- (1.) HEARD on question of admission. This appeal has been preferred against the order passed by the Tribunal on 30th Oct., 2009 in ITA No. 444/Jp/2009.
(2.) THE facts in short are that a survey operation was carried out on the business premises of the assessee on 17th Feb., 2005, during which the books of accounts were found to be incomplete and excess stock of Rs. 8,99,720 and excess cash of Rs. 3,50,280 was found. The AO made an addition of Rs. 12,50,000 under S. 69 of the IT Act. On appeal having been preferred, the CIT(A) allowed the assessee relief of Rs. 2,18,000 on account of excess cash however confirmed the addition of Rs. 8,99,720 for excess stock and Rs. 1,32,280 on account of excess cash. The appeal was allowed in part. The application under S. 154 for rectification was filed which was dismissed by the CIT(A). Aggrieved of the order, appeal was preferred before the Tribunal. The Tribunal has deleted the entire addition of Rs. 10,32,000 sustained by the CIT(A) and has allowed the assessee's appeal. Aggrieved against the same, this appeal has been preferred. The submission raised by learned counsel Ms. Parinitoo Jain is that the finding recorded by the Tribunal is perverse, the amount did not belong to M/s Rajendra Soni, an individual firm. Thus, the order passed by the CIT(A) is appropriate and no case for interference in the same was made out.
(3.) AFTER hearing the learned counsel at length and going through the orders, we are of the opinion that no consideration was given by CIT(A) to the fact that books of accounts of M/s Rajendra Soni, an individual firm were also impounded on the date of survey in which the assessee has made the alleged purchase of stock of gold which was available physically on the date of survey. Thus, in our opinion, the finding of the Tribunal cannot be said to be perverse on facts and the view taken was a reasonable and plausible view. The Tribunal has discussed the matter thus : "Whereas the facts are that the assessee was showing labour income from year to year in its personal capacity even declared in his previous returns as well as current return and the income thereof has been accepted by the Department and thus the existence of this firm and its source of income cannot be doubted. Further during the course of survey a note book was impounded by the Department which were the cash book and ledger of this firm having sources of income of labour and job works and all facts which were reconciled for excess stock and cash were recorded in this account book and the facts of this reconciliation and books of account as impounded could not be overlooked and thus these facts establish the existence of firm M/s Rajendra Soni carrying on the business of labour and job work. (iii) Thus it becomes an established fact that the assessee was the proprietor of two firms. The reconciliation of the surrender as as under : (A) Gold jewellery 1406.940 gms. excess valuing Rs. 8,44,164 During the course of survey on 17th Feb., 2005 gold jewellery weighing 1406.849 gms. was found and there was no stock in books of M/s Shyam Sunder Rajendra Kumar and the survey team alleged to consider whole of the stock of 1406.940 gms. as excess and valued the same at Rs. 8,44,164 (Rs. 6,000 per 10 gms.). No consideration given to the fact that books of account of M/s Rajendra Soni individual firm was also impounded on date of survey in which the assessee has made alleged purchases of stock of gold which was available physically on date of survey. Details of such purchases duly entered in impounded books and based on it the trading account comes as under : Trading cum manufacturing account as on date of survey i.e., 17th Feb., 2005 as per impounded books of Rajendra Soni (paper book 28.) Grams Amount Grams Amount To opening stock Nil By sales 92.59 55,554 To purchase By closing 1406.94 8,44,164 stock Upto 17-2-2005 from Trimurti Jewellers 772.63 4,48,126 Chandrakanta 435.21 2,69,208 Lila Devi 387.40 2,39,810 1595.24 9,57,144 Less : Manufacture 95.71 57,426 loss 1499.53 8,99,718 1499.53 8,99,718 Thus as per the trading account as per the impounded books of Rajendra Soni the closing stock of gold jewellery comes to 1406.94 gms., which is equal to the stock found on date of survey hence no surrender made for this issue since the quantity as per the available facts and evidences impounded by Department got reconciled. The purchases/acquisition of such gold items have separately been explained by assessee in his statements on 28th March, 2005 under S. 131 details as below : (a) Purchase from M/s Trimurti Jewellers 772.63 gms. gold jewellery. The assessee in its firm M/s Rajendra Soni during the year purchased gold jewellery from M/s Trimurti Jewellers vide two bills of 445.110 gms. on 8th Feb., 2005 and 327.520 gms. on 10th Feb., 2005 vide bill No. 17. The facts of purchases were duly recorded in the books as impounded on date of survey of Rajendra Soni individual. Copy of bills and ledger enclosed herewith pp. 30 to 31. Even in the next year the assessee through demand drafts made payments against these bills to Trimurti Jewellers, Jaipur. Copies of demand drafts and demand draft receipts enclosed herewith pp. 32 to 38. Thus the assessee has proved its onus by proving the identity of the seller and if the post office registry for confirmation by AO has been returned with the narration shop closed still the assessee has discharged it onus. Further when copy of bill available, recorded in impounded books before survey and on later date payments made through demand draft the transaction cannot be said unexplained because shop closed does not make the transaction invalid or unexplained. As regards purchase from Chandrakanta 435.210 gms. gold jewellery, the assessee during the year on 25th Dec., 2004 purchased for sale of gold jewellery of Chandrakanta (wife) on credit. The facts of purchases and credit in the name of Chandrakanta was posted in the impounded books of M/s Rajendra Soni. Even the lady confirmed the details of gold jewellery sold to assessee on credit with complete list through a sworn affidavit dt. 27th Sept., 2007 filed to the AO even the statements of the lady recorded by AO during the course of assessment proceedings on 12th Dec., 2007 copy enclosed and the lady confirmed the facts of sale of gold jewellery weighing 435.200 gms. Copy of ledger and affidavits and statements are on record with regard to purchase from Lila Devi 387.405 gms. gold jewellery, the assessee during the year on 20th Jan., 2005 and 22nd Jan., 2005 purchased for sale of gold jewellery of Lila Devi (mother) on credit weighing 89.103 gms. and 298.302 gms. The facts of purchases and credit in name of Lila Devi was posted in the impounded books of M/s Rajendra Soni. Even the lady confirmed the details of gold jewellery sold to assessee on credit with complete list through a sworn affidavit filed with the AO. Even the statements of the lady recorded by AO during the course of assessment proceedings on 12th Dec., 2007 copy on record and the lady confirmed the facts of sale of gold jewellery weighing 387.405 gms. Copy of ledger and affidavit's and statements enclosed herewith (paper book 31 and 46 to 49). Thus, the AO has wrongly alleged to challenge and doubt the existence of firm M/s Rajendra Soni and its transaction when the books of accounts of the same firm were impounded by the survey team on date of survey in which all these transactions were duly narrated and posted and income from labour and sale declared from years in personal capacity and accepted by Department. Thus, the reconciliation of gold as per books needs to be accepted. Further the sworn statements of ladies justified the day, date, weight, nature of jewellery and till the same are not rebutted cannot be denied. The ladies though relatives, have also justified the reasons. The AO has tried to counter verify the facts but could not find any defects in statements/confirmations. In case of M/s Trimurti Jewellers since the registered bill containing dates, sales, gold licence No. are there and further the payments have been made through banking channels." ;