THE ACIT, INV CIR .3(1), SURAT v. SHRI SURESH RAMJIBHAI DHANAK, SURAT

ITSSA 96/AHD/2001 | misc
Pronouncement Date: 09-07-2010 | Result: Partly Allowed

Appeal Details

RSA Number 9620516 RSA 2001
Assessee PAN YVDIS1997W
Bench Ahmedabad
Appeal Number ITSSA 96/AHD/2001
Duration Of Justice 8 year(s) 10 month(s) 16 day(s)
Appellant THE ACIT, INV CIR .3(1), SURAT
Respondent SHRI SURESH RAMJIBHAI DHANAK, SURAT
Appeal Type Income Tax (Search & Seizure) Appeal
Pronouncement Date 09-07-2010
Appeal Filed By Department
Order Result Partly Allowed
Bench Allotted C
Tribunal Order Date 09-07-2010
Date Of Final Hearing 10-06-2010
Next Hearing Date 10-06-2010
Assessment Year misc
Appeal Filed On 23-08-2001
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH 'C' [BEFORE S/SHRI BHAVNESH SAINI JM & A N PAHUJA AM] IT(SS)A NO.96/AHD/2001 [BLOCK PERIOD : 01-04-1988 TO 28-01-1999] ASSISTANT COMMISSIONER OF INCOME-TAX INV. CIRCLE-3(1) SURAT .. ..APPELLANT VS SMT. KUMUDBEN WIFE & SHRI VIMALBHAI SON LEGAL HEIRS OF LATE SHRI SURESHBHAI RAMJIBHAI DHANAK SURAT .RESPONDENT. REVENUE BY :- SHRI K SRIDHAR DR ASSESSEE BY:- SHRI M J SHAH AR O R D E R A N PAHUJA: THIS APPEAL BY THE REVENUE AGAINST AN ORDER DATED 11- 06-2001 OF THE LD. CIT(APPEALS)-III SURAT RAISES THE FOLLOWING GROUNDS :- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW THE LEARNED C.I.T.(A) HAS ERRED IN DIRECTING TO EXCLUD E ALL RECORDED MATERIAL FROM CONSIDERATION FOR THE BLOCK ASSESSMENT CONTRAR Y TO THE FACT THAT HAD THE SEARCH NOT BEEN CONDUCTED THE ASSESSEE WOULD N OT HAVE SHOWN THE SO CALLED CUSTOMERS GOLD WHICH WAS NOT RECORDED IN THE BOOKS OF ACCOUNTS NOR THE DUPLICATE REGISTER NO.11 WOULD HAVE BEEN SH OWN TO THE DEPARTMENT. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW THE LEARNED CIT(A) HAS ERRED IN DELETING THE ADDITION O F RS.24 62 700/- OBSERVING THAT ASSESSEE FILED AFFIDAVITS FROM ALL T HE DEPOSITORS AND GENUINENESS OF SAME WERE VERIFIED BY ASSESSING OFFI CER BUT HAS NOT CONSIDERED VARIOUS DISCREPANCIES POINTED OUT BY ASS ESSING OFFICER IN THE SEIZED MATERIAL INCLUDING THE FACT THAT ASSESSEE CO ULD NOT GIVE EVEN THE ADDRESSES OF THE SO CALLED DEPOSITORS AT THE TIME O F SEARCH AS ALSO NO RECORD OR REGISTER WAS FOUND AT THE TIME OF SEARCH WHICH CONTAINS DETAILS OF REMOLDING OF THE OLD ORNAMENTS. IT(SS)A NO.96/AHD/2001 LATE SURESH RAMJIBHAI DHANAK PROP. M/S LABH JEWELLERS SURAT 2 3. THE LEARNED CIT(A) ALSO ERRED IN DELETING THE AD DITION OF RS.1 36 332/- MADE ON ACCOUNT OF SILVER ARTICLES AC CEPTING ASSESSEE'S PLEA OF HAVING COVERED UNDER VDIS 1997 WHEREAS NO SUCH ENTRIES WERE MADE IN BOOKS OF ACCOUNTS AS REQUIRED UNDER THE LAW NOR ANY NEXUS WAS PROVED AND WITHOUT CONSIDERING THE FACT THAT ASSESS EE HIMSELF ADMITTED DURING THE COURSE OF SEARCH THAT SAME WAS ACQUIRED OUT OF UNDISCLOSED INCOME. 4. THE LEARNED CIT(A) ALSO ERRED IN DELETING ADDITI ON OF RS.1 50 000/- MADE ON PROTECTIVE BASIS BY OBSERVING THAT SUBSTANT IVE ADDITION OF SIMILAR AMOUNT MADE IN THE CASE OF SHRI YOGESHBHAI HAS BEEN CONFIRMED WITHOUT ASCERTAINING THE FACT WHETHER THE ASSESSEE HAS ACCE PTED THE SAID DECISION OF THE CIT(A). 5. THE LEARNED CIT(A) ALSO ERRED IN DELETING THE AD DITION OF RS.59 208/- MADE ON ACCOUNT OF PROFIT ON UNACCOUNTED SALE UNAC COUNTED LABOUR CHARGES OBSERVING THAT THEY HAVE BEEN CLEARLY MENT IONED AS ESTIMATES IN THE RELATED PAPER CONTRARY TO THE FACT THAT THESE E STIMATE BOOKS ARE CONTAINING ALL THE DETAILS AS ALSO CASH RECEIPTS. 6. THE LD. CIT(A) ALSO ERRED IN DELETING ADDITION O F RS.5 62 161 MADE ON ACCOUNT OF UNDISCLOSED INCOME IN RESPECT OF GOLD LOAN ACCEPTING ASSESSEE'S PLEA OF HAVING COVERED BY VDIS 1997 WHER EAS NO SUCH ENTRY WERE MADE IN BOOKS OF ACCOUNTS AS REQUIRED UNDER TH E LAW NOR ANY NEXUS WAS PROVED. 7. THE LD. CIT(A) ALSO ERRED IN DELETING THE ADDITI ON OF RS.3 90 150/- MADE ON ACCOUNT OF UNACCOUNTED INVESTMENT IN FURNIT URE AND FIXTURE OBSERVING THAT FIGURES MENTIONED ON SEIZED PAPERS W ERE ON ESTIMATE WHEREAS ADDITION WAS MADE ON THE BASIS OF SEIZED MA TERIAL. THE CIT(A) HAS ERRED IN ACCEPTING THE NEW VERSION OF THE FACT THAT ASSESSEE HAS FAILED TO ESTABLISH AS TO WHETHER HE LIED BEFORE THE INSUR ANCE AUTHORITY OR BEFORE I.T. AUTHORITY. 8. THE LEARNED CIT(A) ALSO ERRED IN DECIDING THE AP PEAL WITHOUT GIVING AN OPPORTUNITY TO THE ASSESSING OFFICER AS PER PROV ISIONS OF SECTION 250 OF THE I.T. ACT 1961 AND DECIDING THE APPEAL IN A HUR RIED MANNER. 9. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW THE LEARNED CIT(A) OUGHT TO HAVE UPHELD THE ORDER OF TH E AO. 10 IT IS THEREFORE PRAYED THAT THE ORDER OF THE CIT(A) BE SET ASIDE AND THAT OF THE AO BE RESTORED. IT(SS)A NO.96/AHD/2001 LATE SURESH RAMJIBHAI DHANAK PROP. M/S LABH JEWELLERS SURAT 3 2 ADVERTING FIRST TO GROUND NOS.1 & 2 IN THE APPEAL FACTS IN BRIEF AS PER RELEVANT ORDERS ARE THAT INITIALLY T HE ASSESSEE PROPRIETOR OF M/S LABH JEWELLERS WAS ASSESSED WITH THE ASSESSING OFFICER[AO IN SHORT] AT MUMBAI. A SURVEY U/S 133A O F THE INCOME-TAX ACT 1961 [HEREINAFTER REFERRED TO AS THE ACT] WA S CONDUCTED IN THE BUSINESS PREMISES OF THE ASSESSEE ON 28-01-1999 AND SEVERAL INCRIMINATING PAPERS AND STOCK WERE FOUND WHICH WE RE NOT EXPLAINED BY THE ASSESSEE. THEREFORE SURVEY WAS CONVERTED IN TO SEARCH U/S 132 OF THE ACT. IN CONSEQUENCE OF THE SEARCH A NOT ICE U/S 158BC OF THE ACT WAS SERVED ON THE ASSESSEE BY THE ASSESSING OFFICER AT MUMBAI ON 9.7.1999.IN RESPONSE THE ASSESSEE FILED R ETURN DECLARING NIL UNDISCLOSED INCOME. SUBSEQUENTLY JURISDICTION W AS TRANSFERRED TO THE AO AT SURAT VIDE ORDER DATED 22.12.1999 U/S 127 OF THE ACT. 3. AS REGARDS GROUND NO.1 RELATING TO DIRECTIO NS OF THE LD. CIT(A) TO EXCLUDE ALL RECORDED MATERIAL FROM CONSIDERATION OF THE BLOCK ASSESSMENT THE AO HAS DISCUSSED THE ISSUE IN PARA 16.17 OF THE ASSESSMENT ORDER SPECIFICALLY. ACCORDING TO THE AO BUT FOR THE SEARCH STOCK OF GOLD FOUND AND SEIZED AND DUPLICAT E REGISTER NO.11 WOULD NOT HAVE BEEN PRODUCED BEFORE THE DEPARTMENT AND THEREFORE ADDITION ON ACCOUNT OF GOLD ORNAMENTS CLAIMED TO BE BELONGING TO CERTAIN DEPOSITORS WAS REQUIRED TO BE MADE IN THE BLOCK ASSESSMENT ON THE BASIS OF SEIZED DOCUMENTS. HOWEVE R THE LD. CIT(A) AFTER GOING THROUGH THE RELEVANT PROVISIONS OF SEC.158B(B) 158BA(1) AND 158BA(3) CONCLUDED AS UND ER: 4.2 I AGREE WITH THE LEARNED COUNSEL THAT IN VIEW OF THE SPECIFIC PROVISIONS OF LAW WHAT IS FOUND RECORDED IS TO BE EXCLUDED FOR THE PURPOSES OF BLOCK ASSESSMENT. IT IS NOT THAT ADDITI ON CANNOT BE MADE IN RESPECT OF RECORDED MATERIAL BUT SUCH ADDITION CAN BE MADE ONLY IN THE REGULAR ASSESSMENT U/S 143(3) / 144 AND NOT IN THE BLOCK ASSESSMENT U/S 158BC. IT IS NOT REQUIRED THAT THE RECORDED MATERIA L SHOULD CONTAIN ALL MANNER OF DETAIL. THE ONLY REQUIREMENT IN LAW IS TH AT THE INFORMATION SHOULD BE RECORDED IN THE BOOKS OF ACCOUNTS AND OTHER DOCU MENTS MAINTAINED IN IT(SS)A NO.96/AHD/2001 LATE SURESH RAMJIBHAI DHANAK PROP. M/S LABH JEWELLERS SURAT 4 THE NORMAL COURSE. THE ASSESSING OFFICER IS ACCORDI NGLY DIRECTED TO EXCLUDE ALL RECORDED MATERIAL FROM CONSIDERATION FO R THE PURPOSE OF BLOCK ASSESSMENT. 