NO. 429/COCH/2013 ITA 444&445/COCH/2013 ITAS 488-489/COCH/2013 ITA 490- 492/COCH/2013 ITA NO.498/COCH/2013 ITA NO.565/COCH/2013 CO NOS 20 & 26-28/COCH/2013 CO NO.64/COCH/2013 STATEMENT. HOWEVER THE CIT(A) BY ACCEPTING THE AD DITIONAL EVIDENCE FILED BY THE ASSESSEE HAS DELETED THE ADDITION. 26. ON THE CONTRARY SHRI SIVARAMAKRISHNAN THE LD. REPRESENTATIVE FOR THE ASSESSEE SUBMITTED THAT THE ASSESSING OFFICER FOUND THAT THERE WAS A DEPOSIT OF RS.1 50 000 ON 29-06-2006 AND THE SAME I S NOT REFLECTED IN THE CASH FLOW STATEMENT FILED BY THE ASSESSEE FOR THE Y EAR UNDER CONSIDERATION. ACCORDING TO THE LD.REPRESENTATIVE THE CASH FLOW S TATEMENT FILED BEFORE THE ASSESSING OFFICER WAS THE PERSONAL CASH FLOW STATEM ENT OF THE ASSESSEE AND NOT THE BUSINESS CASH FLOW STATEMENT OF THE ASS ESSEE. ACCORDING TO THE LD.REPRESENTATIVE THE CASH FLOW STATEMENT IS O NLY IN RESPECT OF THE PERSONAL TRANSACTION OF THE ASSESSEE LIKE LIC PREMI UM PROPERTY PURCHASE HOUSEHOLD EXPENSES ETC. EVEN THOUGH THE BUSINESS CONCERN OF THE ASSESSEE IS A PROPRIETORY CONCERN THE PERSONAL CAS H FLOW ACCOUNT WAS NOT KEPT WITH THE BUSINESS CASH FLOW ACCOUNT. ACCORDIN G TO THE LD.REPRESENTATIVE FOR THE YEAR UNDER CONSIDERATION THE ASSESSEE HAS OPENED AN ACCOUNT IN VIJAYA BANK BY DEPOSITING RS.1 50 000 ON 29-06- 2006 WHEREAS RS.1 49 000 WAS WITHDRAWN BEFORE 31-03 -2006. THE ABOVE 24 ITA NO. 429/COCH/2013 ITA 444&445/COCH/2013 ITAS 488-489/COCH/2013 ITA 490- 492/COCH/2013 ITA NO.498/COCH/2013 ITA NO.565/COCH/2013 CO NOS 20 & 26-28/COCH/2013 CO NO.64/COCH/2013 DEPOSIT OF RS.1 50 000 WAS MADE AFTER WITHDRAWING R S.1 70 000 ON THE SAME DAY. THESE TRANSACTIONS ARE RECORDED IN THE B OOKS OF ACCOUNT OF AISWARYA JEWEL CRAFT. SINCE THE TRANSACTIONS WERE ENTERED IN THE BOOKS OF ACCOUNT OF AISWARYA JEWEL CRAFT THE SAME WAS NOT D ISCLOSED IN THE PERSONAL CASH FLOW STATEMENT OF THE ASSESSEE. ACCO RDING TO THE LD.REPRESENTATIVE NO ADDITIONAL EVIDENCE WAS FILED BEFORE CIT(A). 27. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EIT HER SIDE AND ALSO PERUSED THE MATERIAL AVAILABLE ON RECORD. THE ONLY OBJECTION OF THE REVENUE IS THAT THE CASH FLOW STATEMENT FILED BY TH E ASSESSEE DOES NOT REFLECT THE DEPOSIT OF RS.1 50 000 ON 29-06-2006 IN VIJAYA BANK. CASH FLOW STATEMENT IS ONLY AN EXTRACT OF THE BOOKS OF A CCOUNT. WHEN THE ASSESSEE ACCOUNTED THE DEPOSIT OF RS.1 50 000 IN TH E BUSINESS ACCOUNT VIZ. AISWARYA JEWEL CRAFT MERELY BECAUSE THE SAME W AS NOT DISCLOSED IN THE CASH FLOW STATEMENT THAT ALONE CANNOT BE A REA SON TO MAKE ADDITION. THE FACT THAT THE ASSESSEE DISCLOSED THE DEPOSIT IN BANK ACCOUNT OF AISWARYA JEWEL CRAFT IS NOT IN DISPUTE. THE ASSESS EE HAS NOT FILED ANY ADDITIONAL EVIDENCE BEFORE CIT(A). THE ASSESSEE EX PLAINED THE SEIZED 25 ITA NO. 429/COCH/2013 ITA 444&445/COCH/2013 ITAS 488-489/COCH/2013 ITA 490- 492/COCH/2013 ITA NO.498/COCH/2013 ITA NO.565/COCH/2013 CO NOS 20 & 26-28/COCH/2013 CO NO.64/COCH/2013 RECORD AND THE CASH FLOW STATEMENT AND WHY IT WAS N OT REFLECTED IN THE CASH FLOW STATEMENT. SEIZED RECORD AND OTHER MATER IALS ARE FORMING PART OF THE RECORDS AND NO FRESH EVIDENCE WAS FILED BEFORE THE CIT(A). THEREFORE THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THE RE WAS NO VIOLATION OF RULE 46A AS CONTENDED BY THE REVENUE. SINCE THE DE POSIT OF RS.1 50 000 IN VIJAYA BANK WAS REFLECTED IN THE BOOKS OF ACCOUN T OF AISWARYA JEWEL CRAFT THIS TRIBUNAL IS OF THE CONSIDERED OPINION T HAT THE CIT(A) RIGHTLY DELETED THE ADDITION. ACCORDINGLY THE SAME IS CON FIRMED. 28. THE NEXT GROUND OF APPEAL IS WITH REGARD TO UNE XPLAINED EXPENDITURE IN THE CONSTRUCTION TO THE EXTENT OF RS.1 18 783. 29. SHRI M ANIL KUMAR THE LD.DR SUBMITTED THAT THE ADDITION WAS NOT MADE ON ESTIMATE BASIS. ACCORDING TO THE LD.DR TH E ADDITION WAS MADE ON THE BASIS OF THE MATERIAL FOUND DURING THE COURS E OF SEARCH OPERATION. REFERRING TO PAGES 25 & 31 OF THE ASSESSMENT ORDER THE LD.DR POINTED OUT THAT THE OBJECTION RAISED BY THE ASSESSEE REGARDING DUPLICATION OF ENTRIES 26 ITA NO. 429/COCH/2013 ITA 444&445/COCH/2013 ITAS 488-489/COCH/2013 ITA 490- 492/COCH/2013 ITA NO.498/COCH/2013 ITA NO.565/COCH/2013 CO NOS 20 & 26-28/COCH/2013 CO NO.64/COCH/2013 WAS CONSIDERED BY THE ASSESSING OFFICER AND THE ADD ITION OF RS.1 18 783 WAS MADE ONLY ON THE BASIS OF THE SEIZED MATERIAL. 30. ON THE CONTRARY SHRI SIVARAMAKRISHNAN THE LD. REPRESENTATIVE FOR THE ASSESSEE SUBMITTED THAT THE CIT(A) FOUND THAT THE A SSESSEE IS ENTITLED FOR 10% RELIEF FOR SUPERVISION CHARGES. REFERRING TO T HE DECISION OF THE CHENNAI BENCH OF THIS TRIBUNAL IN SMT. C.K. SANTHA (2011) 44 SOT 65 THE CIT(A) FOUND THAT THE ASSESSEE IS ELIGIBLE FOR DEDU CTION OF 15% ON THE CPWD RATES AND FURTHER REDUCTION OF WATER SUPPLY S ANITATION AND ELECTRICAL INSTALLATION. AFTER CONSIDERING THE STANDARD DEDUC TION FOR SUPERVISION COST OF MATERIAL THE CIT(A) FIXED THE TOTAL COST OF CONS TRUCTION AT RS.89 50 046. THE ASSESSING OFFICER WAS DIRECTED TO BIFURCATE THE COST OF CONSTRUCTION FOR THE ASSESSMENT YEARS 2007-08 TO 2009-10. THEREFORE THE REVENUE ACCORDING TO THE LD.REPRESENTATIVE MAY NOT HAVE AN Y GRIEVANCE. 31. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EIT HER SIDE AND ALSO PERUSED THE MATERIAL AVAILABLE ON RECORD. THE CPWD RATES ARE FIXED CENTRALLY WITHOUT TAKING INTO CONSIDERATION THE PRE VAILING MARKET CONDITION IN 27 ITA NO. 429/COCH/2013 ITA 444&445/COCH/2013 ITAS 488-489/COCH/2013 ITA 490- 492/COCH/2013 ITA NO.498/COCH/2013 ITA NO.565/COCH/2013 CO NOS 20 & 26-28/COCH/2013 CO NO.64/COCH/2013 THE RURAL AREAS WHEREAS THE STATE GOVERNMENTS AFTER CONSIDERING THE SITUATION IN THE RESPECTIVE STATES ALSO FIXED RESPE CTIVE RATES FOR CONSTRUCTION. THEREFORE UNDER NORMAL CIRCUMSTANCE S THE RATE PRESCRIBED BY THE STATE PWD HAS TO BE PREFERRED THAN THE CPWD RATES. MOREOVER WHEN THE ASSESSEE PERSONALLY SUPERVISES THE CONSTRU CTION AND PURCHASES THE CONSTRUCTION MATERIAL HE CAN SAVE THE COST OF C ONSTRUCTION CONSIDERABLY. THE CIT(A) AFTER CONSIDERING ALL THE RELEVANT FACTORS FIXED THE COST OF CONSTRUCTION AT RS.89 15 046 INSTEAD OF RS. 1 04 88 289 AND THE CIT(A) FURTHER DIRECTED THE ASSESSING OFFICER TO BI FURCATE THIS EXPENDITURE FOR THREE ASSESSMENT YEARS I.E. 2007-08 TO 2009-10 . SINCE THE CIT(A) HAS TAKEN A VERY REASONABLE VIEW ON THE MATERIAL FOUND DURING THE COURSE OF SEARCH OPERATION THIS TRIBUNAL DO NOT FIND ANY INF IRMITY IN THE ORDER OF LOWER AUTHORITY. ACCORDINGLY THE SAME IS CONFIRMED. 