Principal Commissioner Of Income Tax, Jaipur-I, Jaipur, New Centralrevenue Building, Statue Circle, Jaipur (Raj v. M/S Jewels Emporium, D

[2024:RJ-JP:41774-DB] HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH AT JAIPUR D.B. Income Tax Appeal No. 43/2021 Principal Commissioner Of Income Tax, Jaipur-I, Jaipur, New CentralRevenue Building, Statue Circle, Jaipur (Raj.) ----Appellant Versus M/s Jewels Emporium, D-7, M.I. Road, Jaipur. ----Respondent For Appellant(s) : Mr. Anuroop Singhi withMr. N.S. Bhati &Mr. Aditya KhandelwalFor Respondent(s): Mr. Javed Khan HON'BLE MR. JUSTICE AVNEESH JHINGAN HON'BLE MR. JUSTICE ASHUTOSH KUMAR Order 01/10/2024-AVNEESH JHINGAN,J: 1.This appeal is filed against the order of Income Tax AppellateTribunal, Jaipur Bench, Jaipur (for short 'Tribunal') vide order dated15.09.2020 pertaining to assessment year 2015-16. 2.The brief facts are that on 17.12.2014 search operation wascarried out under Section 132 of Income Tax Act, 1961 (for short ‘theAct’) at the business premises of the firm as well as on the residentialpremises of the partner. The assessee filed a return declaring income ofRs.9,97,510/-. The assessment under Section143(3) read with 153B(1)(b) of the Actwas finalised on 23.12.2016, assessing the income atRs.6,58,52,710/- by making an addition of Rs.6,14,97,858/- towardsthe excess stock. The CIT(A) vide order dated 12.12.2018 accepted theappeal of the assessee and deleted the addition made on the basis of excess stock. The appeal of the department was dismissed by the Tribunal, hence the present appeal. 3.The following substantial question of law have been proposed:- “(i)Whether, on the facts and circumstances of thecase and in law, the Learned ITAT was justified indeleting the addition of Rs.6,14,97,858/- made onaccount of excess stock found during searchproceedings when the assessee itself hadsurrendered the same during course of searchproceedings ?case and in law, the Learned ITAT was justified indeleting the addition of Rs.6,14,97,858/- made onaccount of excess stock found during searchproceedings when the assessee itself hadsurrendered the same during course of searchproceedings ? (ii)Whether, on the facts and circumstances of thecase and in law, the Learned ITAT was justified indeleting the addition of Rs.6,14,97,858/- made by AOon account of excess stock found during searchproceeding despite the fact that the assessee was notmaintaining day to day stock register and thevaluation of stock was done on net realizable valueand not on sale price which was not disputed by theassesse during the course of search and even postsearch investigation, he was in full agreement withthe valuation?case and in law, the Learned ITAT was justified indeleting the addition of Rs.6,14,97,858/- made by AOon account of excess stock found during searchproceeding despite the fact that the assessee was notmaintaining day to day stock register and thevaluation of stock was done on net realizable valueand not on sale price which was not disputed by theassesse during the course of search and even postsearch investigation, he was in full agreement withthe valuation? (iii)Whether, on the facts and circumstances of thecase, the finding of the Tribunal is perverse, contraryto the record and untenable in the eyes of law?"case, the finding of the Tribunal is perverse, contraryto the record and untenable in the eyes of law?" 4.Learned counsel for the appellant submits that partner of the firmin his statement had admitted the excess stock and retraction was aftermore than two years. There was no basis for the appellate authority fordeleting the addition. 5.Learned counsel for the respondent submits that no substantialquestion of law is involved. The difference of the stock was due toadding of the profit element whereas books of accounts weremaintained on cost price basis. 6.Heard learned counsel for the parties and perused the pleadings. 7.The admitted facts are:-7.The admitted facts are:- 4.Learned counsel for the appellant submits that partner of the firmin his statement had admitted the excess stock and retraction was aftermore than two years. There was no basis for the appellate authority fordeleting the addition. 5.Learned counsel for the respondent submits that no substantialquestion of law is involved. The difference of the stock was due toadding of the profit element whereas books of accounts weremaintained on cost price basis. 6.Heard learned counsel for the parties and perused the pleadings. 7.The admitted facts are:-7.The admitted facts are:- (i)that at the time of the search the books of accounts wereincomplete and certain entries pertaining to cash were to be made. (ii)the excess stock was result of difference in value as pervaluation report compared with books of account. (iii)that the valuation was done on the basis of the current priceand not on the cost price. (iv)the books were being maintained at cost price. (v)there was no quantitative difference either in the jewels orof the precious metal. (vi)lastly no incriminating documents were found during thesearch to support the alleged excess stock. 8.The CIT(A) held that the statement of a partner recorded at theend of forty five hours long search cannot be the sole basis for makingaddition for excess stocks. Moreso, when there was no quantitativedifference found and difference was result of valuation being done oncurrent market price and books being maintained on cost. 9.There is no question of law much less substantial question of lawinvolved in the appeal. The addition was deleted on the basis of thefactual findings recorded. 10.No case is made out for interference under Section 260(A) of theAct. 11.The appeal is dismissed. (ASHUTOSH KUMAR),J (AVNEESH JHINGAN),J Mohita/Riya/17