4 GROUND NO.2 CONNECTED WITH AFORESAID GROUND NO.1 RELATES TO ADDITION OF RS.24 62 700/- ON ACCOUNT OF GOLD ORNAM ENTS CLAIMED TO BE BELONGING TO CERTAIN DEPOSITORS. DURING THE COUR SE OF SEARCH IN THE BUSINESS PREMISES OF THE ASSESSEE ON 28-01-1999 SEVERAL INCRIMINATING PAPERS AND STOCK FOUND WERE SEIZED. THE DETAILS OF GOLD ORNAMENTS / SILVER ARTICLES SEIZED REVEALED AS UNDER: PARTICULARS FOUND SEIZED WEIGHT VALUE (RS.) WEIGHT VALUE (RS.) GOLD ORNAMENTS AS PER ANNEXURE S- 1 7405.923 GMS 29 80 887 3578.320 GMS 14 40 000 SILVER ARTICLES 26.485 KG. 1 85 395 - - UNDER DEEMED SEIZURE : PARTICULARS WEIGHT VALUE (RS.) GOLD ORNAMENTS 2625.986 GMS. 10 56 960 SILVER ARTICLES 19.00 KG. 1 33 000 4.1 INTER ALIA DURING THE COURSE OF SEARCH IT WAS EXPLAINED THAT 6168.20 GMS. GOLD ORNAMENTS BELONGED TO CUSTOMERS WHO HAD GIVEN FOR REMOULDING/REPAIR ETC. DURING THE SEARCH SHRI KISHORBHAI PANDYA MANAG ER ADMITTED IN HIS STATEMENT THAT STOCK LYING IN THE SHOP BELONGED TO THEIR FIRM AND THERE WAS NO STOCK BELONGING TO CUSTOMERS. HE ALSO STATED THAT THEY WE RE TRADING IN GOLD AND SILVER JEWELLERY AND WERE NOT DOING ANY JOB WORK. IN RESP ONSE TO A SHOWCAUSE DATED 11.10.2000 ISSUED DURING THE COURSE OF BLOCK ASSESS MENT PROCEEDINGS THE ASSESSEE REPLIED VIDE LETTER DATED 21-11-2000 AND F URNISHED COPIES OF IT(SS)A NO.96/AHD/2001 LATE SURESH RAMJIBHAI DHANAK PROP. M/S LABH JEWELLERS SURAT 5 AFFIDAVITS OF THE PERSONS WHO HAD GIVEN LOANS OF GO LD ORNAMENTS TO THE ASSESSEE. IT WAS CONTENDED THAT THE AFFIDAVITS WERE OBTAINED IMMEDIATELY AFTER SEARCH AND THE ASSESSEE HAD EVEN OFFERED TO PRESENT THE LENDERS BEFORE THE INTELLIGENCE WING IN POST SEARCH PROCEEDINGS. IN FACT THE ASSESSEE PRODUCED MOST OF THE LENDERS. SINCE EXCESS STOCK OF ORNAMENTS WAS FOUND RECORDED IN REGISTERS THE ASSESSEE CONTENDED THAT IT COULD NOT BE TREATED AS UNDISCLOSED .IT WAS FURTHER EXPLAINED THAT SINCE MOST OF THE ST OCK BELONGED TO OTHERS SUCH STOCK WAS NOT RECORDED IN FINANCIAL BO OKS. THE ASSESSEE ALSO SUBMITTED NAMES AND ADDRESSES ALONG W ITH AFFIDAVITS OF PARTIES MOST OF WHOM WERE AGRICULTURISTS AND DI D NOT HAVE PAN. HOWEVER THE AO WHILE REJECTING THE AFFIDAVITS OF T HE DEPOSITORS BEING SELF SERVING DOCUMENTS DID NOT ACCEPT THE SU BMISSIONS OF THE ASSESSEE IN TERMS OF HIS FINDINGS IN PARA 16.1 TO 16.19 OF THE ASSESSMENT ORDER IN VIEW OF CATEGORICAL STATEMENT O F THE MAIN PERSON SHRI KISHOR PANDYA LOOKING AFTER THE DAY TO DAY WORKING OF M/S LABH JEWELLERS THAT NO ORNAMENTS BELONGING TO C USTOMERS OR ANY OTHER PERSON WERE LYING IN THE SHOP [REPLY TO QUEST ION NO.20 ] WHILE REGISTER NO. 11 DID NOT CONTAIN ADDRESS OF THE CUST OMERS WHOSE NAMES WERE WRITTEN OR EVEN THE DETAILS OF ORNAMENTS OR ORDER PLACED. EVEN THE FIRST COPY OF THE INCOMING RECEIPT NORMALLY HANDED OVER TO THE CUSTOMERS WAS ALSO LYING WITH THE ASSE SSEE AND THE FACTS IN THE CASE OF M/S PRAKASH JEWELLERS A SIS TER CONCERN REVEALED THAT WITHIN THREE DAYS OF RECEIPT OF OLD O RNAMENTS NEWLY MADE ORNAMENTS WERE RETURNED TO THE CUSTOMERS . INT ER ALIA THE AO CONCLUDED THAT REGISTER NO.11 DID NOT REPRESENT REC ORD OF PERSONS WHO HAD GIVEN GOLD FOR JOB WORK RATHER IT REPRESEN TED PARTLY INTRODUCTION OF ASSESSEE'S OWN UNACCOUNTED GOLD AND PARTLY OF PERSONS WHO EXCHANGED THEIR OLD ORNAMENTS FOR NEW O NE OF SAME VALUE OR HAD PAID THE DIFFERENCE . ACCORDINGLY TH E AO CONCLUDED THAT THE ASSESSEES CLAIM OF JEWELLERY BELONGING T O CUSTOMERS WAS IT(SS)A NO.96/AHD/2001 LATE SURESH RAMJIBHAI DHANAK PROP. M/S LABH JEWELLERS SURAT 6 BOGUS AND UNTENABLE AS GENUINE CUSTOMERS RECEIVED T HEIR GOLD ORNAMENTS THE SAME DAY RESULTING IN ADDITION OF RS .24 82 700/- ON ACCOUNT OF GOLD WEIGHING 6168.2 GMS. VALUED @ RS.402.50 PER GM. 5. ON APPEAL THE LD. CIT(A) DELETED THE AD DITION IN THE FOLLOWING TERMS: 5.1 THIS IS THE MAIN ADDITION IN THIS CASE. THE AD DITION HAS BEEN MADE IN RESPECT OF GOLD BELONGING TO CERTAIN DEPOSITORS. SHRI VEPARI ARGUES THAT DEPOSIT O GOLD IS SUBSTANTIVELY AKIN TO DEPOSIT OF CASH AND IN REGARD TO THE REQUIREMENTS OF PROOF BOTH STAND ON THE SAME FOOTI NG. I AGREE WITH THE LEARNED COUNSEL ON THIS. 5.2 AS TO THE CIRCUMSTANCES IN WHICH THE DEPOSITS H AVE BEEN MADE SHRI VAPARI EXPLAINS THAT THE APPELLANT COMES FROM DAM NAGAR IN AMRELI DISTRICT IN SAURASHTRA WHERE THE FAMILY COMMANDS TR UST AND RESPECT. SHRI VEPARI POINTS OUT THAT MORE THAN ONE LAC PEOPLE FRO M THAT AREA WORK IN SURAT AND THERE IS A REGULAR COMMUNICATION AND INTE RACTION BETWEEN THESE PEOPLE IN SURAT AND THOSE BACK HOME. SHRI VEPARI P OINTS THAT THERE IS A FAIRLY DEVELOPED FEELING OF FRATERNITY AND MUTUAL T RUST AMONG PEOPLE COMING FROM THE SAME PLACE IN SAURASHTRA ON ACCOUNT OF WHI CH THERE ARE EXTENDED NETWORKS OF SOCIAL RELATIONSHIP. SHRI VEPARI SUBMIT S THAT IT IS ONLY ON ACCOUNT OF SUCH FACTORS THAT THE APPELLANT SHIFTED BASE FROM MUMBAI TO SURAT IN THE HOPE THAT THE APPELLANT WILL BE ABLE TO CAPITALIZE ON THE ADVANTAGES THE COMMUNITY SOLIDARITY MAY OFFER. 