32. THE NEXT GROUND OF APPEAL IS WITH REGARD TO ADD ITION OF RS.4 10 929 TOWARDS INVESTMENT IN KURI. 28 ITA NO. 429/COCH/2013 ITA 444&445/COCH/2013 ITAS 488-489/COCH/2013 ITA 490- 492/COCH/2013 ITA NO.498/COCH/2013 ITA NO.565/COCH/2013 CO NOS 20 & 26-28/COCH/2013 CO NO.64/COCH/2013 33. SHRI M ANIL KUMAR THE LD.REPRESENTATIVE FOR TH E ASSESSEE SUBMITTED THAT THE INVESTMENT IN KURI WAS NOT RECORDED IN THE BOOKS OF ACCOUNT. FOR THE ASSESSMENT YEAR 2005-06 THE CIT(A) DELETED THE ADDITION ON THE BASIS OF THE BALANCE-SHEET. ON A QUERY FROM THE BENCH W HETHER THE REVENUE HAS FILED APPEAL FOR ASSESSMENT YEAR 2005-06 THE LD .REPRESENTATIVE SUBMITTED THAT THE REVENUE HAS NOT FILED ANY APPEAL FOR THE ASSESSMENT YEAR 2005-06 IN VIEW OF THE SMALLNESS OF THE AMOUNT . 34. ON THE CONTRARY SHRI SIVARAMAKRISHNAN THE LD. REPRESENTATIVE FOR THE ASSESSEE SUBMITTED THAT THE ASSESSEE SUBSCRIBED TO THE CHIT CONDUCTED BY KERALA STATE FINANCIAL ENTERPRISE (KSFE). THE CONT RIBUTION TO THE CHIT IS SHOWN AS KURI INVESTMENT IN THE BOOKS OF ACCOUNT OF AISWARYA JEWEL CRAFT. SINCE THE INVESTMENT WAS DISCLOSED IN THE BOOKS OF ACCOUNT OF AISWARYA JEWEL CRAFT THE SAME WAS NOT SHOWN IN THE PERSONAL CASH FLOW STATEMENT OF THE ASSESSEE. THE CIT(A) FOR THE ASSESSMENT YE AR 2005-06 DELETED A SIMILAR ADDITION. THE DEPARTMENT HAS NOT FILED ANY APPEAL. WHEN THE DEPARTMENT ACCEPTED THE DECISION OF THE CIT(A) FOR ASSESSMENT YEAR 2005- 29 ITA NO. 429/COCH/2013 ITA 444&445/COCH/2013 ITAS 488-489/COCH/2013 ITA 490- 492/COCH/2013 ITA NO.498/COCH/2013 ITA NO.565/COCH/2013 CO NOS 20 & 26-28/COCH/2013 CO NO.64/COCH/2013 06 THERE WAS NO REASON FOR TAKING A DIFFERENT STAND FOR THE ASSESSMENT YEAR 2007-08. 35. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EIT HER SIDE AND ALSO PERUSED THE MATERIAL AVAILABLE ON RECORD. IT IS NO T IN DISPUTE THAT CHIT INVESTMENT WAS SHOWN AS KURI IN AISWARYA JEWEL CRAF T ACCOUNT. THEREFORE THE CIT(A) DELETED SIMILAR ADDITION FOR THE ASSESSM ENT YEAR 2005-06 AND THE DEPARTMENT ACCEPTED THE DECISION OF THE CIT(A). WHEN THE DEPARTMENT ACCEPTED THE DECISION OF THE CIT(A) FOR THE ASSESSM ENT YEAR 2005-06 THERE IS NO REASON WHY THE SAME DECISION WAS CHALLENGED BEFORE THIS TRIBUNAL FOR THE ASSESSMENT YEAR 2007-08 WHEN THE CIT(A) FOL LOWED THE VERY SAME REASON. FOR THE ASSESSMENT YEAR 2005-06 THE ADDITI ON WAS TO THE EXTENT OF RS.3 97 562. FOR THE YEAR UNDER CONSIDERATION THE ADDITION IS RS.4 10 929. THEREFORE THERE WAS NO MUCH DIFFEREN CE IN RESPECT OF THE INVESTMENT MADE IN THE KURI. MOREOVER WHEN THE KU RI INVESTMENT WAS DISCLOSED IN THE BOOKS OF ACCOUNT OF AISWARYA JEWE L CRAFT THIS TRIBUNAL DO NOT FIND ANY REASON TO MAKE ANY ADDITION IN THE HAN DS OF THE ASSESSEE. 30 ITA NO. 429/COCH/2013 ITA 444&445/COCH/2013 ITAS 488-489/COCH/2013 ITA 490- 492/COCH/2013 ITA NO.498/COCH/2013 ITA NO.565/COCH/2013 CO NOS 20 & 26-28/COCH/2013 CO NO.64/COCH/2013 THEREFORE WE HOLD THAT THE CIT(A) HAS RIGHTLY DELE TED THE ADDITION AND THE SAME IS CONFIRMED. 36. THE NEXT GROUND OF APPEAL IS WITH REGARD TO ADD ITION OF RS.17 30 744 TOWARDS DEPOSIT RECEIVED FROM OUTSIDE WORKERS. 37. SHRI M ANIL KUMAR THE LD.DR SUBMITTED THAT THE ASSESSING OFFICER MADE ADDITION OF RS.17 30 744. THE ASSESSING OFFIC ER FOUND THAT THE ASSESSEE USED TO GIVE VARIOUS QUANTITY OF GOLD TO H IS WORKERS FOR MAKING ORNAMENTS AND THE DETAILS OF SUCH GOLD ADVANCED WAS RECORDED IN THE SEIZED MATERIAL. THE ASSESSING OFFICER FOUND THAT NEARLY RS.23 93 085.75 VALUE OF GOLD WAS LYING WITH WORKERS AS ON 31 ST MARCH 2008. ACCORDING TO THE LD.REPRESENTATIVE THE GOLD LYING WITH WORKERS FOR MAKING GOLD ORNAMENTS WERE NOT DISCLOSED IN THE PROFIT & LOSS A CCOUNT AND BALANCE- SHEET. SINCE THE ASSESSEE HAS NOT OFFERED ANY SATI SFACTORY EXPLANATION THE ASSESSING OFFICER MADE ADDITION OF RS.23 93 086 FOR THREE ASSESSMENT YEARS VIZ. 2007-08 2008-09 AND 2009-10. HOWEVER THE CIT(A) DELETED THE ADDITION ON THE GROUND THAT THE GOLD WHICH WAS GIVEN TO THE WORKERS FOR 31 ITA NO. 429/COCH/2013 ITA 444&445/COCH/2013 ITAS 488-489/COCH/2013 ITA 490- 492/COCH/2013 ITA NO.498/COCH/2013 ITA NO.565/COCH/2013 CO NOS 20 & 26-28/COCH/2013 CO NO.64/COCH/2013 MAKING GOLD ORNAMENTS IS NOT STOCK IN TRADE OF THE ASSESSEE. THE CIT(A) FURTHER OBSERVED THAT THE ASSESSEE RECEIVED THE GOL D FROM THE CUSTOMERS FOR MAKING GOLD ORNAMENTS. ACCORDING TO THE LD.DR THE CIT(A) SHOULD HAVE TAKEN THE GOLD GIVEN TO THE WORKERS AS STOCK I N TRADE AND SHOULD HAVE SUSTAINED THE ADDITION MADE BY THE ASSESSING OFFICE R. 38. ON THE CONTRARY SHRI SIVARAMAKRISHNAN THE LD. REPRESENTATIVE FOR THE ASSESSEE SUBMITTED THAT THE ASSESSEE USED TO RECEIV E GOLD FROM THE CUSTOMERS FOR MAKING NEW ORNAMENTS. THE GOLD RECEI VED FROM THE CUSTOMERS IS NOT A PURCHASE. IT IS ONLY FOR REMAKI NG. THEREFORE THE GOLD GIVEN TO THE WORKERS FOR RE-MAKING THE ORNAMENTS AS PER THE CUSTOMERS SPECIFICATIONS DOES NOT FORM PART OF STOCK IN TRADE OF THE ASSESSEE. HOWEVER THE DETAILS OF SUCH RECEIPT WERE SHOWN IN THE SEPARATE BOOKS. EVEN IF THE VALUE OF THE GOLD WHICH WAS LYING WITH THE WORKERS ARE TAKEN AS CLOSING STOCK THEN THE CORRESPONDING VALUE HAS TO B E TAKEN AS VALUE OF THE PURCHASE OF GOLD. IN THIS CASE THE ASSESSING OFFI CER HAS NOT TAKEN THE PURCHASE VALUE BUT HE HAS TAKEN THE VALUE OF THE GO LD WHICH IS LYING WITH THE WORKERS. THEREFORE THE CIT(A) AFTER CONSIDER ING THE PRACTICE 32 ITA NO. 429/COCH/2013 ITA 444&445/COCH/2013 ITAS 488-489/COCH/2013 ITA 490- 492/COCH/2013 ITA NO.498/COCH/2013 ITA NO.565/COCH/2013 CO NOS 20 & 26-28/COCH/2013 CO NO.64/COCH/2013 PREVAILED IN THE LINE OF TRADE FOUND THAT IT IS NOT THE STOCK IN TRADE OF THE ASSESSEE. THE OWNERSHIP OF THE GOLD REMAINS WITH T HE CUSTOMERS AND THE ASSESSEE WAS ENTRUSTED WITH THE TASK OF MAKING NEW ORNAMENTS. AT THE BEST THE ASSESSEE MAY GET A COMMISSION OR MAKING C HARGES. THEREFORE THE CIT(A) HAS RIGHTLY DELETED THE ADDITION. 39. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EIT HER SIDE AND ALSO PERUSED THE MATERIAL AVAILABLE ON RECORD. IN RESPE CT OF PURCHASE AND SALE OF JEWELLERY THE ASSESSEE HAS TO PAY PURCHASE TAX ON PURCHASE OF JEWELLERIES FROM THE CUSTOMERS. IT IS ALSO CUSTOMA RY FOR THE CUSTOMERS TO ADVANCE THEIR OLD GOLD AND REQUEST THE JEWELLERY MA KERS TO MAKE NEW JEWELLERIES. WHEN THE CUSTOMERS ENTRUSTED THEIR GO LD WITH THE ASSESSEE FOR MAKING NEW ORNAMENTS THE JOB OF THE ASSESSEE IS ON LY A WORK CONTRACT. THE OWNERSHIP OF THE GOLD REMAINS WITH THE CUSTOMER ONLY AND IT WILL NOT PASS ON TO THE ASSESSEE. THEREFORE THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT WHEN THE ASSESSEE RECEIVED OLD JEWELLE RIES FOR MAKING NEW ORNAMENTS FROM THE CUSTOMERS THE SAME CANNOT FORM PART OF THE STOCK IN TRADE OF THE ASSESSEE. STOCK IN TRADE OF THE ASSES SEE WOULD BE ONLY WHEN 33 ITA NO. 429/COCH/2013 ITA 444&445/COCH/2013 ITAS 488-489/COCH/2013 ITA 490- 492/COCH/2013 ITA NO.498/COCH/2013 ITA NO.565/COCH/2013 CO NOS 20 & 26-28/COCH/2013 CO NO.64/COCH/2013 THE ASSESSEE PURCHASES THE GOLD AND DISPLAY THE SAM E FOR RETAIL / WHOLESALE SALES. IN THE ABSENCE OF ANY MATERIAL TO SHOW THAT THE ASSESSEE PURCHASED THE GOLD FROM THE CUSTOMERS THIS TRIBUNA L IS OF THE CONSIDERED OPINION THAT THE CIT(A) HAS RIGHTLY DELETED THE ADD ITION. EVEN OTHERWISE THE PURCHASE PRICE HAS TO BE TAKEN INTO CONSIDERATI ON IF THE GOLD LYING WITH THE WORKERS IS TAKEN AS CLOSING STOCK. IN VIEW OF THE ABOVE FACTUAL CIRCUMSTANCES THIS TRIBUNAL DO NOT FIND ANY INFIRM ITY IN THE ORDER OF THE LOWER AUTHORITY. ACCORDINGLY THE SAME IS CONFIRME D. 40. THE NEXT GROUND OF APPEAL IS WITH REGARD TO ADD ITION OF RS. 5 93 470 U/S 40A(3) OF THE ACT. 41. WE HEARD THE LD.DR SHRI M ANIL KUMAR AND SHRI SIVARAMAKRISHNAN THE LD.REPRESENTATIVE FOR THE ASSESSEE. THE LD.REP RESENTATIVE FOR THE ASSESSEE SUBMITTED THAT HE HAS NO OBJECTION TO ALLO W THIS GROUND OF THE REVENUE. THE LD.REPRESENTATIVE HAS ALSO MADE AN EN DORSEMENT TO THAT EFFECT IN THE APPEAL FOLDER. 