Dhirubhai Naranbhai Patel, J. - (1.) THIS Tax Appeal has been preferred against the order, passed by the Income Tax Appellate Tribunal, Circuit Bench, Ranchi in Income Tax Appeal No. 15/Pat/2005 for the Block Assessment Period 1996 -97 to 2001 -02 and from 01.04.2001 to 26.09.2001 with Cross Objection No. 18/Pat/2005 for the very same block assessment period and for the broken period of 2001. The order was passed by the Income Tax Appellate Tribunal (hereinafter referred to as 'the ITAT' for the sake of brevity) dated 23rd June, 2006 against which this appeal has been preferred wherein the following substantial questions have been raised: "a. Whether on the facts and in the circumstances of the case the ITAT was rights in deleting the addition of Rs. 22,84,923/ - without considering that the assessee has not disclosed the aforesaid addition before the Settlement Commission as provided under section 245D(4). b. Whether ITAT was right in deleting the addition of Rs. 22,84,923/ - added as undisclosed stock of gold & diamond jewellery on the strength of difference in physical verification of the stock found and its booked value by ignoring the physical verification which was available on record. c. Whether on the facts and in the circumstances of the case, the ITAT right in deleting the addition of Rs. 41,51,301/ - added as undisclosed income for A.Y. 2002 -03 on the strength of the seized document marked as A/JJ/6 with ITAT overlooked, ignoring the provisions of Evidence Act. d. Whether on the facts and in the circumstances of the case, ITAT without considering section 132(4A) read with section 158BB of the I.T. Act, right in deleting the addition of Rs. 41,51,301/ - for the A.Y. 2002 -03."
(2.) WE have heard counsel for the appellant, who has submitted that deleting the addition of Rs. 22,84,923/ - by the ITAT was without appreciating the fact that the respondent -assessee has not disclosed the said addition before the Settlement Commission as provided under Section 245D(4) of the Income Tax Act, 1961 and this amount was added because of undisclosed stock of gold and diamond jewellery on the strength of difference in physical verification of the stock found and its book value. It is also submitted by the counsel for the appellant that similarly, the ITAT has committed an error in deleting the addition of Rs. 41,51,301/ -. This addition was made by Assessing Officer. This was undisclosed income for the year 2002 -03 on the basis of seized documents marked as A/JJ/6 which IIAT has overlooked or ignored. Counsel for the appellant submitted that search and seizure operation under Section 132 of the Income Tax Act, 1961 was conducted on 26th September, 2001 at various premises of the respondent. Thereafter, application was preferred by Sri Prem Prakash Arya, who is main partner of M/s. Jever Jewellers, Bangalore, under Section 245C of the Income Tax Act before the Settlement Commission. Settlement Commission took sometimes meanwhile Assessing Officer passed an order dated 23rd October, 2003 and two major additions were made which is at Rs. 22,84,923/ - on the basis of physical verification of the stock firm and the book value and the 2nd major addition was Rs. 41,51,301/ - on the basis of the seized documents which ITAT has ignored. Appeal was preferred by the respondent before Commissioner of Income Tax (Appeals), who passed an order dated 15th July, 2004 in favour of the respondent and therefore, appellant preferred Appeal before the ITAT which was dismissed vide order dated 23rd June, 2006 and therefore, this Tax Appeal has been preferred with the aforesaid substantial questions of law and as this Settlement Commission passed an order on 8th January, 2014, Commissioner of Income Tax (Appeals) as well as ITAT has placed heavy reliance upon the order, passed by the Settlement Commission and more particularly, upon the disclosure of income by Mr. P.P. Arya. Thus, it is mainly submitted by the counsel for the appellant that ITAT has not properly appreciated that additions of income at Rs. 22,84,923/ - which is based upon a difference in physical verification of stock and its book value and this was never disclosed before the Settlement Commission by Mr. P.P. Arya and 2nd addition of Rs. 41,51,301/ - was on the basis of the seized documents marked as A/JJ/6 which the ITAT has overlooked or ignored and therefore, deletion of both these additions may be quashed and set aside by an order of this Hon'ble Court. We have heard counsel for the respondent who has submitted that no error has been committed by the Commissioner of Income Tax (Appeals) nor by the ITAT in deleting both the aforesaid additions. Firstly on the ground that voluntarily disclosure made by Mr. P.P. Arya includes the aforesaid amount which is at Rs. 22,84,923/ - and so far as addition of Rs. 41,51,301/ - is concerned, it is submitted that the basic principles of accountancy have been properly appreciated by the Commissioner of Income Tax (Appeals) and the ITAT. There is no variance of stocks. Nonetheless, the closing stock was made as per cost price by the assessee and the said plea cannot be altered by the department. Since the assessee is valuing the closing stock on the basis of the cost price or market price whichever is lower and therefore, assessee has valued his stock at cost price which is also supported by the auditors report and therefore, this addition of Rs. 41,51,301/ - has been rightly dealt by both the authorities under the Income Tax Act namely, Commissioner of Income Tax (Appeals) and ITAT and no illegality has been committed by both the authorities below and hence, this appeal may not be entertained by this Court.
(3.) COUNSEL for the respondent has also relied upon the decision rendered by Hon'ble Supreme Court as well as Hon'ble Delhi High Court as: (a) : (2005) 2 SCC 324 (Para 11 to 15). To point out what is the substantive question of law and on the basis of this decision, it is submitted that there is no substantive question of law involved in this Tax Appeal. (b) : (2004) 189 CTR (Del) 103 (Para 26, 30, 32 to 36). On the point that the order passed by the Settlement Commission may not be interfered with, except in exceptional cases. (c) : (2010) 8 SCC 739 (Para 27, 35 and 37). This judgment has been relied upon by the respondent mainly for the reason that once true, correct and legal procedure has been followed before the Settlement Commission, the order passed by the Settlement Commission may not be called in question nor it can be reopened by the Court. (d) : (1999) 8 SCC 338 (Para 24, 25 and 26). This judgment has been relied upon to point out the methodology of following of closing stock and the principle propounded by the Hon'ble Supreme Court as stated in para 26 On the basis of the aforesaid submissions, it is submitted by the counsel for the respondent that this appeal may not be entertained by this Court. Reasons:;