5.3 ON THE MATTER OF DEPOSITS OF GOLD SHRI VEPARI EXPLAINS THAT IT IS A WIN-WIN ARRANGEMENT. IN THIS ARRANGEMENT THE DEPOSI TOR DEPOSITS GOLD ORNAMENTS WITH THE JEWELLER. THOSE ORNAMENTS LOSE I DENTITY ONCE THEY ARE DEPOSITED. THE JEWELLER UTILIZES THIS GOLD TO MAKE JEWELLERY IN THE LATEST DESIGNS WHICH IS DISPLAYED IN THE SHOP FOR SALE AS THE JEWELLERS OWN STOCK- IN-TRADE. WHEN THE ORNAMENTS ARE NEEDED THE DEPOSI TOR CAN COLLECT THEM FROM THE JEWELLER IN EQUIVALENT WEIGHT IN THE LATES T DOSIGNS. THE ADVANTAGE SUCH ARRANGEMENT OFFERS THE JEWELLER IS OBVIOUS. TH E JEWELLER IS SAVED FROM MAKING A PERSONAL INVESTMENT TO THE EXTENT OF THE G OLD RECEIVED AS DEPOSIT. FOR THE DEPOSITOR THE PAY-OFF IS BY WAY O F SECURITY AND CHOICE OF THE LATEST DESIGNS. SHRI VEPARI POINTS OUT THAT TH E SECURITY ASPECT IS IMPORTANT FOR PEOPLE IN RURAL AREAS WHO DON'T NORM ALLY KEEP BANK LOCKERS. SHRI VEPARI POINTS OUT THAT SUCH ARRANGEMENT WOULD NOT BE POSSIBLE WITHOUT AN UNDERPINNING OF TRUST SUCH AS EXISTS IN THE AREA THE APPELLANT COMES FROM. SHRI VEPARI ALSO POINTS OUT THAT IT IS LACK OF APPRECIATION OF THIS ARRANGEMENT AND OF THE SOCIAL COHESION IN THE COMMUNITY THAT HAS IT(SS)A NO.96/AHD/2001 LATE SURESH RAMJIBHAI DHANAK PROP. M/S LABH JEWELLERS SURAT 7 CONTRIBUTED TO SOME OF THE CONFUSION THAT IS APPARE NT FROM A READING OF THE ASSESSMENT ORDER. 6.1 THE ASSESSMENT ORDER PRESENTS ONE HIGHLY UNUSUA L FEATURE. IT IS WELL ESTABLISHED THAT ANY ADDITION SOUGHT TO BE MAD E TO THE TOTAL INCOME DECLARED BY AN ASSESSEE IS REQUIRED TO BE JUATIFIED WITH ADEQUATE EVIDENCE. A CURIOUS FEATURE OF THIS CASE AND TWO OT HER RELATED CASES SUMANGAL JEWELLERS AND PRAKASH JEWELLERS IS THAT T HE ASSESSMENTS POINT TO A PATENTLY CAPRICIOUS AND NON-JUDICIOUS APPROACH . THE PREDOMINANT ADDITION IN THIS CASE (AND OTHER TWO CASES REFERRED TO ABOVE) IS OF DEPOSITS OF GOLD BY CERTAIN PERSONS. THE RECORD REVEALS THAT THE AO WENT ABOUT VERIFICATION IN A TEXT-BOOK FASHION AND ALL THAT AN AO WOULD BE EXPECTED TO DO IN REGARD TO SUCH VERIFICATION WAS DONE. THERE A RE PROPER ORDER-SHEET ENTRIES BY WAY OF RECORD OF SUCH VERIFICATION. IF A NYTHING WERE FOUND AMISS OR IF THE ASSESSING OFFICER WANTED THE ASSESSEE TO PRODUCE SOME FURTHER EVIDENCE ON SOME POINT IT WOULD BE REQUIRED TO BE MENTIONED IN THE ORDER- SHEET RECORDED IN THE PROCESS OF VERIFICATION OF GO LD DEPOSITS. THERE IS NOTHING AT ALL THAT POINTS TO THE FACT THAT THE ASS ESSING OFFICER CONSIDERED EVIDENCE TENDERED BY THE ASSESSES TO BE INADEQUATE OR ASKED THE ASSESSEE TO SUBSTANTIATE THE EVIDENCE IN SOME MANNE R. THE ASSESSEE FILED AFFIDAVITS IN SUPPORT OF THE GENUINENESS OF T HE GOLD DEPOSITS AND THESE AFFIDAVITS WERE VERIFIED BY THE ASSESSING OFFICER BY ASKING FOR THE PRODUCTION OF THE DEPOSITORS AND ALSO BY SENDING TH E WARD INSPECTOR TO THE AREA THE DEPOSITORS COME FROM. IN THESE CIRCUMSTANC ES THE FOLLOWING REASONING OF THE ASSESSING OFFICER IN JUSTIFICATION OF THE ADDITION IS WHOLLY INCONGRUOUS AND SUGGESTS A LACK OF REASONED JUDGEME NT: (A) AFFIDAVITS HAVE NO EVIDENTIARY VALUE. (B) AS THERE ARE CONTRADICTIONS IN THE STATEMENTS R ECORDED AND IDENTITY OF PERSONS PRODUCED IS NEITHER ESTABLISHED NOR VERI FIABLE AND THE STATEMENT RECORDED ALWAYS HAS PREFERENCE OVER AFFID AVITS. 6.2 IN THE CONTEXT OF THE FACTS CONCERNING VERIFICA TION OUTLINED ABOVE ONE CAN SEE THAT THE ABOVE REASONING IS CLEARLY OUT OF PLACE. BESIDES THE ABOVE JUSTIFICATION PATENTLY MISREPRESENTS FACTS. T HE FOLLOWING ASPECTS DESERVE ATTENTION: (I) AFFIDAVITS BY THEMSELVES WITHOUT CORROBORATION MAY NOT CONSTITUTE ADEQUATE EVIDENCE. BUT IN THIS CASE THE AFFIDAVITS HAVE BEEN CORROBORATED BY ACTUAL PRODUCTION OF THE DEPOSITORS FOR EXAMINATION BEFORE THE ASSESSING O FFICER. THE ASSESSING OFFICER HAS FURTHER SATISFIED HIMSELF BY SENDING THE WARD INSPECTOR FOR FURTHER ENQUIRIES. N EITHER THE ORDER-SHEET NOR THE ASSESSMENT ORDER SPECIFY THE IN FIRMITIES EMERGING FROM VERIFICATION. IF SOME INFIRMITIES HAD COME TO LIGHT FROM SUCH VERIFICATION PRINCIPLES OF NATURAL JUSTICE WOULD IT(SS)A NO.96/AHD/2001 LATE SURESH RAMJIBHAI DHANAK PROP. M/S LABH JEWELLERS SURAT 8 REQUIRE ADEQUATE OPPORTUNITY TO BE GIVEN TO THE AS SESSEE TO EXPLAIN THE THINGS. THE ORDER-SHEET DOES NOT MENTIO N A SINGLE INFIRMITY OR REQUIREMENT HAVING BEEN BROUGHT TO THE ASSESSEES ATTENTION IN COURSE OF VERIFICATION OF G OLD DEPOSITS. (II) THERE IS NO METHOD OF VERIFICATION OTHER THAN WHAT THE ASSESSING OFFICER ADOPTED THAT THE DEPARTMENT FOLL OWS. IN FACT THERE SEEMS TO BE NO OTHER BETTER METHOD OF VE RIFICATION KNOWN TO LAW THAT WOULD BE APPLICABLE TO THE FACTS. THE DEPOSITORS HAVE CONFIRMED THEIR DEPOSITS THROUGH A FFIDAVITS AND BY WAY OF FURTHER CORROBORATION THE DEPOSITORS WERE PRODUCED BEFORE THE ASSESSING OFFICER AND WERE EXAM INED TO THE SATISFACTION OF THE ASSESSING OFFICER. NO FURTH ER EVIDENCE ON ANY ASPECT OF VERIFICATION HAS BEEN CALLED FROM THE ASSESSEE. SO WHERE HAS THE ASSESSEE BEEN WANTING? (III) THE OBSERVATION OF THE OFFICER QUOTED AT (B) ABOVE TO THE EFFECT THAT IDENTITY OF PERSONS PRODUCED IS NEITHE R ESTABLISHED NOR VERIFIABLE' IS PATENTLY FALSE. 6.3 THE SITUATION AS IS EMERGES FROM THE ABOVE DISC USSION SEEMS UNUSUAL. A QUESTION AT ONCE ARISES: HOW A PERSON T RAINED IN LAW AND WITH LONG EXPERIENCE IN THE DEPARTMENT SHOULD TAKE SUCH A SELF-CONTRADICTORY AND UNREASONABLE STAND?. IF THE FACTS BROUGHT ON R ECORD DIDN'T FAVOUR AN ADDITION ADDITION SHOULD NOT HAVE BEEN MADE. 6.4 SOME RELEVANT ORDER SHEET ENTRIES RECORDED IN THE CONTEXT OF VERIFICATION OF GOLD DEPOSITS IN DIFFERENT CASES OF THE GROUP ARE AS UNDER:- SUMANGAL JEWELLERS: 17-11-2000 CASE HEARD. VERIFICATION OF DETAILED SUBMISSIONS WAS MADE. THE AR & YOGESH R DHANAK ATTENDED ASKED TO FURNISH THE FURTHER EVIDENCE IN SUPPORT OF AFFIDAVITS FILED. THE INFORMATION SHALL BE FURNISHED IN THE PROFORMA SUPPLIED BY THIS OFFICE EITHER PERSONALLY OR THROUGH REPRESENTATIVE. FURTHER THE ASSESSEE FURNISHED THE NOTICES IN SUPPORT OF THEIR CLAIM FOR RETURNING THE ORNAMENTS. ADJOURN. REFIXED ON 27-11-2000. 6/7/8-12-2000 PRODUCED THE INFORMATION CALLED FOR U /S 133(6) WHO LENT GOLD FOR REMODELING. PROOF OF INCOME FURNISHED. IT(SS)A NO.96/AHD/2001 LATE SURESH RAMJIBHAI DHANAK PROP. M/S LABH JEWELLERS SURAT 9 6-1-2000 TO8-1-2001 PROOFS REGARDING INFORMATION C ALLED FOR U/S 133(6) FURNISHED. BROUGHT THE PERSONS WHO LENT THE GOLD QUERIES AND VERIFICATION MADE. PRAKASH JEWELLERS: 21-11-2000 THE ASSESSEES AR ATTENDED. FURNISHED TH E REPLY IN DETAIL. CASE HEARD. VERIFICATION MADE WITH SEIZED MATERIAL. SHRI PRAKASH R DHANAK PARTNER OF THE FIRM WAS ASKED TO FURNISH THE EVIDENCE / PROOF IN SUPPORT OF PERSONS IN WHOSE CASE THE AFFIDAVITS WERE FILED I.E. IN RESPECT OF ANNEXURE C OF LETTER DATED 21-11-2000. AR & YOUR ATTENTION IS DRAW IN RESPECT OF LETTER NO. ACIT / INV. CIR.3(1)/B.ASSTT./2000-01 DATED 16- 11-2000 ISSUED IN THE CASE OF M/S LABH JEWELLERS. THE SAME WAY YOU HAVE TO FURNISH THE DETAILS IN THIS CASE ALSO. HOWEVER A SEPARATE LETTER IS ALSO ISSUED. SD/- 23/24-11-2000 THE ASSESSEE IN SUPPORT OF CLAIM PROD UCED THE CUSTOMERS WHO LENT THE GOLD FOR REMOULDING. FURTHER THE NECESSARY EVIDENCE OF CAPACITY OF LENDING GOLD PROOF OF RESIDENCE ETC. FURNISHED IN VIEW OF INFORMATION CALLED FOR U/S 133(6). SD/- 21-12-2000 SUMMONS ISSUED ON 21-12-2000 IN THE CASE OF ..