34 ITA NO. 429/COCH/2013 ITA 444&445/COCH/2013 ITAS 488-489/COCH/2013 ITA 490- 492/COCH/2013 ITA NO.498/COCH/2013 ITA NO.565/COCH/2013 CO NOS 20 & 26-28/COCH/2013 CO NO.64/COCH/2013 42. WE HAVE CAREFULLY GONE THROUGH THE ORDERS OF TH E LOWER AUTHORITIES. THE ASSESSING OFFICER FOUND THAT THE ASSESSEE HAS M ADE CASH PAYMENT EXCEEDING RS.20 000 CONTRARY TO THE PROVISIONS OF S ECTION 40A(3) AS PER THE MATERIAL FOUND DURING THE COURSE OF SEARCH OPER ATION. SINCE THE MATERIAL FOUND DURING THE COURSE OF SEARCH OPERATIO N SHOWS THE CASH EXPENDITURE EXCEEDING RS.20 000 THIS TRIBUNAL IS O F THE CONSIDERED OPINION THAT THE ASSESSING OFFICER HAS RIGHTLY MADE THE ADDITION. NOW THE LD.REPRESENTATIVE FOR THE ASSESSEE HAS NO OBJECTION TO ALLOW THE GROUND RAISED BY THE REVENUE. ACCORDINGLY THE ORDER OF T HE CIT(A) IS SET ASIDE WITH REGARD TO ADDITION U/S 40A(3) OF THE ACT AND T HAT OF THE ASSESSING OFFICER IS RESTORED. 43. LET US NOW TAKE ASSESSEES APPEAL FOR THE ASSES SMENT YEAR 2008-09 IN ITA NO.491/COCH/2013. 44. THE FIRST GROUND OF APPEAL IS WITH REGARD TO AD DITION OF RS.11 70 000 ON ACCOUNT OF LOANS FROM NRIS / RELATIVES. 35 ITA NO. 429/COCH/2013 ITA 444&445/COCH/2013 ITAS 488-489/COCH/2013 ITA 490- 492/COCH/2013 ITA NO.498/COCH/2013 ITA NO.565/COCH/2013 CO NOS 20 & 26-28/COCH/2013 CO NO.64/COCH/2013 45. SHRI SIVARAMAKRISHNAN THE LD.REPRESENTATIVE FO R THE ASSESSEE SUBMITTED THAT DURING THE YEAR UNDER CONSIDERATION THE ASSESSEE HAS RECEIVED LOAN FROM NRI FRIENDS AND RELATIVES TO THE EXTENT OF 21 40 000. THE CIT(A) ALLOWED THE CLAIM OF THE ASSESSEE TO THE EXTENT OF 9 10 000 HOWEVER CONFIRMED THE ADDITION TO THE EXTENT OF RS .11 70 000. THE ASSESSEE HAS FILED THE APPEAL AGAINST THE ADDITION CONFIRMED BY THE CIT(A) TO THE EXTENT OF RS.11 70 000. THE REVENUE ALSO FI LED APPEAL IN RESPECT OF ADDITION DELETED BY THE CIT(A) TO THE EXTENT OF RS. 9 70 000 IN ITA NO.489/COCH/2013. ACCORDING TO THE LD.REPRESENTATI VE THE ASSESSEE HAS FILED DETAILS REGARDING THE CREDITWORTHINESS OF THE CREDITORS AND MATERIAL TO PROVE THE IDENTITY OF THE CREDITORS AND GENUINENESS OF THE TRANSACTION BEFORE THE ASSESSING OFFICER. CONFIRMATION LETTERS WERE ALSO FILED BEFORE THE CIT(A). ACCORDING TO THE LD.REPRESENTATIVE DURING THE FINANCIAL YEAR 2009- 10 AND 2010-11 THE LOANS BORROWED WERE REPAID. THE CIT(A) FOUND THAT THE ASSESSEE HAS PROVED THE CREDITWORTHINESS OF THE CREDITORS GENUINENESS OF THE TRANSACTIONS AND IDENTITY OF THE CREDITORS TO THE EXTENT OF RS.9 70 000. HOWEVER IN RESPECT OF LOAN TO THE EXTENT OF RS.11 70 000 THE CIT(A) FOUND THAT THERE WAS NO CORROBORATIVE EV IDENCE TO PROVE THE 36 ITA NO. 429/COCH/2013 ITA 444&445/COCH/2013 ITAS 488-489/COCH/2013 ITA 490- 492/COCH/2013 ITA NO.498/COCH/2013 ITA NO.565/COCH/2013 CO NOS 20 & 26-28/COCH/2013 CO NO.64/COCH/2013 CLAIM OF REPAYMENT. ACCORDING TO THE LD.REPRESENTA TIVE THE CIT(A) OUGHT TO HAVE DELETED THE ENTIRE ADDITION MADE BY THE ASS ESSING OFFICER. 46. ON THE CONTRARY SHRI M ANIL KUMAR THE LD.DR S UBMITTED THAT THE ASSESSEE CLAIMS THAT HE RECEIVED A LOAN OF RS.21 40 000 FROM NON RESIDENT FRIENDS AND RELATIVES. ACCORDING TO THE LD.DR THE ASSESSEE HAS NOT FILED ANY MATERIAL TO PROVE THE CAPACITY OF THE CREDITORS TO LEND THE MONEY TO THE ASSESSEE THE GENUINENESS OF THE TRANSACTIONS AND T HE IDENTITY OF THE CREDITORS. MERE FILING OF CONFIRMATION LETTER CANN OT BE TREATED AS PROOF OF CREDITWORTHINESS OF THE CREDITORS. ACCORDING TO TH E LD.DR IN THE ABSENCE OF ANY MATERIAL THE CIT(A) OUGHT TO HAVE CONFIRMED TH E ENTIRE ADDITION OF RS.21 40 000. 47. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EIT HER SIDE AND ALSO PERUSED THE MATERIAL AVAILABLE ON RECORD. IT IS NO T IN DISPUTE THAT THE ASSESSEE CLAIMED TO HAVE RECEIVED RS.21 40 000 AS L OAN FROM NON RESIDENT INDIANS. THE ASSESSEE CLAIMS THAT HE SUBM ITTED THE NAMES AND ADDRESSES OF THE CREDITORS TO THE ASSESSING OFFICER . THE CONFIRMATION 37 ITA NO. 429/COCH/2013 ITA 444&445/COCH/2013 ITAS 488-489/COCH/2013 ITA 490- 492/COCH/2013 ITA NO.498/COCH/2013 ITA NO.565/COCH/2013 CO NOS 20 & 26-28/COCH/2013 CO NO.64/COCH/2013 LETTERS WERE ALSO FILED BEFORE THE CIT(A) IN RESPEC T OF THREE CREDITORS VIZ. SHRI ANOOR DAVIS SHRI SUNIL BHASKARAN AND SHRI DAV IS. SHRI SUNIL BHASKARAN IS WORKING AS AN ARCHITECT IN DUBAI. THE COPIES OF THE PASSPORT VISA BANK STATEMENT ETC. WERE FILED BEFORE THE LO WER AUTHORITIES. IN RESPECT OF LOAN FROM SHRI DAVIS WHO IS SETTLED IN MUSCAT IS A CIVIL ENGINEER BY PROFESSION. SIMILARLY SHRI ANOOR DAVIS WHO IS ALSO SETTLED IN MUSCAT HAS CONFIRMED THE PAYMENT OF RS.5 000 TO THE ASSESS EE. AFTER CONSIDERING THESE DETAILS THE CIT(A) FOUND THAT THE ASSESSEE H AS PROVED THE CREDITWORTHINESS OF THE CREDITORS GENUINENESS OF T HE TRANSACTIONS AND IDENTITY OF THE CREDITORS IN RESPECT OF THESE THREE CREDITORS VIZ. SHRI ANOOR DAVIS SHRI SUNIL BHASKARAN AND SHRI DAVIS. ACCORD INGLY THE CIT(A) ALLOWED THE CLAIM OF THE ASSESSEE TO THE EXTENT OF RS.9 70 000. IN RESPECT OF CREDITS TO THE EXTENT OF RS.11 70 000 THOUGH THE ASSESSEE CLAIMED THAT THE SAME WAS REPAID DURING THE FINANCIAL YEARS 2008 -10 AND 2010-11 NO MATERIAL WAS PRODUCED BEFORE THE LOWER AUTHORITIES. THEREFORE THE CIT(A) CONFIRMED THE ADDITION TO THE EXTENT OF RS.11 70 00 0. 