Mr.sujith Cherianprop. Kerala Fashion Jewellerychennai 4 v. The Asst. Commissioner Of Income Tax,Business Circle Ii,3[Rd] Floor, New Block, Aayakar Bhavan121, M.g. Road, Chennai 34

IN THE HIGH COURT OF JUDICATURE AT MADRASDATED: 03.01.2020 CORAM THE HON'BLE DR.JUSTICE VINEET KOTHARIANDTHE HON'BLE MR.JUSTICE R.SURESH KUMAR Tax Case (Appeal) No.467 of 2010 Mr.Sujith CherianProp. Kerala Fashion JewelleryChennai 4....Appellant/Respondent Vs. The Asst. Commissioner of Income Tax,Business Circle II,3[rd] Floor, New Block, Aayakar Bhavan121, M.G. Road, Chennai 34...Respondent/AppellantTax Case Appeal filed under Section 260A of the Income TaxAct, 1961 against the order of the Income Tax AppellateTribunal, ' D' Bench, Chennai in I.T.A.No.2201/MDS/2008 dated16.10.2009 against the order passed by the Commissioner ofIncome Tax (Appeals)VI, Chennai PAN No. inI.T.A.No.32/2006-2007 dated 22.07.2008 against the order passedby the Assistant Commissioner of Income Tax Circle II, ChennaiGDR No. AADPC7155R, Assessment year 2003-2004, dated of order17.03.2006.For Appellant : Mr.Ashok PathiFor Respondent : Mr.S.Rajesh, Junior Standing Counsel The Assessee has preferred this appeal under Section 260A ofthe Income Tax Act aggrieved by the order dated 16 October 2009passed by the learned Income Tax Appellate Tribunal Branch “D”,Chennai, whereby the learned Tribunal partly allowed the appealfiled by the Revenue and set aside the order passed by thelearned Commissioner of Income Tax Appeals on 22 July 2008 forthe Assessment year 2003-04, and restored the Additions made bythe Assessing Authority with the following observations : https://hcservices.ecourts.gov.in/hcservices/ 9. A significant fact, which in ourview, has not been appreciated by thelearned Commissioner of Income Tax (Appeals)while deciding the issue is the admission bythe Assessee after the survey vide itsletter dated 7.3.2005 as well as letterdated 17.2.2006, as duly recorded by thelearned Commissioner of Income Tax (appeals)in the impugned order at P.No.3.Thus, whenthe Assessee has admitted an additionalincome of Rs.42 lakhs subsequent to surveyand even during the assessment, then thesaid admission in the absence of anythingcontrary on record cannot be overlooked. Wedo not agree and accept the contention ofthe learned A.R. Of the Assessee that if theoffer of the Assessee is considered to betrue then the same has to be telescopedagainst the excess book stock. It was theonus and duty of the Assessee to prove thatthere was no discrepancy in the books ofaccounts as well as in the stock. When thefact of discrepancy of recorded excesspurchases has not been disputed then theAssessee cannot take advantage by pleadingthat the same will reduce the discrepancy inthe stock. We find that when the Assesseehas admitted an additional income of Rs.42lakhs, then, irrespective of the rivalcontentions of the parties, the same isliable to be added to the income of theAssessee. It is a case of unambiguousadmission on the part of the Assessee.Accordingly, we are of the view that anaddition of Rs.42 lakhs as admitted by theAssessee on account of unproved purchases isjustified. The order of the learnedCommissioner of Income Tax (Appeals) is setaside and the order of the Assessing Officeris modified to that extent.10. In the result, this appeal filed bythe Revenue is partly allowed. 2. During the time of admission of this appeal, thefollowing substantial questions of law were framed forconsideration of the court:- 1. Whether on the facts and in thecircumstances of the case, the Appellate https://hcservices.ecourts.gov.in/hcservices/ 2. During the time of admission of this appeal, thefollowing substantial questions of law were framed forconsideration of the court:- 1. Whether on the facts and in thecircumstances of the case, the Appellate https://hcservices.ecourts.gov.in/hcservices/ Tribunal is right in law in holding that theaddition of Rs.42 lakhs is warranted asundisclosed purchases in the hands of theAppellant as per the real income theoryunder Section 28 of the Income Ta Act, 1961?2. Whether the Tribunal's finding inpara 9 is perverse especially when in paras5 to 8, the Tribunal itself observes the“contrary facts on record” to prove that thepurchases were not properly entered and onlythere was “Excess Book Stock” as compared to“Physical Stock” recorded in the books?” 3. Having heard the learned counsel for the parties and uponperusal of the record, we find that the additions in question tothe extent of Rs.42 lakhs are mainly based on the admission madeby the Assessee himself who is a dealer of jewellery, based uponthe statements recorded during the course of survey, which wasconducted in the business place of the Assessee on 16 December2002 and thereafter, during the course of the assessmentproceedings also for the aforesaid Assessment Year 2003-04 bytwo letters dated 7 March 2005 and 17 February 2006, theAssessee himself agreed to additions of Rs.42 lakhs on accountof unproved purchases of gold from various dealers, during theassessment period in question. 4. The learned counsel for the Assessee sought to urgebefore us that the said admission of the Assessee was notcorroborated by any other material on record by the AssessingAuthority and therefore, such an admission could not haveresulted in the addition in the declared income. 5. Per contra, the learned counsel for the Revenue supportedthe impugned order passed by the learned Income Tax AppellateTribunal. 6. Having heard the learned counsel, we are of the opinionthat in fact, no question of law arises in the present case,much less substantial question of law, giving rise to themaintainability of the appeal under Section 260A, by theAssessee. The admission on the part of the Assessee was the bestevidence to be used by the Assessing Authority in the presentcase. Admittedly, during the course of survey, the discrepanciesin the stocks of gold were found at the business place of theAssessee for which initially though he admitted a difference ofRs.50 lakhs in value, but later on during the course ofassessment proceedings, he seems to have reduced that valuationby the admission letters dated 7 March 2005 and 17 February2006, to the extent of Rs.42 lakhs. The Tribunal has upheld theadmissions only to the extent of Rs.42 lakhs in the present case. We do not find any perversity in the said findings of thelearned Tribunal based on the admission of the Assessee himselfand therefore, we do not find any merit in the appeal filed bythe Assessee and the same deserves to be dismissed. 7. In view of the aforesaid, we answer the questions of lawas admitted by the Coordinate Bench against the Assessee and infavour of the respondent. The appeal is dismissed. There is noorder as to costs. s/d- Assistant Registrar(CS VI) True Copy Sub-Assistant RegistrartarTo1. The Asst. Commissioner of Income Tax,Business Circle II,3[rd] Floor, New Block121, M.G. Road, Chennai 342.The Income Tax Appellate Tribunal'D' Bench, Chennai3.The Commissioner of Income Tax(Appellate)VIChennai+1 CC to M/s. Pass Associates sr 649+1 CC to Mr.S.Rajesh, Advocate sr 507. T.C.(A).No.467 of 2010 PP(CO)SP(29/05/2020)