(5 PERSONS ARE MENTIONED NAMES NOT LEGIBLE) TO ATTEND OFFICE IN CONNECTION WITH THE CASE OF M/S PRAKASH JEWELLERS. SD/- 5-2-2001 STATEMENT U/S 131 RECORDED OF SHRI P P DHA NAK AND N G SONI. THE INSPECTOR WAS DIRECTED TO VISIT DAMNANAGR AND THE SURROUNDING VILLAGES AND MAKE THE INQUIRIES RELATING TO AUTHENTICITY OF AFFIDAVIT FURNISHED AND TO ASCERTAIN THE CAPACITY OF THE PERSONS OF LENDING GOLD. SD/- 14-2-2001 THE INQUIRY REPORT OF INSPECTOR VISITING THE PLACES AS DIRECTED IS RECEIVED. ANOTHER LETTER IN IT(SS)A NO.96/AHD/2001 LATE SURESH RAMJIBHAI DHANAK PROP. M/S LABH JEWELLERS SURAT 10 RESPECT OF PAYMENT RECEIVED FROM ---- (NAMES NOT LEGIBLE) WAS ISSUED TO THE ASSESSEE. SD/- LABH JEWELLERS: 16-11-2000 CASE HEARD VERIFICATION OF DETAILED SUBMISSION WAS MADE. SHRI SURESHBHAI ASSESSEE WAS ASKED TO FURNISH THE EVIDENCE / PROOF IN SUPPORT OF PERSONS IN WHOSE CASE THE AFFIDAVITS WERE FILED I.E. IN RESPECT OF ANNEXURE C OF LETTER DATED 14-11-2000. THE INFORMATION SHALL BE FURNISHED IN THE PROFORMA SUPPLIED BY THIS OFFICE; EITHER PERSONALLY OR THROUGH REPRESENTATIVE. IN SUPPORT OF CLAIM ASSESSEE FURNISHED THE NOTICES WHICH HE RECEIVED FROM THE ADVOCATES FOR RETURNING OF GOLD ORNAMENTS OF CUSTOMERS. SD/- 23/24-11-2000 THE ASSESSEE IN SUPPORT OF CLAIM PROD UCED THE CUSTOMERS WHO LENT THE GOLD FOR A REMOULDING. FURTHER THE NECESSARY EVIDENCE OF CAPACITY OF LENDING GOLD PROOF OF RESIDENCE ETC. FURNISHED IN VIEW OF INFORMATION CALLED FOR U/S 133(6). SD/- 12-12-2000 FOR FURTHER VERIFICATION CERTAIN PARTIE S WERE CALLED BY INQUIRY SUMMONS. SD/- 7.1 SINCE IT IS SO PIVOTAL TO THE ISSUE AT HAND IT WILL BE PROPER TO EXAMINE THE FOLLOWING REASONING OF THE AO IN JUSTIF ICATION OF THE ADDITION OF GOLD DEPOSITS AGAIN. (A) AFFIDAVITS HAVE NO EVIDENTIARY VALUE. (B) AS..IDENTITY OF PERSONS PRODUCED IS NEITHER ESTABLISHED NOR VERIFIABLE. 7.2 THE IDENTITY OF THE PERSONS PRODUCED WAS FIRST VERIFIED BY THE ASSESSING OFFICER IN COURSE OF EXAMINATION OF DEPOS ITORS WHEN THEY WERE PRODUCED BEFORE HIM. SO THAT NO DOUBT REMAINS ON TH E IDENTITY AND THE CAPACITY TO MAKE DEPOSITS THE ASSESSING OFFICER A LSO CARRIED OUT ON-THE- SPOT CHECK THROUGH THE WARD INSPECTOR. PARAS 3 AND 5 OF THE INSPECTOR'S IT(SS)A NO.96/AHD/2001 LATE SURESH RAMJIBHAI DHANAK PROP. M/S LABH JEWELLERS SURAT 11 REPORT ARE REPRODUCED BELOW. THE REPORT IS ATTACHED TO THIS ORDER AS ANNEXURE A. 3. ON 8-02-2001 AND 9-2-2001 I HAVE VISITED DAMNA GAR AND NEARBY VILLAGES VIZ. TURAKHAKHIA PANDARSIGA DHU FANIA CHHABHODA OF TAL. LATHI DIST. AMRELI TO CONFIRM T HE IDENTITY OF LENDERS OF GOLD ORNAMENTS RELATED TO M/S PRAKASH JE WELLERS & OTHERS. IN THIS REGARD I HAVE PERSONALLY VISITED T HE RESIDENTIAL HOUSES OF THE LENDERS AND AS A MARK OF MY VISIT I H AVE OBTAINED THEIR SIGNATURE ON NOTES-PAD WHICH HELPED ME TO COM PARE THEIR SIGNATURES WITH AFFIDAVITS FILED BY THEM AND INTERR OGATE VERBALLY. 5. I HAVE VISITED RESIDENTIAL HOUSES OF THE LENDER S AND LOOKING TO THE STANDARD OF LIVING IN THE VILLAGE AREA AND HOUS ES OCCUPIED BY THEM LEADS TO ARRIVE AT THE CONCLUSION THAT LENDER DOES POSSESS CAPACITY TO LEND GOLD ORNAMENTS BELONGING TO THEIR FAMILY MEMBERS. 7.3 IN THE LIGHT OF THE ORDER SHEET ENTRIES CONCER NING VERIFICATION OF GOLD DEPOSITS AND THE INSPECTORS REPORT WHICH IS SO MUC H IN THE AFFIRMATIVE IT WILL BE EASY TO SEE HOW MISLEADING THE JUSTIFICATIO N FOR THE ADDITION IS. IT IS AMAZING THAT THE AO SHOULD HAVE RESORTED TO SUCH JU STIFICATION FOR ADDITION. THE QUESTION ARISES THAT IF AFFIDAVITS HAVE NO EVID ENTIARY VALUE WHY THE AFFIDAVITS WERE VERIFIED IN ALL THE THREE CASES AT LENGTH BY SUMMONING DEPOSITORS ALL THE WAY FROM SAURASHTRA AND AN INSP ECTOR SENT TO SAURASHTRA TO SUPPLEMENT THE AOS ENQUIRY. IT IS AL SO RELEVANT TO ASK IN WHAT OTHER WAY WAS THE ENQUIRY SOUGHT TO BE CARRIED OUT IF THE AFFIDAVITS HAVE NO EVIDENTIARY VALUE AND WHY WAS IT NOT DONE? FURTHER AS THE AFFIDAVITS HAVE BEEN CORROBORATED AND ENQUIRY HAS N OT BROUGHT OUT ANYTHING TO THE CONTRARY THE AFFIDAVITS DO HAVE AD EQUATE EVIDENTIARY VALUE. AS THE ADDITION OF GOLD ORNAMENTS IS WITHOUT BASIS IT IS DIRECTED TO BE DELETED. 6. THE REVENUE IS NOW IN APPEAL AGAINST THE AFOR ESAID FINDINGS OF THE LD. CIT(A) . BEFORE US BOTH THE PARTIES AGREE D THAT ISSUE RAISED IN THIS GROUND IS SQUARELY COVERED BY THE DECISION DATED 19 .9.2002 OF THE ITAT IN THE GROUP CASE OF M/S PRAKASH JEWELLERS IN IT(SS)A NO. 63/AHD./2001. 7. WE HAVE HEARD BOTH THE PARTIES AND GONE THR OUGH THE DECISION DATED 19.9.2002 IN THE AFORESAID CASE OF PRAKASH JE WELLERS WHEREIN THE ITAT WHILE ADJUDICATING A SIMILAR ISSUE CONCLUD ED AS UNDER: 6.4 THE DISPUTE IS WITH REGARD TO ONLY THIRD SOURCE WH ICH IS STATED TO BE LOANS FROM VARIOUS PERSONS. IN THE THIRD CATEGORY OF RECEIPTS IT(SS)A NO.96/AHD/2001 LATE SURESH RAMJIBHAI DHANAK PROP. M/S LABH JEWELLERS SURAT 12 ALSO THERE IS NO DISPUTE OVER- THE ORNAMENTS RECEIV ED AS LOANS FROM 180 PERSONS OUT OF TOTAL 232 PERSONS FROM WHOM THE ASSE SSEE HAD RECEIVED THE ORNAMENTS. THE DISPUTE IS WITH REGARD TO THE OR NAMENTS RECEIVED FROM THE BALANCE 52 PERSONS ONLY. IT IS INTRIGUING TO NO TE THAT WHEN THESE LOAN TRANSACTION'S BELONGED TO THE SAME GENRE HOW AND W HY THE AO BIFURCATED THESE TRANSACTIONS INTO TWO SUB-CATEGORIES NAMELY (A) PERSONS TO WHOM THE ORNAMENTS WERE RETURNED AND (B) PERSONS TO WHOM THE ORNAMENTS WERE YET TO BE RETURNED. IF THE TRANSACTIONS WITH 1 80 PERSONS WERE FOUND TO BE GENUINE AND NO ADDITION WAS MADE IN RESPECT THER EOF WHAT WAS NON- GENUINE ABOUT REMAINING 52 PERSONS IS INCOMPREHENS IBLE. ALL THE 232 POISONS ARE STATED TO BE BELONGING TO THE AREAS IN AND AROUND AMRELI. IF 180 PERSONS FROM AMRELI COULD COME AND DEPOSIT THE ORNAMENTS WITH THE ASSESSEE WE FAIL