38 ITA NO. 429/COCH/2013 ITA 444&445/COCH/2013 ITAS 488-489/COCH/2013 ITA 490- 492/COCH/2013 ITA NO.498/COCH/2013 ITA NO.565/COCH/2013 CO NOS 20 & 26-28/COCH/2013 CO NO.64/COCH/2013 48. WE HAVE CAREFULLY GONE THROUGH THE JUDGMENT OF THE APEX COURT IN THE CASE OF P.R. GANAPATHY (2012) 26 TAXMAN.354. I N THE CASE BEFORE THE APEX COURT THE ASSESSEE DID NOT ANSWER THE QUERY R AISED BY THE INCOME- TAX DEPARTMENT. THE INCOME-TAX APPELLATE TRIBUNAL ALLOWED THE CLAIM OF THE ASSESSEE ON THE GROUND THAT CREDITORS ARE ASSES SEES IN SINGAPORE. THEREFORE THE APEX COURT SET ASIDE THE ORDER OF TH E ITAT AND HIGH COURT AND DIRECTED THE ASSESSING OFFICER TO EXAMINE THE M ATTER IN THE LIGHT OF THE JUDGMENT OF THE APEX COURT IN THE CASE OF SHRI P MO HANAKALA 291 ITR 278 (SC). IN THE CASE BEFORE US THE ASSESSEE HAS FILED CONFIRMATION LETTERS COPIES OF THE PASSPORTS ADDRESSES OF THE PARTIES COPIES OF THE BANK STATEMENTS ETC. WHEN THE ASSESSEE HAS FURNISHED A LL THESE DETAILS THE DEPARTMENT CANNOT SAY THAT THE ASSESSEE HAS NOT ANS WERED ANY QUERY RAISED BY THE DEPARTMENT. IT IS FOR THE DEPARTMENT TO EXAMINE THE MATTER FURTHER AND FIND OUT WHETHER THE CLAIM MADE BY THE ASSESSEE IS CORRECT OR NOT. IN RESPECT OF THREE PERSONS VIZ. SHRI ANOOR DAVIS SHRI SUNIL BHASKARAN AND SHRI DAVIS THE CIT(A) FOUND THAT THE ASSESSEE HAS ESTABLISHED THE CREDITWORTHINESS OF THE CREDITORS GENUINENESS OF THE TRANSACTIONS AND IDENTITY OF THE CREDITORS. HE TH EREFORE DELETED THE 39 ITA NO. 429/COCH/2013 ITA 444&445/COCH/2013 ITAS 488-489/COCH/2013 ITA 490- 492/COCH/2013 ITA NO.498/COCH/2013 ITA NO.565/COCH/2013 CO NOS 20 & 26-28/COCH/2013 CO NO.64/COCH/2013 ADDITION TO THE EXTENT OF RS.9 70 000;. WHEN THE A SSESSEE FILED THE DETAILS THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THE CIT(A) HAS RIGHTLY DELETED THE ADDITION TO THE EXTENT OF RS.9 70 000. IN RESP ECT OF THE REMAINING AMOUNT OF RS.11 70 000 NO MATERIAL WAS FILED BY THE ASSESSEE EITHER BEFORE THE LOWER AUTHORITIES OR BEFORE THE TRIBUNAL THEREFORE THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THE CIT(A) HAS RI GHTLY CONFIRMED THE ADDITION TO THE EXTENT OF RS.11 70 000. THEREFORE THIS TRIBUNAL DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE LOWER AUTHORITY I N RESPECT OF CREDITS SAID TO HAVE BEEN RECEIVED FROM NON RESIDENT INDIANS. ACCO RDINGLY THE ORDER OF THE LOWER AUTHORITY ON THIS ISSUE IS CONFIRMED. 49. THE NEXT GROUND OF APPEAL IS WITH REGARD TO SUN DRY CREDITORS TO THE EXTENT OF RS.16 51 662. 50. SHRI SIVARAMAKRISHNAN THE LD.REPRESENTATIVE FO R THE ASSESSEE SUBMITTED THAT THE ASSESSING OFFICER TREATED THE SU NDRY CREDITORS TO THE EXTENT OF RS.26 15 038 AS INCOME OF THE ASSESSEE ON THE GROUND THAT THE CONFIRMATION WAS NOT PRODUCED FROM THE RESPECTIVE P ARTIES. ACCORDING TO 40 ITA NO. 429/COCH/2013 ITA 444&445/COCH/2013 ITAS 488-489/COCH/2013 ITA 490- 492/COCH/2013 ITA NO.498/COCH/2013 ITA NO.565/COCH/2013 CO NOS 20 & 26-28/COCH/2013 CO NO.64/COCH/2013 THE LD.REPRESENTATIVE IN THE BALANCE-SHEET AS ON 3 1-03-2007 THE ABOVE SAID CREDITS WERE SHOWN INDIVIDUALLY. HOWEVER AS ON 31-03-2008 THESE CREDITORS WERE CLUBBED TOGETHER. FOR THE ASSESSMEN T YEAR 2007-08 NO ADDITION WAS MADE BY THE ASSESSING OFFICER EXCEPT T HE BALANCE AMOUNT DUE TO BOBBY SATHYAN. THE TRADE CREDITS TO THE EXT ENT OF RS. 9 51 662 WAS PAYABLE TO OUTSIDE WORKERS. ACCORDING TO THE LD.RE PRESENTATIVE MAJORITY OF THE AMOUNTS WERE ALREADY REPAID AND PRESENTLY THE ASSESSEE IS NOT IN TOUCH WITH THEM. SINCE THE CONFIRMATION LETTERS IN MAJORITY OF THE CASES WERE FILED BEFORE THE ASSESSING OFFICER ACCORDING TO THE LD.REPRESENTATIVE THERE IS NO JUSTIFICATION FOR MAKING ANY ADDITION. THE CIT(A) FOUND THAT THE CREDIT IN THE CASE OF BOBBY SATHYAN TO THE EXTENT O F RS.10 07 376 HAS TO BE ALLOWED. THE REMAINING ADDITION TO THE EXTENT O F RS.16 51 662 WAS CONFIRMED BY THE CIT(A). ACCORDING TO THE LD.REPRE SENTATIVE THE CIT(A) OUGHT TO HAVE DELETED THE ENTIRE ADDITION MADE BY T HE ASSESSING OFFICER. 51. ON THE CONTRARY SHRI M ANIL KUMAR THE LD.DR S UBMITTED THAT THE CIT(A) FOUND THAT THE CREDIT AMOUNT APPEARING TO TH E EXTENT OF RS.10 07 376 IN THE BALANCE-SHEET AS ON 31-03-2008 IN THE CASE OF BOBBY 41 ITA NO. 429/COCH/2013 ITA 444&445/COCH/2013 ITAS 488-489/COCH/2013 ITA 490- 492/COCH/2013 ITA NO.498/COCH/2013 ITA NO.565/COCH/2013 CO NOS 20 & 26-28/COCH/2013 CO NO.64/COCH/2013 SATHYAN NEEDS TO BE VERIFIED AFTER CHECKING BOBBY S ATHYANS BALANCE- SHEET PROFIT & LOSS ACCOUNT STATEMENT OF AFFAIRS ETC. AND IF THE SAME FOUND TO BE CORRECT THEN THE REVENUE MAY NOT HAVE ANY OBJ ECTION. ACCORDING TO THE LD.DR THE CIT(A) DIRECTED THE ASSESSING OFFICE R TO VERIFY THE BALANCE- SHEET AND DIRECTED TO ALLOW THE CLAIM IF IT IS FOUN D CORRECT. IN RESPECT OF RS.16 51 662 NO MATERIAL WAS AVAILABLE ON RECORD T HEREFORE THE CIT(A) CONFIRMED THE ADDITION. ON A QUERY FROM THE BENCH WHETHER THE DEPARTMENT HAS FILED APPEAL IN RESPECT OF THE DIREC TION OF THE CIT(A) TO ALLOW THE CLAIM OF RS.10 07 376 THE LD.DR VERY FAIR LY SUBMITTED THAT SINCE THE CIT(A) DIRECTED THE ASSESSING OFFICER TO VERIFY THE SAME AND DIRECTED THE ASSESSING OFFICER TO ALLOW THE CLAIM IF IT IS F OUND CORRECT THE DEPARTMENT HAS NOT FILED ANY APPEAL. 52. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EIT HER SIDE AND ALSO PERUSED THE MATERIAL AVAILABLE ON RECORD. AS ON 31 -03-2008 THE ASSESSEE HAS CLAIMED RS.28 24 038 FROM SUNDRY CREDITORS INCL UDING BOBBY SATHYAN. THE DETAILS OF SUNDRY CREDITORS WERE NOT AVAILABLE; THE ONLY DETAIL AVAILABLE IS IN RESPECT OF BOBBY SATHYAN. THEREFORE THE CIT (A) FOUND THAT THE CLAIM 42 ITA NO. 429/COCH/2013 ITA 444&445/COCH/2013 ITAS 488-489/COCH/2013 ITA 490- 492/COCH/2013 ITA NO.498/COCH/2013 ITA NO.565/COCH/2013 CO NOS 20 & 26-28/COCH/2013 CO NO.64/COCH/2013 OF THE ASSESSEE NEEDS TO BE VERIFIED ON THE BASIS O F THE MATERIAL AVAILABLE ON RECORD. ACCORDINGLY HE DIRECTED THE ASSESSING OFFICER TO VERIFY THE CLAIM OF THE ASSESSEE AND TO ALLOW THE SAME TO THE EXTENT OF RS. 10 07 376 IF IT IS FOUND CORRECT. IN THE ABSENCE OF ANY DETA ILS THE CIT(A) CONFIRMED THE ADDITION TO THE EXTENT OF RS.16 51 662. THE AS SESSEE FAILED TO FURNISH THE DETAILS OF SUNDRY CREDITORS AND THEREFORE THE CIT(A) CONFIRMED THE ADDITION. THIS TRIBUNAL DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE LOWER AUTHORITY. ACCORDINGLY THE SAME IS CONFIRMED. 53. THE NEXT GROUND OF APPEAL IS WITH REGARD TO ADD ITION OF RS.3 00 542 TOWARDS EXCESS SALARY. 54. SHRI SIVARAMAKRISHNAN THE LD.REPRESENTATIVE FO R THE ASSESSEE SUBMITTED THAT THE ASSESSEE HAS DEBITED RS.13 00 68 6 AND RS.18 80 105 AS SALARY PAID TO HIS EMPLOYEES IN THE PROFIT & LOS S ACCOUNT FOR THE ASSESSMENT YEARS 2008-09 AND 2009-10. AFTER VERIFY ING THE SEIZED MATERIAL THE ASSESSING OFFICER OBSERVED THAT THE A CTUAL AMOUNT COMES TO RS.10 00 144 FOR THE ASSESSMENT YEAR 2008-09 AND RS .13 27 432 FOR THE 43 ITA NO. 429/COCH/2013 ITA 444&445/COCH/2013 ITAS 488-489/COCH/2013 ITA 490- 492/COCH/2013 ITA NO.498/COCH/2013 ITA NO.565/COCH/2013 CO NOS 20 & 26-28/COCH/2013 CO NO.64/COCH/2013 ASSESSMENT YEAR 2009-10. THE DIFFERENCE OF RS.3 00 542 FOR THE ASSESSMENT YEAR 2008-09 AND RS.5 52 673 FOR THE ASS ESSMENT YEAR 2009- 10 WAS TAKEN AS INCOME OF THE ASSESSEE. ACCORDING TO THE LD.REPRESENTATIVE SOME CLERICAL MISTAKE HAS CREPT IN. WE HEARD SHRI M ANIL KUMAR THE LD.DR ALSO. 55. FOR THE ASSESSMENT YEAR 2008-09 THE DIFFERENCE IN SALARY IS RS.3 00 542. THE ONLY CONTENTION OF THE ASSESSEE I S THAT A CLERICAL MISTAKE HAS CREPT IN. THIS TRIBUNAL IS OF THE CONSIDERED O PINION THAT THE ASSESSING OFFICER AS WELL AS THE CIT(A) FOUND OUT THE DIFFERE NCE IN RESPECT OF EXCESS SALARY DEBITED ON THE BASIS OF THE MATERIAL FOUND D URING THE COURSE OF SEARCH OPERATION AND THE PROFIT & LOSS ACCOUNT FILE D ALONG WITH THE RETURN OF INCOME. IN THE ABSENCE OF ANY MATERIAL TO EXPLAIN THE EXCESS SALARY DEBITED THIS TRIBUNAL DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE LOWER AUTHORITY IN TREATING EXCESS SALARY TO THE EXTENT O F RS.3 00 542 AS INCOME OF THE ASSESSEE. WE UPHOLD HIS ORDER ON THIS ISSUE . 