TO UNDERSTAND WHY THE REMAINING 5 2 PERSONS COULD NOT. THE CASE OF THE REVENUE HINGES MAINLY ON THE IMPROB ABILITY THAT THE PERSONS FROM AS FAR AS 400 KMS WOULD COME TO DEPOSI T THEIR ORNAMENTS. FOR A MOMENT WE MAY IGNORE THE INCOMPREHENSIBLE BI FURCATION MADE BY THE AO AND LET US EXAMINE THIS ISSUE INDEPENDENT OF THAT FACT. THE CASE OF THE REVENUE IS THAT IT IS IMPROBABLE. WELL IN OUR OPINION APPARENTLY IT MAY SOUND TO BE IMPROBABLE BUT CERTAINLY NOT IMPOSSIBL E. HOWEVER WHEN A PROPOSITION APPEARS TO BE IMPROBABLE IT CALLS FOR CLOSURE EXAMINATION AND A PROBE IN DEPTH. THE AO DID NOT FAIL IN HIS DUTY T O FURTHER INVESTIGATE INTO THE MATTER. NOT ONLY THE AFFIDAVITS WERE PRODUCED B EFORE HIM BUT HE ALSO HAD THE OPPORTUNITY TO EXAMINE THE DEPOSITORS. HE A LSO DEPUTED A WARD .INSPECTOR AT AMRELI TO ASCERTAIN THE'REAL FACTS. T HIS DETAILED EXAMINATION DID NOT REVEAL ANYTHING ADVERSE AGAINST THE ASSESSE E. THERE CAN NOT BE ANY EVIDENCE FOR AN IMPOSSIBLE PROPOSITION. BUT WHE N COGENT EVIDENCE AND THE RESULT OF A DETAILED INVESTIGATION ARE ON RECOR D THE IMPROBABLE PROPOSITION CAN NOT BE TREATED AS AN IMPOSSIBLE ONE . THIS IS EXACTLY WHAT HAS HAPPENED IN THE PRESENT CASE. ANOTHER ASPECT ON WHICH MUCH STRESS WAS LAID BY THE LEARNED DR IS WITH REGARD TO THE SI GNING OF RECEIPTS AND CERTAIN TORN OUT BILLS. THE PRACTICE OF OBTAINING OLD ORNAMENTS ON LOAN BASIS IS NOT UNCOMMON AND HAS BEEN ACCEPTED BY THE AO HIMSELF IN RESPECT OF 180 PERSONS. THE RECORD MAINTAINED IN RE GISTER NO.11 ALSO CORROBORATES THE VERSION OF THE ASSESSEE WHICH HAS BEEN THE SAME RIGHT FROM THE DAY OF SEARCH. WHEN ALL THESE SUBSTANTIAL FACTS DO NOT INCRIMINATE AGAINST THE ASSESSEE THE STRESS OF THE LEARNED DR ON UNSIGNED RECEIPTS AND TORN OUT BILLS ARE MERE PERIPHERAL ASPECTS WHIC H CANNOT BE GIVEN MUCH WEIGHTAGE. SINCE THE DEPOSITOR IS ENTITLED TO TAKE BACK ORNAMENTS OF EQUAL WEIGHT THE DISTINCTION BETWEEN GROSS WEIGHT AND NE T WEIGHT LOSES SIGNIFICANCE. GENERALLY MAKING CHARGES ARE NOT REC OVERED BY THE ASSESSEE FROM THE LENDERS. HOWEVER IF THE LENDER T AKES BACK THE ORNAMENTS WITHIN A SHORT TIME THEN CERTAINLY THE A SSESSEE WOULD RECOVER MAKING CHARGES FROM HIM. THIS FACT WAS BEFORE THE A O VIDE ASSESSEE'S LETTER DATED 21-11-2003. THE GAIN OF THE LENDER WAS UNDOUBTEDLY SECURITY OF THE ORNAMENTS AND RETURN IN THE FORM OF NEW DESI GNS. GAIN OF THE ASSESSEE WAS USE OF MORE GOLD TO MAKE NEW ARRANGEME NTS MORE DISPLAY AND MORE BUSINESS. QUID PRO QUO DOES NOT APPEAR TO BE LOPSIDED ON EITHER IT(SS)A NO.96/AHD/2001 LATE SURESH RAMJIBHAI DHANAK PROP. M/S LABH JEWELLERS SURAT 13 SIDE. WE NEED NOT GO INTO THE ASPECT WHETHER DEPOSI T OF GOLD IS SIMILAR TO CASH CREDIT OR NOT. BUT THE FACT REMAINS THAT THE A SSESSEE WAS SUCCESSFUL IN PROVING TO THE HILT THE GENUINENESS OF THE TRANS ACTIONS ENCOMPASSING ALL ITS ASPECTS. THE ASSESSEE HAD DULY DISCHARGED ITS O NUS. THEREFORE WE SEE NO JUSTIFICATION AT ALL FOR REVERSING THE ORDER OF THE CIT(A) ON THIS ISSUE. WE UPHOLD THE DELETION OF ADDITION OF RS.29 77 726/-. 7.1 IN THE INSTANT CASE AS THE FACTS ALREA DY NARRATED ABOVE IN THE IMPUGNED ORDERS REVEAL THE ASSESSEE EXPLAINED THAT 6168.20 GMS. OF GOLD ORNAMENTS BELONGED TO CUSTOMERS WHO HAD GI VEN FOR REMOULDING/REPAIR ETC. THE ASSESSEE ALSO FURNISHED THE AFFIDAVITS OF THE PERSONS WHO HAD GIVEN SUCH LOANS OF GOLD ORNAMENTS TO HIM. SUBSEQU ENTLY THESE DEPOSITORS WERE PRODUCED BEFORE THE ASSESSING OFFIC ER AND WERE EXAMINED . INSPECTOR DEPUTED BY THE AO ALSO CONDUCTED NECESSAR Y ENQUIRIES AND SUBMITTED HIS REPORT. IN THE LIGHT OF THESE FAC TS THE LD. CIT(A) ON THE BASIS OF THE ORDER SHEET ENTRIES RELATING TO V ERIFICATION OF GOLD DEPOSITS AND THE INSPECTORS REPORT CONCLUDED THAT THE CONTENTS OF THE AFFIDAVITS HAVING BEEN CORROBORATED AND ENQUIRY HAVING NOT BROUGHT OUT ANY THING TO THE CONTRARY THE AFFIDAVITS DID HAVE ADEQUATE EVIDENTIARY VALUE. CON SEQUENTLY ADDITION OF GOLD ORNAMENTS WAS DELETED. IN THE ABSENCE OF ANY BASIS WE AGREE WITH THESE FINDINGS OF THE LD. CIT(A) AS ALSO HIS CONCLUSION THAT IF ANY TRANSACTION IS RECORDED IN THE BOOKS OF ACCOUNTS AND OTHER DOCUMEN TS MAINTAINED IN THE NORMAL COURSE ADDITION CAN NOT BE MADE IN THE BLOCK ASSES SMENT .. IN THIS CONNECTION HONBLE GUJARAT HIGH COURT IN THE CASE OF N.R. PAPE R & BOARD LTD. & ORS. VS. DY. CIT (1998) 146 CTR (GUJ) 612 : (1998) 234 ITR 733 (GUJ) HELD THAT THE ESSENCE OF THE SPECIAL PROCEDURE OF CHAPTER XIV-B IS TO PRO VIDE FOR AN ASSESSMENT OF THE UNDISCLOSED INCOME DETECTED AS A RESULT OF THE SEAR CH WITHOUT AFFECTING THE REGULAR ASSESSMENTS MADE OR TO BE MADE. THE SPECIAL PROVISIONS ARE DEVISED TO OPERATE IN THE SEPARATE FIELD OF UNDISCLOSED INCOME AND ARE CLEARLY IN ADDITION TO THE REGULAR ASSESSMENTS COVERING THE PREVIOUS YEARS FALLING IN THE BLOCK PERIOD. WE ARE OF THE OPINION THAT TRANSACTIONS WHICH ARE T HE SUBJECT-MATTER OF REGULAR ASSESSMENT CAN BE ASSESSED IN THE REGULAR ASSESSME NT AND NOT IN THE BLOCK ASSESSMENT IN TERMS OF PROVISIONS OF SECTION 158BB OF THE ACT . IT(SS)A NO.96/AHD/2001 LATE SURESH RAMJIBHAI DHANAK PROP. M/S LABH JEWELLERS SURAT 14 7.2 IN VIEW OF THE FOREGOING THE REVENUE HAVING NOT PLACED ANY MATERIAL BEFORE US IN ORDER TO CONTROVERT THE AFORESAID FIN DINGS OF FACTS RECORDED BY THE LD. CIT(A) SO AS ENABLE US TO HAVE A DIFFERENT VIEW IN THE MATTER WE ARE NOT INCLINED TO INTERFERE. THEREFORE GROUND NOS.1 & 2 IN THE AP PEAL ARE DISMISSED. 8. GROUND NO.3 RELATES TO ADDITION OF RS.1 36 33 2/- ON ACCOUNT OF SILVER ARTICLES WHILE GROUND NO.6 RELATES TO AN ADD ITION OF RS.5 62 161/- ON ACCOUNT OF GOLD LOAN. DURING THE C OURSE OF SEARCH SILVER ARTICLES WERE FOUND IN EXCESS BY 19 476 KGS. THE PHYSICAL STOCK BEING 26.485 KGS WHILE AS PER BOOKS ONLY 7.00 9 KGS. DURING THE SEARCH NO EXPLANATION WAS GIVEN FOR SUCH EXCES S STOCK. HOWEVER DURING THE BLOCK ASSESSMENT PROCEEDINGS T HE ASSESSEE'S COUNSEL VIDE HIS LETTER DATED 21-12-2000 RECONCILED THE STOCK DIFFERENCE STATING THAT THE SILVER WAS BROUGHT OUT OF THE DISCLOSURE MADE UNDER THE VDIS 1997. A COPY OF THE RELEVANT CE RTIFICATE ISSUED BY THE C.I.T. WAS ALSO SUBMITTED. HOWEVER NECESSAR Y ACCOUNTING ENTRIES WERE ADMITTEDLY NOT MADE IN THE BOOKS. ACCO RDINGLY WHILE REFERRING TO PROVISIONS OF SEC. 68 OF THE ACT AND C IRCULAR NO. 754 DATED 10.6.1997 ISSUED BY THE CBDT THE AO ADDED A N AMOUNT OF RS. 1 36 332/- NEXUS OF THE SILVER DECLARED UNDER VDIS AND THAT FOUND IN THE BUSINESS PREMISES HAVING NOT BEEN EST ABLISHED. 8.1 LIKEWISE THE AO ADDED AN AMOUNT OF RS.5 62 20 8/- ON ACCOUNT OF UNDISCLOSED INCOME IN RESPECT OF GOLD LOAN IN PA RA 16.20 OF THE ASSESSMENT ORDER THE ASSESSEE HAVING NOT MADE ANY ENTRIES IN THE BOOKS OF ACCOUNTS AFTER ACCEPTANCE OF THEIR DECLAR ATION UNDER VDIS NOR THE ASSESSEE ESTABLISHED NEXUS. 9. ON APPEAL THE LD. CIT(A) DELETED THE ADDITION ON THE BASIS OF SUBMISSIONS ON BEHALF OF THE ASSESSEE THAT NECESSAR Y ENTRIES HAD BEEN MADE IN THE BOOKS HOLDING AS UNDER: IT(SS)A NO.96/AHD/2001 LATE SURESH RAMJIBHAI DHANAK PROP. M/S LABH JEWELLERS SURAT 15 9 SILVER ORNAMENTS RS.1 36 332/- IN THE WRITTEN SUBMISSIONS SHRI VEPARI OBSERVES A S UNDER:- VIDE PARA 19 OF THE ASSESSMENT ORDER THE AO HAS NO T ACCEPTED THE EXCESS STOCK OF SILVER ORNAMENTS OF 19.476 KG. INSP ITE OF THE FACT THAT THE COMMISSIONER OF INCOME TAX HAD ISSUED THE CERTIFICATE. IN THIS REGARD I ALSO FURTHER RELY ON THE EARLIER PARA OF LETTER. THE ONLY GROUND FOR THE AO NOT TO CONSIDER IT AVAILABLE IS N OT PASSING OF THE ENTRY. HOWEVER ENTRIES WERE PASSED AND ENGLISH TRA NSLATION THEREOF IS ENCLOSED. ON THAT GROUND ALONE NO ADDITION SHOUL D HAVE BEEN MADE. THAT APART MERELY NON-FULFILLING OF A TECHNIC AL REQUIREMENT WHEN THE COMMISSIONER OF INCOME-TAX HAS ACCEPTED TH E DISCLOSURE ISSUED CERTIFICATE AND TAX HAS BEEN PAID WOULD BE S UFFICIENT TO ACCEPT THE EXISTENCE OF GOLD AND SILVER ORNAMENTS A S MENTIONED ABOVE. I AGREE WITH THE LEARNED COUNSEL THAT THE ADDITION IS NOT JUSTIFIED. 9.1 LIKEWISE THE LEARNED CIT(A) DELETED THE ADD ITION OF RS.5 62 161/- IN PARA 8 OF HIS ORDER MERELY ACCEPT ING THE SUBMISSIONS OF THE ASSESSEE. 10. THE REVENUE IS NOW IN APPEAL AGAINST THE A FORESAID FINDINGS OF THE LD. CIT(A) . BEFORE US BOTH THE PARTIES AGR EED THAT ISSUES RAISED IN THESE GROUNDS ARE SQUARELY COVERED BY THE DECISION DATED 19.9.2002 IN THE GROUP CASE OF M/S PRAKASH JEWELLERS IN IT(SS)A NO. 63/AHD ./2001. 11. WE HAVE HEARD BOTH THE PARTIES AND GONE TH ROUGH THE DECISION DATED 19.9.2002 OF THE ITAT IN THE AFORESAID CASE O F PRAKASH JEWELLERS WHEREIN THE ITAT WHILE ADJUDICATING A SI MILAR ISSUE CONCLUDED AS UNDER: 7.5 WE HAVE DULY CONSIDERED THE RIVAL CONTENTIONS ARID MATERIAL ON RECORD. IT HAS BEEN HELD BY THE HON'BLE SUPREME COU RT IN THE CASE OF JAMNAPRASAD KANHAIYALAL (130 ITR 244) THAT THE AMOU NT DECLARED UNDER VDIS GRANTS IMMUNITY ONLY TO THE DECLARANT. IT DOES NOT PRECLUDE INQUIRY INTO THE GENUINENESS OF CREDIT AND THEIR ASSESSMENT AS FIRM'S INCOME FROM UNDISCLOSED SOURCES. IT IS ALSO HELD THAT EVEN IF I T IS AGAIN ASSESSED IN THE HANDS OF THE PERSON TO WHOM THE AMOUNT REALLY BELON GS TO THERE IS NO QUESTION OF DOUBLE TAXATION. HENCE IN THE INSTANT CASE MERELY BECAUSE IT(SS)A NO.96/AHD/2001 LATE SURESH RAMJIBHAI DHANAK PROP. M/S LABH JEWELLERS SURAT 16 THE GOLD AND SILVER ARTICLES WERE DECLARED BY THE R ELATIVES UNDER VDIS 1997 THE ASSESSEE FIRM DOES NOT AUTOMATICALLY GET IMMUNITY FROM PROVING THE GENUINENESS OF SUCH CREDIT. IN THE PRESENT CASE SINCE THE DECLARANTS DID NOT MAINTAIN ANY BOOKS OF AC COUNT NO ENTRIES COULD HAVE BEEN MADE BY THEM. HOWEVER BETWEEN DECLA RATION MADE BY THEM AND CREDIT TAKEN THEREOF BY THE A SSESSEE FIRM HAS TO BE ESTABLISHED. COPY OF GOLD LOAN STOCK AC COUNT AS APPEARING IN THE BOOKS OF THE ASSESSEE FIRM IS PLACED BEFORE US TO S HOW THAT THE ASSESSEE HAD TAKEN CREDIT THEREOF DURING 1997-98. IT APPEARS THAT A COPY OF THIS ACCOUNT WAS NOT BEFORE THE AO. EVEN IF THE SEIZED M ATERIAL CONTAINED THIS LEDGER THE AO DOES NOT SEEM TO HAVE VERIFIED THE E NTRIES FROM THE LEDGER. THEREFORE WE ARE OF THE VIEW THAT IT WOULD BE IN T HE INTEREST OF JUSTICE IF THIS MATTER IS REMANDED BACK TO THE FILE OF THE AO FOR P ROPER VERIFICATION. THEE AO IS DIRECTED LO VERIFY THE LEDGER ACCOUNT AND SAT ISFY HIMSELF THAT THE CREDIT TAKEN BY THE ASSESSEE PERTAINS TO THE DECLAR ATION MADE BY THE RELATIVES. IF HE IS SO SATISFIED THEN NO ADDITION NEED BE MADE MERELY ON THE GROUND THAT THE DECLARANTS THEMSELVES HAD NOT M ADE ANY ENTRIES IN THEIR BOOKS OF ACCOUNT. IT IS EXPECTED THAT BOTH TH E PARTIES WILL EXTEND MUTUAL CO-OPERATION TO DISPOSE OF THE ISSUE EXPEDIT IOUSLY. 11.1. SINCE THE LD. CIT(A) DELETED THE AFORESAID A DDITIONS MERELY ON THE SUBMISSIONS ON BEHALF OF THE ASSESSEE THAT NECE SSARY ENTRIES FOR THE SILVER ARTICLES AND GOLD ORNAMENTS DECLARED UNDER VDIS HAD BEEN MADE IN THE BOOKS WHILE BEFORE THE AO THE ASS ESSEE ADMITTED THAT NO SUCH ENTRIES WERE MADE IN THE BOOKS FOLLOW ING THE VIEW TAKEN IN THEIR AFORESAID DECISION BY THE ITAT WE A RE OF THE OPINION THAT IT WOULD BE IN THE INTEREST OF JUSTICE IF THIS MATTER IS REMANDED BACK TO THE FILE OF THE AO FOR PROPER VERIFICATION. THE AO IS DIRECTED TO V ERIFY THE RELEVANT BOOKS OF ACCOUNTS AND SATISFY HIMSELF THAT THE CREDIT TAKEN BY THE ASSESSEE PERTAINS TO THE DECLARATION MADE UNDER THE VDIS. IF HE IS SO SATIS FIED THEN NO ADDITION NEED BE MADE MERELY ON THE GROUND THAT THE ENTRIES FOR THE SILVER OR GOLD ARTICLES DECLARED UNDER VDIS HAD NOT BEEN MADE BY THE ASSESSEE IN THE IR BOOKS OF ACCOUNT. THE ASSESSEE IS ALSO DIRECTED TO CO-OPERATE WITH THE AO IN THE PROCESS OF VERIFICATION. WITH THESE DIRECTIONS GROUND NOS.3 & 6 ARE DISPOS ED OF. 12. GROUND NO.4 RELATES TO PROTECTIVE ADDITION OF RS.1 50 000/- DURING THE COURSE OF SEARCH IT WAS FOUND THAT THE SHOP OF THE ASSESSEE BELONGED TO MR. KISHOR PANDYA AND MR. ASHW IN SATKUVER IT(SS)A NO.96/AHD/2001 LATE SURESH RAMJIBHAI DHANAK PROP. M/S LABH JEWELLERS SURAT 17 WHILE POWER OF ATTORNEY FOR THIS PROPERTY WAS HELD BY SHRI YOGESH DHANAK BROTHER OF THE ASSESSEE. THE AO WAS OF THE OPINION THAT SHRI YOGESHBHAI HAD BEEN MADE THE VIRTUAL OWNER OF THE PROPERTY FOR ALL PURPOSES. HOWEVER SINCE PROPERTY WAS USED BY T HE ASSESSEE THE AO ADDED AN AMOUNT OF RS.L 50 000/- ON PROTECT IVE BASIS ON THE BASIS OF AMOUNT REFLECTED IN THE PURCHASE DEED FOR THIS SHOP WHILE SUBSTANTIVE ADDITION WAS MADE IN THE HANDS OF SHRI YOGESHBHAI PROP. M/S SUMANGAL JEWELLERS. 13. ON APPEAL THE LEARNED CIT(A) DELETED THE ADDI TION THE SUBSTANTIVE ADDITION IN THE CASE OF SHRI YOGESHBHAI PROP. SUMANGAL JEWELLERS HAVING BEEN UPHELD. 