44 ITA NO. 429/COCH/2013 ITA 444&445/COCH/2013 ITAS 488-489/COCH/2013 ITA 490- 492/COCH/2013 ITA NO.498/COCH/2013 ITA NO.565/COCH/2013 CO NOS 20 & 26-28/COCH/2013 CO NO.64/COCH/2013 56. THE NEXT GROUND OF APPEAL IS WITH REGARD TO ADD ITION OF RS.8 80 631 TOWARDS EXCESS WAGES. 57. SHRI SIVARAMAKRISHNAN THE LD.REPRESENTATIVE FO R THE ASSESSEE SUBMITTED THAT THE ASSESSEE HAS DEBITED RS.57 71 16 5 FOR THE YEAR UNDER CONSIDERATION IN RESPECT OF WAGES FOR WORKERS IN TH E PROFIT & LOSS ACCOUNT. THE ASSESSING OFFICER FOUND THAT THE ASSESSEE HAS D EBITED AN EXCESS AMOUNT OF RS.8 80 631 FOR THE ASSESSMENT YEAR 2008- 09. ACCORDING TO THE LD.REPRESENTATIVE THERE WAS A CLERICAL MISTAKE CRE PT IN THE ACCOUNT. THE CIT(A) OUGHT TO HAVE DELETED THE ENTIRE ADDITION MA DE BY THE ASSESSING OFFICER. WE HEARD SHRI M ANIL KUMAR THE LD.DR ALS O. 58. ADMITTEDLY THE ASSESSEE HAS DEBITED RS.57 71 1 65 IN THE PROFIT & LOSS ACCOUNT FOR THE ASSESSMENT YEAR 2008-09. ON V ERIFICATION OF THE SEIZED MATERIAL FROM 01-04-2007 TO 26-02-2008 AND 2 7-02-2008 TO 31-03- 2009 THE ASSESSING OFFICER FOUND THE TOTAL WAGES AT RS.48 90 534 FOR THE ASSESSMENT YEAR 2008-09. THE DIFFERENCE OF RS.8 80 631 COULD NOT BE EXPLAINED BEFORE THE LOWER AUTHORITIES PROPERLY. N O PROPER EXPLANATION IS 45 ITA NO. 429/COCH/2013 ITA 444&445/COCH/2013 ITAS 488-489/COCH/2013 ITA 490- 492/COCH/2013 ITA NO.498/COCH/2013 ITA NO.565/COCH/2013 CO NOS 20 & 26-28/COCH/2013 CO NO.64/COCH/2013 FORTHCOMING FROM THE ASSESSEE BEFORE THIS TRIBUNAL ALSO. IN THE ABSENCE OF ANY EXPLANATION TO RECONCILE THE DIFFERENCE AS SHOW N IN THE PROFIT & LOSS ACCOUNT AND AS FOUND IN THE SEIZED MATERIAL THIS T RIBUNAL IS OF THE CONSIDERED OPINION THAT THE LOWER AUTHORITY HAS RIG HTLY TAKEN RS.8 80 631 AS INCOME OF THE ASSESSEE. THIS TRIBUNAL DO NOT FI ND ANY INFIRMITY IN THE ORDER OF THE LOWER AUTHORITY. ACCORDINGLY THE SAM E IS CONFIRMED. 59. NOW COMING TO THE DEPARTMENTAL APPEAL IN ITA NO .489/COCH/2013 FOR ASSESSMENT YEAR 2008-09 THE FIRST ISSUE IS WIT H REGARD TO ADDITION OF RS.11 70 000. THIS ISSUE HAS BEEN CONSIDERED BY US WHILE DEALING WITH THE ASSESSEES APPEAL FOR ASSESSMENT YEAR 2008-09. WE HAVE UPHELD THE ORDER OF THE CIT(A) AND REJECTED THE GROUND RAISED BY THE ASSESSEE. HENCE FOR THE DETAILED REASONS GIVEN THEREIN WE DO NOT SEE ANY MERIT IN THE GROUND RAISED BY THE REVENUE. ACCORDINGLY THE SAME IS REJECTED. 60. THE NEXT GROUND OF APPEAL IS WITH REGARD TO ADD ITION OF RS.5 37 576 TOWARDS COST OF CONSTRUCTION. THE VERY SAME ISSUE WAS DISCUSSED FOR THE ASSESSMENT YEAR 2007-08. THIS ISSUE HAS BEEN ADEQU ATELY DISCUSSED IN 46 ITA NO. 429/COCH/2013 ITA 444&445/COCH/2013 ITAS 488-489/COCH/2013 ITA 490- 492/COCH/2013 ITA NO.498/COCH/2013 ITA NO.565/COCH/2013 CO NOS 20 & 26-28/COCH/2013 CO NO.64/COCH/2013 EARLIER PARAGRAPHS WHILE DEALING WITH THE IDENTICAL ISSUE RAISED FOR ASSESSMENT YEAR 2007-08. WE HAVE ALREADY FOUND THA T ADDITION WAS MADE BY THE ASSESSING OFFICER ONLY ON THE GROUND THAT TH E ASSESSEE HAS NOT SHOWN ANY OUTFLOW OF CASH TOWARDS INVESTMENT IN THE LANDED PROPERTY; CASH FLOW STATEMENT IS NOTHING BUT AN EXTRACT OF BO OKS OF ACCOUNT; IT IS NOT THE CASE OF THE REVENUE THAT THE INVESTMENTS MADE I N THE LANDED PROPERTIES WERE NOT REFLECTED IN THE BOOKS OF ACCOUNT OF AISWA RYA JEWEL CRAFT; AND THAT WHEN THE INVESTMENT IS REFLECTED IN THE BUSINE SS CONCERN VIZ. AISWARYA JEWEL CRAFT MERELY BECAUSE THERE WAS AN OM ISSION TO MENTION THE SAME IN THE CASH FLOW STATEMENT THERE CANNOT BE ANY ADDITION. THE FACTS AND CIRCUMSTANCES FOR THE YEAR UNDER CONSIDER ATION ARE STATED TO BE IDENTICAL. IN THE CIRCUMSTANCES CONSISTENT WITH THE EARLIER VIEW TAKEN WE DECIDE THE ISSUE IN FAVOUR OF THE ASSESSEE AND AGAI NST THE DEPARTMENT. THE ORDER OF THE CIT(A) ON THIS ISSUE IS CONFIRMED. 61. THE NEXT GROUND OF APPEAL IS WITH REGARD TO ADD ITION OF RS.10 90 220 ON ACCOUNT OF GOLD WITH OUTSIDE WORKERS. WE HAVE A LREADY CONFIRMED THE ORDER OF THE CIT(A) FOR THE ASSESSMENT YEAR 2007-08 UNDER IDENTICAL SET OF 47 ITA NO. 429/COCH/2013 ITA 444&445/COCH/2013 ITAS 488-489/COCH/2013 ITA 490- 492/COCH/2013 ITA NO.498/COCH/2013 ITA NO.565/COCH/2013 CO NOS 20 & 26-28/COCH/2013 CO NO.64/COCH/2013 FACTS AND CIRCUMSTANCES. WE HAVE FOUND THAT WHEN T HE ASSESSEE RECEIVED OLD JEWELLERIES FOR MAKING NEW ORNAMENTS FROM THE C USTOMERS THE SAME CANNOT FORM PART OF THE STOCK IN TRADE OF THE ASSES SEE. STOCK IN TRADE OF THE ASSESSEE WOULD BE ONLY IF THE ASSESSEE PURCHASE S THE GOLD AND DISPLAYS THE SAME FOR RETAIL / WHOLESALE SALES AND THAT THERE WAS NO MATERIAL ON RECORD TO SHOW THAT THE ASSESSEE PURCHA SED THE GOLD FROM THE CUSTOMERS. EVEN OTHERWISE THE PURCHASE PRICE HAS TO BE TAKEN INTO CONSIDERATION IF THE GOLD LYING WITH THE WORKERS IS TAKEN AS CLOSING STOCK. SINCE THE FACTS AND CIRCUMSTANCES ARE IDENTICAL CO NSISTENT WITH THE DECISION ALREADY ARRIVED AT WE DO NOT SEE ANY INFIR MITY IN THE ORDER OF THE CIT(A) ON THIS ISSUE. THE SAME IS CONFIRMED. 62. THE NEXT GROUND OF APPEAL IS WITH REGARD TO ADV ANCE GIVEN TO WORKERS TO THE EXTENT OF RS.3 96 726. 63. THE SEIZED MATERIAL CHN-04-09-VNB-19 22 AND 23 REVEALED THAT AMOUNT RECEIVABLE FROM WORKERS WAS RS.4 64 932 WHER EAS THE BALANCE- SHEET DEPICTED AN AMOUNT OF RS.68 206. THE DIFFERE NCE WAS WORKED OUT AT 48 ITA NO. 429/COCH/2013 ITA 444&445/COCH/2013 ITAS 488-489/COCH/2013 ITA 490- 492/COCH/2013 ITA NO.498/COCH/2013 ITA NO.565/COCH/2013 CO NOS 20 & 26-28/COCH/2013 CO NO.64/COCH/2013 RS.3 96 726. AS NO EXPLANATION WAS OFFERED THE AS SESSING OFFICER MADE THE ADDITION. ON APPEAL THE CIT(A) ACCEPTING THE CONTENTION OF THE ASSESSEE FOUND THAT GIVING ADVANCE TO WORKERS IS T HE USUAL PRACTICE IN THIS LINE OF BUSINESS WHICH IS SETTLED WITH THE WEEKLY P AYMENTS OF WAGES / SALARY AND THAT ONLY IF THERE IS ANY BALANCE AS ON THE LAST DAY OF THE ACCOUNTING YEAR THAT AMOUNT IS SHOWN AS ADVANCE OU TSTANDING WHICH HAS BEEN SHOWN IN THE BALANCE-SHEET AS AT THE YEAR ENDI NG. WE HEARD THE LD.DR AND THE LD.COUNSEL FOR THE ASSESSEE. NO NEW FACTS HAVE BEEN BROUGHT TO OUR CONSIDERATION BY EITHER OF THE PARTI ES BEFORE US. AS SUCH THE FACTUAL FINDINGS RECORDED BY THE CIT(A) REMAINS UNCONTROVERTED. THEREFORE WE DO NOT FIND ANY REASON TO INTERFERE W ITH THE ORDER OF THE CIT(A) ON THIS ISSUE. THE SAME IS CONFIRMED. 63. NOW COMING TO ASSESSEES APPEAL FOR THE ASSESSM ENT YEAR 2009-10 IN ITA NO.492/COCH/2013 THE FIRST ISSUE PERTAINS TO DISALLOWANCE OF EXCESS SALARY. THIS ISSUE HAS BEEN DISCUSSED IN DETAIL AB OVE WHILE DEALING WITH THE APPEAL FOR ASSESSMENT YEAR 2008-09. THIS TRIBU NAL FOUND THAT THAT THE ASSESSING OFFICER AS WELL AS THE CIT(A) FOUND OUT T HE DIFFERENCE IN RESPECT 49 ITA NO. 429/COCH/2013 ITA 444&445/COCH/2013 ITAS 488-489/COCH/2013 ITA 490- 492/COCH/2013 ITA NO.498/COCH/2013 ITA NO.565/COCH/2013 CO NOS 20 & 26-28/COCH/2013 CO NO.64/COCH/2013 OF EXCESS SALARY DEBITED ON THE BASIS OF THE MATERI AL FOUND DURING THE COURSE OF SEARCH OPERATION AND THE PROFIT & LOSS AC COUNT FILED ALONG WITH THE RETURN OF INCOME. AND IN THE ABSENCE OF ANY MA TERIAL TO EXPLAIN THE EXCESS SALARY DEBITED THIS TRIBUNAL UPHELD THE ORD ER OF THE CIT(A) TREATING EXCESS SALARY AS INCOME OF THE ASSESSEE. SINCE TH E FACTS AND CIRCUMSTANCES FOR THE YEAR UNDER CONSIDERATION ARE IDENTICAL TO THAT OF ASSESSMENT YEAR 2008-09 THIS TRIBUNAL UPHOLD THE O RDER OF THE CIT(A) ON THIS ISSUE FOR THE ASSESSMENT YEAR 2009-10 ALSO. T HE REVENUE FAILS ON HIS GROUND. 64. THE NEXT GROUND OF APPEAL IS WITH REGARD TO ADD ITION OF RS.8 80 631 TOWARDS EXCESS WAGES. THIS ISSUE HAS BEEN DISCUSSE D IN DETAIL FOR ASSESSMENT YEAR 2008-09. THE FACTS AND CIRCUMSTANC ES ARE STATED TO BE IDENTICAL. THEREFORE CONSISTENT WITH THE VIEW ALR EADY TAKEN THIS TRIBUNAL CONFIRM THE ORDER OF THE CIT(A). 65. NOW COMING TO THE APPEAL FILED BY THE REVENUE F OR THE ASSESSMENT YEAR 2009-10 IN ITA NO.490/COCH/2013 THE FIRST GROU ND PERTAINS TO 50 ITA NO. 429/COCH/2013 ITA 444&445/COCH/2013 ITAS 488-489/COCH/2013 ITA 490- 492/COCH/2013 ITA NO.498/COCH/2013 ITA NO.565/COCH/2013 CO NOS 20 & 26-28/COCH/2013 CO NO.64/COCH/2013 UNEXPLAINED EXPENDITURE IN HOUSE CONSTRUCTION AMOUN TING TO RS.45 17 673. THE VERY SAME ISSUE WAS DISCUSSED FOR THE ASSESSMEN T YEAR 2007-08. THIS ISSUE HAS BEEN ADEQUATELY DISCUSSED IN EARLIER PARAGRAPHS WHILE DEALING WITH THE IDENTICAL ISSUE RAISED FOR ASSESSM ENT YEAR 2007-08. WE HAVE ALREADY FOUND THAT ADDITION WAS MADE BY THE AS SESSING OFFICER ONLY ON THE GROUND THAT THE ASSESSEE HAS NOT SHOWN ANY O UTFLOW OF CASH TOWARDS INVESTMENT IN THE LANDED PROPERTY; CASH FLO W STATEMENT IS NOTHING BUT AN EXTRACT OF BOOKS OF ACCOUNT; IT IS NOT THE C ASE OF THE REVENUE THAT THE INVESTMENTS MADE IN THE LANDED PROPERTIES WERE NOT REFLECTED IN THE BOOKS OF ACCOUNT OF AISWARYA JEWEL CRAFT; AND THAT WHEN T HE INVESTMENT IS REFLECTED IN THE BUSINESS CONCERN VIZ. AISWARYA JE WEL CRAFT MERELY BECAUSE THERE WAS AN OMISSION TO MENTION THE SAME I N THE CASH FLOW STATEMENT THERE CANNOT BE ANY ADDITION. THE FACTS AND CIRCUMSTANCES FOR THE YEAR UNDER CONSIDERATION ARE STATED TO BE IDENT ICAL. IN THE CIRCUMSTANCES CONSISTENT WITH THE EARLIER VIEW TAK EN WE DECIDE THE ISSUE IN FAVOUR OF THE ASSESSEE AND AGAINST THE DEPARTMEN T. THE ORDER OF THE CIT(A) ON THIS ISSUE IS CONFIRMED. 51 ITA NO. 429/COCH/2013 ITA 444&445/COCH/2013 ITAS 488-489/COCH/2013 ITA 490- 492/COCH/2013 ITA NO.498/COCH/2013 ITA NO.565/COCH/2013 CO NOS 20 & 26-28/COCH/2013 CO NO.64/COCH/2013 66. THE NEXT ISSUE PERTAINS TO THE UNEXPLAINED INVE STMENT IN KURIES TO THE EXTENT OF RS. 14 54 617. THIS GROUND IS AKIN T O ONE OF THE GROUNDS RAISED BY THE REVENUE FOR THE ASSESSMENT YEAR 2006- 07. WE HAVE ELABORATELY DISCUSSED THE ISSUE THERE IN THE EARLIE R PARAGRAPHS AND COME TO A CONCLUSION IN FAVOUR OF THE ASSESSEE BY UPHOLD ING THE ORDER OF THE CIT(A) ON THIS ISSUE. THE FACTS AND CIRCUMSTANCES FOR THE ASSESSMENT YEAR 2009-10 ARE STATED TO BE IDENTICAL. IN THE CI RCUMSTANCES CONSISTENT WITH THE EARLIER CONCLUSION REACHED WE UPHOLD THE ORDER OF THE CIT(A) ON THIS ISSUE AND REJECT THE GROUND RAISED BY THE REVE NUE. 67. THE THIRD GROUND PERTAINS TO DELETION OF ADDITI ON OF RS.12 17 913 ON ACCOUNT OF GOLD WITH OUTSIDE WORKERS. THIS ISSUE H AS BEEN DELIBERATED IN DETAIL WHILE DEALING WITH THE APPEAL FOR ASSESSMENT YEAR 2007-08 FILED BY THE REVENUE. THE FACTS AND CIRCUMSTANCES FOR THE A SSESSMENT YEAR UNDER CONSIDERATION ARE STATED TO BE IDENTICAL. IN THE C IRCUMSTANCES WE DO NOT FIND ANY REASON TO COME TO A DIFFERENT CONCLUSION T HAN THE ONE ALREADY REACHED FOR THE ASSESSMENT YEAR 2007-08. THEREFORE WE UPHOLD THE ORDER OF THE CIT(A) ON THIS ISSUE FOR THE ASSESSMENT TEAR 2010-11. 52 ITA NO. 429/COCH/2013 ITA 444&445/COCH/2013 ITAS 488-489/COCH/2013 ITA 490- 492/COCH/2013 ITA NO.498/COCH/2013 ITA NO.565/COCH/2013 CO NOS 20 & 26-28/COCH/2013 CO NO.64/COCH/2013 68. NOW COMING TO ASSESSEES APPEAL FOR THE ASSESSM ENT YEAR 2010-11 IN ITA 498/COCH/2013 THE ONLY ISSUE ARISES FOR CON SIDERATION IS DISALLOWANCE OF RS.29 00 297 TOWARDS STAFF CREDITOR S FOR GOLD. 69. SHRI SIVARAMAKRISHNAN THE LD.REPRESENTATIVE FO R THE ASSESSEE SUBMITTED THAT THE ASSESSEE CLAIMED RS. 29 00 297 T OWARDS STAFF CREDITS FOR GOLD. HOWEVER THE ASSESSING OFFICER DISALLOWE D THE CLAIM OF THE ASSESSEE ON THE GROUND THAT NO CONFIRMATION LETTER WAS FILED. ACCORDING TO THE LD.REPRESENTATIVE THE ASSESSEE HAS FILED ALL T HE DETAILS REQUIRED BEFORE THE LOWER AUTHORITIES. IN ORDER TO MEET THE DEMAND AND PRESSURE OF CUSTOMERS THE ASSESSEE OBTAINED OLD GOLD FROM THE WORKERS INCLUDING THE OUTSIDE WORKERS. THE ASSESSEE HAS ISSUED PURCHASE BILLS FOR PURCHASE OF OLD GOLD AND ALSO FILED SALES-TAX RETURN BEFORE THE SALES-TAX DEPARTMENT. ACCORDING TO THE LD.REPRESENTATIVE THESE ARE ALL C REDIT PURCHASES. THE ASSESSEE HAS ALSO FILED CONFIRMATION LETTERS FROM T HE RESPECTIVE WORKERS. THEREFORE THERE IS NO JUSTIFICATION FOR DISALLOWIN G THE CLAIM OF THE ASSESSEE TO THE EXTENT OF RS.29 00 297. 53 ITA NO. 429/COCH/2013 ITA 444&445/COCH/2013 ITAS 488-489/COCH/2013 ITA 490- 492/COCH/2013 ITA NO.498/COCH/2013 ITA NO.565/COCH/2013 CO NOS 20 & 26-28/COCH/2013 CO NO.64/COCH/2013 70. ON THE CONTRARY SHRI M ANIL KUMAR THE LD.DR S UBMITTED THAT THE ASSESSEE HAS NOT FILED ANY MATERIAL TO PROVE THE ID ENTITY OF THE PARTIES CREDITWORTHINESS OF THE PARTIES TO GIVE OLD AND THE GENUINENESS OF THE TRANSACTION. THE ASSESSING OFFICER REJECTED THE CL AIM OF THE ASSESSEE ONLY ON THE GROUND THAT THE ASSESSEE HAS NOT FILED ANY M ATERIAL. 71. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EIT HER SIDE AND ALSO PERUSED THE MATERIAL AVAILABLE ON RECORD. THE ASSE SSEE NOW CLAIMS THAT THE ASSESSEE HAS FILED ALL THE REQUIRED DETAILS BEF ORE THE LOWER AUTHORITIES INCLUDING THE CONFIRMATION LETTERS FROM THE RESPECT IVE WORKERS. HOWEVER PERUSAL OF THE ORDERS OF THE LOWER AUTHORITIES SHOW S THAT THE ASSESSEE HAS NOT FILED ANY MATERIAL TO PROVE THE IDENTITY OF THE WORKERS CREDITWORTHINESS OF THE PARTIES. SINCE THE ASSESSEE CLAIMS THAT THE DETAILS WERE ALREADY FILED THIS TRIBUNAL IS OF THE CONSIDERED OPINION T HAT ONE MORE OPPORTUNITY MAY BE GIVEN TO THE ASSESSEE TO EXAMINE THE MATERIA LS SAID TO BE FILED BEFORE THE LOWER AUTHORITIES. BY GIVING SUCH AN OP PORTUNITY THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THE INTEREST OF THE REVENUE MAY NOT BE 54 ITA NO. 429/COCH/2013 ITA 444&445/COCH/2013 ITAS 488-489/COCH/2013 ITA 490- 492/COCH/2013 ITA NO.498/COCH/2013 ITA NO.565/COCH/2013 CO NOS 20 & 26-28/COCH/2013 CO NO.64/COCH/2013 PREJUDICED IN ANY WAY. IF THE ASSESSEE HAS REALLY RECEIVED GOLD ON CREDIT FROM THE WORKERS THE SAME HAS TO BE TAKEN INTO CON SIDERATION. ACCORDINGLY THE ORDERS OF THE LOWER AUTHORITIES AR E SET ASIDE AND THE ISSUE OF ADDITION OF RS. 29 00 027 IS REMITTED BACK TO T HE FILE OF THE ASSESSING OFFICER. THE ASSESSEE SHALL FILE THE REQUIRED DETA ILS TO PROVE THE IDENTITY AND CREDITWORTHINESS OF THE WORKERS FROM WHOM THE G OLD WAS SAID TO HAVE BEEN RECEIVED. THE ASSESSING OFFICER AFTER CONSID ERING THE EVIDENCE IF ANY FILED BY THE ASSESSEE SHALL DECIDE THE ISSUE A FRESH IN ACCORDANCE WITH LAW AFTER GIVING REASONABLE OPPORTUNITY TO THE ASSE SSEE. 72. NOW COMING TO REVENUES APPEAL IN ITA NO.565/CO CH/2013 FOR THE ASSESSMENT YEAR 2010-11 THE FIRST GROUND OF APPEAL IS WITH REGARD TO UNEXPLAINED INVESTMENT IN KURI TO THE EXTENT OF RS. 19 98 583 73. THIS GROUND IS AKIN TO ONE OF THE GROUNDS RAISE D BY THE REVENUE FOR THE ASSESSMENT YEAR 2006-07. WE HAVE ELABORATELY D ISCUSSED THE ISSUE THERE IN THE EARLIER PARAGRAPHS AND COME TO A CONCL USION IN FAVOUR OF THE ASSESSEE BY UPHOLDING THE ORDER OF THE CIT(A) ON TH IS ISSUE. THE FACTS AND 55 ITA NO. 429/COCH/2013 ITA 444&445/COCH/2013 ITAS 488-489/COCH/2013 ITA 490- 492/COCH/2013 ITA NO.498/COCH/2013 ITA NO.565/COCH/2013 CO NOS 20 & 26-28/COCH/2013 CO NO.64/COCH/2013 CIRCUMSTANCES FOR THE ASSESSMENT YEAR 2010-11 ARE S TATED TO BE IDENTICAL. IN THE CIRCUMSTANCES CONSISTENT WITH THE EARLIER C ONCLUSION REACHED WE UPHOLD THE ORDER OF THE CIT(A) ON THIS ISSUE AND RE JECT THE GROUND RAISED BY THE REVENUE. 74. THE NEXT GROUND OF APPEAL IS WITH REGARD TO ADD ITION OF RS.23 93 086 ON ACCOUNT OF GOLD WITH OUTSIDE WORKERS. THIS ISSU E HAS BEEN DELIBERATED IN THE DETAILS WHILE DEALING WITH THE APPEAL FOR AS SESSMENT YEAR 2007-08 FILED BY THE REVENUE. THE FACTS AND CIRCUMSTANCES FOR THE ASSESSMENT YEAR UNDER CONSIDERATION ARE STATED TO BE IDENTICAL . IN THE CIRCUMSTANCES WE DO NOT FIND ANY REASON TO COME TO A DIFFERENT CO NCLUSION THAN THE ONE ALREADY REACHED FOR THE ASSESSMENT YEAR 2007-08. T HEREFORE WE UPHOLD THE ORDER OF THE CIT(A) ON THIS ISSUE FOR THE ASSES SMENT TEAR 2010-11. 75. THE NEXT GROUND OF APPEAL IS WITH REGARD TO ADD ITION OF RS.57 572 ON ACCOUNT OF ADVANCE SALARY TO WORKERS. THIS ISSUE T OO HAS BEEN DECIDED BY US IN FAVOUR OF THE ASSESSEE AND AGAINST THE DEP ARTMENT WHILE DEALING WITH THE APPEAL FILED BY THE REVENUE FOR THE ASSESS MENT YEAR 2008-09. FOR 56 ITA NO. 429/COCH/2013 ITA 444&445/COCH/2013 ITAS 488-489/COCH/2013 ITA 490- 492/COCH/2013 ITA NO.498/COCH/2013 ITA NO.565/COCH/2013 CO NOS 20 & 26-28/COCH/2013 CO NO.64/COCH/2013 THE REASONS STATED THEREIN AND CONSISTENT WITH THE DECISION ALREADY TAKEN WE UPHOLD THE ORDER OF THE CIT(A) ON THIS ISSUE. 76. THE NEXT GROUND OF APPEAL IS WITH REGARD TO EXP ORT OF UNACCOUNTED GOLD TO THE EXTENT OF RS. 42 77 680. 77. SHRI M ANIL KUMAR THE LD.DR SUBMITTED THAT THE ASSESSEE WAS EXPORTING GOLD ORNAMENTS FROM JANUARY 2009 ONWARDS . ACCORDING TO THE LD.DR THE ASSESSEE PURCHASED 24 CARAT BULLION FROM MMTC AND CONVERTED THE SAME INTO 22 CARAT GOLD ORNAMENTS FOR EXPORTS. AFTER VERIFYING THE DETAILS FURNISHED BY THE ASSESSEE THE ASSESSING OF FICER FOUND THAT THE ASSESSEE HAS NOT PURCHASED BULLION CORRESPONDING TO THE GOLD ORNAMENTS EXPORTED ON 25-05-2009 AND 19-12-2009 TO THE EXTENT OF RS.48 49 442. ACCORDING TO THE LD.DR THE ASSESSEE HAS NO SATISFA CTORY EXPLANATION TO OFFER. THEREFORE THE VALUE OF THE GOLD EXPORTED O N 25-05-2009 AND 19-12- 2009 WAS ADDED TO THE INCOME OF THE ASSESSEE FOR TH E ASSESSMENT YEAR 2010-11. HOWEVER THE CIT(A) DELETED THE ADDITION ON THE BASIS OF THE STOCK DETAILS FURNISHED BY THE ASSESSEE. ACCORDING TO THE LD.DR THE 57 ITA NO. 429/COCH/2013 ITA 444&445/COCH/2013 ITAS 488-489/COCH/2013 ITA 490- 492/COCH/2013 ITA NO.498/COCH/2013 ITA NO.565/COCH/2013 CO NOS 20 & 26-28/COCH/2013 CO NO.64/COCH/2013 CIT(A) WITHOUT ANY CORROBORATIVE EVIDENCE DELETED T HE ADDITION ON THE BASIS OF THE STATEMENT OF THE ASSESSEE. 78. ON THE CONTRARY SHRI SIVRAMAKRISHNAN THE LD.R EPRESENTATIVE FOR THE ASSESSEE SUBMITTED THAT THE ASSESSING OFFICER WAS U NDER THE PRESUMPTION THAT THE ASSESSEE USED TO PURCHASE GOLD BULLION ONL Y FROM MMTC. ACCORDING TO THE LD.REPRESENTATIVE THE ASSESSEE NO RMALLY PURCHASES BULLION FOR MAKING GOLD ORNAMENTS FOR EXPORT. HOWE VER ON CERTAIN OCCASIONS THE GOLD PURCHASED FROM THE LOCAL CUSTOM ERS ALSO USED FOR MAKING GOLD ORNAMENTS FOR EXPORT. SOMETIMES THE B ILLIONS WERE NOT AVAILABLE IN MMTC. THE ASSESSEE WOULD BE UNDER THE .PRESSURE TO EXPORT THE ORNAMENTS IMMEDIATELY THEREFORE HE HAS TO PUR CHASE BULLIONS FROM THE LOCAL BULLION DEALERS AND THE CUSTOMERS AS AND WHEN NECESSARY. ACCORDING TO THE LD.REPRESENTATIVE THERE IS NO HAR D AND FAST RULE THAT ONLY BULLION SUPPLIED BY THE MMTC SHOULD BE USED FOR MAK ING GOLD ORNAMENTS FOR EXPORT. THE STOCK DETAILS AND OTHER MATERIALS WERE AVAILABLE BEFORE THE ASSESSING OFFICER TO ESTABLISH THAT THE EXPORT OF 3 111.040 GMS OF GOLD WAS MADE FROM THE AVAILABLE STOCK. WHEN THE ASSESSEE H AS AVAILABLE STOCK TO 58 ITA NO. 429/COCH/2013 ITA 444&445/COCH/2013 ITAS 488-489/COCH/2013 ITA 490- 492/COCH/2013 ITA NO.498/COCH/2013 ITA NO.565/COCH/2013 CO NOS 20 & 26-28/COCH/2013 CO NO.64/COCH/2013 THE EXTENT OF EXPORT MADE ON 25-05-2009 AND 19-12-2 009 ACCORDING TO THE LD.REPRESENTATIVE THERE CANNOT BE ANY PRESUMPTION THAT THE ASSESSEE PURCHASED THE BULLION FROM MMTC. 79. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EIT HER SIDE AND ALSO PERUSED THE MATERIAL AVAILABLE ON RECORD. THE CIT( A) AFTER CONSIDERING THE STOCK DETAILS AND THE BALANCE-SHEET FOUND THAT AS ON 25-05-2009 AND 19-12-2009 THE ASSESSEE HAS SUFFICIENT STOCK OF JEW ELLERY FOR MAKING EXPORT TO THE EXTENT OF 3111.040 GMS. IT IS ALSO N OT IN DISPUTE THAT THE ASSESSEE IS PURCHASING OLD GOLD FROM THE CUSTOMERS ON PAYMENT OF PURCHASE TAX. IT IS ALSO A FACT THAT BULLIONS SOME TIMES MAY NOT BE AVAILABLE IN MMTC THEREFORE THE ASSESSEE HAS TO PURCHASE BU LLION FROM LOCAL DEALERS. SO LONG AS THE STOCK IS AVAILABLE WITH TH E ASSESSEE FOR EXPORT OF JEWELLERY TO THE EXTENT OF 3111.040 GMS OF JEWELLER Y ON 25-05-2009 AND 19-12-2009 THERE CANNOT BE ANY PRESUMPTION THAT THE ASSESSEE HAS INVESTED UNACCOUNTED MONEY FOR PURCHASE OF BULLION FROM MMTC. THEREFORE THIS TRIBUNAL DO NOT FIND ANY INFIRMITY IN THE ORDER OF LOWER AUTHORITY. ACCORDINGLY THE SAME IS CONFIRMED. 