14. THE REVENUE IS NOW IN APPEAL AGAINST THE A FORESAID FINDINGS OF THE LD. CIT(A) . BEFORE US THE LD. AR ON BEHAL F OF THE ASSESSEE SUBMITTED THAT ADDITION HAVING BEEN ACCEPTED IN THE GROUP CA SE OF SHRI YOGESHBHAI PROTECTIVE ADDITION IN THIS CASE HAS RIGHTLY BEEN D ELETED BY THE LD. CIT(A).TO A QUERY BY THE BENCH THE LD. AR STATED THAT ADDITIO N UPHELD BY THE LD. CIT(A) IN THE CASE OF SHRI YOGESHBHAI HAS NOT BEEN DISPUTED IN FU RTHER APPEAL. THE LD. DR ON THE OTHER HAND SUBMITTED THAT IN THE EVENT ENTIRE AMOUNT HAS BEEN UPHELD IN THE CASE OF SHRI YOGESHBHAI THERE IS NO POINT IN PROTE CTIVE ADDITION IN THIS CASE. 15. WE HAVE HEARD THE LD. DR AND GONE THROUGH THE FACTS OF THE CASE. SINCE A SIMILAR AMOUNT OF RS. 1 50 000 ADDE D SUBSTANTIVELY IN THE CASE OF SHRI YOGESHBHAI PROP. SUMANGAL JEWEL LERS HAD BEEN UPHELD BY THE LD. CIT(A) WHILE THE ORDER DATED 19.9 .2002 OF THE ITAT IN THE CASE OF SHRI YOGESHBHAI REVEALS THAT ADDITIO N HAD NOT BEEN DISPUTED IN THE CO NO. 84/AHD./2002 FILED BY THE AS SESSEE WE DO NOT FIND ANY INFIRMITY IN THE CONCLUSION OF THE LD. CIT(A). THEREFORE GROUND NO.4 IS DISMISSED. IT(SS)A NO.96/AHD/2001 LATE SURESH RAMJIBHAI DHANAK PROP. M/S LABH JEWELLERS SURAT 18 16. GROUND NO.5 RELATES TO ADDITION OF RS.5 9 208/- ON ACCOUNT OF PROFIT ON UNACCOUNTED SALES & UNACCOUNTED LABOUR CHARGES. ON EXAMINATION OF THE SEIZED DOCUMENTS BS-3 BS-5 AND BS-6 AO NOTICED UNACCOUNTED SALES FOR THE PERIOD 20.1.99 T O 23.1.99 21 1.99 TO 27 1.99 AND 12.1.99 TO 29.1.99. ACCORDIN GLY THE AO ADDED GROSS PROFIT FOR AN AMOUNT OF RS.54 683/- CAL CULATED @15% OF THE UNACCOUNTED SALES CORRESPONDING PURCHASES HAVI NG ALREADY BEEN ACCOUNTED FOR IN THE BOOKS WHILE RELYING UPON DECISION OF THE ITAT BOMBAY BENCH IN THE CASE OF SUNDRAM AGENCIES AND M/S N.R. PAPER AND BOARD LTD AND OTHERS VS. DY. CIT 2 34 ITR 733(GUJ).BESIDES ANOTHER AMOUNT OF RS.4 525/- ON A CCOUNT OF UNACCOUNTED LABOUR RECEIPTS MENTIONED IN SEIZED DOC UMENT BS-4 WAS ALSO ADDED. 17. ON APPEAL THE LEARNED CIT(A) DELETED THESE T WO ADDITIONS WHILE ACCEPTING THE SUBMISSIONS OF THE ASSESSEE THA T THE SEIZED DOCUMENTS BS-3 BS-4 BS-5 AND BS-6 DID NOT CONTAIN D ETAILS OF ANY UNACCOUNTED SALES OR LABOUR RECEIPTS. 18. THE REVENUE IS NOW IN APPEAL AGAINST THE A FORESAID FINDINGS OF THE LD. CIT(A) . BEFORE US THE LD. AR ON BEHALF OF THE ASSESSEE SUBMITTED THAT THE ISSUE RAISED IN THIS GROUND IS SQUARELY COVERED BY THE DECISION DATED 19.9.2002 IN THE GROUP CASE OF SHRI YOGESHBHAI RAMJ IBHAI PROP. M/S SUMANGAL JEWELLERS IN IT(SS)A NO. 64/AHD./2001.ON THE OTHER HAND THE LD. DR DID NOT OPPOSE THESE SUBMISSIONS OF THE LD. AR. 19. WE HAVE HEARD BOTH THE PARTIES AND GONE THROUGH THE D ECISION DATED 19.9.2002 OF THE ITAT IN THE AFORESAID CASE O F SHRI YOGESHBHAI RAMJIBHAI PROP. M/S SUMANGAL JEWELLERS WHEREIN TH E ITAT WHILE ADJUDICATING A SIMILAR ISSUE CONCLUDED AS UNDER: 5. WE HAVE DULY CONSIDERED THE RIVAL SUBMISSIONS A ND THE MATERIAL ON RECORD. ON PAGE 73 OF THE PAPER BOOK SUBMITTED BY T HE DEPARTMENT IT IS IT(SS)A NO.96/AHD/2001 LATE SURESH RAMJIBHAI DHANAK PROP. M/S LABH JEWELLERS SURAT 19 MENTIONED THAT THE CASH RECEIPTS WERE ALSO FOUND IN THE COURSE OF SEARCH. IT IS ALSO MENTIONED THAT THE ESTIMATE BOOK CONTAIN ING DETAILS OF CASH PAYMENTS AND DATES CANNOT BE IMAGINED. THESE FACTS HAVE NOT BEEN CLEARLY BROUGHT OUT BY THE AO IN THE ASSESSMENT ORD ER. THE ORDER OF THE CIT(A) IS ALSO CRYPTIC ON THIS ISSUE. NEITHER THE D EPARTMENT NOR THE ASSESSEE HAVE PLACED BEFORE US THE SEIZED MATERIAL ON THE BASIS OF WHICH ADDITION IS MADE. AS THE ISSUE INVOLVES APPRECIATIO N OF EVIDENCE WHICH IS NOT PLACED BEFORE US WE DEEM IT PROPER TO REMAND T HIS ISSUE BACK TO THE FILE OF THE AO TO BRING OUT THE FACTS CLEARLY AND D ECIDE IT AFRESH AFTER GIVING DUE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 19.1 AS IS APPARENT FROM THE AFORESAID DECIS ION OF THE ITAT IN THE GROUP CASE SINCE FACTS WERE NOT BROUGHT OUT IN THE IMPUGNED ORDERS MATTER WAS RESTORED TO THE FILE OF THE AO. IN THE INSTANT CASE ALSO THE IMPUGNED ORDER OF THE LD. CIT(A) MERELY A CCEPTING THE SUBMISSIONS OF THE ASSESSEE IS CRYPTIC AND NON-SPE AKING. NEITHER THE LD. AR NOR THE LD. DR PLACED BEFORE US THE RELEVANT SEIZED DOCUMENTS FORMING THE BASIS OF AFORESAID ADDITIONS . AS IS APPARENT FROM THE IMPUGNED ORDER THE LD. CIT(A) HAVE NOT PASSED A S PEAKING ORDER BRINGING OUT CLEARLY THE NATURE OF TRANSACTIONS MENTIONED IN THE RELEVANT SEIZED DOCUMENTS NOR THESE DOCUMENTS HAVE BEEN PLACED BEFORE US. IN THES E CIRCUMSTANCES WE ARE OF THE OPINION THAT MATTER NEEDS TO BE RECONSIDERED BY HIM. THE APPLICATION OF MIND TO THE MATERIAL FACTS AND THE ARGUMENTS SHOULD MANI FEST ITSELF IN THE ORDER. SECTION 250(6) OF THE INCOME TAX ACT MANDATES THAT THE ORDER OF THE CIT(A) WHILE DISPOSING OF THE APPEAL SHALL BE IN WRITING AND SHA LL STATE THE POINTS FOR DETERMINATION THE DECISION THEREON AND THE REASON FOR THE DECISION. THE IMPUGNED ORDER PASSED BY THE LD. CIT(A) IN OUR OPI NION IS CRYPTIC AND GROSSLY VIOLATIVE OF ONE OF THE FACETS OF THE RULES OF NATU RAL JUSTICE NAMELY THAT EVERY JUDICIAL/QUASI-JUDICIAL BODY/AUTHORITY MUST PASS RE ASONED ORDER WHICH SHOULD REFLECT APPLICATION OF MIND BY THE CONCERNED AUTHOR ITY TO THE ISSUES/POINTS RAISED BEFORE IT. THE REQUIREMENT OF RECORDING OF REASONS AND COMMUNICATION THEREOF HAS BEEN READ AS AN INTEGRAL PART OF THE CONCEPT OF FAIR PROCEDURE AND SAFEGUARD TO ENSURE OBSERVANCE OF THE RULE OF LAW. IT INTRODU CES CLARITY CHECKS THE INTRODUCTION OF EXTRANEOUS OR IRRELEVANT CONSIDERAT IONS AND MINIMIZES ARBITRARINESS IN THE DECISION-MAKING PROCESS. WE MA Y POINT OUT THAT A DECISION IT(SS)A NO.96/AHD/2001 LATE SURESH RAMJIBHAI DHANAK PROP. M/S LABH JEWELLERS SURAT 20 DOES NOT MERELY MEAN THE CONCLUSION. IT EMBRACES WITHIN ITS FOLD THE REASONS FORMING BASIS FOR THE CONCLUSION.[MUKHTIAR SINGH VS . STATE OF PUNJAB (1995)1SCC 760(SC)]. 19.2 IN VIEW OF THE FOREGOING ESPECIALLY WHEN T HE LD. CIT(A) HAVE NOT PASSED A SPEAKING ORDER WE CONSIDER IT FAIR AND APPROPRIATE TO SET ASIDE THE ORDER OF THE LD. CIT(A) AND RESTORE THE ISSUE RAISED IN THIS GROUND NO.5 TO HIS FILE FOR DECIDING THE MATTER AFRESH IN ACCORDANCE WITH LAW AFTER ALLOWIN G SUFFICIENT OPPORTUNITY TO BOTH THE PARTIES. NEEDLESS TO SAY THAT WHILE REDECIDING THE APPEAL THE LEARNED CIT(A) SHALL PASS A SPEAKING ORDER KEEPING IN MIND INTER ALIA THE MANDATE OF PROVISIONS OF SEC. 250(6) OF THE ACT BRINGING OUT CLEARLY TH E NATURE OF AMOUNTS REFLECTED IN THE AFORESAID SEIZED DOCUMENTS. WITH THESE OBSERVA TIONS GROUND NO. 5 IS DISPOSED OF. 20 GROUND NO.7 RELATES TO AN ADDITION OF RS.3 90 150/- ON ACCOUNT OF UNACCOUNTED INVESTMENT IN FURNITURE AND FIXTURES . ON EXAMINATION OF SEIZED MATERIAL IN FORM OF BS-23 AT PAGE NO.1 T HE AO NOTICED THE DETAILS OF DAMAGE IN THE BUSINESS PREMISES OF THE A SSESSEE DURING FLOODS. THE ITEM AND VALUE THEREOF WERE SHOWN AS UN DER:- [1] MELTER RS. 35 000/- [2] FAN RS. 3 000/- [3] FRIDGE RS. 10 000/- [4] TRAYS RS. 47.550/- [5] BOX RS. 19 250/- [6] STATIONERY RS. 4 800/- [7] WOOD RS. 72.500/- [8] PLYWOOD & CHAIRS RS.1 35 000/- [9] GLASSES RS. 43 000/- [10] COLOURS RS. 42 500/- [11] SUNMICA RS. 24 000/- [12] LABOUR RS. 48 000/- [13] CARPETS RS. 4 550/- TOTAL RS.4.89 150/- SINCE THE ASSESSEE REFLECTED ONLY AN AMOUNT OF RS. 99 000/- IN THE BOOKS WHILE THE TOTAL AMOUNT MENTIONED ON THE LETT ER PAD OF M/S IT(SS)A NO.96/AHD/2001 LATE SURESH RAMJIBHAI DHANAK PROP. M/S LABH JEWELLERS SURAT 21 LABH JEWELLERS WAS RS.4 89 150/- AS ON 3-10-1998 AN D THE RENOVATION EXPENSES AS PER THE SAME ANNEXURE ON VAR IOUS PAGES 3 ONWARDS AND AS PER BS-24 WERE FOUND TO HAVE BEEN IN CURRED PRIOR TO 3-10-1998 THE AO ADDED THE DIFFERENCE OF RS.3 90 1 50/- TOWARDS UNDISCLOSED INCOME. 21. ON APPEAL THE LEARNED CIT(A) DELETED THE ADDI TION MERELY ACCEPTING THE SUBMISSIONS OF THE ASSESSEE HOLDING A S UNDER: 12 UNACCOUNTED INVESTMENT MADE ON FURNITURE RS.3 90 150/- SHRI VEPARI SUBMITS AS UNDER IN THE WRITTEN SUBMIS SIONS. VIDE PARA 20 OF THE ASSESSMENT ORDER THE AO HAS M ADE ADDITION OF RS.3 90 150/- BEING UNACCOUNTED INVESTMENT IN FURNI TURE AND FIXTURES. HE HAS MADE THIS ADDITION ON THE BASIS OF SEIZED MATERIAL IN FORM NO.BS-23 (PAGE NO.150) IN WHICH DETAILS ARE GIVEN TO THE EXTENT OF RS.4 89 150/-. THIS WAS JUST A CLAIM MADE ON ACCOUNT OF LOSS IN FLOOD AND WAS NOT EVEN SIGNED BY THE APPELL ANT. THE INFLATED CLAIM WAS MADE TO GET AS MUCH DAMAGES AS POSSIBLE. EVENTUALLY THE APPELLANT DID NOT GET ANY CLAIM. THE ABOVE STAT EMENT DOES NOT ESTABLISH THAT THE ASSESSEE HAD INCURRED SUCH EXPEN DITURE. THE ADDITION MADE MAY KINDLY BE DELETED. I AGREE THAT THE ADDITION IS REQUIRED TO BE DELETE D. 22. THE REVENUE IS NOW IN APPEAL AGAINST THE A FORESAID FINDINGS OF THE LD. CIT(A) . BEFORE US THE LD. AR ON BEHALF OF THE ASSESSEE PLEADED THAT ISSUE RAISED IN THIS GROUND IS SQUARELY COVE RED BY THE DECISION DATED 19.9.2002 IN THE GROUP CASE OF M/S PRAKASH JEWELLER S IN IT(SS)A NO. 63/AHD./2001.THE LD. DR ON THE OTHER HAND DID NOT OPPOSE THESE SUBMISSIONS OF THE LD. AR. 23. WE HAVE HEARD BOTH THE PARTIES AND GONE THROUGH THE D ECISION DATED 19.9.2002 OF THE ITAT IN THE AFORESAID CASE O F PRAKASH JEWELLERS WHEREIN THE ITAT WHILE ADJUDICATING A SI MILAR ISSUE CONCLUDED AS UNDER: IT(SS)A NO.96/AHD/2001 LATE SURESH RAMJIBHAI DHANAK PROP. M/S LABH JEWELLERS SURAT 22 8.4 ON DUE CONSIDERATION OF THE MATTER WE UPHOLD THE ORDER OF THE CIT(A) DELETING THE ADDITION. IT IS TRUE THAT THE I NSURANCE OF ANY ASSET IS GENERALLY NOT TAKEN ON ITS PURCHASE PRICE EXCEPT IN THE YEAR OF PURCHASE. IN SUBSEQUENT YEARS GENERALLY INSURANCE WOULD BE TAK EN ON MARKET VALUE OF THE ASSET OWNED BY THE ASSESSEE. THIS IS OBVIOUSLY TO COVER THE COST OF REPLACEMENT. MOREOVER THE MERE FACT THAT THE INSUR ANCE WAS TAKEN FOR HIGHER VALUE IT DOES NOT BY ITSELF GO TO SHOW THAT THERE ARE CERTAIN FIXTURES WHICH ARE NOT ACCOUNTED FOR IN THE BOOKS OF ACCOUNT . THERE IS ALSO NO FINDING TO THE EFFECT THAT THE RECORDED FURNITURE A ND FIXTURES WERE FOUND IN THE COURSE OF SEARCH. THUS THE ADDITION NOT BEING JUSTIFIED IS RIGHTLY DELETED BY THE CIT(A). RULE 46A IS WITH REGARD TO THE ADMIS SION OF ADDITIONAL EVIDENCE. IN THE INSTANT CASE THE OBJECTION OF THE REVENUE IS WITH REGARD TO THE NEW EXPLANATION BEING ACCEPTED BY THE CIT(A). NEW EXPLANATION CAN NOT BE EQUATED WITH NEW EVIDENCE AND. HENCE RULE 46 A HAS NO APPLICABILITY AND THEREFORE THE OBJECTION OF THE R EVENUE IS REJECTED. 24. WE ARE OF THE OPINION THAT FINDINGS RECORDED BY THE ITAT IN THE AFORESAID CASE WERE ON DIFFERENT FACTS OF THEIR OWN . IN THE SAID CASE DIFFERENCE BETWEEN AMOUNT AS PER APPROVED PROPOSAL FOR INSURANCE AND AMOUNT REFLECTED IN THE BOOKS WAS ADDED IN THE ABSENCE OF ANY EXPLANATION OF THE ASSESSEE WHILE IT WAS CONTENDED BEFORE THE LD. CIT(A) THAT NORMALLY A BUSINESSMAN WOULD TAKE INSUR ANCE ON A HIGHER AMOUNT TO COVER COST OF REPLACEMENTS. BUT I N THE INSTANT CASE NO SUCH FACTS HAVE BEEN BROUGHT TO OUR NOTICE NOR THE LD. CIT(A) ASSIGNED ANY REASONS FOR HIS CONCLUSION. SI NCE THE LD. CIT(A) HAS NOT PASSED A SPEAKING ORDER IN VIEW OF DETAI LED REASONS GIVEN IN PARA 19.1 ABOVE WE CONSIDER IT FAIR AND APPROPRIATE TO SET A SIDE THE ORDER OF THE LD. CIT(A) AND RESTORE THE ISSUE RAISED IN THIS GROUND NO.7 T O HIS FILE FOR DECIDING THE MATTER AFRESH IN ACCORDANCE WITH LAW AFTER ALLOWING SUFFI CIENT OPPORTUNITY TO BOTH THE PARTIES. NEEDLESS TO SAY THAT WHILE REDECIDING THE APPEAL THE LEARNED CIT(A) SHALL PASS A SPEAKING ORDER KEEPING IN MIND INTER ALIA THE MANDATE OF PROVISIONS OF SEC. 250(6) OF THE ACT BRINGING OUT CLEARLY THE N ATURE OF AMOUNTS REFLECTED IN THE SEIZED DOCUMENTS. WITH THESE OBSERVATIONS GROUND NO. 7 IS DISPOSED OF. IT(SS)A NO.96/AHD/2001 LATE SURESH RAMJIBHAI DHANAK PROP. M/S LABH JEWELLERS SURAT 23 25. GROUND NOS. 8 TO 10 BEING GENERAL IN NATURE N OR ANY SUBMISSIONS HAVING BEEN MADE BY THE LD. DR ON THESE GROUNDS DO NOT REQUIRE ANY SEPARATE ADJUDICATION AND ARE THER EFORE DISMISSED. 26. IN THE RESULT APPEAL IS PARTLY ALLO WED BUT FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE COURT TODAY ON 9- 7-2010 SD/- SD/- (BHAVNESH SAINI) JUDICIAL MEMBER (A N PAHUJA) ACCOUNTANT MEMBER DATE : 9-7-2010 COPY OF THE ORDER FORWARDED TO: 1. SMT. KUMUDBEN WIFE AND SHRI VIMALBHAI SON AND LH OF LATE SHRI SURESHBHAI RAMJIBHAI DHANK A-502 PANCHR ATNA TOWER LAMBE HANUMAN ROAD VARACHHA SURAT. 2. THE ACIT INV. CIRCLE-3(1) SURAT 3. CIT CONCERNED 4. CIT(A)-III SURAT 5. THE DR BENCH-C ITAT AHMEDABAD 6. GUARD FILE BY ORDER DEPUTY REGISTRAR ASSISTANT REGISTRAR ITAT AHMEDABAD