59 ITA NO. 429/COCH/2013 ITA 444&445/COCH/2013 ITAS 488-489/COCH/2013 ITA 490- 492/COCH/2013 ITA NO.498/COCH/2013 ITA NO.565/COCH/2013 CO NOS 20 & 26-28/COCH/2013 CO NO.64/COCH/2013 80. THE NEXT GROUND OF APPEAL IS WITH REGARD TO INV ESTMENT IN THE GOLD SEIZED FROM THE RESIDENCE OF THE ASSESSEE. 81. SHRI M ANIL KUMAR THE LD.DR SUBMITTED THAT DUR ING THE COURSE OF SEARCH OPERATION 5393.610 GMS OF GOLD JEWELLERY WAS FOUND AND SEIZED. ACCORDING TO THE LD.DR SHRI RAMAKRISHNAN THE MANA GER OF AISWARIYA JEWEL CRAFT WAS EXAMINED U/S 131 OF THE ACT AND HE EXPLAINED THAT THE STOCK STATEMENT PREPARED INCLUDES STOCK KEPT FOR TH E PURPOSE OF EXPORT. THE ASSESSEE EXPLAINED THAT THIS 5393.610 GMS OF GO LD MIGHT HAVE EARMARKED FOR EXPORT. THEREFORE IT IS OBVIOUS THA T THE GOLD FOUND AND SEIZED DURING THE COURSE OF SEARCH OPERATION BELONG S TO THE ASSESSEE. THE STOCK FOUND AT THE TIME OF SEARCH IN THE BUSINE SS PREMISES OF THE ASSESSEE DOES NOT INCLUDE THE ABOVE MENTIONED 5379. 460 GMS OF GOLD. IN THE ABSENCE OF ANY EXPLANATION ACCORDING TO THE LD .DR THE ASSESSING OFFICER TREATED THE ENTIRE GOLD AS UNACCOUNTED INVE STMENT. ACCORDINGLY THE VALUE OF THE ABOVE SAID GOLD TO THE EXTENT OF RS.76 04 550 WAS TAKEN AS INCOME OF THE ASSESSEE. HOWEVER ON APPEAL THE CIT (A) FOUND THAT THE 60 ITA NO. 429/COCH/2013 ITA 444&445/COCH/2013 ITAS 488-489/COCH/2013 ITA 490- 492/COCH/2013 ITA NO.498/COCH/2013 ITA NO.565/COCH/2013 CO NOS 20 & 26-28/COCH/2013 CO NO.64/COCH/2013 SEIZED GOLD TO THE EXTENT OF RS.5393.610 GMS FORM P ART OF THE TOTAL JEWELLERY ON 19 093.731 GMS OF GOLD WHICH WAS EARMA RKED FOR EXPORT. ACCORDING TO THE LD.DR THE CIT(A) DELETED THE ADDI TION WITHOUT CONSIDERING THE MATERIAL AVAILABLE ON RECORD. 82. ON THE CONTRARY SHRI SIVARAMAKRISHNAN THE LD. REPRESENTATIVE FOR THE ASSESSEE SUBMITTED THAT ON THE REVERSE SIDE OF THE SEIZED MATERIAL CHN- 04-09-/VN-B(1) MORE PARTICULARLY ON PAGE 20 SHOWS EARMARKS FOR EXPORT. THIS GOLD WAS FOUND AT THE RESIDENCE OF THE PROPRIE TOR VIZ. THE PRESENT ASSESSEE. ACCORDING TO THE LD.REPRESENTATIVE THE GOLD FOUND WAS SEMI FINISHED GOLD ORNAMENT FROM THE WORK SITE. THE ASS ESSING OFFICER CONFUSED HIMSELF IN SAYING THAT 5379.460 GMS OF GOLD WAS EXP ORTED ON 27-09-2009 AND THIS IS DIFFERENT FROM 5393.610 GMS OF GOLD FOU ND AT THE RESIDENCE. ACCORDING TO THE LD.REPRESENTATIVE ADMITTEDLY 5379 .460 GMS OF GOLD JEWELLERY WAS KEPT AT THE RESIDENCE OF THE ASSESSEE FOR EXPORT. THE ASSESSEE HAS ALSO OBTAINED NECESSARY CLEARANCE FROM THE CUSTOMS AUTHORITIES FOR EXPORT. THESE EVIDENCES ARE AVAILA BLE BEFORE THE LOWER AUTHORITIES. DURING THE VALUATION BY THE REGISTERE D VALUER IT WAS CERTIFIED 61 ITA NO. 429/COCH/2013 ITA 444&445/COCH/2013 ITAS 488-489/COCH/2013 ITA 490- 492/COCH/2013 ITA NO.498/COCH/2013 ITA NO.565/COCH/2013 CO NOS 20 & 26-28/COCH/2013 CO NO.64/COCH/2013 THAT THE GOLD FOUND WAS UNFINISHED JEWELLERY. THER EFORE ACCORDING TO THE LD.REPRESENTATIVE THE UNFINISHED JEWELLERY TO THE EXTENT OF 5393.610 GMS MAY NOT BE TREATED AS UNACCOUNTED JEWELLERY. ACCOR DING TO THE LD.REPRESENTATIVE THE MANAGER SHRI RAMAKRISHNAN DU RING THE COURSE OF EXAMINATION EXPLAINED THAT THE TOTAL JEWELLERY FOUN D IN THE POSSESSION OF THE ASSESSEE WAS 19 039.731 GMS OF GOLD. THE ASSES SEE HAS ALSO FILED RECONCILIATION STATEMENT WHICH WAS EXTRACTED BY THE CIT(A) ON PAGE 16 OF HIS ORDER. SINCE THE UNFINISHED JEWELLERY FOUND TO THE EXTENT OF 5393.610 WAS PART OF THE TOTAL JEWELLERY OF 19039.731 GMS A CCORDING TO THE LD.REPRESENTATIVE THERE IS NO UNACCOUNTED INVESTME NT IN THE JEWELLERY FOUND IN THE COURSE OF SEARCH OPERATION ALSO. 83. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EIT HER SIDE AND ALSO PERUSED THE MATERIAL AVAILABLE ON RECORD. ADMITTED LY 5393.610 GMS OF GOLD JEWELLERY WAS FOUND. THE ASSESSEE EXPLAINED T HAT THE JEWELLERY FOUND AT THE WORK SITE WAS UNFINISHED JEWELLERY. THE ASS ESSEE FILED A RE- CONCILIATION STATEMENT EXPLAINING THE OPENING STOCK GOLD ISSUED TO THE WORKERS GOLD GIVEN FOR TESTING ETC. THE TOTAL JEW ELLERY WAS 19039.731 GMS 62 ITA NO. 429/COCH/2013 ITA 444&445/COCH/2013 ITAS 488-489/COCH/2013 ITA 490- 492/COCH/2013 ITA NO.498/COCH/2013 ITA NO.565/COCH/2013 CO NOS 20 & 26-28/COCH/2013 CO NO.64/COCH/2013 WHICH INCLUDES 5393.610 JEWELLERY FOUND DURING THE COURSE OF SEARCH OPERATION. WHEN THE ASSESSEE EXPLAINS AND RECONCIL ES THE TOTAL GOLD WHICH FORM PART OF THE UNFINISHED JEWELLERY TO THE EXTENT OF 5393.610 THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THE CIT( A) HAS RIGHTLY DELETED THE ADDITION. THIS TRIBUNAL DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE CIT(A) ON THIS ISSUE. ACCORDINGLY THE SAME IS CONFIRMED. 84. NOW COMING TO THE CROSS OBJECTIONS FILED BY THE ASSESSEE; THEY ARE FILED IN SUPPORT OF THE DECISION OF THE CIT(A). SI NCE THE REVENUE APPEALS ARE DISMISSED EXCEPT FOR ASSESSMENT YEAR 2007-08 WH ERE THE DISALLOWANCE U/S 40A(3) AMOUNTING TO RS.5 93 470 HA S BEEN CONFIRMED AS THE LD.REPRESENTATIVE HAS CONCEDED THE SAME AT BAR THE CROSS OBJECTIONS BECOME INFRUCTUOUS. THE FIRST GROUND IN THE CROSS OBJECTION FOR THE ASSESSMENT YEAR 2010-11 NEITHER ARISES FROM THE ORD ER OF THE CIT(A) NOR CULMINATES FROM THE APPEAL FILED BY THE REVENUE. T HE CROSS OBJECTIONS ARE ACCORDINGLY DISMISSED. 63 ITA NO. 429/COCH/2013 ITA 444&445/COCH/2013 ITAS 488-489/COCH/2013 ITA 490- 492/COCH/2013 ITA NO.498/COCH/2013 ITA NO.565/COCH/2013 CO NOS 20 & 26-28/COCH/2013 CO NO.64/COCH/2013 85. IN THE RESULT REVENUES APPEAL FOR ASSESSMENT YEARS 2006-07 2008- 09 TO 2010-11 ARE DISMISSED AND FOR ASSESSMENT YEAR 2007-08 IS PARTLY ALLOWED. THE APPEALS FILED BY THE ASSESSEE FOR ASS ESSMENT YEAR 2005-06 AND 2010-11 ARE ALLOWED FOR STATISTICAL PURPOSE; FO R ASSESSMENT YEAR 2006- 07 IT IS PARTLY ALLOWED AND FOR ASSESSMENT YEAR 200 8-09 AND 2009-10 THEY ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 31 ST JULY 2014. SD/- SD/- (CHANDRA POOJARI) (N.R.S. GANESAN) ACCOUNTANT MEMBER JUDICIAL MEMBER COCHIN DT : 31 ST JULY 2014 PK/- COPY TO: 1. SHRI P.M. SATHYAN PROP AISWARYA JEWEL CRAFTS C HERPU TRICHUR DIST 2. THE DY.CIT CENT.CIR. TRICHUR 3. THE COMMISSIONER OF INCOME-TAX CENTRAL KOCHI 4. THE COMMISSIONER OF INCOME-TAX(A)-I KOCHI 5. THE DR (TRUE COPY) BY ORDER ASSTT. REGISTRAR INCOME-TAX APPELLATE TRIBUNAL COCHIN BENCH